Digital banking is the modern method of banking which covers the traditional banking activities, programs and services which we did inside the bank branch including money deposits, withdrawals, transfer and so on. It also helps the business firms to transfer easily their payments to the employee’s account, which also helps to automate money transfer which reduces the time consumption. Internet of Things, the next phase of digital revolution which helps to transforms the customer life. The selected bank should be a part of World Wide Web for surviving the competition in the rapid change of business and to take the further benefits. In true, digital banking, any enquiry or transactions is being processed online without any reference to the branch at any time providing it becomes a need to have rather than a nice to have service. The importance of digital banking reached beyond the expectation in many developed countries due to the fact that it is the cheapest way of providing banking services.

The usage of internet has opened new horizons and scenarios for the retail banking. Now a day’s bank is providing their products and services through the electronic media via net banking. Thus digital banking is considered as a substantial impact on the bank’s performance and existence in the fast growing economy. The term digital banking come to exist with the introduction of ATM and also includes telephonic banking, direct bill payment, electronic fund transfers and online banking so on. However, some of them, future of digital banking is the acceptance of the mobile, telephonic banking and interactive tele banking. However, it has been forecasted by many that the online banking will continue to be the most popular method for further electronic financial services. Although there are a lot of advantage there are some limitations too which includes online frauding, phishing and so on. It is easy for the hackers to track a customer in the digital world. Hence complete transformation to the digital world leads to data mining, which also lead to identity theft. Even a scanned image of a signature or thumb can be mishandled which can lead to a great forgery where these are using without any security now a days. Hence, this research paper includes the importance of digital banking, its functions, advantages and limitations of digital banking. This will also show the impact of digital banking over the traditional banking services.

Keywords:  Digital banking, Functions, Advantages, Limitations, Internet of things, Online frauding and Digital security.