Most banks nowadays practices the virtual banking in some form. In UAE we have various modes of virtual banking like ATM, ECSS, EFTS, RTGS, CSCT CFMS, etc. Virtual banking enables a customer to pay bills online, check account details, secure loans, withdraw and deposit money anytime as per their convenience. Virtual Banking allows a bank account to transact with multiple currencies.
Definition: Virtual Banking; – Availing the banking services without actually going to the bank branch/office in person and access bank and related services online. Simply, use of information technology for availing the banking services without physical walk-in to any premises is called as virtual banking.
One of the advantages of virtual banking service is that the transactions can be checked in real time, i.e. as and when the transactions are made and the customer is not required to wait to check the transaction details. The cost incurred in handling the transactions is lower than the traditional form of banking, and also, it charges low fee comparatively because of less overhead expenses.
UAE is ready for Virtual Banking
Virtual banking is also known as cyber-banking, e-banking, home banking or online banking. Most banks nowadays are encouraging for branch-less transactions. It is environmentally friendly because of no paper statements and because of which it has huge support from the UAE Government. Also no additional space is required for staffing or housing of operations, which will be cost effective for banks and the customer gets better profit for their deposits. Now on a trial, in some banks the customer need not approach to the tellers for cheques encashment and can get cash at special ATM. Some banks are using automated bots at their branches to avoid queues and to conduct cheques encashment just by scan. This development is supported by the keenness of banks in UAE to invest in the latest technologies to provide better services to clients.
Benefits of implementing virtual banking
Virtual banking helps bank to reach their clients in multiple ways with the offers. This is valuable for VIP, senior citizens and disabled customers. As the customers can access 24/7 to bank services, they can communicate with a bank advisor anytime he/she wants. Reach the mass client base with less physical offices. Highly cost effective because of less staff and lower operation cost.
5 Benefits of Virtual Banking
Cost Effective / Charge free
As efficiency of bank will increase with virtual operation, they don’t need to charge the same fees as traditional banks do to their customers for sending or receiving international payments. For example, a freelancer based in the UAE can receive payments from clients in the US and Asia through a virtual banking platform without being highly charged like traditional banks. In many cases, they pay no fee at all.
Virtual banking is easy and secured for the small businesses which operate in local and international market. Virtual banking platforms have been developed with modern businesses in minds with hassle free transactions.
With flat rate or without charges, card holder of Virtual bank can withdraw cash in local currency anywhere in the world. Customers also have the convenience to check or top up the card balance by using mobile app.
Real time / Instant payments
Multiple currencies and multiple channels for sending and receiving funds is allowed with Virtual Accounts as it is virtually global. It means you need only a single account to collect, hold and send payments in multiple currencies and channels. This enables you to instantly send money anywhere in the world.
Customer service is available 24/7, this makes banking faster and more efficient, allowing customers to have real control of their finances on their preferred time. No limitation of physical branches and service timing for any transaction.
Helpful for smaller businesses
Small businesses often don’t have their needs met efficiently from banks because of their lower investments. Virtual banking let SMEs operate effectively and efficiently, with lower overheads and with the ability to work in a more global way.
Note: ATMs – Automated Teller Machine, MICR – magnetic ink character recognition code ECSS – Electronic clearing service scheme, EFTS – electronic fund transfer scheme, RTGS- Real Time cross settlement, CSCT – computerized settlement of clearing transactions, CFMS – centralized fund management schemes, etc.
This blog post is written by Mr. Syed Ahmed Mazhar, Senior Business Consultant at Flyingcolour, a leading Business Setup, VAT and Accounting Services company based in Dubai. If you have any query related to setting up any business in Dubai or anywhere in UAE, please feel free to contact us. Send inquiry to info[at]flyingcolour[dot]com or call +971 4 4542366.