In the past two to three years, banks have been adopting technology to provide innovative products to retail customers. Further, the regulator’s stance to focus on cashless transactions has led to new technologies being adopted in the payments space. Financial technology is a space that is being keenly watched by the banking industry. Many banks are now collaborating with these firms to introduce products for payments, loans and remittances.

Here are five areas where you can expect innovation.


In April, the National Payments Corp. of India launched the unified payments interface (UPI) system. It is expected to make e-commerce transactions easier, facilitate micro-payments and person-to-person payments. You will be able to instantaneously transfer funds across different banks with the use of a single identifier which will act as a virtual address. Hence, you don’t need to disclose sensitive information—such as bank account numbers—during a financial transaction.

The payments space has also seen the introduction of technology such as near-field communication (NFC), quick response code and sound waves.

Accounts and deposits

Gone are the days when you had to queue up at a bank branch to open an account. At present, most large commercial banks such as ICICI Bank Ltd, Kotak Mahindra Bank Ltd and Axis Bank Ltd allow you to open savings bank accounts online. The user has to download the form from the bank’s website, fill it and upload the know-your-customer (KYC) documents. But rules still require you to submit the form and KYC documents for the wet signature either at a bank branch or by asking an executive to collect them. Fixed deposits and recurring deposits, too, can be booked online.

Banks say there is room for further improvisation. “To give a good digital experience, you have to digitise all the processes at the back-end. For instance, for our corporate segment, we can now capture images of KYC documents and open a bank account within a day or the next day," said Shanti Ekambaram, president—consumer banking, Kotak Mahindra Bank.


Banks such as HDFC Bank Ltd and Axis Bank allow you to take a loan through Net banking or even mobile app, though only existing customers with pre-approved loans can do this. Since the process is entirely online, even a small mismatch in information will mean non-disbursal. If the information matches, the money—after deduction of processing fees and other charges—gets credited into the customer’s account. Then there are banks that give instant approval online, but rest of the process of submitting documents and disbursal is done offline. Smaller loans such as personal loans are on offer online at the moment, though some banks have started offering home loans via the Internet.

Credit cards

Credit cards have also evolved in the past two years. As a concept, virtual cards have been in the market for the past 3-5 years. These were initially issued by banks for existing credit card holders who didn’t want to use plastic online to minimise exposure. Now, even non-customers can get such cards. It needs a one-time registration, which will get you a 16-digit number and a CVV2 number. This is different from the CVV number mentioned at the back of a card.

Banks are now launching virtual-only cards. “As part of virtual-instant card basket, we have plans to eliminate the physical card. We currently have a lot of plans in the pipeline and in the product development stages," said Parag Rao, country head—card payment products, merchant acquiring services and marketing, HDFC Bank.

Banks also offer NFC technology that you can use to tap- and-pay. There are banks that offer battery-enabled cards which allow to switch the card ‘off’ when you are not transacting.


Outward remittances, too, can now be done online. ICICI Bank has its portal, Money2World, and Axis Bank, has Axis Forex Online, for sending money abroad to any bank account in the world, and also to order forex cards and foreign currency in cash. You will have to register on the website and fill details such as bank account number, mailing address where you want the KYC documents to be picked up, email ID, and mobile phone number. Once the mobile phone number is verified using a one-time password sent via SMS, you can login to complete the KYC process. Since RBI mandates a wet signature to complete the KYC process, you have to submit signed documents at a branch.

Mint Money take

The way you bank is evolving, with innovations in payments, deposits, loan disbursals, remittances, and cards. But it will be some time before these processes are standardised. Many of the solutions may die out or evolve into something else. Also, there are glitches that need to be ironed out. But in FY17, users can be certain to see advancements in these five categories.