HomeFINANCEWhy has digital banking become so important? • ENTER.CO

Why has digital banking become so important? • ENTER.CO

The appearance of digital banking has provided new tools and possibilities for customers. Financial inclusion has been one of the great advantages provided by the arrival of these new companies.

The digital transformation has made many of our day-to-day activities easier to carry out. We can even do them from the comfort of our homes and with just one click.

Bank operations, which used to involve cumbersome queues, endless paperwork and hours of wasted time, can now be carried out immediately. But in addition to these obvious advantages, digital banking has allowed thousands of people who previously did not have a savings account, much less could access credit, to now be able to access it in a very simple way.

In Colombia, digital banking certification programs is growing, after Brazil and Mexico, it is the third strongest nation in the region. NEobanks such as Iris, Lulo Bank, Nubank have more and more users and expect to continue growing in the short term.

With the arrival of these new entities, a new terminology also appeared. Lorenzo Garavito, president of Iris, explains some of the terms to understand this new trend. In particular, Iris is a 100% Colombian neobank focused on companies.

Neobanco: is the new generation of regulated financial entities with 100% digital services.

Open Banking: open banking model that seeks that the information of both financial entities, system participants and users can be consulted to offer products and services tailored to users.

Fintech: results from joining the words ‘finance’ and ‘technology’ (finance and technology) and its main objective is to provide financial services digitally designed to make life easier for users.

Challenger Bank: it would translate to challenger bank and it is a supervised financial entity that has a small market share, but that offers services comparable to the largest entities. They offer 100% digital and more agile services than traditional entities and that is why they are gaining market share.

API – Application programming interface that often acts as a mediator that allows one software program to interact with other software. In the fintech context, an API often refers to the interface that allows financial institutions to talk to each other, in order to better serve customers.

Every day new services, new tools and above all new opportunities for financial experience appear. More and more people have greater access to this sector and companies are finding excellent allies in neobanks.

Image by gstudioimage on Freepik

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