Major disruptions: Empowering customer & Bank-Fintechs partnerships, says Capgemini
As the banking industry is going high on digital from instant payment transfer to e-account opening and branchless to doorstep banking, the question in the constant changing environment is this: What will actually disrupt the market in near future?
“Digital transformation focusing on customer empowerment and partnerships between banks and Fintechs will be the two major disruptions,” says, Eric Anklesaria, Global VP, Financial Services at Capgemini.
Eric has been handling a banking transformation and he is part of the Capgemini’s core team offering digital solutions to banks and financial institutions.
Banks are undergoing architectural change to simplify its processes. The idea is to provide seamless services to its customers. Banks are also partnering with Fintechs to speed up the operations.
Eric observes major differences between PSU banks and private banks in India in adopting digital strategy. “The focus of PSU banks is on regulatory compliance and risk mechanism. Also, macroeconomic factors are more important for PSU banks; hence digitalization is at a back seat except for State Bank of India (SBI). SBI is far more aggressive in digital than many other banks. Whereas the focus of private banks is on customer engagement and building a strong business model,” says Eric.
Most of the PSU banks are also grappling with asset-related issues. But private banks have been partnering with many Fintechs to automate traditional setup which delays the process. Importantly, private banks are also exploring Open API.
“Europe has offered enough support to their banks for open banking. But private banks in India are embracing Open API without major guidance from regulators,” adds Eric.
Indian Government is yet to take final call data privacy bill. There are many arguments pertaining to data centralization, data ownership, and privacy. Eric believes that: “Tech companies will have humungous opportunities, considering every company will have to consider a potential data strategy in place,” adds Eric.
Eric adds that every finance company faces a major challenge when it comes to availability of the quality of data. It may be easy for regulators to impose regulations but tough for them to ensure that financial institutions are adhering to it. IndAS is one such example of delay in adhering to regulations.
Regulators from around the world are busy reviewing sandbox, interoperability, digital currency, data privacy, and many other such subjects. Considering the regulator’s interest and agenda, Eric believes that financial institutions should always be prepared for the regulations.
One of the major technologies that most of the financial institutions and banks are betting on is Blockchain. As of now most of the banks in the world have adopted blockchain specifically for trade finance. Banks are planning to use the same for other products in near future.
“While adopting blockchain bankers must take a holistic perspective. Also, regulatory initiatives are essential to bring banks on one platform,” asserts Eric.
Though the banks and financial institutions are going high on digital adoption, what will actually determine the success is how these companies deal with customers demand and regulatory policies.
Eric Anklesaria reports that regulators around the world are busy reviewing sandbox, interoperability, digital currency, data privacy, and many other such subjects