India is making rapid strides in the area of digital banking, meeting the expectations of a digitally agile customer base in the information age
The last two years bear testimony to the spirit of human resilience to overcome the rigours of extreme turbulence, which at times threatened to erase the growth and progress made by mankind over centuries. Fortitude and innovation are the outcomes of such extraordinary circumstances, paving the way for conceiving and executing many new and exciting ideas of an enduring nature.
One of the prominent features of the past few years has been the rise of Indian banking serving a billion-plus people across geographies and demographics, with both brick-and-mortar and digital banking co-existing — an India where possibilities outweigh vulnerabilities by a huge margin.
Banking is no longer somewhere that one goes for, but something that one does. This seemingly simple, yet nuanced statement defining the paradigm shift in users’ expectations and the banking industry’s constant meandering around the upwardly mobile, shifting landscape dotted with emerging disruptive trends should define Indian banking in 2023.
It is making rapid strides in the area of digital banking, meeting the expectations of a digitally agile customer base basking in the information age. Indian banks have been embracing innovation-laced predictive banking while adopting globally accepted best practices in the areas of risk and compliance, ESG (environmental, social, and corporate governance), green banking and sustainability aimed at banking for a better tomorrow.
Building on the trials, learnings and triumphs, 2023 should be a year of bold experimentation and collaborative exchange of ideas, resources, and infrastructure among regulated entities — all juxtaposed against the rapidly unfolding global scenario as the industry eventually shifts to the Banking 5.0 model, in a uniquely Indian way.
It would be naïve to believe that from a product, process or channel perspective, the customer is agnostic, merely looking at getting her banking tasks done seamlessly at her convenience. Today, banking is about being customer-centric and relationship-based, compared with being transactional. It is the customer experience that matters; and products suitably customised to ensure a seamless customer experience need to be designed.
While technology will remain a crystal ball towards attaining monumental changes with the least amount of friction in 2023, banks will be doing much more on the human capital front, reskilling and upskilling their most precious assets, recognising the difference that a motivated and agile workforce can make by harnessing the positive powers of tech-led disruption, a vector of fostering long-term good.
Champion banks — both state-run and private — will maintain their prime position by accelerating investments for creating better architecture allows for fine tuning, a healthier mix of asset quality, fortifying balance sheets against accentuated external shocks and improving key financials while reducing credit costs and other expenses.
Phygital infrastructure blending should gain decisive traction as banks rush to connect the dots for bringing communities at the fringe to the forefront. New digital architectures like artificial intelligence, Open Credit Enablement Network, and data-based lending should gain a firm foothold, benefitting small businesses, agri and allied activities the most.
Against a weakened global growth outlook through 2023, India remains an outlier among large economies, chalking new vistas of growth in calculated strides by forging ties with reliable partner nations while chasing self-reliance through revolutionary prisms like Make in India, promoting waves of entrepreneurial acumen during the invigorating Amrit Kaal. Banks, innate and interwoven in the socio-cultural-financial fabric of our great nation, would be at the forefront of the decadal change, with enhanced scale.
India is expected to become the third-largest economy by FY28, reclaiming its rightful position in the economic community. Indian banking will be a key partner in this process, with the focus on ensuring that the benefits of economic growth and prosperity are distributed to all strata of the society in an equitable and sustainable manner.
The writer is Chairman, State Bank of India