Digital banking the way forward for banks, says study
The entire Indian banking industry ecosystem is at the cusp of a digital revolution, which requires adoption of technology to stay ahead of competition, a CII and PricewaterhouseCoopers study said here on Tuesday.
The study titled 'Banks taking a quantum leap through digital' said digital foreground is a big opportunity for the banking industry to attract new customers, lower costs, develop new propositions and business models and explore customer value to its maximum.
"With non-traditional players such as telcos, fintech start-ups and niche payments companies disrupting the digital space, there will be an increased onus on traditional banks to augment their current capabilities with innovation in the ecosystem, potentially leveraging investments, to maintain their differentiation," Vivek Belgavi, leader of the financial services technology, PwC India said.
The top trends to lookout for in 2015 are innovative customer acquisition and engagement strategies, data driven innovation, disruptive solutions in the payments space, convergence of regulations, emphasis on data management and new security frameworks for combating fraud and cyber security and disruptive innovations from non-conventional financial players.
According to the study, e-commerce boom in India made customers feel comfortable with online purchases and this trend has given a shot in the arm for online financial transactions as well.
Tying up with online market spaces is another strategy for acquiring customers, the report said.
Exploding mobile-based services and the falling price of smartphones is good for digital banking and has to be aided by policy framework, the report said.
Banking industry CEOs believe that mobile technologies are the strategic focus for better customer engagement as mobile phone user base would grow at a compounded annual growth rate (CAGR) of 91 percent from 2012 to 2016.
The report also stated that digital platforms are susceptible to security risks and negative effects can destroy trust and jeopardise investment made in digital solutions and advocated financial institutions to adopt cyber-security approach to address the associated risks.
3 years ago
I am amazed at how everyone is going ga ga over digital banking without looking at the ground level realities. Our housemaid Mala doesn't know what digital banking is - yet we are talking about financial inclusion. My uncle and aunt living in Beasant Nagar, Chennai are unable to manage digital payments and indulge in digital banking. Some of the senior citizens have health ailments, have poor eyesight and they have to forever depend on others to fulfil their banking needs. I suggest that Money Life Foundation organize a debate on this subject, call experts to speak on this sensitive subject and provide a way forward. That would be another manner in which ML team can fulfil their CSR. There is a widespread opinion that everyone in India has a high speed internet connection at home or that they can afford it. Why not ML do a survey among senior citizens to understand the challenges that they face in the name of digital banking.
9 years ago
As phase ONE, Nationalised banks can arrange to introduce the following facility:
Account holders who do online banking (I mean, checking balances, transfer funds to other branch of the same bank or other banks, paying utility bills, and the like) should be allowed to transfer funds from savings accounts to fixed or term or cumulative time deposits by opening such accounts without visiting the branch in person.
Also, up on maturity os such accounts, customers should have the option of transfering the amount back to the savings account from which such an account was opened or extend the duration of the deposit.
B. Yerram Raju
9 years ago
McKinsey in its November 2014 issue has mentioned: “some people are experimenting with very large showcase, highly tech-enabled hub branches that are surrounded by much smaller branches in different formats, some ATM-only, some with a few or even no tellers. There are others that are thinking that the branch of the future may be a very different model, where they have six to ten strategically located branches in a city that supports a very strong digital presence… Digital capabilities can turn the customer journey into something that’s highly personalized.” One has to remember that while these overtures in the delivery systems are on, cyber security issues have been on accelerated track as the author has cautioned. In fact, H.M. Khan, the Dy.Governor cautioned that for a long time to come the jet planes and bullock carts would continue in India. So would be the branch banking within easy reach of the customer in rural India at a cheaper cost and better interface.
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