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YES Bank all set to take the digital plunge

YES Bank has several digital initiatives and some of these are really pioneering ones. Ritesh Pai, senior president and country head, Digital Banking of the bank, outlines some of these efforts

Mohammed Irshad: Can you list the efforts being made to integrate the channels in the digitization effort of YES Bank?

Ritesh Pai explains the salient aspects of SIM Sleeve,Which enables carrying out banking and payments on feature phones

Ritesh Pai explains the salient aspects of SIM Sleeve, Which enables carrying out banking and payments on feature phones

Ritesh Pai: To bring about a paradigm shift in Indian direct banking experience, we at YES Bank has embarked on a strategy of ‘innovative use of technology’, with an aim to rapidly achieve intense pan-India coverage by introducing high quality customer touch points. This tactical strategy emanates from our strategic objective, strategic goals and the business strategy. We have moved technology function to a ‘service-oriented architecture’, where solutions are procured as a service from multiple vendors. The approach is to build strategic partnerships with the best known IT majors globally, to develop innovative system features and create sector-specific banking solutions. The strategic outsourcing approach pays off in many ways. For one, it allows to shift management focus away from routine tasks to business transformation projects. It helps to make fewer investments in diverse technology infrastructure as much of that responsibility gets shifted to the vendors. It can also operate with smaller IT teams, give flexibility and agility. Furthermore, all the channels are seamlessly integrated with transactions on one channel available for view or closure on other channels in most cases. For example, bills can be registered using retail net banking and paid using mobile banking, FD can be created using ATM and be permeated on online banking.

We are known for many industry-first initiatives such as first Mobile Money Service in partnership with Nokia-Obopay, voice-based IVR in partnership with Nuance, first bank to implement dynamic second factor (OTP) with Portwise, personal finance management tool with Yodlee, online account opening portal with ‘choose your account number’ option, customer gratification through discount coupons on ATM/internet transactions, organized/assisted remittance service through BC outlets, ESB and mobility platforms in collaboration with IBM and CRM implementation in partnership with Microsoft.

To what extent paper-based transactions have come down with the digitization efforts?

Payments entail a broad spectrum of requirements, with constantly varying payment formats and systems. While paper-based payments currently constitute a majority of payment modes in the country, electronic payments are fast gaining importance. At YES Bank not only retail payments but bulk disbursement solution with dedicated systems are in a position to execute bulk payments requirement like dividend distribution in a smooth and seamless manner.

We manage these constantly evolving and varied requirements, while seeking to effect payments in a timely and accurate manner and ensuring that your internal guidelines and controls are in place. For example, we offer end to end collection services for IPOs and NFOs including banking of applications, processing of returns and delivery of MIS as per the registrar’s requirement. We understand the time criticality of such collections and have a centralized team which monitors collections across the country for our clients. Similarly, we offer a one stop shop approach for your dividend disbursement requirements. These are covered through warrants (drawn on YES Bank and partner bank locations), drafts and ECS. In addition, we also provide periodic reconciliation services and regular servicing of the dividend account as per regulatory requirements. Again, salary disbursements can be facilitated to a firm’s employees holding accounts with YES Bank and any other bank

With this, we have created a digital infrastructure that not only can allow free flow of information digitally along with authorization but also facilitate payments followed by customized reports to ease out reconciliation efforts.

Do you expect mobile to be the predominant banking channel in say five years?

Our mobile banking strategy is tightly integrated with other channels like net banking, contact center and ATMs. Following innovations have been initiated to ensure seamless cross-channel experience for our customers:

  • Unified and intuitive UI/UX
  • Personalized themes, geo location/segment specific offers, opinion polls and surveys within logged in session, personalized x-sell, product recommendations and lead generation
  • Third party system integrations enabled through single sign-on
  • Augmented reality based branch and ATM locators etc
  • Payments to Facebook, Twitter, phone contacts etc
  • Use of native feature of mobile devices such as camera, mic, map, GPS, calendar, storage, accelerometer etc
  • Customer service management on social media through CRM such as notifications
  • Centralized MIS and analytical reporting for better product lifecycle management

The key here is to ensure that customers have the full range of payment and collections options available for self-service and be rewarded for frequent usage to enhance loyalty and retention. Considering the growth in digital savvy mass, there is scope to build additional level of functionalities as a way of saving time for customers and engage with them real-time.

Many banking technologists are focused on APIs to deliver services to customers. YES Bank is a pioneer in this area. Is it relevant in retail banking?

e1467108911349We have received a great response for the API banking to facilitate corporate payments and salary disbursements. When coming to retail offering, API banking helps a long way for offering instant credit on points of purchase. We are redesigning our risk and service delivery aspects to take a plunge into this area. We are also integrating our APIs into various enterprise accounting and billing applications so that all users of the licensed versions can have access to our payment options by default.

Can you elaborate on how banking apps or social chat platforms can become medium for small payments?

At chat platforms, direct messages and bots have replaced our browser and app based interactions such as email, SMS, MMS. Soon, they will also replace the way we access bank services. Its ability to provide text, image etc based conversation and asynchronous behaviour will certainly help the bank and the customers to interact with each other on real-time basis. It would also facilitate banking transaction including service requests such as cheque book, account statement and payments like bill payments and small value payment to peers/vendors etc. We have introduced YES TAG, which operates on various chat platforms such as WeChat, Twitter, Facebook Messenger etc and allow interactions with the bank.

How do you see the future of mobile wallets?

If we look at the value proposition of mobile wallets, it is offering user convenience, security and freebies (cash backs and deals). While freebies may come down over the next few months, the user convenience and security aspects will still remain till an alternative payment mode like UPI gets popularized and withstand the test of time. Any mobile wallet willing to stay for long will have to attempt to become an integral part of the customer life which can only be done by partnering with literally everyone in the ecosystem or offering credit services in partnership with a financial institution and this is definitely going to be a daunting task.

RBI is promoting tie-ups between banks and e-commerce entities. Are banks responsive to this suggestion? What is YES Bank’s stand on this?

We follow the alliances, relationships and technologies – ART – approach to increase our reach and range. So, we obviously look at this as an opportunity and RBI promotion further encourages us to move in that direction. Currently, we are working with various partners to complement their services and offer banking and payment services to customers and sellers on e-commerce platforms. Currently, we are offering APIs to process refunds, closed loop wallets and virtual cards and very soon we will be working with many of them on UPI based payments. Further, we are also working on offering credit to their sellers and in future we will find more opportunities to partner and offer banking and payment services.

Do you think there is corresponding innovation in security systems to handle newer digitized products?

Digital payments and technology based banking obviously is an emerging area and hence it is important that we understand the potential threats and incorporate sufficient checks and controls. Some of the scenarios which were remotely possible during the web regime are easy to exploit with mobile based solutions, hence even the application security teams are gearing up to understand the threats associated with latest technologies like mobility platforms, accessing native handset features, SDK integrations, custom notifications, encryptions to be followed in the case of NFC and sound based payments etc. Obviously when the teams are tackling issues pertaining to these emerging areas, they are forced to innovate on daily basis so that the process of understanding the risks, security and keep revised the coding and testing frameworks / policies.

Further, as a thumb rule, any payment service involving new technology tools are launched post conducting an intensive pilot with fewer users and limited exposure where we could monitor the robustness and understand the weak links. Post this all necessary operational controls are incorporated and security nets are added. Only then the solutions are offered to masses

YES Bank is said to be working on a mobile app that works without data connection and on feature phones. Can you elaborate on this?

While there are about 200 million smartphones in India, there is huge population in the country –  about 700 million – which uses feature phones. Payments through SIM Sleeve is an attempt to provide interactive interface for carrying out banking and payments on these feature phones. This entirely works on encrypted SMS and hence there is no need for the users to subscribe for data as well. The innovative SIM Sleeve wafer allows the phones to get access to a mobile banking app and perform banking transactions in a seamless, secure manner.

What is YES Tag? When will it be launched?

YES Tag is first of its kind smart social banking application that allows you do banking transactions seamlessly on Twitter, Facebook Messenger, WeChat, Telegram and Skype. Now, customers can check their balance, get mini statements, FD details, cheque status and much more through messaging apps. Customers can also send money to registered beneficiaries from either of these messaging apps.

Your tie-up with T-Hub is expected to help startup fintech companies. Will there be a focus on digitization? Can you give details?

As part of our engagements with T Hub, we are working with various startups for payment digitization using latest technologies like NFC to facilitate payments, collections, merchant solutions and prepaid based solutions. By the way, as a first step we have already digitized the payments and collections between the startups and incubators. Further, we are also keen to partner with players who can help us with service digitization using robotics, chatbots backed by analytics. However, these are early days and hence we are yet to find players with such technology offerings.

Digitization, especially in retail banking, can be a major facilitator for targeting unbanked or under banked segments of the society. Is YES Bank considering this aspect?

We understand the potential of taking technology to the under banked segments. YES Bank DIGICAL (Digital+Physical) strategy is primarily aimed at taking technology in the form of assisted services and digitize the payments of even under banked segment. Our YES Money has been a successful service offering for migrants across the country. We have learnt that such an offering not only helps us to service a huge volume of transactions but also make some money out of it.

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