Society is advancing by leaps and bounds toward a new world dominated by technology. Digitalization, understood as the penetration of the internet into our lives, is a fundamental part of this process because it affects the way we think and act. This innovation process is unprecedented in our history. Few skeptics question the benefits of the digital revolution, which contributes to economic growth by breaking down barriers between activities and expanding the range of possibilities for businesses.
It is difficult to conceive of a digitalized economy and society without the financial sector leading the change, accustomed as it is to adapting and even anticipating new times. Banking customers demand agility, efficiency, ease, simplicity, and security in their financial transactions—the same things they demand in other aspects of their lives. A society increasingly accustomed to using mobile devices represents a natural impetus for the transformation of the financial sector, which has made business digitalization its priority.
Financial innovation benefits customers by giving them access to a broader range of products and services, facilitating comparison between institutions, and reducing costs in an environment of security guaranteed by banks. This may explain the exponential growth of digital customers.
The most recent statistics indicate that in Spain, 92% of banking customers are regular internet users, 85% have mobile phones, and 68% check their balances online. Improving access to digital, open, transparent, and competitive services facilitates income and savings management and limits assumed risks. According to the latest World Bank report, digitalization contributes significantly to financial inclusion and promotes entrepreneurship.
Currently, only 37% of banking customers visit their branch each month. Banks seek a balance between the growing demand for digital financial services and continuing to provide the best possible service for analog customers under a multichannel framework. Institutions adapt to the preferences of their customers, who are, ultimately, their reason for being.
The debate about the optimal level of physical branches in Spain makes no sense unless we consider the other measures taken by banks to improve the already high level of financial inclusion—which reaches 98% of the population—such as commercial agents, ATMs, and mobile branches. The digitalization of financial services is one of the best tools for integrating those at risk of being excluded due to geographic distribution. For this reason, it is essential that authorities become aware of the need to extend internet connectivity in Spain to guarantee access to financial services for all citizens.
Effective improvement in financial inclusion cannot be achieved without parallel progress in society’s financial education. Banks already make significant efforts to help people manage their money, both young people who were born in the digital era and older individuals who have difficulty benefiting from the advantages of new technologies. However, for this enormous effort by banks to succeed, collaboration from all of society is needed—from authorities, the academic world, and families themselves. Financial education is key to advancing financial inclusion, as well as to consumer protection and financial stability.
Digitalization must not call into question the relationship of trust with customers on which banking is based. Cybersecurity is not a new activity for the financial industry; on the contrary, it is a leader in cybersecurity risk management. All departments and business areas of banks are involved in cybersecurity. Nevertheless, it is vital that customers be aware of the risks associated with activity in digital environments and the need to take precautions.
The banking sector’s efforts to drive its digital transformation are in addition to the significant changes undertaken to adapt to regulatory and supervisory requirements in recent years, designed to provide greater security and protection to customers while reinforcing financial stability. Digitalization promotes competition between credit institutions and other types of companies that are not banks. This competition must be on equal terms precisely to achieve the objectives pursued by authorities. It makes no sense for regulation to focus on types of companies when what is necessary is to limit the risks arising from an activity regardless of who carries it out. For example, according to EBA data, more than 30% of new technology companies providing financial services are not subject to any type of regulation or supervision.
