Shopping. Groceries. Medicines. Schooling. We are right now massively dependent on doing everything online thanks to the pandemic. That includes a big chunk of Indian banking customers switching to digital banking. While traditional banking systems in India were losing ground to digital channels, albeit slowly, before the pandemic, the pace has accelerated ten fold now, forcing most industries including banks to invest in robust digital experiences.
What is ‘digital’?
So, what does going digital entail for banks? Among other things, it includes an intuitive, AI-driven customer experience, increased responsiveness, and technology-led platforms. It’s an umbrella term for banking that uses different types of smart technologies. There’s API banking, where banking services are made available to third-party apps through APIs. There’s open banking, which enables the sharing of user information. Lastly, there’s neo banking, which are fintech companies offering a full range of financial services online.
It’s this last category that has emerged as the latest star in the fintech space offering a host of benefits for a tech-savvy audience. It’s a change wrought by mutual dependence – banks who want to get a foothold in the digital revolution taking place, and customers who are increasingly going online for all their basic needs. Here are four prominent ways in which this change is happening in India.
Branch banking is disappearing
Remember those days when, on any given afternoon, harried bank tellers would be dealing with snaking queues? Neobanks have done away with that concept by introducing branchless banking. Offering everything from easy account openings to mutual fund investments, neobanks have created a seamless banking experience without need to establish a physical presence.
Intelligent and personalised banking
Nobody truly defined intuitive and personal like Netflix did. The company took tv watching to a whole new level with its hyper-personalised recommendations tailored to each individual. Neobanks are employing the same strategy by offering bespoke financial products for customers based on their lifestyle. The approach is now holistically oriented towards the overall spending patterns and personal financial goals of an individual rather than the products alone.
Adapting to the mobile generation
India’s smartphone users are expected to reach 820 million by 2022, according to a recent report from KPMG and the Indian Cellular and Electronics Association. “Smartphones have facilitated access to a rapidly expanding range of digitally delivered services through apps,” the report quotes Ajay Sawhney, the Secretary of MEITY (Ministry of Electronics and Information Technology). Neobanks are a large part of those digital services targeting an entire generation of mobile-first consumers.
Leading with technology for the younger generation
India’s millennials number 426 million, accounting for 36% of the Indian population, which is the largest in the world. Millennials or young professionals are the biggest driving force behind consumer behaviour in India and they are digitally very literate. They are technology evangelists, heavily reliant on apps for fulfilling most of their requirements including banking. Digital-first banks, then, cater to this wide consumer base by incorporating AI and intelligent, personalised recommendations.
Banking needs to infuse agility in its way of working and neobanks are the answer. They are now at the heart of India’s digital banking revolution.
Author: Vikas Kothari, Co-founder, P10 Bank, India’s first digital bank designed for young working professionals.