Mastering the new realities of India’s banking sector – a McKinsey report by Aditya Sharma and Renny Thomas states- The country is in the midst of a digital revolution, and the ongoing disruptive changes (including momentum on the regulatory front) point to possibilities for both new entrants and incumbent banks. The Indian government’s twin thrusts—to encourage digital identification and cashless transactions—are driving change throughout the economy. Although processes are evolving, regulatory interventions point to the emergence of a digital, inclusive, and interoperable financial-services market in India. At the same time, a regulatory push by the government and the RBI over the past few years is encouraging more competition and the emergence of digital business models. New categories of banking licenses have been launched—such as payments banks and small-finance banks.
Realising at a very early stage that technology is going to endow them with a competitive edge and also enhance customer experience Indian Banks were quick to implement new technological solutions. Earlier, mobile was a budding technology, today it has been mainstreamed with most banks offering mobile banking facilities to meet the dynamic nature of the business and evolving customer expectations.
Mobile also is fast unsettling the financial services industry. With non-financial organizations entering the market, mobile is opening up new vistas. Experts predict new hybrid intermediary players replacing banks in near future.
What will the Future of the Banking Sector look like?
Great customer experience, ease of operations and stout security are going to be the watchwords of mobile banking. Banks will need to be where its customers are. With most of the customers hooked on social media, social media based banking solutions are fast becoming the new normal. With NFC and IOT becoming common and smartphones gaining more power, app-based smartphone banking are promising to be the emerging banking channels. Virtual assistants including Alexa, Siri, Cortana and Echo, and Virtual Reality tech-innovations like Oculus are making Virtual Reality Banking a feasible option to personal banking.
According to Deepak Sharma, Chief Digital Officer, Kotak Mahindra Bank, a digital approach should be built with a focus on customer experience, convenience and meeting customer requirements efficiently.
“Smartphones and inexpensive data rates have led to digital becoming the medium of choice across a host of financial services – account balance checks, fund transfers, shopping, deposits, loans, investment & insurance. With 811 we took a giant leap of faith by sourcing new customers using a Mobile First approach. We see over 80% of new customers using their mobile as their primary channel to start a banking relationship with us and begin transacting. Mobile has also helped us acquire, serve and engage customers at a channel of their choice in a cost-effective manner,” he shared.
It is being said that Artificial Intelligence will power data, insights, and analytics thereby helping banks understand customers better. At Kotak Mahindra Bank, Sharma and his team have already started to implement ways in which conversations, offers, product recommendations and advisory can be customized to suit the specific requirements and profile of each customer.
“Credit decisions, risk management, marketing, operations are witnessing tangible benefits. Thus, it is fair to say that AI will not only enhance customer experience but will power all functions of the bank to deliver a superior customer experience and manage core functions efficiently. Keya, India’s first AI-powered voice-bot in the banking sector ushers in a new era of customer interaction that combines conversational intelligence with human-like natural dialogue delivering a superior overall experience,” he informed.
Sharma believes that we will also see the emergence of chatbots powered by AI, facilitating banking transactions through social media. With the emergence of voice conversation banking, he feels that conversation in native languages could be a possible solution to make banking more inclusive across the country.
“Our launch of “Kotak Bharat”, a mobile banking app that does not require internet connectivity and offers offline multi-lingual banking and our recent launch of banking services on a pilot basis on WhatsApp are steps in combining AI, social, multi-languages and Inclusive banking. In fact, we have just recently launched our new campaign for 811 – #IndiaInvited, which champions inclusive banking and providing equal access to everyone,” concluded the industry leader.