Ma­jor dis­rup­tions: Em­pow­er­ing cus­tomer & Bank-Fin­techs part­ner­ships, says Capgem­ini

Banking Frontiers - - Disruption & Transformation - Amol Dethe

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

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