‘Banks evolved from being a legacy platform to adopting modern tech’
Banks as an institution cannot be replaced. But that does not mean banking as an institution should stop innovating. The Indian banking system left behind its legacy to adopt modern technology, and there is lot more that the Indian banking system can do.
This was discussed at the recently held ‘Banking Conclave’, in MIT-SOB (the acronym for MIT’s School of Business), Pune.
Former RBI executive director and current chairman of Atom Technologies Amarendra Sahoo said, “Banks will continue to be there, but in a different avataar. Payment features of banking will be challenged.” He specified that banks need not have the monopoly over transfer of funds from the spender to the receiver.
Sahoo said, “Banks have evolved from being a legacy platform to adopting the most modern technology and platforms. Banks will not disappear.”
With United Payment Interface (UPI), India has just taken that step but soon India will start transferring funds as they are sending WhatsApp messages. The speed in transferring funds and the volume of transfer of funds will take a quantum leap.
Adding to these views, Venkatesh Hariharan, Director, Fintech, stressed, “We will have a modern banking system which will stand out compared to the rest of the world.” He also pointed out that UPI will bring down the cost of transactions for customers. “The biggest change in India is its new financial eco-system.”
Sachin Seth- PartnerAdvisory, Ernst &Young, believes, “Banking will have to move from transaction provider to eco-system provider. Banking will also see lot more consolidation.”
Further, Mukul Varshney, Director, John Deere, stated that places where banks cannot reach NBFCs and other payment options come into play. Along with banks, NBFCs will evolve too.
Bank of Maharashtra ex-GM L N Deshmukh opined that nationalisation of banks was one of the best decisions and that has pushed banks to go to unbanked areas (though the moderator pointed out that this wasn’t the case, and that nationalisation was a means to ensure that the government controlled the purse-strings of industry).