Digital transformation driving future banking

For the banks to get success in the digital age, the only mantra is banks need to embrace emerging technology, remain flexible to adopt evolving business models, and put customers at the center of every strategy. India needs four or five more banks like the State Bank of India, said Finance Minister Nirmala Sitharaman.

The FM said, India needs to scale up banking to meet the changing requirements in light of the shifting realities of the economy and industry. “We need not just more, but bigger banks. If we look at the post-Covid scenario, India’s banking contour will have to be very unique to the country, where there has been an extremely successful adoption of digitization. The level of digitization of Indian banks helped us to transfer money to small, medium and big account holders through DBT and digital mechanisms.

The need of the hour is Indian Banks’ Association (IBA) to improve the access of banking in every district through a rationalised approach and optimal utilisation of digital technologies, and to carry out digitised mapping of all bank branches in every district of the country. “Almost two-thirds of nearly 7.5 lakh panchayats have optical fibre connections.

The IBA should consider this and conduct an exercise to decide where banks should have a physical presence and where we are able to serve customers without the presence of a branch. Such nimbleness and agility are especially important for India to be able to achieve the ambitious export targets of $2 trillion by 2030, $1 trillion in merchandise exports and $1 trillion in service exports.

The banking industry needs specialists to understand the unique business requirements of diverse sectors and the businesses that are rapidly relocating to India. The Finance Minister commended the amalgamation of the banks during the pandemic, without causing any disruption in the services to customers. She called for a reimagination and sprucing up of banks’ corporate communications in line with the changing realities of the new digital and connected age.

Deepak Sahu, President & CEO, VARINDIA