Photo: Pradeep Gaur/Mint
Photo: Pradeep Gaur/Mint

Digital banking does not mean end of branches

Branches may become resolution centres for technology glitches, says a SBI official

Mumbai: The growth of digital banking channels has helped provide faster and better services to customers but it does not mean that bank branches are no longer relevant, said bankers at an industry conference on Monday.

Bankers from ICICI Bank Ltd, Citibank NA, Union bank of India and State Bank of India (SBI) said digital banking on the mobile and the Internet is expanding but branches still have their utility.

“Branches are not going to go away in a hurry," said Sunil Srivastava, deputy managing director, SBI. “Established branches will not become extinct channels. They may become resolution centres for technology glitches. The touch and feel of the branch will change. But branches will not go away," Srivastava said.

Rajeev Sabharwal, executive director at ICICI Bank Ltd, said many new technology companies are operating in niche segments like payments and banks will have to look for partnerships.

“Mobile and internet is happening faster and more products and services are being offered to customers. In the long run, it’s going to be a game of partnerships which will help us provide much better solutions to customers," Sabharwal said.

Sabharwal added that branch and ATM proximity continue to be key reasons behind the choice of a bank.

“All our analysis so far has showed that the distance from a branch or an ATM is one of the primary reason why people choose a bank. Its also not that technology companies do not have branches. Even Vodafone and (Bharti) Airtel are opening new brick and mortar stores and expanding so branches are not going anywhere," Sabharwal said.

Kartik Kaushik, managing director, country business manager, global consumer bank in India at Citibank NA, said financial technology has redefined expectations of customers for real-time transactions.

Arun Tewari, chairman and managing and director (CMD) at Union Bank of India, added that financial technology will supplement branches but not override them.

However, Sabharwal said it is important that bank employees understand technology.

“Any new product has to be first thought of as a mobile and Internet product and if the employees can’t think of it that way they should not go ahead with the product. It’s not that the products should not be physical but there are a whole lot of opportunities in the mobile and digital space that we cannot ignore," Sabharwal said.

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