The newest addition to the C-suite is the Chief Digital Officer. In a roundtable on 'Fintechs and The Future of Banking' in Mumbai, Business Today invited half a dozen Chief Digital Officers of private banks. Two founders of fintech companies and CEOs of payments and small finance banks also joined in. Undoubtedly, the banking business is at the cusp of disruption. WhatsApp is already beta-testing in the payment space. Google and Facebook are being talked about as future distributors of financial services products. So, how are banks gearing up to face the future challenge?
There is a fundamental shift as customer preference and brand loyalty are changing fast. "Traditional cost structures are just not sustainable. That is creating urgency and relevance to drive change," said Deepak Sharma, Chief Digital Officer at Kotak Mahindra Bank. Cloud computing, data analytics, artificial intelligence, or AI, machine learning, software robotics and blockchain are leading to better operational and customer experiences. B. Madhivanan, Chief Technology and Digital Officer at ICICI Bank, talked about the classical process flow getting converted into modular API approach, which is defining the journey for employees as well as consumers.
There are opportunities for banks in cross-selling and digital services. "We have a clear view of what AI, process automation and blockchain will do for the bank and not just for the customer," said Nitin Chugh, Digital Head of HDFC Bank.
But that is not true for all banks. Public sector banks or PSBs are lagging behind. According to Gayathri Parthasarathy, Partner and Head (Financial Services Advisory) at KPMG India, customers are becoming demanding irrespective of a PSB or a private bank. Rajesh Shewani, Head (Technology and Solution Architecture) at business analytics firm Teradata, said data analytics and digitisation help a lot in looking at customer interactions and transactions for larger patterns and relationships, which the banks can exploit.
Praveen Bhatt, Head, Digital Banking and Customer Experience at Axis Bank, said it is very easy to get carried away with new technologies. "But the focus has to be on customer problem solving initiatives," he added.
Going forward, millennials will keep demanding self-service. "The challenge is to find a balance in servicing the conventional customers and also the new-age people," stressed Ritesh Pai, Chief Digital Officer at Yes Bank. Rajeev Ahuja, Executive Director at RBL Bank, said, "Digital is now a kind of a DNA change for the bank. Digital is now a fundamental driver of our strategy." The capex model of banking is also shifting to opex model. Adhil Shetty, CEO and Founder of Bankbazaar, said that customers want frictionless banking services. And fintech companies have the natural advantage and ability to keep innovating. "The bank does not have this independence and freedom," said V.R. Govindarajan, Founder and CEO at Perfios Software.
The new banks, too, are taking digitisation advantage although they are serving a completely different customer segment. "We actually issue a debit card in four minutes. We have the advantage of India stack to quickly onboard a customer," said Rishi Gupta, CEO of Fino Payments Bank. Ditto for Rajeev Yadav, MD and CEO at Fincare Small Finance Bank who added, "The less you keep on core banking, the better it is."