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Re-imagine banking
Re-imagine banking

Battling post-Covid challenges of Banking

  • The latest episode of Mint CXO Dialogues, ‘Reimagine Banking’, powered by Microsoft discussed the impact of digitization on the banking ecosystem.

The banking sector has always been ahead of the curve when it comes to digitization. In fact, more than 90 per cent of customers in the retail banking space were technology friendly even before the pandemic hit.

But, in the age of Amazon and Netflix, where customer expectations have hit new highs and

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we grapple with the challenges of the new world order, there are some digital tools that can be used to manage risk, modernize payments, secure transactions and offer an enhanced customer experience.

The latest episode of Mint CXO Dialogues, a virtual panel discussion powered by Microsoft and Livemint, titled ‘Reimagine Banking’ discusses the changes that have taken place in the Banking space and the impact of digitization on this ecosystem.

“The banking industry had a high level of digital transactions across the industry. In retail, over 90 per cent transactions are self-service. We had 10 per cent people who were not technology friendly, who were a small segment and hence not a focus area. But the last few months made us think how to get these people also to migrate," said Anita Pai, COO, Yes Bank.

The past few months from March to December have brought new challenges and real-time has become more important, self-service has become the norm and complete transparency is what the new-age customer demands.

“Pre-Covid, people were not very comfortable moving to digital and post-Covid you see a change. This is the time you realise the true value of digital with Corporates moving to digital signatures and digital loan documents. This also ensured that all the teams at the bank came together to think digital, compared to the earlier physical mode. But, a few challenges remain and resilience has become a huge part of the ecosystem," said Shekhar Bhandari, President - Global Transaction Banking, Kotak Mahindra Bank, the first bank to launch a digital KYC.

Even though the banking system was well primed to make the switch to digital, banks had to balance customer experience and risk. “Getting a simple cheque book delivered to a client, for instance, was not as simple as a pizza delivery as it had to be handed to a security guard which was not feasible. Adapting to changes was much harder for this heavily regulated industry," said Brijesh Mehra, Head, Corporate, Institutional and Transaction Banking, RBL Bank (Ratnakar).

Paradoxically, Tier 2 and Tier 3 cities, as well as rural areas were quick to go digital. “We do business on the tractor side, commercial banking side and loans and most of them adopted to the Kotak bank app journey for loans quite well. Seeing the real Bharat adapting to technology would not have happened otherwise. Its 3-4 years of digital transformation crunched in 6-9 months," Bhandari added.

Data security emerged as a big area of concern in post-Covid as employees switched to work from home, some on their devices and some on laptops provided by banks which were running on a variety of unsecured networks. For banks, there was more information sent about these safeguards than about work in the first few weeks and security is a core element of product development.

“What we are seeing after March is that there are two channels that have gone up. Firstly, customers demanding digital experience the way you would get from Uber or Amazon from BFSIs also. Second, is building security into this. Work from any device, anywhere, as a result of which data is emerging as a very important tool which needs to be secured. Microsoft gathers a lot of data on attacks and is invested heavily into security," said Afaq Choonawala, Director Sales, BFSI, Microsoft India.

Even for wealth management, which is high touch business with a lot of assisted journey, data protection is emerging as a key focus area. “In March, a lot of transaction volumes were happening. Every asset class that its own peculiar reactions. So we had to get everyone running from home to deliver a seamless customer experience, which was a challenge," said Parinaz Vakil, Head – Digital Initiatives, IIFL Wealth Management.

“We need to be agile as clients as well as regulations keep changing. Also, the risk to security will keep growing as we expand. We are custodians of a huge amount of client data, and confidentiality remains the key. We will also start looking into data privacy as well going forward," Vakil added.

India has one of the most modern and progressive banking systems in the world. But skilling a workforce that has suddenly been forced to look at an all-new skill set is critical. One of the most important aspects is how to build this digitization journey top down.

“For banks, IT is an enabler. But as a basic premise, solutions should be integrated and not one-point solutions. Security is a daily conversation as we have threat protection, information protection and security management. Lastly, invest into training, skilling and certifying staff on various aspects of cloud, security, application development, and using Azure as a platform to build data security," Choonawala added.

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