Technological Odyssey of Indian Banking

Introduction

Gone are the days when customers must wait for a long time to get to the front of the queue, meet protocols, fill forms, or reach out to customer service for assistance at banks. The banking business model has evolved significantly from physical to digital, and now hybrid banking is taking over. Blessed with evolving technologies and fintech firms leveraging digital tools to revolutionize how we bank, the banking sector is making waves to weave out exceptional customer experiences.

In recent years, digital payment methods have increased by leaps and bounds. The EY 2021 NextWave Global Consumer Banking Survey witnessed a sample of customers' primary financial interactions and discovered that FinTechs and neobanks are growing in popularity. Technology has become the engine for change, transforming the face of financial services in India with a digital-first strategy. Let’s look at the exciting advancements in the Indian banking industry and the impact of technology on driving business operations.

Indian Banking Redefined

Due to several macroeconomic, demographic, and technical advances, the Indian banking industry is one of the most lucrative sectors worldwide. The growth of fintech has transformed the very face of the industry. Fintech firms and UPI have revolutionized digital payments. By providing technologically advanced banking, credit, and insurance solutions, fintech has increased access to financial services for underserved demographics.

Fintech has changed the way loans are processed. Enabling substitute platforms that quickly approve loans based on digital data and analytics, fintech is helping small firms and others with spotty credit histories. Fintech has also enhanced personal finance management by providing easy-to-use tools and apps for budgeting and investment management. Finally, personalized advice based on algorithms provided by robo-advisory firms has made wealth management affordable and accessible. These developments have greatly impacted India's financial management and accessibility.

Bank of the Future: The Revolutionary ‘India Stack’

The innovative digital infrastructure known as 'India Stack' has transformed financial inclusion and access in India. Leveraging open APIs to provide seamless digital information exchange and giving users mobile phone access to various financial services. Digital payments, e-KYC verification, digital signatures, and data storage are just a few of the creative solutions fintech companies have offered by utilizing India Stack. India Stack's adoption has increased financial services to underserved communities, decreased transaction costs, and improved service effectiveness. As reported, 90% of India’s population registered for a digital ID in less than a decade.

Furthermore, it has aided in digitizing government services, improving governance, lowering corruption, and improving the delivery of public services. India Stack has greatly increased individual empowerment by promoting financial inclusion and transforming the nation's digital landscape.

Key Technology Influences

Some of the technology-first techniques that represent an acceleration in the digitalization of banking in India include the adoption of the Aadhaar Card, know-your-customer (KYC), card-less cash withdrawals, paperless customer onboarding, and "tap and pay" using mobile. Here we give you some significant technological drivers that improved banking's agility and supported users' access to various digital experiences.

Popular UPI Payments

In India, cash payments have been predominant for over a decade. But the emergence of mobile internet and demonetization resulted in a significant shift toward digital payments. The government provided incentives for online payments, while fintech firms overcame KYC challenges and invested in innovations. Fund transfers take a few seconds, changing consumer purchasing patterns and enhancing financial responsibility.

Emergence and Growth of Neo Banks

Neobanks are digital banks called without any physical branches. They provide various banking and financial services, including lending products, fast loans, mutual funds, savings accounts, fixed deposits, and more. These services are conveniently accessed online through a website or a dedicated app in collaboration with other licensed institutions. Many consumers now rely on online banking because of the disruptions due to the pandemic.

Cloud Computing and Data Analytics

Integrating advanced analytics capabilities to improve customer service delivery, company value, and efficiency through "hands off the wheel" decision-making. Banks are devising unique analytical capabilities regarding people and technology, deploying these resources in high-priority use cases.

Banking as a Service

BaaS refers to the various goods or capabilities produced by the banking infrastructure's unbundling and providing access via their APIs to perform certain banking services (loans, cards, deposits, insurance, payments, etc.) in a marketplace model. Greater innovation and specialization are made possible by BaaS in the financial industry. Instead of providing a comprehensive range of banking services, businesses can concentrate on specific services like payments, loans, or insurance.

AI/ML, Automation, and Blockchain Technology

Financial organizations have historically maintained data in silos, which made analysis less effective. Banks are already embracing AI and machine learning for real-time data analysis on a wider scale to address this. About 75% of the major banks today are reported to integrate AI strategies. Blockchain technology can also potentially improve data governance and transaction credibility online.

Speculating about Indian banking's future exposes potential effects on operations and client experience. Processes might be streamlined with a fully automated banking ecosystem, and hyper-personalization would provide specialized financial products. Trust must be built and managed through improved cybersecurity and data privacy controls. Integration of augmented and virtual reality might change how people interact with banks.

Discover endless possibilities in banking with TTBS

Maintaining a current tech stack demands being proactive in the quickly changing financial market to stay ahead. Tata Tele Business Services provides sound advice and practical strategies to help banks and financial institutions to overcome obstacles and seize the limitless opportunities in the market. We have purpose-built solutions for the BFSI sector, taking care of the following key areas:

• Enable business continuity

  with our bundle of smart communication suites to facilitate high-quality and secured collaborations irrespective of the business locations.

• Enhance customer experiences

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• Ensure business growth

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• Drive full-fledged digital transformation

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• Empower collaborations

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• Improve productivity

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• Secure banking

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• Cost-effective creative solutions

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Make the Best of Unrealised Opportunities

Summing up, the Indian banking industry has made significant progress in the last decade with the help of disruptive digital technology. The India Brand Equity Foundation (IBEF) projects that by 2028, India will rank as the world's fourth-largest private wealth market. To streamline services and improve competition, banks can still make use of a lot more unrealized opportunities. These technologies will help BFSI companies to create a better customer experience, stop online fraud, give customers more control over their sensitive data, and assist all of us in safeguarding our identities online. The accelerated rate of adoption may fundamentally alter a financial institution's cost structure and result in an entirely new range of services for customers never seen before.