Banking of the Future

India: Banking On the Future: Vision 2020

“The entry barriers to traditional Banks have been disrupted with new specialized entrants and emerging business models which have blurred the lines between business and technology. The traditional approach to creating value in Banking through growth and efficiency and advantages realized through acquisition, new markets and product offerings will likely be short lived. A Bank’s ability to manifest opportunities out of the disruptive environment based on Technology and external partnerships to create customer value will determine its success in the future.

With several new players entering the banking scene, the sector is set to witness unprecedented changes in the times to come. The Financial Inclusion agenda has led to several types of banking models–small banks, payment banks, and on tap license for new banks. The agenda has also taken a step forward to include new non-bank players in the Fintech space who are vying to grab a larger share of the Banking value chain. While, on the one hand, this allows last mile connectivity and lowering of cost to the end customer, it causes huge disruption in the banking environment, possibly leading to a realignment of players in the market as we look ahead to the year 2020.

“Banking on the future : Vision 2020” select key changes that banks need to make in their go-to market approach, starting with shortening their strategy cycles to months instead of years, getting better at reading signals of change in this disruptive environment, and becoming tactically focused on being operationally lean and agile in response to market conditions. This will result in choices being made to adopt or partner with fintech businesses offering digital interactions and to accept that there are alternatives to core legacy IT systems offering greater speed to revenue generation, effective operations and better customer experience. Technology has democratized businesses by creating access across all levels and by creating a level playing field.”

-Article by Monish Shah, by Deloitte,

Engaging the 2020 customer

 “Digital footprint” will be the way forward for all Public Banks. How well Public Banks engage in competition with Fintech startups playing in emerging technologies will determine how they can differentiate in an increasingly crowded market that will likely see high customer churn. The success of these Banks will largely depend on the customer base they target, adapt to, and the types of alliances Public Banks form. Therefore, judicious selection of partners, e.g., partners with similar brand values, for scaling their businesses is key to ensuring the success of new age banks.

Source : DBS Bank

Fintech Partnerships

Fintech or ‘Financial Technology’ has become a buzzword in financial circles. Fintech players the world over are challenging the status quo of the financial services industry by bringing in a fresh take on problems faced by customers, as seen through the lens of technology. The unprecedented growth in the fintech sector in India is a direct result of rapidly changing demographics and consumer behavior, underpinned by the need for convenience. India is fast becoming a digital economy with over a billion mobile phones, 330 million internet users (c.94% on wireless devices), and 240 million smart phones.

Though nascent, partnerships between banks and fintech players are on the rise In this process of heightened disruption, a clear insight emerges – banks and fintech players are naturally interdependent. Fintech players have built a bouquet of innovative products and services on the strong backbone of the banking and payments infrastructure in the country. Banks, on the other hand, have relied on innovative solutions developed by fintech players to better address the needs of their existing customer base.


Growth through Innovation

2020 and look at how they are likely to impact the Banking sector:

 1. Artificial Intelligence & Cognitive opportunities

 2. Blockchain & Distributed Ledger Technology

3. Robotic Process Automation

 4. Cyber Security

Productivity Excellence

“We are made wise not by the recollection of our past but by the responsibility of our future” — George Bernard Shaw

On the quality and soundness of the financial services sector, India has edge over other emerging markets. Sound performance is complemented by rapid growth that supports India’s GDP expansion. At the current rate, the Indian banking industry will be the world’s third– largest by 2025, as shown in Exhibit 1b.

New Channel Excellence

In last 4 years, the number of ATM transactions increased three times from about 1,500 million to about 4,200 million. Such explosive growth in the usage of new channels is going to characterize the next decade of Indian banking in the same way as rapid growth in retail lending did in the last decade.

Exhibit 3a captures how the face of Indian banking will change during the next decade. It shows the percentage composition of transaction volumes by channel in 2003, 2010, and as projected for 2020.

Use of Big Data, artificial intelligence, and even robots are the in-thing in Indian banks now; many private banks are showing the door to thousands of employees who are not needed in the new landscape. By 2025, or even before that, the point of sales, or PoS, machines and even ATMs and credit cards can become obsolete as the smartphone will be the main mode of all banking transactions.

For the public sector, the challenge of transformation is higher because it has to change the old business model and introduce new expertise, business model, and processes. The road to excellence in risk management is a mandatory journey for banks and speed is of the essence.


  • Deloitte
  • Ficci
  • PwC
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