The future of the Indian banking sector has a potent instrument in its arsenal: social media and modern technologies. The bank’s success is determined by the extent to which banks harness their full power of data and social media to tailor offerings and meet increasing customer demands. RBI governor Shaktikanta Das recently discussed banking beyond tomorrow during an Bank of Baroda conference and stressed how expectations for customers are shifting.
He stated that consumers today expect banks to give rapid, reliable, and personal services. To adapt to ever-changing times Governor urged banks that they need to make large investment in technology and organizational capabilities.
“The Indian banking system has been through significant transformations. The increasing use of technology by traditional banks for self-upgrade or collaborate with fintechs is in line with the concept that of New Age banking. This is resulting in innovative products, services, and more innovative model of business.” added Das.
Future banking is also going to include the development of business models with robust governance frameworks, more efficient information management, adjustments to the way of operation, development of improved resilience capabilities as well as more accountable social and environmental impact for banks, he stated.
In a statement that said the banking industry is experiencing a period of change and is facing challenges from fintech companies, Das suggested that banks should be prepared to meet the challenges of the future.
“To remain relevant, banks must to adopt newer and more tested technology to ensure timely and efficient business decision-making, while also understanding the requirements of their customers and providing personalized services to their customers.”
Although the websites and apps of banks have increased exponentially throughout the years, the existence of human interaction in branch banking traditional methods could remain relevant to customers in a variety of ways and in many different areas according to Das.
To introduce a brand new banking paradigm and ensure that banks are in good standing for the Indian economy the governor advised banks to utilize social media in a proactive manner.
“The study of social media usage can assist banks review their strategies regarding customer segmentation, acquisition, and advancing financial inclusion. Social media is also utilized in grievance redress management. Continuously learning and keeping in the forefront of technology will become more vital in the years to come,” said Das.
Covid 19-related lockdowns forced the banks, financial services, as well as insurance (BFSI) sector to consider more closely at their tech architectures.
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“Technology advances within technology advancements in the BFSI sector have resulted in an array of advantages ranging from risk and fraud management and cost reduction, and facilitating the integration of this sector that is not included in the formal economy” Sanjay Sharma, MD of Fintech Aye Finance, a platform for fintech Aye Finance told Business Insider India.
The introduction technology of artificial intelligence (AI) as well as machine-learning models massive data analytics, and blockchain technology by fintech firms have created the opportunity for the development of customized products and services, as well as radically changed customer experiences as well, he said.
With fintechs being part of the mix, banking’s expectations are not different. Customers expect brands to be responsive and respond quickly to complaints via tweet.
This adds pressure to banks, who are searching for ways to increase their social media strategy, enhance customer service and increase business opportunities.
from AI and blockchain to AI, from machine learning to robo-advisory. There is a whole new set of possibilities banks are currently exploring.
“Having an ongoing presence on social media platforms could aid banks in establishing relationships, add an added value to their customers, increase sales and improve engagement with potential customer base,” Vineet Tyagi, the Global CTO of SaaS platform Biz2X said to Business Insider India. “Social media has the potential to revolutionize the banking industry by bringing in huge customer bases.”
For example, banks can establish loyalty programs, and search for particular interest groups – for instance, seniors, women or farmers – through social media for their different products, Tyagi added.
In a time when business owners are now accustomed to speed and efficiency across all fields, Tyagi said that a slow, traditional banking system isn’t something that could go over well with.
Bank accounts that are personalised
Naushad Contractor is the CEO and founder of Fable Fintech, believes that the future of banking will be invisibly connected, connected, insight-driven and with a purpose.
“Very in the near future, a handful of banks will be operating as tech firms. The capability to provide seamless access to various digital channels products and services will soon become a necessity within the banking industry. Digitally driven technologies will affect how people save, invest and interact with every aspect of their finances.” Contractor told Business Insider India.
Neha Juneja, the CEO of IndiaP2P.com which is a fintech platform for retail investors, believes that the model for banking of the future will be more personalized.
“This personalization and the capability to treat each user as a top user is only possible through the use of technology to increase effectiveness and social media channels, which is where users are already,” said Juneja.
There could also be large banks struggling to catch-up with innovative fintech startups, according to Manoj Mohan, executive director at the Centre for Financial Studies.
“We are likely to see the development of Amazon counterparts, which will take the business out of Walmart. The main reason behind this is the polarity between the safety culture in big banks and the an environment of innovation in start-ups,” said Mohan.
He said that in order to keep up to adapt to changing times, banks need to form subsidiaries or teams specifically tasked with innovating.
“To be at the forefront of the latest innovations regarding finance, banking institutions need to change their approach and approach to innovations and the potential for change brought about by innovation,” Mohan said. Mohan.
In announcing his vision of banking India, Das said, “Banking beyond the next decade will focus on the use of new technologies, tailoring of services, improved process and business automation.”