Going Contactless: The new normal in banking

June 28, 2020 1:12 PM

Customers can open a savings account with Aadhaar and PAN card and the KYC gets completed through video - effectively allowing the person to open an account and transact within a few minutes.

Video KYC, Personal loan, credit card or savings account, KYC process, video interaction, salary account, personal loan, Bank, home loan,Digital adoption is increasing at a pace never seen hitherto.

The Coronavirus pandemic has created major upheavals across all industries. As physical distancing becomes the new normal, we are observing a behavioral shift across all consumer categories. The rising concerns about the spread of the COVID-19 virus through contact has sparked an adoption of digital, globally. Banking, too, is witnessing this disruptive change and it seems relatively more permanent here than it may be for other sectors. The consumer preferences have moved more aggressively towards essentially contactless transactions.

The new concept of “Contactless Banking” is largely inspired and developed keeping in mind the customer’s interaction points with the banks, which include opening an account, transactions, making payments, or raising a query. While consumers had already begun to use digital payment options, the pandemic, however, accelerated the adoption rate as people are increasingly opting for safer, convenient, and contact-free banking methods.

Additionally, some shifts in the regulatory framework have also aided the cause of these “low-touch or no-touch” models. The launch of the video KYC i.e. Video-based Customer Identification Process (VCIP) has aided in remote account opening for customers. Today, a customer can open a savings account with Aadhaar and PAN card and the KYC gets completed through video – effectively allowing the person to open an account and transact within a few minutes.

On the servicing and transactions aspect, the self-service channels – mobile banking apps, internet banking portals – have evolved considerably over the years. They now enable many other transactions, beyond payments, which were traditionally perceived as branch-based activities. Furthermore, multiple other services such as investments into mutual funds or gold sovereign bonds, checking credit score, applying for IPOs through online ASBA can be done on the net banking or mobile banking channels. Safety features like controlling limits on the debit or credit cards, restricting online payments can also be done through such mediums.

Also, some news channels such as service-bots and WhatsApp banking have been launched by RBL Bank and they have seen tremendous acceptance instantly. Customers reach out on such channels and find them very convenient.

At RBL Bank, we have witnessed a four-fold increase in savings accounts being opened digitally. Booking fixed deposits and SIPs through self-services modes, too, have grown by more than 100 per cent in the last quarter. Digital adoption is increasing at a pace never seen hitherto.

Besides the above, there are some other emerging trends that further will support the contactless evolution of the Banking space. With customers not keen on either visiting the bank or being visited, remote relationship management through video is emerging as the preferred option. Banks, too, are leveraging customers’ transaction behavior and other non-traditional data to underwrite loans and make it available to the customer on tap through the digital channels.

Payment services such as ‘tap & pay’ at PoS terminals, ‘scan & pay’ through QR codes and cardless cash withdrawal at ATMs are becoming more popular too.

The RBI guidelines on debit card management – such as switch on/off, limits setting, domestic and international control, etc. – is made available in the self-service channels and have also helped in building the trust in digital payments.

As society moves beyond the survival mode, the momentum in digital adoption is likely to continue and become more permanent. Contactless banking as a phenomenon will evolve and stay. The banking sector is gearing up with all its strength for the world after COVID-19 and RBL Bank will continue to innovate and evolve its offerings to make Banking business convenient and safe for its customers.

by, Surinder Chawla, Head, Retail Liabilities and Wealth Management, RBL Bank

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