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May 17, 2017 07:25 PM IST

How we have learnt to bank without a bank

Exciting times lie ahead of us. Technologies such as 3D printing, Artificial Intelligence, Robotics, cognitive banking, Augmented Reality, Blockchain are throwing interesting opportunities and challenges for the banks.

Sanjay Sharma

It’s Monday morning and you are getting ready for office. Just then, your boss calls up to inform you that the CEO has called for an unplanned meeting related to a High Networth Individuals client relationship in an hour’s time.

Your boss asks you to complete a million dollar banking transaction related to the client urgently and present the status in the meeting. To add to it, Murphy’s Law prevails and your phone drops dead post the call, so you are unable to retrieve the bank account number and other details.

You don’t panic.

All you do is to hop into an Uber cab, authenticate yourself through your social media login presented on the dashboard in front of the seat and complete the first few steps of the transaction; then hop out, board a metro, complete the remaining part of the transaction by punching a few keys on the portal present inside the cab; reach office and inform the CEO that the transaction is completed. The CEO appreciates the speed of execution of the team.

You just banked, without a bank, and this will be the scenario in the not-so-distant future.

Now, just rewind a few years back. Such an ease of completing the transaction would have been impossible. You would have needed to visit to branch, and then exchange bundles of paper.

The change in how you bank has been driven primarily by the change in the mindset and perception of banking. Earlier. people got comfort only through “touch and feel”. Getting a stamped receipt from a physical branch was perceived as the only acknowledgement of a cheque or cash deposit.

The physical connect with the bank has now been replaced by a virtual connect. The pace has been more rapid in urban areas which have a higher usage of smartphones and better internet connectivity. Post demonetisation, however, even the rural areas have started adopting digital modes of transactions on a wider scale.

The gears of who approaches who have also reversed: Earlier customers had to visit bank branches for their transactions; now banks visit customers in a suitable shape and form. Phrases such as “Bank in your pocket” have gained popularity. This, in all likelihood will evolve to “Bank in whatever you can touch and feel”. The rise of Internet of Things has given birth to concept of “Bank of Things”, where customers will be able to avail services wherever they desire. Banks will become like “air”: Omnipresent, yet invisible.

As a result of the change in banking, the entities providing banking services have evolved. Fintech companies are evolving from being competition to banks to becoming their partners. RBL Bank realised the role of non-traditional players a long time ago and was one of the few early pioneers of concept of “Open Banking” before regulation in the West made it mandatory.  The bank introduced the concept of “Bank as a Service”: Any entity desirous of providing financial services is able to consume the RBL Bank’s APIs and develop its own products.

Exciting times lie ahead of us. Technologies such as 3D printing, Artificial Intelligence, robotics, cognitive banking, Augmented Reality, Blockchain are throwing interesting opportunities and challenges for the banks.

The proper and most effective adoption of these technologies complementing the DNA of the entity will become extremely critical. However, focusing only on modern technologies without sufficient attention to cyber security will be akin to accelerating without any attention to the fuel indicator. The attacks will continue to get sophisticated and banks need to continue to become smarter.

As Darwin has mentioned in his evolution theory “Survival of the fittest”, only those banks or rather financial service providers which are the smartest and adapt to change the fastest will manage to meet the expectations of the consumer and provide services in the safest and most user friendly environment. Ironically, the service provider which will be the most invisible, yet the most naturally available will win the race in banking without bank.

(The author is Head - Technology, Innovation and Customer Fulfillment, RBL Bank)
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