Advancement in digital technologies and advent of internet banking have pushed the traditional banks in a tight spot. Now, the traditional banks have no option but either to adopt technologies for their survival or perish.
“Legacy institutions have a lot to deal with when competing with modern fintechs,” said Gautam Mahesh, Director of Products at Decentro, adding, “The exponential growth within the fintech sector has laid many options for customers. This is where traditional banks are now starting to lose ground to new-age fintechs, like insurtech or investment platforms.”
With the digital banks bringing banking services to the fingertips of the customers, people – especially of the technology-savvy young generation – don’t want to take time out to visit bank branches physically to get their work done.
“The long queues in physical branches have been upgraded to provide a 24X7 digital experience by Neobanks. Another could be the evolution of insurtech as a sector, and the evolution of Buy Now Pay Later (BNPL) brings in an industry that was just a small use case until a few years back. This is where legacy institutions need to modernise,” said Mahesh.
“The daily use of tools like artificial intelligence, machine learning, and cloud technology has to be more streamlined in all day-to-day customer activities. This will help customers make informed decisions like investment options and others. But, banks should never forget the accessibility smartphones have provided to users. Banking facilities, including payment collection, payouts, investments, mortgages, and others, must be accessible with a click on their smartphones,” he added.
Talking about the future course of action, Mahesh said, “As of now, banks can start by providing a personalised view of finance, including budgeting and savings recommendations, spending & saving behaviors, and all services in a complete digital mode without compromising security.”
“To survive, legacy institutions need to start digitalising their services as early as possible,” he added.