Indian Banks Ride On SMAC Innovation
The Indian banking sector is increasingly using disruptive technologies such as SMAC (social, mobile, analytics and cloud) to bring innovation in their banking activities and strategies, according to a recent CII-PwC survey. While on one hand, they are using mobile technologies to create a competitive edge, on the other they are set to explore the world of social media and analytics, which they believe has the power to garner new business and serve customers better.
The social universe
Social media is a relatively new area for banks in India. Banks are seen experimenting with various social media channels to build their brand equity, gauge which stream will actually yield more visibility and help promote the organizations’ image, says the report.
As compared to public sector banks, private sector and foreign banks have adopted social media more openly and integrated it as a part of their strategy. Nearly 63% of respondents have used social media campaigns quite frequently to get leads in the past one year. Over half of them are using social media aggregators to help interpret unstructured data.
Most banking CIOs have begun to realize that social media can not only be a means to reach out to customers, but also a tool to engage with them on a continual basis by providing the latest updates, offers, campaigns, facilitate transactions such as booking movie tickets, fund transfers, addressing grievances and the like.
Bank CIOs in general believe that the social media gambit is targeted towards the youth who are found to be spending a large amount of time online. Consequently, banks find it a great way to increase their visibility, says the report.
Mobile banking has already created a buzz, despite experts pointing out various challenges with this channel time and again. Currently almost all banks are using mobile to create a competitive edge. Around 86% said that they had already deployed mobile banking and only 14% are still in the initial stages of the launch. “Mobile telephony has become ubiquitous, with around three quarters of the population using mobile devices. It is a well acknowledged fact that the mobile platform is being used to a large extent by customers,” says the report.
Mobile channel is currently used mostly for checking account details such as account balance, mini statement and cheque status. But other transactions such as money transfers, utility payments and mobile payments are also gaining prominence.
The report indicates that currently, around 78 banks in the country offer mobile banking services in some form or the other. The use of smart phones and tablets has also helped increase the traffic on mobile banking transactions. However, there still remains scope for growth, it says pointing out that the sector is likely to witness increased use of mobile specific features such as geo location, camera or scanning and voice identification.
However, there are some challenges in mobile technology that need to be addressed. As the report points out that lack of awareness and change in mindset, inability to sync the mobile number with the account number, features of the handset and inconsistent revenue-sharing models are currently needed to be overcome.
Winning on analytics
Debdas Sen, leader Tech Consulting PwC India said, “Indian banks have grown accustomed to using technology. However, we have now reached a point where technology needs to be used as a value lever to traverse a fast-paced growth trajectory. Innovation to help develop the product, process and service is the new mantra. Increased customer awareness has mandated banks to align their strategies to provide an enhanced customer experience. The advent of social media, mobile and changing regulatory environments are further strengthening the strategic role that technology plays in the industry.”
Considering the huge volume, velocity of data observed from different sources, there is a need to segregate and filter it all to gain an insight into customer behaviour trends and preferences. The CII-PwC report notes that big data use in payments or unstructured areas like social media, customer care and internal communications will mature.
Banks in the small to medium space will start looking for entire core banking platforms as a service, while more established banks increase cloud adoption in non-core areas such as HR.
Data aggregation, customer relationship management and financial inclusion initiatives are essential to take banking to the next level of growth, Sen believes and adds that banks will continue to invest in platforms such as integrated payment hubs which supplement existing core banking systems and provide a consolidated view across all payment channels.
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