| | JUNE 20228IN MY OPINIONBy Biren Parekh Director, CRISILFINTECH DISRUPTORSne might remember banking experiences 3-4 decades back. When you go to the bank to update the passbook, you drop it in a basket and go back the next day to collect it. The process took so long since the banker had to reconcile entries from a huge B4 size ledger book and manually update the entries in the passbook. Gone are those days! The banking industry has come a long way from the 80s and 90s. Today, digital banking gives us notifications on a real-time basis with a tap on mobile or wearables ­ be it transactions, bank balance, or statements.While banks have transformed themselves with innovative digital offerings, several incumbent and Neo banks have made a significant dent in traditional revenue with their innovative digital transformation initiatives. To sustain high growth and customer retention, traditional banks need to traverse the extra mile and develop hyper-personal relationships with customersm, turning apathy into emotional connection.These days, a frictionless digital banking experience is inevitable to maintain or increase the market share of the banks. Omni-channel experiences, smart onboarding, microservices-based architecture, cloud-native approach, or automation ­ these are de facto expectations from the banks. The main reason behind these high expectations is Fintechs raising the bar for banks in the post-pandemic world. Millennial and Gen-Z customers are now looking for an exceptional banking experience in all areas, and not isolated service.To provide `value for the money' or exhibit customer-centricity, banks ought to step-up their game plan by increasing their focus on innovative offerings. With over 26,000 Fintechs operating worldwide, banks have to go beyond their usual territory and provide hyper-personal curated banking experience by embracing ML, NLP, and open APIs. Not only do legacy banks need to innovate and implement, but even central authorities like RBI should become liberal and revise their policies to promote healthy competition and innovation culture across the BFSI segment. Several innovative initiatives are becoming mainstream because of Fintechs, which can be adopted by banks in a phased manner. Banks can embrace following leading-edge technology to remain ahead of the cut-throat competition.· Enable Composable banking, whereby the customer is not tied to a specific vendor, product, or technology. For an instance, Mambo provides over 4,000 products from different banks, NBFC, and Fintechs on its platform.· Augment innovation quotient like ENBD, which provides an additional interest rate based on the number of daily steps (5k or more) OTo provide `value for the money' or exhibit customer-centricity, banks ought to step-up their game plan by increasing their focus on innovative offerings
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