Next Frontier in Indian Banking

February 2, 2017by Deep0
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No doubt banks are the backbone of any economy, they rise or fall with it. But many of us don’t know that this sector has experimented the most with the innovations. Indian Banking system is going through a revolution called “Digitalization”.

The new demand for modern banking services in India is to be the strongest in the world. In the next decade, over 500 new billion-dollar companies are going to be created.

To avoid missing the “digital bus”, numerous banks are rushing towards the technologies like cloud, mobile banking, mobile wallets, POS transactions, social media and business analytics.

Our Government is trying its level best to successfully implement Digitalization with initiatives like Pradhan Mantri Jan Dhan Yojana (PMJDY), Unified Payment Interface (UPI) and automated Data Flow (ADF). Till 23rd Nov 2016, 25.68 Crores of accounts were opened and 72,834.72 crores deposits have been made.

Results:

  • India has seen a major growth in terms of a number of smart phone users and internet users, it is ranked second after China in both.
  • There is a steep increase of 112.43% in the number of the **transaction through IMPS between May 2015 and May 2016. Digitalisation has contributed a lot for supporting the cashless economy.
    *Internet Penetration 34.8% (July 2016) 18% (July 2015)
    #Mobile Banking Transactions 49,029 Crore (Dec 2015) 11,323 Crore (Dec 2014)

    Source: *www.internetlivestats.com, #National Payments Corporation of India.

SCOT Analysis:

Strengths

  1. Maximum Youth Available
  2. Govt. initiatives
  3. Wide Customer Base

Concerns

  1. Digital Skill Gaps
  2. Govt. initiatives
  3. Lack of Infrastructural Support

Opportunities

  1. Digital identification
  2. Paperless Economy
  3. Rise of FinTech/ Startups

Threats

  1. Security Breach
  2. Regulatory Pressure
  3. Rise of FinTech/ Startups

Future Ride

We don’t see FinTech players as competition but as partners to create solution” Ritesh Pai, country head digital banking, Yes Bank. Yes Bank has signed 36 partnerships with FinTech platforms for services related to lending, payments, digital acquisition and customer service.

Banks are basically working on the AAA approach

flow

Firstly, Associating with the challenger (peer banks, Fintech startups etc.) rather competing.

Second, Absorbing their systems, technology, and procedures to build a digital ecosystem.

Third, automating the processes and pushing the customers more towards self-servicing.

Huge opportunities are awaiting to be unlocked through their collaborations.

For achieving success “One must consider it as a Marathon rather a Sprint”.

A race is going on to “pluck the low hanging fruit”. It is an “Adapt” or “Die” situation for Indian Banks.


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