Developing A Digital Banking Framework in the Iranian Banks: Prerequisites and Facilitators

Introduction

Like many economies, banks are a major component of the Iranian financial system; in fact, Iran's financial system seems to be at an advantage for being based on the banking industry (Hosseini & Sori, 2007). Considering this, it becomes highly important to answer the questions raised about the banks' approach regarding their degree of environmental adaptation while facing competitive pressures. Also, the development of internet, broadband networks, social networks and new data processing solutions have resulted in higher customer expectations in their quest for more comfort, and more customized products. Previous studies show that in the next five years, 2/3 of the bank customers will take the lead and select the online world (Hashemi, 2016). Interestingly, the studies conducted by Exchanger, EY, Forrester, Gartner and IDC reveal that the future of all businesses is digital. Becoming digital does not necessarily mean all companies must be high-tech; rather, it conveys the message that in future, the pioneering companies would be the ones investing in digital assets that create value for customers (Buvat & Subrahmanyam, 2014). Because of the characteristics of digital environments, banks have no choice other than becoming digital and they should completely delete the gap between the physical and digital worlds in due time (Gill & Vanboskrik, 2016). Meanwhile, countries vary considerably in their level of digitalization. For instance, some countries are already pioneering in this field while due to certain environmental conditions and statutory restrictions, some other countries like Iran have not been advancing much. Of course, banking in Iran has started its electronic journey .Currently, mobile and internet banking services are offered, but the country is yet distant from digital banking since it still lacks key businesses and technical foundations to implement digital banking. Similarly, digital culture is a missing ingredient in the Iranian banking. In short, the insufficient level of synchronization and integrity in this field is quite tangible despite the fact that some of the services provided by Iranian banks are in digital form.