Digital Banking/e-banking vs normal traditional Banking

Rashaed Esson

Staff Writer

#TheBahamas, April 11, 2023 – Last year December, a leaked memo which was confirmed to be true by CIBC revealed that come January 3rd of 2023, CIBC branches in the Bahamas and TCI would no longer process over the counter transactions which can be performed  through digital banking channels.

This is indicative of the shift to digital banking in the banking industry as technological advancement diffuses into the corporate world.  The success of the shift so far, has been good.  There is much to say about the benefits of the newly digitized banking system, but this brings forth the question of whether it outweighs the drawbacks that come with heavily computerized banking systems.

Last year in October, Scotia Bank TCI alongside its branches on other Caribbean Islands namely, The Bahamas, Cayman Islands, Jamaica and Trinidad and Tobago, were titled the Best Consumer Digital Bank for 2022, by the North America Financial Publication, Global Finance.  During that time, the Bank highlighted that they gained positive results from their investment in digital banking.

The figures spoke for themselves.  During the eighteen months prior to when they were awarded, the Bank saw a 6 percent increase in customers actively using the bank’s digital channels as well as a 41 percent increase in online transactions.

This is an indication that digital banking for Scotiabank throughout the Caribbean, a major banking entity, has been good.

There are many pros to digital banking or e-banking including quicker and easier processing times, not needing to wait in lines to do business and going cash free.

Naturally, however problems will and have presented themselves.

Back in December of 2022 the Royal Bank of Canada (RBC) experienced a three-day shut down of their digital banking platform.  The Tribune reported that this caused multiple Bahamian Businesses to suffer as they were unable to conduct transactions crucial to the seamless running of the businesses and make or receive payments given that they were ‘locked out’ of their accounts due to the issues with RBC’s online and mobile banking platform.

The aim then and now for the industry regulator is to be rid of cheques by 2024, reducing the need for other manual forms of payment.  But due to this, at the time of the issue, this led to the question of whether this move to the digitization of banking is a move too fast.

So far there have not been any major reported issues with e-banking.  However, taking into consideration the issue with RBC in December, and its impact on Bahamian Businesses, do the risks outweigh those that would come with normal physical banking as well as the pros of the digitization of the industry?

That we are not so sure about just yet but we are aware that various banks are committed to make the transition seamless.

This was expressed by Deepa Boucad, CIBC’s Executive Director, Retail and Business Banking, at an award show earlier this year where  CIBC copped an award for great advances in digital banking, claiming the title for “Best Digital Transformation Bank 2022.”

“We will continue to lead the way with modern, innovative products and services that simplifies the everyday banking experience for our clients by providing them with new digital capabilities across all our service delivery channels.  Digital is the future of banking, and we are continuously enhancing our digital channels to provide innovative solutions to meet your unique and changing banking needs,” she said.