image source : reuters
Just a few years back, in 2012-13, when Indian banks were picking technology, they were shopping for things that could up revenues, or augment customer experience, or cut costs, or shrink risks – or better still – do all of it.
But, fast forward to 2017, and banks are choosing technology with a new brain and nose altogether. There are robots, digital ledgers, Smartphone apps, and cashless interfaces up and about even as we speak.
Technology, in the present scenario, is doing a multitude of things – it is enabling digital transformation, converting information to insight, equipping banks for a tougher risk regime, allowing players to dovetail with regulatory dynamics, and pushing wheels of innovation miles ahead.So, get ready for:
- Chat bots:
ICICI Bank is not the only one to embrace Artificial intelligence (AI) and deploy it across many front/back business process functions, in the dash to reduce response time to customers considerably. Chat bots and intelligent digital assistants with M2M (Machine to Machine) learning capabilities and self-learning muscle are blurring the boundaries for seamless and customer interactions for many banks and players ahead. They are moving fast from pilots to production-scale.
The central, immutable ledger of transactions which can empower auditors and regulators with rapid monitoring of financial data , while also arming parties in a process with unheard-levels of transparency – is here. Block-chain has evoked more than just interest and curiosity from BFSI players in India. There are pilots, POCs (Proof of Concepts), going around to ascertain this technology’s viability and on-ground potential.
PwC has noted this concept among the five ‘catalysts of change’ where comfort with technology, cheaper access, globalization, competitive advantage, and the multiplier effect were paramount indicators.
As a digitized ledger built upon a distributed database that stores the information of each transaction that happens over a network, with extra-ordinary and tamper-proof security, Block-chain certainly makes it possible for BFSI players to re-imagine how they work and what they sell.
If we consider a survey by Pegasystems, Cognizant and Marketforce, that spanned 500 global banks and insurance officials, we can observe 22 per cent of the respondents expecting their customers to hold most of their financial assets in block chain wallets within five years. The number changes to 55 per cent when it comes to 10 years and 71 per cent for 15 years. Of the 129 block-chain consultancy engagements carried out by provider that Gartner recently analyzed, 94 were being carried out by the banking, insurance or investment and capital markets sector. Block-chain is also finding ready use in areas like payment processing, trading and settlement processing etc.Reportedly, RBI has also announced a special committee to study the use of Block-chain and as the sector continues to evaluate Block-chain at different levels and stakes, we will continue witnessing its impetus in gradual but concrete ways ahead.
There is a hard-to-ignore impact of analytics and algorithms around the banking space. A case in point - the Automated Data Flow (ADF) initiative encouraged by regulators to usher in correct, manual-intervention-less and consistent data from banks’ systems to the RBI without any manual intervention.Automation will also see increased impetus through advances happening in areas like digital banking, mobile computing, social media, cloud computing etc.
- Payment interfaces
Modern electronic payment systems are fast replacing paper-based systems and RBI’s own efforts in the promotion of electronification of payment instruments are substantial here. Whether it is the Payment & Settlements Systems Act, provision of robust RTGS/NEFT platforms, advent of National Payments Corporation of India (NPCI) as a blanket institution for all retail payment systems or encouragement of ATMs, POS and payment gateways and thrust on Unified Payments Interface (UPI); there is an unmistakable air for cashless banking in India at the moment. Open banking is not the so-called future of banking anymore.All in all, it looks like technology is turning from being a fly-on-the-wall catalyst to a hero who is at the forefront of and in the thick of all action in the BFSI sector. There’s clearly more on the pages that will turn next.