By Indranil Basu Roy
Next to “new normal,” the most overused term could be Digital Banking. What’s the tipping point of technologies or service delivery that tends to make a Bank really digital? Net Banking? Yes and No, as its entry dates to an earlier era. App-based access? You have to be joking. Cashless payments… now we are speaking.
Let’s take one step back to fully grasp digital banking. Over time, as fintech progressed from state-of-the-art, to cutting edge, to top edge, services provided by banks migrated from standard delivery channels to on line.
Banks, in their eagerness to retain pace, ensured they incorporated each facet of digital banking in their ecosystem. Somewhere down the line, the music stopped. After all, clients have been not complaining – no branch visits, no staying on hold in the helpline, no relationship manager to deal with – banking was no longer a chore but a breeze.
Not just retail or individual banking, the transformation had encompassed corporate banking as properly, and had eased the procedures in document- oriented items such as Trade Finance.
Should we conclude that all is properly, and congratulate the fraternity? Can we compliment the far-considering CTOs and CMDs on their vision for digitisation? Can we name the prime 10 digital-driven banks and announce such other lists that make the jury glow and winners really feel great?
If we do, we are falling into the trap that other people have currently got into. Let’s get this straight, digital banking has reached such levels of disruption that the disrupted are unaware of disruptors racing ahead.
As a banking institution, how do you gauge or assure you are not left behind? Here are 3 test inquiries (do not look for synergy, this is a random round):
- How equipped are you to compete with a wholly-digital bank that does not have a single brick and mortar branch?
- To improve your digital capability, has your Bank partnered with, or invested into non-economic players, such as a fintech enterprise, information analytics firm, mortgage-software program start out up or any other disruptor?
- Here are 5 terminologies which are the most current in fintech applications: If you have to look up any, you are labeled “behind,” if you have implemented one or more you are “ahead.”
Here we go: Social Banking, Digital Queue, Conversational Banking, Peer to Peer Payment Systems, Facial Recognition Banking.
Assuming that banks can not endlessly invest in technologies (tech is not their domain) the answer is cross-market collaboration with fintech players who focus on agile options. If the engagement method gets additional delayed, the next wave will be fintechs playing the function of banks in particular item locations (we currently have many on line lending platforms which are not backed by a Bank). Look closely, lending platforms of today are replicating services that Banks pioneered 5 years ago by supplying immediate loans based on a overview of credit history.
Looking back, IBM, the one-time mainframe behemoth, proved elephants can dance by producing a dramatic turnaround in the mid 1990s. Now is the turn of mammoth banks to appreciate that digital transformation calls for more than on line banking. If not, they could as properly recall the story of a humble ant that troubled the mighty elephant by getting into its trunk (can not consider of a far better disruptor-disrupted metaphor).
Beyond folklore and stories of yore, here’s a reality verify reflected in a investigation report on ‘Digital Banking in Asia,’ published by Mckinsey & Company:
“The disruption caused by digitisation can create or destroy significant value for banks, depending on their starting positions and how well they respond to shifting consumer behaviour and other trends. Experience is showing that 30 to 50 percent of net profit is at risk.”
The findings are disquieting. Rather than assuage your anxiousness, I finish with a contact to action. Start with an audit of your bank’s digital platforms and items, benchmark against the ideal in the market, get to know exactly where you feature, and get to work on higher transformation.
If the fraternity fails to retain pace, more rapidly adapters, disruptors and other innovators will get ahead. No marks for guessing who could laugh all the way to the Bank.
(The author is the chief company officer of Modefin, a fintech options provider. Views expressed are individual and not necessarily that of TheSpuzz Online)