Internet-based firms will play major role in banking
Internet companies are likely to have a greater impact on India’s banking industry, according to research firm Gartner. The research firm stated that even though traditional technologies will continue to dominate the country’s banking scenario, internet companies such as Google, Facebook and Apple will shape the financial services sector on the whole.
According to David Furlonger, Gartner fellow Vice-President, this is because the digital mega-firms have a good many things in their favor. For example, these firms are are masters of data management and analytics. They also define agility and flexibility, both from the point of view of technologies the business model they offer.
As the banking and financial services sector is going through a lot of transition, the mega digital firms are increasingly identifying new opportunities for business and highlighting specific customer needs, thereby standing as a strong differentiator.
The banking industry is also going through a lot of challenges with the adoption of newer technology. The primary concern is security and privacy of data, noted Gartner. Performance challenges and regulatory compliances are also taxing for this sector. In such a scenario, Furlonger believes that the digital mega-firms will help the industry cope with the change, by making customers better informed by niche offerings and promotions.
“For many existing financial services institutions, mapping out the path to the future is proving extremely difficult and challenging. Traditional models are therefore not applicable to many of their customers or markets,” said Furlonger.
He believes that the need of the hour is to exert influence over the broader market, which is possible through greater level of digitalisation and the encouragement should come from the top management.
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