Key Digital Tips For Banks To Be Future Ready

by CXOtoday News Desk    Jul 29, 2015



With rising expectations of speed and efficiency, digitization is transforming the banking industry. Be it effective customer engagement or bringing in cost efficiency, banking models are evolving rapidly to accommodate emerging technologies.

“Furthermore, fintech companies are setting new standards in innovation, time to market, and customer experience which traditional banks are forced to measure up to,” writes Vivek Belgavi, Leader, Financial Technology Services, PwC India, in a blog.

While banks are accepting the need for a change, there are some critical areas they need to focus on to ensure sustainability and future readiness.

Digital investments

Digital banking requires huge capital to improve operational efficiency as well as marketing on digital platforms.

“Technology and marketing go hand-in-hand. Without marketing one can’t create the need for the product.  One has to create awareness and then the need to buy.  If technology solution is not good, there are chances customer will go to other products,” says Sanjay Tripathy, Senior EVP, Marketing, Product, Digital and Ecommerce, HDFC Life.

Ad spending on digital media financial institutions industry will top $7 billion in 2015, a 14.5% gain over 2014, according to a report from eMarketer in association with The Financial Brand. 

After mobile banking, adoption of new-age technologies is picking, thereby ensuring increased budget allocation for IT in banks. 

“Software is forecast to achieve the highest growth rate amongst the top level IT spending categories – at about 19.2 percent in 2015,” says Vittorio D’Orazio, research director at Gartner. “Banks will invest more in technology in order to win market share and drive expansion. There will also be a lot of greenfield projects. Specifically, we expect an increase in IT spending correlated to branch technology, inclusive of core banking systems, and in the mobile channel space,” added D’Orazio.

Data  analytics

With proliferation of devices and increased online banking transactions, there is humongous amount of data being accumulated.

“Banks need to ensure that their data set-up and technology architecture are optimally designed to meet the volume, velocity and variety of data at their disposal,” says Vivek.

Analytics plays a vital role in understanding customer behaviour which will enable the bank to channelize and prioritize strategies. 

“Banks can also use data and analytics to ensure responsible lending. While credit bureau data can play a crucial loan in customer management practices, Decision Analytics help banks and NBFCs undertake effective risk management measures and provide better customer service,” says Mohan Jayaraman, MD, Experian Credit Information Company of India and Country Manager, Experian India.

“Banks can also use data and analytics to reduce delinquency, manage cost of collections, manage attrition and reduce wasted time. It is all about knowing the right value of the customers to understand optimal customer treatment,” added Jayaraman.


Today India has a total of 120 million Internet users making it the third largest user base in the world, according to a McKinsey report. India is likely to have the second-largest user base in the world, and the largest in terms of incremental growth, with 330 million to 370 million Internet users in 2015. 

The rising technology adoption is a positive influence, but there is an increased fear of cyberattacks.

“There is need to adopt a lifecycle approach to implement a complete, multi-layered defense. The three core capabilities of the lifecycle defense include ongoing operations, incident containment and incident resolution. The process begins with detection and blocking of all known threats while unknown threats are moved to the incident containment stage,” says Ambarish Deshpande, MD-India, Blue Coat Systems.


Regulations for banks need to be differentiated to fit the realities of differentiated banking. As banks continue to adopt technologies, the RBI is formulating regulations to enable banks to work in collaboration with non-bank and digital firms.

“The existing guidelines for payments banks and small finance banks are largely drawn from universal bank guidelines. However, differentiated banks will not be able to bear the compliance cost structure of universal banks. As differentiated banks evolve and become more integrated into the formal financial system, regulatory approach may need to similarly evolve and differentiate,” says Shinjini Kumar, Leader, Banking and Capital Markets.