Digital banking has become more and more over the years, and the COVID-19 pandemic only underlined the need for convenient, contact-free financial institutions. Customers now expect that digital banking will be available to them, regardless of where they do their banking. That demand has put pressure on many banks to expand their digital offerings and keep pace with the fast-changing financial services industry.

Digital banking does deliver numerous benefits to the industry as a whole, such as easier and more convenient transactions with customers. That said, digital banking brings its own set of challenges to financial institutions, too, such as more cybersecurity risk and a greater need for reliable, “always on” IT systems. Banks need to consider all those challenges and opportunities carefully to execute a successful digital transformation.

What Are the Challenges of Digital Banking?

One persistent, widespread challenge is the continued use of the COBOL programming language to run bank IT systems. COBOL has been a banking industry standard for decades, but legacy systems are ill-suited to the requirements of modern digital banking. Many institutions find it challenging (and expensive) to upgrade their systems to keep pace with the demand for digital options.

Another challenge lies in the speed at which new technologies become necessary. The size and scale of most bank networks is massive, making them difficult to defend. Hackers and cyberthieves constantly change their tactics, and your security measures must move quickly to counter such new threats. The pandemic has made contact-free banking a necessity, and some institutions may have difficulty meeting these new initiatives quickly enough.

Customer reluctance is another issue. Even though lots of customers have embraced digital commerce eagerly, many people are still suspicious of digital banking and feel safer knowing that a bank has brick-and-mortar locations. Balancing physical locations with increased digital functionality can be difficult and costly for smaller financial institutions.

What Are Opportunities in Digital Banking?

Despite these challenges, digital banking also opens a variety of opportunities, both for quality of service and the potential for profit. It’s still very much in a bank’s interest to take the digital plunge.


Banks are increasingly partnering with third-party apps and fintech companies. This is a mutually beneficial arrangement: it gives your customers flexible money management and improves the user experience, without the bank having to overhaul its entire system. It also gives the startups stability and an opportunity to gain new customers. Partnerships of this kind can also help you engage with the potentially lucrative cryptocurrency market, which will be seen as a major benefit to some patrons.

Enhanced Services

The access provided by digital banking allows you to connect to your customers in new ways. This not only provides an enhanced guest experience; it also opens up a new profit area for banks. For example, the process of taking out a loan or opening a new line of credit can be intimidating for many people. By offering information on assorted options on your website and giving your customers a way to apply online, you’ll be able to help them find the solution that works best for them, in the comfort of their home.

New Customers

Digital and mobile banking is now an expectation for most people, and especially for younger people who may be opening their first account. Attracting these new customers now depends on offering a smooth and user-friendly banking experience on your app and website, just as would happen in traditional banks. In addition to attracting new users, your digital banking system can help you gather data on new trends, which can help you predict new trends and advancements in the banking sector and the economy as a whole.

Examples of Major Banking Innovations

Social Media and the Cloud

Integrating your bank offerings into social media can help you communicate with your customers where they are: on social media apps. The ability to answer questions and offer assistance through your bank’s social media profiles will help you access new customers and keep your existing clients happy. Additionally, using cloud storage can help you keep your customers’ private information safe, while saving money and space.

Ease and Convenience of Use

Banks that embrace the digital realm can give their customers a better user experience than those that haven’t. Banks with digital services can offer their users 24-hour access, remote check deposits, and the ability to pay for purchases using their phones. This level of access was unthinkable before digital technology, and it is increasingly becoming a requirement for customer satisfaction.

Increased Protection

Digital solutions can cause a host of vulnerabilities, but technology can also help to protect your customers’ data more thoroughly. The use of biometric protection has increased in recent years, with face, voice, and retinal ID becoming more and more popular. Artificial intelligence (AI) and computer automation can also help you streamline your risk and compliance efforts, which will give your users a safe and secure customer experience.

How ZenGRC Helps With Digital Banking

These increased protections are beneficial but they are not enough on their own. The bottom line is, your institution must integrate risk management and compliance into your digital offerings. While banks often fall into a more traditional siloed approach, it’s critical that companies offering digital banking move forward with an integrated enterprise risk management approach.

ZenGRC is a risk management software solution that allows you to chart risk and compliance efforts throughout your organization. This real-time view of your risk management program will help you identify potential security issues and address them before they can start. ZenGRC is also compatible with a variety of common banking industry regulatory frameworks, including PCI DSS, NIST, and others.

Schedule a demo today and learn more about how ZenGRC can provide your financial institution with a clear and consistent risk management plan.