Digital Strategic Choices for Indian Banks
With the Indian prime minister’s Digital India moment, Banks in India are trying to keep pace with the global baking industry. This includes rapid digital innovation in payments, transformation in systems enabled by digital technologies.
Indian Banks have three to five years at most to become digitally skilled banks. If they fail to take action, they risk entering a spiral of decline but good for digital India banks, the momentum is in the right direction with high adoption of .bank TLD in India is the first sign of the Indian becoming digitally proficient.
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Digital innovation in the Indian banking industry offers potential reward and loss
Banks in India, which can successfully deploy digital technologies to automate processes will see growth in revenues and profits, Those banks will create new products more regularly and will improve regulatory compliance from RBI and transform the experiences of their customers, and disrupt key components of the value chain. Banks that resist digital innovation in India will eventually be punished by customers, financial markets, and—sometimes—regulators.
Indeed, My analysis suggests that digital banks in India could see up to 55 percent of net profit eroded compare to non-digital banks.
Where does Indian Bank stand?
Global banks, more innovative compelling banks & financial institutions are moving rapidly to adopt digital move. I am happy to say India is not left behind, Indian big banks like HDFC Bank, SBI, ICICI Bank are namely few which are in a race to adopt new technology and adopt new technology as soon as they can.
Companies like Paytm and Kotak are also trying new digital wallets in the Indian market which is catching up fast. Even small microfinance banks like Utkarsh small finance bank and AU small finance bank has invested massively in transaction migration. They have also significantly enhanced web and mobile technologies and design innovation and testing centers.
4 fundamental ways to create value in which digital techniques can be used by Indian banks.
- Digital technologies enhance a bank’s reach —not just with customers but also with employees and suppliers.
I have seen and worked on several small mobiles apps that banks used internally to manage teams better (Like BSO Management ). This helps the bank to monitor and provide better services to a customer and even offer the right product to the customers.
- Digital banking draws on big data and excellent analytics data to extend and refine decision-making. Such analytics data are being deployed by the most innovative banks in many areas, including sales, product design, pricing and underwriting, and the design of truly amazing customer experiences.
- Digital banking creates value is by enabling straight-through processing—that is, automating and digitizing several repetitive, low-value, and low-risk processes. Process apps, for example, boost productivity and facilitate regulatory compliance, while imaging and straight-through processing lead to paperless, more efficient workflows.
- Digitization is a means of encouraging innovation across products and business models. Examples of this include social marketing and crowdsourced assistance, as well as “digitally centralized bank” business models. Which is a hot topic with Indian bankers nowadays.
For CEOs of Indian Bank, the good news is that each of these ways of creating value through digital can be applied to every bank function. However, developing a digital agenda and driving a digitally centered transformation is a complex task. This is where a company like Netspaceindia provides technical consulting to banks in India through our one-stop technical solution of financial insulation for banks in India.
Why? Well, to start with, Converting a bank into a digital bank requires an unusually high level of coordination of cross-bank initiatives spanning prioritization, resource allocation, and collaboration in execution. Moreover, most banks in India are only in the early stages of growing the capabilities and knowledge of digitally native organizations, which includes but is not limited to :
- Personalization, leveraging data, for high-level analytics. in my notice, I have seen most data still go unused. Yet there is meaningful value in applying high-level analytics to create targeted offerings for cross-selling and up-selling.
- Rapid experimentation and agile development. Indian banks need to learn to adapt rapidly or imitate high-value initiatives while showing tolerance for failures in trials. Indian Banks often struggle with this trialing and testing culture.
Becoming aware of the need for change is the first challenge that bank CEOs face. The next challenge is to take leadership in the development and execution of a holistic change program that simultaneously addresses the culture, systems, and capabilities required. Invariably, several issues will arise to test CEOs.
But if CEOs manage to address the multiple strategic challenges posed by digital advances, they can position their institutions to compete effectively and capture an emerging, long-term growth trajectory.
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