Emerging strategies for Indian banks: Social, Mobile, Analytics & Cloud
The banking sector has been constantly optimising the use of technology for creating innovative and cost-efficient operating models. Indian banks are now deliberating on social media initiatives and SMAC (social, mobile, analytics and cloud) strategies to reach out to the urban and emerging class.
Indian banking has been grappling with several challenges over the last few months. The twin tasks of reinvigorating economic growth and reining in inflation during the times of dwindling rupee value, weak global demand and persistent current account deficit present a mesh of problems that need immediate action.
The KPMG-CII study titled ‘Indian Banking: Maneuvering through Turbulence, Emerging strategies’ attempts to capture the current scenario and detail the strategies being adopted by banks, way forward to compliance and governance, technology in banking etc. CXO Today brings you some excerpts.
Focus on improving operational efficiency and outsourcing
With increasing competition, emerging customer demands, regulatory interventions, technology-led disruptions, higher shareholder expectations, Indian banks are being forced to constantly review and revisit their operating models. The resulting changes are making Indian banks nimbler, more cost efficient, better focused on customer services and witnessing good returns through fee based services and products.
The Indian banking industry has to its credit a number of tech-driven innovations. Adoption of multiple channels like internet banking, mobile banking, and mobile ATMs has resulted in greater efficiencies, wider reach and cost optimization. According to the KPMG-CII study, it is estimated that Indian banking and securities companies will spend Rs 416 billion ($6.75 billion) on IT products and services in 2013, which will be a 13% increase from Rs 370 billion ($6.0 billion) spent in 2012.
Banks have either centralised mid/back office processes through a shared services center or have outsourced their technology requirements to a third party. In addition to focus, this also gives banks a huge cost advantage.
SMAC – the future of technology
Traditionally banks have been the pioneers in harnessing new technology trends. The applicability of Moore’s law in the areas of telecommunication, internet and mobility were significant enablers for banks in achieving two extremely important business objectives – revenue enhancement with cost efficiencies. In existing times, the financial services industry is keenly exploring the transformation potential of the new generation of technologies available like Social media, Mobile, Analytics and Cloud (SMAC).
The fundamental use that a social network can serve a financial institution is brand awareness. Financial institutions can engage the users of social media in different ways such as by displaying special offers and discounts, asking questions or conducting polls, displaying industry related news and opinions, etc. Engaging the social media users effectively can result in increase in brand awareness at a significantly lower investment compared to mainstream media.
One of the most promising signs of India’s leadership in mobile payments comes from the high level of cooperation within the industry itself. On both the banking and the telecoms sides, we are seeing players come together and put aside their competitive differences in order to develop common standards and approaches to mobile payments. All stakeholders - banks, telecoms operators, technology providers, regulators and government organizations - have created the Mobile Payments Forum of India (MPFI), and are collaborating to address the market needs.
Using cloud services, it is easier to collaborate with partners and customers, which can lead to improvements in productivity and increased innovation. Cloud-based platforms can bring together disparate groups of people who can collaborate and share resources, information and processes. The ability to respond to rapidly changing customer needs is a key competitive differentiator. Like companies in other industries, banks are continuously seeking ways to improve their agility and adjust to market demands.
Analytics today can be effectively deployed at every stage of the consumer lifecycle. The Know your customer (KYC) activity in the customer onboarding process is increasingly dependent on analytics tools to identify the right set of customers. Anti-money laundering (AML) monitoring is another aspect where complex algorithms are used to identify reportable transactions. Similarly consumer spend analysis can assist banks in identifying cross sell and up sell opportunities.
Ultimately, this granular, 360-degree customer view made possible through SMAC technologies can improve the loyalty of existing customers, help banks engage these customers in new services, and increase the market share for banks by attracting new customers.
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