An app a day keeps the doctor away. That seems to be the mantra at banks these days. From interactive ATMs to apps that allow corporate treasurers to approve loans even if they’re travelling...
An app a day keeps the doctor away. That seems to be the mantra at banks these days. From interactive ATMs to apps that allow corporate treasurers to approve loans even if they’re travelling, customers are being wooed with a full suite of digital products.
Banks believe the environment will change completely in the next 18 to 24 months given mobile only customers are fast overtaking net-banking customers. With 60% of online shopping happening on smart phones and the penetration of smart phones expected to hit 45%, by 2020 from 15% currently, that’s not hard to believe.
The ‘real digital’ is all about enabling a transaction seamless across the life-cycle of the product and across channels and banks are investing large amounts in technology. State Bank of India has set up digital banking outlets to ‘break in’ customers into the digital world because the omni channel is the best way forward. For corporate clients the lender has rolled out products that facilitate reporting, reconciliation and settlement of funds automatically. And there’s also a payment aggregator for e-commerce and m-commerce transactions.
Banks aren’t too concerned about fintechs luring customers with freebies because they know it cannot be a profitable proposition in the long run. They’re focussed instead on incentivising their own customers to go digital on their platforms; it’s a free market out there but a very competitive one.It’s encouraging PSU banks are able to offer digital solutions because more mobile banking will mean faster financial inclusion; typically PSU banks have a larger reach in the hinterland and they can leverage this reach to access households in the interiors.
How cost effective mobile banking will be in rural India is not clear, however; the potential for business, as bankers point out, is smaller in rural areas compared with that in big cities. Nevertheless experts believe the younger customers, even in rural areas, will be owners of smart phones given they are becoming cheaper and banks should be able to tap this catchment by leveraging UID.
FE India’s Best Bank Magazine explores this issue and also unveils FE India Best Bank Survey. Out on 29th March. Only with The Financial Express.