The Future Of Banking Is Paperless, Say Experts
In last few years, the Indian banking sector has realized the need of digital technologies and is rapidly moving in that direction. The emergence of forces such as social, mobile, analytics, cloud and Internet of Things (IoT) is creating new and valuable sources of business information, ways to interpret data and the means to do so cost-effectively. The value of digital in India is huge; as per a study by the World Economic Forum just four digital initiatives could unlock USD 1.2 trillion of value for the Indian industry and society over the next decade, representing about 40 percent of national GDP in 2015.
Online banking has enhanced customer satisfaction by providing anywhere anytime banking and benefitted banks through cost savings and increased penetration. They are making considerable investment in creating digital infrastructure in order to offer various solutions like mobile banking, e-wallets and virtual cards, etc. The key innovations in Digital banking are virtual banking, biometric technology, artificial intelligence, blockchain technology, bitcoin and robotics to name a few.
Digital-only bank provides end-to-end services through digital platforms like mobile, tablets and internet. It is paperless, branchless and signature-less banking offering 24*7 services to its customers. Based on this assumption, oe of India’s financial marketplace BankBazaar hosted the second edition of the BankBazaar Paperless Finance Conclave in Mumbai this week.
The conclave saw more than 200 eminent bankers, industry influencers and regulators come together to discuss the ways to fast-track paperless access to finance in India.
Adhil Shetty, CEO, BankBazaar, said that India was ready for the paperless revolution and is seeing a surge in demand for a perfectly frictionless experience while buying financial products. Shetty said, “Thanks to regulatory encouragements, paperless technology is perfectly placed to provide that kind of frictionless experience for every financial product. There has been a lot of support from all quarters in calling for removing barriers to paperless services, and the question today is how do we make that happen.”
The keynote speaker at the BankBazaar Digital Finance Conclave, Amitabh Kant, CEO, NITI Aayog, emphasized the need for accelerating reforms and on the need to push for wider acceptance of digital signatures in the industry and acceptance of OTP-based eKYC. “To my mind the proposal to push OTP-based eKYC is high (priority). For deposit accounts, the present limit is Rs. 1 lakh. I think we should increase it to about Rs. 10 lakh. For loan accounts, the existing limit is Rs. 60,000. My view is that it should be raised to Rs. 6 lakh,” Kant said.
During the discussion that followed Kant’s address, several points of easing the paperless journey, especially in light of how it can help reduce NPAs, were made. Zarin Daruwala, the CEO of Standard Chartered Bank, suggested that GST records should be available with the consent of loan applicants for better analysis of the financial track-record.
The evening also featured two panel discussions on how paperless finance is a game changer for the financial industry and what are the constraints that need to be resolved to make completely paperless on-boarding a reality. The first panel ‘Access to paperless finance as a game changer for citizens and industry’ saw panelists discussing how customers have evolved and how paperless finance has contributed to making the process more secure and foolproof.
Vijay Jasuja, MD & CEO of SBI Card, believes their customers of instantly-issued credit cards display better awareness in terms of things such as maintaining their credit history, and so the portfolio quality is better. “I believe that it is a myth that meeting face-to-face, obtaining documents physical form is safer than obtaining documents direct from the source,” he said. Manoj Adlakha, SVP & CEO, American Express, added that early activation is key to the credit card industry.
“In instant issuance, you have immediate activation,” Adlakha said. “Otherwise the activation rates typically in India are now 30-40%. But instant activation means 100%.” The other panelists included Zarin Daruwala, CEO, Standard Chartered Bank; Rajesh Sud, EVC & MD, Max Life Insurance; Arvind Kapil, Country Head, Unsecured Loans, Home & Mortgage Loan, HDFC Bank; and Jayesh H, Co-founder, Juris Corp.
The second panel, ‘What will it take for paperless on-boarding to be a reality?’ discussed the biggest barrier to digital mobile access to financial products-the friction in the offline process in the form of physical KYC and wet-signature collection-and how moving from paper-centric to digital processes can help remove this barrier. The role of regulators in realizing dream of frictionless finance was discussed at length. Anup Bagchi, Executive Director, ICICI Bank, suggested, “Once you’ve on-boarded a customer, no regulator has come in the way of the experience being fully frictionless.” Shinjini Kumar, Consumer Business Manager, CITI India, said going paperless is more than just digitization.
“The move from paper to Paperless is as much about liability transfer as it is about technology,” she emphasized. The other panelists were Puneet Nanda, ED, ICICI Prudential; Anjan Dasgupta, Partner, HSA Advocates; Ugen Bhutia, GC, SBI Card; Deepak Sharma, Chief Digital Officer, Kotak Mahindra Bank; and Sushanta Kumar Kar, CGM, Dept. of Banking Regulations, RBI.
Experts believe, with rising Internet connectivity and smartphone penetration, and with the availability of world-class digital infrastructure provided by the government of India, the future of finance is going to be paperless.
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