Cooperative banks bracing for the new normal

Banking Frontiers organized its annual FCBA conference-cum-awards on January 22-23, 2021. The theme of the conference was ‘Rising to New Normal.’ The conference covered a wide range of topics relating to business, technology and coping with the pandemic crisis. This time the entire conference was held online. We present here excerpts of the panel discussions:

Bankers have been our silent warriors. They have led the country out of economic crisis brought upon by the covid situation. Cooperative banks have always been customer-centric. Banking did not stop during the pandemic and it goes on to show that cooperative banks are robust enough to face challenges:

Mu ku nd Ab h yank ar, former chairman of Cosmos Bank, Satish Utekar, former CEO of TJSB Bank & and consultant for cooperative banks, Rajesh Mirjankar, CEO of Infrasoft Technologies, Indrasinh Mahida, CEO, Surat DCC Bank, Anurag Srivastava, CEO of UP Federation of Urban Cooperative Banks, Atul Khirwadkar, CEO and General Manager, Kalyan Janata Sahakari Bank were the panelists at the discussion, moderated by Babu Nair, Publisher, Banking Frontiers.

Babu Nair: What are the new possibilities that the cooperative banks are looking for?

Mukund Abhyankar: In my opinion, the technology provided by the tech giants is costly. Though it is being regularly updated to suit the needs of the customers and fulfill banking needs, smaller banks may not have the funds to invest in such technology. At Cosmos Cooperative Bank, we have developed our own technology and also helped a couple of other banks to implement it. As a result, the business has been running smoothly despite lockdowns.

Satish Utekar: It is because of the pandemic that we are witnessing a digital revolution. Banks have been adopting technologies, but without training the staff, all the advances in technology will not work. Banks have to provide customers the ease of banking, which is possible with the digital revolution. Technology will help profitability and productivity. Cooperative banks should focus on the development of HR and utilize this time for advancements.

Babu Nair: What is your opinion about small finance banks and the technology used?

Atul Khirwadkar: We have become stronger as a result of the situation. One finding is that it is possible to work with a lesser workforce. We had conducted an impact analysis and evaluated various contours. With the newer regulations by RBI, cooperative banks will have to rethink their model. The exposure to risks is getting higher due to technology. Huge investments have to be made to make sure the banks’ online transactions are secure and safe. While this is not productive, it is an inevitable cost.

Babu Nair: In your experienced opinion how is one of the oldest banks bracing for the change?

Indrasinh Mahida: The oldest traditional bank had to change ways due to the pandemic. There have been a huge 250% increase in mobile transactions. ATM vans and mobile banks have been launched to reach out to people in the most rural areas. Innovative schemes have been launched to give loans to farmers. With the help of training, the staff has been taught digital ways of banking.

We reached out to people through digital platforms. Previously it was used as one of the tools but post-pandemic it has been the most effective tool. Taking into confidence the key staff of the branch, we reached out to the customers personally.

Babu Nair: What are the newer technological demands of the industry?

Rajesh Mirjankar: Cooperative banks have been pioneers and proactive in adopting newer technologies. The amount of business done is very significant and cooperative banks are not going anywhere. Adaptability to digital platforms has allowed them to survive the onslaught in the market from commercial banks.

POS, ATMs & micro-ATMs, simple digital payments have helped them keep afloat. Helping over 200 cooperative banks onboard cloud platforms, we have seen that changing to technology has helped them sail through adversity. Emerging out of the pandemic the cooperative banks will have to be socially distanced but digitally closer to the customer. Cooperative banks can work closely with the cooperative sector to emerge out of the crisis.

Babu Nair: Do you see a loss of trust for the cooperative banks from customers in the wake of scams?

Anurag Srivastava: It is true that any bad news brings negativity to the sector. There has been a little mistrust but it is mostly perceptional. It has not harmed business. Now the customers are demanding more from the digital platforms and it is the responsibility of the banks to provide it to them.

Babu Nair: What are the technological changes and advances that cooperative banks are adopting to bring back customer confidence?

Mukund Abhyankar: There is a lot to be done in the security and fraud sections.

To keep hackers at bay, advanced firewalls have to be installed. Many technologies can be adopted for safe transactions.

Babu Nair: What are the innovative technologies making their niche in the market?

Satish Utekar: The greatest learning from the pandemic has been to be customercentric. Upgrading and leveraging technology are as important as training staff. The shift has been from giving loans to selling them as a product. New avenues of business and collaboration are opening up. This has been possible due to technology. Keeping the customer as the pivot point and using technology to leverage growth is possible.

Atul Khirwadkar: Migration from cooperative bank to small finance bank is not on the cards for all. The core competency of the bank decides whether to move or not.

Babu Nair: How is AI shaping the banking industry?

Rajesh Mir jankar:Da ta-driven approach will help banks in decision making. With lending at its core, banks will have to come up with lending solutions with AI. Checks and balances have to be placed before lending. This will help the bank give loans again and again to the same customer. Loan Origination Systems and social profiling of the customer are the 2 areas where technology can be used extensively.