Samuel Theodore of credit ratings agency Moody’s says that banks are currently going through their “fourth disintermediation”. The first involved savings and the growth of mutual funds, specialised pension funds, and life insurance policies at the expense of bank deposits.

The second was the capital market that sought to take on some of the banks’ traditional role as credit providers. The third was the advances in technology that commoditised and streamlined back-office work. Now the distribution of banking products is being disintermediated.

Brick and mortar branches are but a financial superstore. Quizzically, customers do five times the transactions outside the “superstore” than they do in the store. Because in a world of inverted logic, customers don’t want to visit the branch. They want to be served where they are, and they need safe, reliable and consistent access to a range of financial services. The old fashioned sales schmooze they are willing to live with, provided it is personalised and relevant.

Else every irrelevant offer hitting them is an interference in their timestarved lives. Customers don’t want to bend over or wait in a queue while you service, they want to be in the driver’s seat themselves. They don’t want you to deliver the end product, instead they want to see the stage of processing, again a need for control.

Even if you offer them a choice, customers don’t want to be chauffeured; they want to be in the driver’s seat themselves. The answer lies in the Net’s chameleon qualities. It can be many things to many people. It is not just a new distribution channel. It is a place for the customer to drag and drop his own product. It is a marketplace, an information system and a transparent one at that.

It makes you feel you have a fishbowl existence, but then that’s what gives the customer control in the first place. And it’s real time. The network is far more pervasive than any other change the world has ever seen but banking is yet to make the most of it, as Net banking is not yet interactive. Despite some auctioning, you still don’t negotiate live.

You’d feel better if you had a relationship manager pop out of the screen and advise you. That will happen too.

India has 70,000 branches, 30,000 ATMs, 20 million Net connections and 200 million mobile phones. And they are all networked. It doesn’t take much to see where banking is headed. According to a study by financial consultancy Celent, 35% of online banking households will use mobile banking by 2010, up from 1% today.

Over 70% of a bank’s call centre volume is projected to come from mobile phones while mobile contactless payments will make up 10% of contactless market. As banks start rolling out their platforms, you’ll see that you can do everything on your mobile that you could do online. Tomorrow you could do more.

There is a retail paradox that large companies are forever trying to overcome. A small retailer develops intimacy with a customer as a survival mechanism. His staff knows customers’ names and preferences. It’s a personalised experience that the local retailer uses to convert a commodity into an experience.

The larger a company gets, the tougher it gets to keep personalisation going. But the paradox is this: technology that turned products and services into a commodity can also help turn it back into an experience. It gives the customer power to demand lower prices, but it can also be used to deepen relationships, send reminders and updates, and more. It can help develop loyalty like no other. And it’s not only relevant for the “cash rich, time poor” sorts. It’s for everyone.

If you take a Darwinian view, then technology in banking has been an evolutionary process. As Paul Saffo, a futurologist, puts it, “Progress isn’t built on the spires of successful technologies; it is built on the rubble of failed technologies that went before.”

V Vaidyanathan, Executive Director, ICICI Bank