It was the day when my whole perception of the Indian banking scene did a volte-face. On a routine bank visit, I presented my cheque to the Teller and waited to receive a token. Imagine my surprise when I was handed cash instead! Sensing something amiss, I crosschecked to ensure no processes were compromised and was duly assured that everything was just fine. This experience was in stark contrast to the tedious transactions I have had over the years. On investigating the whys and wherefores of this drastic change, the one word that emerged was “technology.”
Technological advancements have enhanced the banking experience exponentially over the past decade. Apart from striving to make banking faster, simpler and more efficient for the average customer, banks today aim to reach a larger section of society, especially the unbanked. Also, with judicious use of technology, banks can attract new customers while retaining the existing ones.
Banks today are not just physical “brick and mortar” buildings. The various banking “channels” including ATMs, kiosks, mobile phones, etc. are beneficial to banks and customers alike. While banks save considerably on costs, customers enjoy greater accessibility round the clock. Mobile banking, in particular, has gained a fillip with rapid advancements in mobile technology, and has opened up endless possibilities. The day isn’t far when any and all banking transactions can happen over a mobile phone.
This brings us to the other crucial enabler of this positive trend – the technology providers. Given the high rate of obsolescence of technology, they have to constantly innovate and upgrade. A separate budgetary allocation for research and development activities would help them to stay at the top of their game.
However, recent figures from Celent showing a 77.6% budgetary allocation by banks on maintaining current systems and only the remainder on new technology suggests excessive spending on obsolete and inflexible systems, which in turn can adversely affect the banks’ operational efficiency.
Banking today is highly competitive and banks have to run to stay in the same place. Clearly, technology is the one thing they can ill afford to compromise.