Every business experienced a subsequent change in the ever-evolving digital age due to the unexpected worldwide pandemic. Banking is no different. In recent years, customers no longer visit bank branches as frequently to obtain financial services. Digital banking units (DBUs) and digital money are two essential government efforts introducing self-service, financial inclusion, and cost-effective banking ideas into regulated systems.
Every digital bank must adhere to a few basic principles. These days, banking is changing quickly. As a result, they must allow customers to interact with them whenever and wherever they choose without having to be physically present. This process eliminates the need for waiting in lines or completing paper forms. Banks have recently begun using speech, video, and fingerprint e-KYC.
Digital institutions should more efficiently use data. Successful digital banking companies use data to give customers a more tailored experience, and it is made feasible by analysing spending habits, debt responsibilities, and other information. As an illustration, a modern bank in India onboards clients using a smartphone application from a third party. The entire assembly procedure is 70% quicker than the method used by conventional banks. To confirm the names of their clients, they employ machine learning, fingerprints, and neural networks. Customer device cameras and biometric technology are extensively used these days for authentication to monitor eye motions, face characteristics, and lighting conditions.
Open banking serves as the foundation for data aggregation today. Banks can supplement client information by partnering with third-party suppliers such as retailers or utility firms. One vital element of banking is security. Multiple levels, two-factor authentication, name verification, facial recognition, fingerprint scanning, and voice recognition are most commonly used to differentiate between traditional and new-age security in banking systems.
The fact of digital banking is continually disrupting the finance industry. Market decentralisation could result from a mix of digital currency and P2P in the upcoming years. Additionally, major tech firms will keep digitising financial systems. In addition, currently, tiny competitors and neo-banks will expand to dominate the banking industry. Consumers anticipate transparent and engaging financial services representing and supporting their needs and tastes. They also prefer institutions that take decisive action.
The Indian banking system should actively tap into clients’ experiences to comprehend and align with their wants, goals, and ideals to introduce innovative products and services. Tech-savvy Indian consumers have access to various tools to help them handle their money.
On the path to recovery from the economic consequences of COVID-19, which India had to experience and was comparable to those of the entire world, financial fortitude has been a crucial subject. Customers’ emotional and bodily health, as well as general productivity levels in our communities, are all directly impacted by financial stress.
Banks can provide customers with the necessary resources to meet their financial objectives to increase financial knowledge. The most critical and cutting-edge banks seek more comprehensive ways to help their clients better their money rather than just offering consumers essential personal financial management (PFM) tools. For instance, if consumers are allowed access to a contextual flood of insightful, tailored content and valuable insights, that will eventually translate into better economic behaviour. In that case, they are more likely to embrace new financial management strategies and sophisticated mechanisms. As a result, the pandemic’s acceleration of the creation of digital banking options has been a benefit for institutions all over the world.
Financial organisations must be adaptable, collaborative, and ready to work together to combat bias to successfully integrate the appropriate technology or trend into the current digital banking operations. To ensure that the banks find the best technological solutions for accelerating extensive digital transformation that supports the larger objectives of India’s banking sector, digital banking & lending firms should work towards continuous, adaptable cooperation with key stakeholders.
The article has been written by Praveen Paulose, MD and CEO at Celusion Technologies