Rana Kapoor
The year 2017 was a watershed moment for the Indian Banking industry, defined by reform tailwinds like demonetisation, digital India drive and global changes like rapid technological advances and an exponential rise in computing power.
From experimentation of use cases on the Block chain technology, Artificial Intelligence (AI) and Machine Learning to bolstering operations through Bots and RPA (robotic process automation), the industry is today geared to embrace challenges and opportunities of the future.
It wouldn’t, hence, be a hyperbole to define 2018 as the “Year of Cognitive Banking”; taking the industry to an inflection point by strategically blending technology with processes for real-time business impact.
Below are the trends that would define the industry and role of stakeholders going forward:
- Data Analytics, Machine Learning and Voice
Banks will start meaningfully adopting machine learning tools and techniques to draw insights from various data points employed to collect customer’s profile and transaction behavior, in order to predict user needs and design better customer experience.
There will be several innovations on customer interfaces through use of multilingual text and voice.
- Next Gen Chatbots
In the last two years, major banks globally launched Chatbots primarily to streamline information and facilitate transactions. This year predicts better quality of interactions with bots, likened to human interactions and eventual transformation of bots to Personal Financial Assistants, thereby, helping customers in financial decision making.
- Analytics of Things and Alternate Lending
With increasing implementation of Big Data and Mobility Solutions by Banks, we could see a new wave of Analytics of Things or AOT, which would help banks analyze customer interactions with various devices on IoT and deploy this information to enhance customer experience and design better lending opportunities.
With clear Peer-to-Peer frameworks planned, we could also see some alternate lending platforms flourishing and serving latent customer credit needs.
- Robotic Process Automation and Operationally Agile Institutions
Over next two years, operations of Banks would undergo automation through RPA clocking a staggering decline in TATs and commensurate improvement in customer service. Further, banks would move into agile architecture and cloud infrastructure in order to shrink various project timelines and budgets resulting in faster go-to-market of various payment solutions.
- Open Banking and Fintech Partnerships
While steps taken towards API-integrations have made banking more open than ever, Banks will continue to work on opening up APIs for more and more businesses to give enterprises a seamless banking experience. Banks will also partner with various fintech partners and market places to ensure that banking and payments are contextualized for various customer segments.
- Digital Convergence of Fintechs, Ecommerce and Banks
With Google and Hike entering the payments space, Banks entering the e-commerce game, Paytm offering chat, commerce and banking services, Flipkart and Amazon entering the payments space, we see a convergence of Fintechs, Banking and e-commerce companies aimed at providing a one-stop solution to customers and increasing respective mindshare and wallet share. It will be interesting to see how regulations evolve to cover adjacent entities offering banking-related services.
- Smart Cities and Block Chains
As the current governing regime moves into the last year of its term, implementation of Smart Cities could see heightened activity and 2018 could herald interesting times for connected payments and IoT.
Further, with NITI Aayog focusing on setting up IndiaChain, Banks could look for potential participation on this platform and make the KYC and documentation process interoperable.
- Cyber Security and Biometrics
With Digital India at the core of National Agenda, digital footprint of consumers will grow at unprecedented levels. It is natural that miscreants would be tempted to discover loopholes and make attempts to breach existing security infrastructure. Hence, Banks will going forward have a laser- focus on cyber security investments and in implementing newer tools and techniques to defend possible threats.
With the mandatory seeding of Aadhaar, Banks could also use biometrics for customer authentication and reduce transaction risks.
- Impetus to Digital Acceptance
Government policies around MDR would definitely incentivize small-size peer-to-peer transfers and small merchant transactions. This will have a multiplier effect on acceptance of digital payment solutions especially by smaller merchants and eventually result in much needed evangelism and penetration of small payment solutions.
- Banks will Create In-house Technology Teams
Technology will play a pivotal role in hiring decisions, going forward. Technology will aid in preliminary elimination process- case in point being the increased use of video resume softwares for automatic screening of candidates by bots which will help in identifying certain pre-defined characteristic matches from video interviews submitted by candidates.
Also, hiring and training is moving towards building Deep-tech skills and understanding emerging technologies. Robotic Process Automations call for up-skilling of human capital and movement of repetitive jobs to intellectually stimulating ones.
(Writer is the MD and CEO, Yes Bank)
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