On Tuesday, 19 April, ICICI Bank Ltd concluded Appathon, a virtual app development challenge. The bank plans to incorporate the three winning mobile innovations in its digital road map. In March, HDFC Bank Ltd had held a digital innovation summit where the bank shortlisted five financial technology (fintech) startups and is currently working with them on pilot projects. In December 2015, Kotak Mahindra Bank Ltd, along with Nasscom, had organised the Kotak Fintech Mobility Hackathon. Reserve Bank of India (RBI) backed National Payments Corporation of India (NPCI) also concluded its Unified Payments Interface Hackathon in April.
The aim behind organising such technology-based competitions is to find solutions for banking services that can reduce cost and provide better customer service. Themes range from micro-transactions, gamification, real-time banking, wearables, conversational banking, and new digital payments to artificial intelligence. The ideas are either incorporated in existing products or are bought out. “Usually, there are some problems that need solutions. We are surprised by the outcome of these events. It is like using open source community rather than working in a single community,” said Amit Sethi, chief information officer, Axis Bank Ltd. The bank is set to announce the winners of its second hackathon on Friday.
Many of the solutions offered are set to be the next products that banks will roll out. Here is a look at some of them.
Banks have started using the Aadhaar number and biometric details for cashless and cardless payments. For instance, recently DCB Bank Ltd launched a service where you can withdraw cash from ATMs without your card and PIN. For this to work, your Aadhaar should be linked to your bank account. At the ATM, enter your Aadhaar number and authenticate it with your fingerprint to withdraw cash. HDFC Bank is working on similar product with Indore-based FingPay of Tapits Technologies Pvt. Ltd, on biometric authentication at point of sale terminals. With this service, you will have to enter you Aadhaar number and scan your fingerprint at the merchant’s outlet. FingPay was one of the winners at HDFC Bank’s event.
Though NPCI’s Unified Payments Interface (UPI) has been launched, banks are yet to roll out UPI-enabled products. The platform is expected to make e-commerce transactions easier, and facilitate micropayments and person-to-person payments. As part of the launch, NPCI organised the hackathon in which startups built UPI-enabled apps. For instance, VSoft Nerds created the Jeb app which allows you to send and receive money. “This app is available in regional languages and enables quick response (QR) code payment. We are currently in talks with banks to offer this product,” said Murthy Veeraghanta, chairman and chief executive officer, VSoft Technologies Pvt. Ltd.
Eko Financial Services Pvt. Ltd, launched Fundu app. “This app will allow you to act as an ATM. Say, you have linked your UPI-enabled bank account to the app. Whenever a Fundu app user near you needs cash, you will get a notification. If you have cash and are willing to provide it, you can accept the request. The individual will transfer the money to your bank account using your virtual address,” said Abhishek Sinha, co-founder and chief executive officer, Eko Financial Services.
Chat and messaging
Today, if you want to contact your bank, you either have to visit a branch or go through the interactive voice response (IVR) system. However, the number of calls that can be addressed depends on the number of executives available. Banks are trying to solve this problem using artificial intelligence. For instance, the winner of ICICI Appathon, Mohit Talwadiya, used artificial intelligence and natural language processing to create a product where without manual intervention channels such as chat, speech commands and messages can be operated.
Senseforth Technologies Pvt. Ltd, which won at the HDFC Bank competition, also used artificial intelligence to chat with millions of customers simultaneously. So, for instance, if you have a query, the artificial intelligence technology can mimic a human being and create one-to-one conversations with people. Senseforth Tech is working with HDFC Bank on three pilot projects and is set to go live with its app in two to three months.
Mint Money take
Banks have realised the need to collaborate with fintech companies to provide solutions to customers. Most of the products mentioned above are expected to go live in two to six months. Thanks to such innovations, you can expect most banks to come out with upgraded versions of existing apps. However, it is still too early to estimate the kind of changes that you can expect.