Digitization drive has reached an inflection point in banking parlance: it is no longer a mere option but an absolute must. The motive is not solely to pull in the huge unbanked customer base but also serve the existing market by providing them with easy access to carry out transactions smoothly and securely on their smartphones. This provides relief to the customers and helps them save their valuable time by carrying out transactions on their smartphones without the inconvenience of going to the bank for every little task.
Digitization has helped banks successfully leverage technology effectively and efficiently. This has massively minimized costs, without having to invest more in brick and mortar presence for garnering new customers into its database. Thus banks are able to achieve a dual objective and able to generate more revenue with the same infrastructure thus ensuring that their bottom line remains healthy.
In order to ensure that the word digitization is not overused and connoted with cost factor singularly, Indian banks do realize the fact that for achieving digitization, it doesn’t imply putting in massive investments in technology or any distinctive change in its operative module; rather what is required is leveraging the existing platforms and investing wisely on the basis of requirements.
Banks are adopting mobility based platform keeping the financial inclusion goal in mind and at the same time able to maintain pace with the growing trend of higher mobile penetration among the masses. This emerging trend definitely points towards mobile and cloud-based application mediums, which undoubtedly shall rule the roost in the years to come.
It is important to note that for availing cloud-based services: banks shall have to only consider investments related to only operational cost. However simultaneously, it also needs to build safeguards against data theft and ensure that security along with compliance is strictly taken care.
Introduction of Newer Products
Technology in the banking sector has introduced new products viz Blockchain technology. A blockchain is one type of distributed ledger comprising of unchangeable digitally recorded data in packages called blocks. The ingenuity of this new concept helps in simplifying technology further by storing data block wise in a linear chain. Therefore each block containing data is cryptographically hashed which ensures that the data remains untampered and unchanged. One of the key innovation of blockchain technology is the crypto instrument which is poised to be a fundamental game changer in the history of banking world over. Cryptocurrency, an outcome of the crypto instrument shall be a new form of money which will pave the way for a new financial system. The role of banks in the day to day transaction shall be further marginalized.
Messaging Bots is the other major invention by banks: using technology effectively to engage with customers. According to Hardeesh Kumar, Canara bank has plans to deploy such applications across various mobile apps and the bank’s website to facilitate customer’s related queries by engaging with them regarding information related to financial products.
Similarly, Ashutosh Kumar says Standard Chartered too is working on similar lines and if a corporate is registered with any one of the banks mobile apps-’Straight to banking platform’.In such a case, the customer can view a cash position of any company by simply speaking on their smartphones – show me the cash position of XYZ Company. The app would then respond by displaying the information of cash flow position on the screen of the customer.
The above emerging trend points towards a fascinating digital journey wherein customers are bound to benefit from technological advancement. Besides making it convenient, banking experience shall be easy and secure. It could therefore be said that the banking domain will not be the same again. Several pilots are undergoing trial runs by most of the banks and we believe it’s a matter of time before the entire BFSI industry undergoes major transformations in the years to come.