Reported by: banking|Updated: September 5, 2018
The banking sector in India is undergoing a massive digital transformation, led by a new generation of FinTech startups. Not to be left behind, traditional banks are taking the long-term view and investing in new technologies to transform into future-ready financial services providers.
Unlike earlier digitization efforts, which mostly focused on streamlining business as well as back-end operations, improving efficiencies along with saving on costs, the next generation of transformation revolves around customer experience.
Banks have become savvier when it comes to experimenting with new payment services to make electronic transactions faster and simpler, mobile apps that enable transactions in a few clicks, AI-powered chatbots to address customer queries and offer contextual information faster than people.
Being data-driven is the key
Central to this reinvention is a sound understanding and apt use of data to seamlessly bring together many of the recent disruptive technologies: Artificial Intelligence (AI)/Machine Learning (ML), Big Data and Analytics, Internet of Things (IoT), blockchain and even robotics, with cloud as the foundation.
Traditional banks have a key advantage, given the treasure trove of data they possess. The ability to harness and extract maximum value from this huge dataset can enable these big banks to get ahead in the digital revolution curve, with deeper insights into customer preferences.
Innovation at the branch level – urban and rural
Beyond digital innovation, technology is also being deployed in-branch to make customers’ branch visits a smooth affair. Powered by big data analytics, bank staff could soon start offering more concierge like services. In fact, you might even be greeted by a robot soon at your branch, to guide you to the right staff member, who’s familiar with your profile.
A lot is happening on the rural banking front too. Under the aegis of the Central Government’s Digital India initiative, which aims to connect all of India with a broadband highway, banks are leveraging technology to support the agenda of financial inclusion. Thanks to cloud and mobile, rural customers who otherwise have no access to financial services are now being brought into the banking fold.
A cloud-first approach helps
Underpinning much of this transformation are cloud solutions. Legacy banking systems often meant over-provisioning infrastructure to handle quarter end spikes. Now, with cloud based technologies, just-in-time expansion of IT infrastructure has become commonplace, with bursting capacity no longer a tedious process, but something that can be done in a matter of minutes. This has also resulted in huge cost savings for banks. So a bank’s new rural branch has immediate access to the same enterprise-grade, cloud infrastructure as that of a well-established urban branch.
An AI-enabled future is closer to reality than we can imagine
With data pools set to grow to levels beyond human comprehension, it’s just a matter of time before AI becomes a pervasive part of the financial services industry – spanning expert customer service, to fraud management via facial recognition, bio-metrics and pattern evaluation. Blockchain has already made its mark in the financial services sector, offering a tamper proof, transparent mechanism to manage multi-party transactions. Virtual Reality (VR) use cases are also being explored to provide a more immersive banking experience for customers.
Given the pace and scale of innovation, would you agree that banks are almost becoming technology companies themselves?