Banks need to invest more in core tech, says Accenture in India’s Sonali Kulkarni

Banks, both in the public and private sector, need to invest in their core technology platforms and services, said Sonali Kulkarni, Lead, Financial Services - Accenture in India, the local arm of the global consulting company. Though banks have been investing in non-core tech services such as fintech partnerships, digital lending deals and the like, there is a need to invest more in core tech given the rise of use of digital banking services, Kulkarni said.

Kulkarni also said that a mix of artificial intelligence technology and human interaction can create better work efficiency in banks.

In an exclusive interaction with Moneycontrol, Kulkarni said banks need to develop digital banking services in regional languages alongside English. Edited excerpts:

What is your assessment of the overall investments by banks in their technology?

The last few years saw a lot of investments from banks, both in the private and public sector, in areas of data, as well as broader investment, including some of the other parts within technology.

Also, on the back end, there is some place for improvement. Although banks have made significant investments, this needs to be further strengthened given the large volume of digital transactions.

Banks have been aggressively developing partnerships with fintech companies. What is your take on that?

The partnership between banks and fintechs will continue to evolve in a very collaborative manner. The collaboration has provided a very good ecosystem for banks to grow. It has given banks a way to establish themselves in areas where they probably did not have skills earlier because innovation was much faster and earlier in fintechs.

From a fintech perspective, most fintech do not have balance sheets on their own. They are more fee-based providers. So they do need banks with bigger balance sheets to help support their growth as well.

Besides this, how do you see investments made by banks in the core space?

Earlier, core banking was the only point of focus. However, with time, as banking architectures have evolved, the core is becoming just a small part of the banking technology landscape. In the past few months, we have seen a trend wherein banks have been investing in technology catering to their non-core services. These services include fintech partnerships, digital lending deals, etc.

Here, there is a need for banks to invest more in core technology services. The core services include the technology used in the software and platforms used by banks at the branch level and at the top level.

Additionally, there is a need for greater use of regional languages when it comes to digital. As per Google statistics, 30 to 40 percent of queries from Indian consumers they were getting on the search engine were not in English but in regional languages.

Do you see the need to hire more special executives in the tech and digital teams of banks?

The key roles that banks should focus on are not just CIOs or CTOs but also product owners or platform owners who work to innovate and chart out a roadmap. There are a set of skills like cloud management, cloud metering, data governance, etc., which are needed across levels in a bank.

To address this, all customer servicing, sales and marketing teams—across bank branches, contact centres and digital channels—need to possess digital fluency.

And in some cases, banks have perhaps opted to hire for different tech skills.

How do you assess the use of AI in the banking sector?

Through the use of AI and especially generative AI, banks can leverage customer intelligence and accelerate the interpretation of customer purpose and preference to improve customer interactions.

Also read: Axis Bank may use ChatGPT to talk to customers

Also, banks can work on enhancement of complaint management, KYC (know your customer) controls and streamline operational processes with human interaction as required.

Lastly, what are your thoughts on central bank digital currency or CBDC?

CBDC is an evolving space, and we will have to wait and see how it unfolds. But CBDC as a concept will usher in greater degree of transparency and a greater degree of accountability, which will be much beneficial for end customers and for the overall financial system.