Technologies for banking industry: Leveraging Digital India
Digitisation in the banking industry essentially means making banking smooth and seamless for customers
Information Technology (IT) today has become an important tool for an efficient banking system, and Indian banks have put in place a fairly strong infrastructure to leverage its benefits.
The 'Digital India' campaign has the potential to transform the Indian banking industry. Highlighting the progress of 'Digital India', more than 12,000 rural post office branches have been linked into payment banking.
Apart from giving licences to new payment banks, many other policies and regulations are expected to be in place in the upcoming years which can bring a paradigm shift in the Indian banking sector. The Digital India vision aims to transform our country into a digital economy with participation from citizens and businesses.
JAM (Jan Dhan-Aadhar-Mobile) is another step in digitizing India through a synchronised banking system covering the whole nation. It is assumed that bank accounts opened under Jan-Dhan-Yojana now said to have a total balance of almost Rs 26,000 crore.
Over 190 million accounts have been opened under the financial inclusion scheme, with around 38 per cent of these being zero-balance accounts. It aims at achieving the maximum -- maximum value, maximum empowerment to people and maximum technological penetration among the masses.
With the increase in convergence of wireless and mobility, it has transformed smartphone into a fully operational personal bank.
India, being a nation which continues to be driven by cash, is also moving towards a cashless economy with financial inclusion policy and 'Digital India' campaign by the government, with the aim of controlling the flow of black money.
It means the flow of cash within an economy is non-existent and all transactions have to be through electronic channels such as direct debit, credit and debit cards, electronic clearing and payment systems such as IMPS and NEFT.
The technology being used in a cashless age has the potential to offer security benefits to its users and make it convenient for users who like to combine multiple functions onto one handheld device. Making transactions cashless results in curbing black money and in turn makes all transactions accountable.
Digitisation in banking industry essentially means making banking smooth and seamless for the customers.
In the recent years, there is a notable drop in the usage of branches and tremendous increase in digital banking consumption. Most of the private banks and public sector banks are focused on offering new technology-based services to its customers like mobile banking, mobile banking apps and e-wallets.
The biggest advantage of digital channeling in banking is its ability to provide new propositions and customer specific business models by analysing this banking pattern which explores the customer value to the maximum.
To create a digital environment is now the priority of all banks and they need to devote a considerable budget for a full transformation to a completely digitised circle of consumers.
There has been a large transformation in the banking habits of customers including e-commerce and online shopping. They adopt mobile services for a diverse range of services in day-to-day routines for ordering food, taxi booking, movie booking, mobile recharging, purchasing, etc. It is obvious that customers expect a fundamentally simpler way to avail these services with minimum efforts.
While information technology and digital transactions continue to proliferate at a rapid rate, this has also opened up potential loopholes which pave the way to various frauds and security breaches.
High success rate of digitisation also raises security concerns that can destroy the business and the brand name. Cyber risk management in the business environment is one of the complex issues being faced by the banks, requiring incorporating sophisticated techniques and new skills and capabilities to be embedded in the people.
However, the availability of biometric technologies and integration of Aadhaar cards has essentially digitised the customer inclusion process in a secure and streamlined manner.
Anand Natarajan is the managing director and chief technology officer of Image InfoSystems