Gone are the days when banking meant deposit of cheques, withdrawing money, payments of bills or money transfers at a bank’s branch. The long queues outside ATMs to withdraw cash is also not a very regular feature these days. For everything mentioned above, the banks have a digital solution that does take care of consumers’ transaction and financial needs right from money transfer to financial advisory to loans in just a few clicks on the mobile-phone.
In the last three-four years, banking has undergone a paradigm shift in the way customers are serviced. From human cashiers and tellers behind a glass window, banks now have human-like chatbots to address customer needs real-time.
Both public and private sector banks have been investing heavily in the technology of future such as artificial intelligence, blockchain and machine learning to stay relevant in a digitally connected world. The banks are working to provide solutions that can be used by customers across the demography and geography even as the banking regulations around the globe are undergoing a sea change.
Besides, banks are also collaborating with several new-age financial technology companies and start-ups to re-imagine the future of banking and design customised offerings addressing specific customer needs. Customers now have dedicated chat-bots that can respond to their query in their own language.
BusinessLine spoke to several banks and found out that over 80 per cent of the total transactions happen digitally.
Praveen Kumar Gupta, MD, Retail and Digital Banking at State Bank of India (SBI), said, “The banking industry is currently undergoing transformation in various aspects, mostly due to the integration of technology in the last five years and the pace of change is accelerating every day.”
For SBI, the country’s largest public sector lender with branches even in the remotest part of the country, the digital strategy is aimed at providing simple, interactive and secure solutions to its customers.
In the last few years, SBI has launched digital initiatives like SBI InTouch, bank’s omni-channel platform YONO, CRM, optimisation and re-engineering of existing business processes in the branches.
“With new and upcoming regulations such as PSD2 (Payment Systems Directive2) in Europe, it is necessary for banks to build a platform that integrates its capabilities with that of external service providers and partners, and offer these to customers using a simplified and uniform way,” Gupta said.
He further added that SBI has been witnessing a huge migration of customers from branch banking to other channels.
The share of alternative channels, including Internet, mobile, ATMs, POS and YONO in conducting transactions, has increased to over 83 per cent in September 2018, when compared to 78 per cent in the same period last year.
Ritesh Pai, Chief Digital Officer at YES Bank, said with customers growing increasingly comfortable with digital platforms, their needs in terms of banking solutions have also evolved. “These innovations have been applied to develop both corporate and retail solutions, ensuring reduction in documentation and paperwork,” Pai said adding that the bank has developed cashless solutions for multiple Smart Cities.
It has also launched some industry-first solutions such as YES GST, YES MSME Mobile, YES TRANSACT Smart Trade, amongst others for small business that have witnessed several challenges as the government implemented the new taxation regime,.
From January to November this year, YES Bank has processed 722 million UPI (Unified Payment Interface) transactions amounting to ₹1.30 lakh crore .
The bank also processed over 90 million AEPS transactions of ₹10,800 crore in value and 112 million IMPS transactions, which proves that more and more people are willing to do online or digital transactions.
Deepak Sharma , Chief Digital Officer, Kotak Mahindra Bank, said, “Kotak Bank’s mobile app does not just let customers transfer money or pay the bills, it has evolved as a lifestyle app offering shopping, travel, payments, investments and banking in one single app in a seamless manner.”
He further added that there is a massive spurt in digital transactions coming from rural India with the bank witnessing over two million transactions a month. It also has banking solutions on chat apps such as WhatsApp to support financial inclusion.
“Our focus through digital intervention is to enhance customer experience, bring in operational efficiencies, acquire new customers, foster innovation and offer higher levels of security.” he added.
Meanwhile, at HDFC Bank, the digital transformation is about moving from convenience to providing an experience to its customers. Today, more than 85 per cent of the bank’s transactions take place on mobile and Internet, said Nitin Chugh, country head-digital banking at HDFC Bank.