banking financial services technology banks trends india

Top 10 Emerging Banking and Financial Services Trends in IndiaThe Banking industry and financial institutions are vital sectors of anyeconomy. Development of these two sections of the economy can impact thegrowth of the country in an incredible way. In the era of “Digital India”, thebanking and financial services in India have undergone a massive evolution andthe phenomenon continues. The change can be attributed to various componentslike new regulatory policies and customer expectations. However, the oneelement that has affected banking and financial services the most istechnological advancement.The emergence of innovative financial technology has revolutionized financialservices in India as well as the banking sector. It has resulted in theintroduction and advancement of several technology trends that havecontributed to the radical transformation, growth, and advancement of theseindustries. The alliance between the innovative technologies of the financialsector and banking services has changed the conventional systems of handlingmoney, and this collaboration is expected to create a massive shift withemerging trends in financial services.The rise of Fintech companies, internet banking, and mobile banking are someof the classic examples of emerging trends in the banking sector and financialservices. In addition to the betterment of traditional systems, these bankingand financial services industry trends are a few steps toward creating acashless society, complete digital transformation, and the rise of Fintech. Inthis time of change, the only thing that is constant is change.## Few Trends in Banking and Financial Services in India That Are Changing theEntire Scenario### 1. Digitization:With the rapid growth of digital technology, it became imperative for bankingand financial services in India to keep up with the changes and innovatedigital solutions for the tech-savvy customers. Besides the financialinstitutions, insurance, healthcare, retail, trade, and commerce are some ofthe major industries that are experiencing the enormous digital shift. To staycompetitive, it is necessary for the banking and financial industry to takethe leap on the digital bandwagon.In India, it all began not earlier than the 1980s when the banking sectorintroduced the use of information technology to perform basic functions likescustomer service, book-keeping, and auditing. Soon, Core Banking Solutionswere adopted to enhance customer experience. However, the transformation beganin the 1990s during the time of liberalization, when the Indian economyexposed itself to the global market. The banking sector opened itself forprivate and international banks which is the prime reason for technologicalchanges in the banking sector. Today, banks and financial institutions havebenefitted in many ways by adopting newer technologies. The shift fromconventional to convenience banking is incredible.Modern trends in banking system make it easier, simpler, paperless,signatureless and branchless with various features like IMPS (ImmediatePayment Service), RTGS (Real Time Gross Settlement), NEFT (National ElectronicFunds Transfer), Online Banking, and Telebanking. Digitization has created thecomfort of “anywhere and anytime banking.” It has resulted in the reduced costof various banking procedures, improved revenue generation, and reduced humanerror. Along with increased customer satisfaction, it has enabled thecustomers creating personalized solutions for their investment plans andimprove the overall banking experience.### 2. Enhanced Mobile Banking:Mobile banking is one of the most dominant current trends in banking systems.As per the definition, it is the use of a smartphone to perform variousbanking procedures like checking account balance, fund transfer, and billpayments, without the need of visiting the branch. This trend has taken overthe traditional banking systems. In the coming years, mobile banking isexpected to become even more efficient and effortless to keep up with thecustomer demands. Mobile banking future trends hint at the acquisition of IoTand Voice-Enabled Payment Services to become the reality of tomorrow. Thesevoice-enabled services can be found in smart televisions, smart cars, smarthomes, and smart everything. Top industry leaders are collaborating to adoptIoT-connected networks to create mobile banking technologies that requireusers’ voice to operate.### 3. UPI (Unified Payments Interface):UPI or Unified Payments Interface has changed the way payments are made. It isa real-time payment system that enables instant inter-bank transactions withthe use of a mobile platform. In India, this payment system is considered thefuture of retail banking. It is one of the fastest and most secure paymentgateways that is developed by National Payments Corporation of India andregulated by the Reserve Bank of India. The year 2016 saw the launch of thisrevolutionary transactions system. This system makes funds transfer available24 hours, 365 days unlike other internet banking systems. There areapproximately 39 apps and more than 50 banks supporting the transactionsystem. In the post-demonetization India, this system played a significantrole. In the future, with the help of UPI, banking is expected to become more“open.”### 4. Block Chain:Blockchain is the new kid on the block and the latest buzzword. The technologythat works on the principles of computer science, data structures andcryptography and is the core component of cryptocurrency, is said to be thefuture of banking and financial services globally. Blockchain uses technologyto create blocks to process, verify and record transactions, without theability to modify it.NITI Aayog is creating IndiaChain, India’s largest blockchain network, whichis expected to revolutionize several industries, reduce the chances of fraud,enhance transparency, speed up the transaction process, lower humanintervention and create an unhackable database. Several aspects of banking andfinancial services like payments, clearance and settlement systems, stockexchanges and share markets, trade finance, and lending are predicted to beimpacted. With its strenuous design, blockchain technology is a force to bereckoned with.### 5. Artificial Intelligence Robots:Several private and nationalized banks in India have started to adopt chatbotsor Artificial intelligence robots for assistance in customer support services.For now, the use of this technology is at a nascent stage and evolution ofthese chatbots is not too far away. Usage of chatbots is among the manyemerging trends in the Indian banking sector that is expected to grow.More chatbots with the higher level of intelligence are forecasted to beadopted by the banks and financial institutions for improved customerinteraction personalized solutions. The technology will alleviate the chancesof human error and create accurate solutions for the customers. Also, it canrecognize fraudulent behavior, collate surveys and feedback and assist infinancial decisions.### 6. The rise of Fintech Companies:Previously, banks considered Fintech companies a disrupting force. However,with the changing trends in the financial services sector in India, fintechcompanies have become an important part of the sector. The industry hasemerged as a significant part of the ecosystem. With the use of financialtechnology, these companies aim to surpass the traditional methods of finance.In the past few decades, massive investment has been made in these companiesand it has emerged into a multi-billion-dollar industry globally.Fintech companies and fintech apps have changed the way financial solutionsare provided to the customers. Besides easy access to financial services,fintech companies have led to a massive improvement in services, customerexperience, and reduced the price paid. In India, the dynamic transformationhas been brought upon by several important elements like fintech startups,established financial institutions, initiatives like “Start-Up India” byGovernment of India, incubators, investors, and accelerators. According to areport by National Association of Software and Services Companies (NASSCOM),the fintech services market is expected to grow by 1.7 times into an $8billion market by 2020.### 7. Digital-Only Banks:It is a recent trend in the Indian financial system and cannot be ignored.With the entire banking and financial services industry jumping to digitalchannels, digital-only banks have emerged to create paperless and branchlessbanking systems. This is a new breed of banking institutions that areovertaking the traditional models rapidly. These banks provide bankingfacilities only through various IT platforms that can be accessed on mobile,computers, and tablets. It provides most of the basic services in the mostsimplified manner and gives access to real-time data. The growing popularityof these banks is said to be a real threat to traditional banks.ICICI Pockets is India’s first digital-only bank. These banks are attractiveto the customers because of their cost-effective operating models. At the sametime, though virtually, they provide high-speed banking services at very lowtransaction fees. In today’s fast lane life, these banks suit the customerneeds because they alleviate the need of visiting the bank and standing in aqueue.### 8. Cloud Banking:Cloud technology has taken the world by storm. It seems the technology willsoon find its way in the banking and financial services sector in India. Cloudcomputing will improve and organize banking and financial activities. Use ofcloud-based technology means improved flexibility and scalability, increasedefficiency, easier integration of newer technologies and applications, fasterservices and solutions, and improved data security. In addition, the bankswill not have to invest in expensive hardware and software as updating theinformation is easier on cloud-based models.### 9. Biometrics:Essentially for security reasons, a Biometric Authentication system ischanging the national identity policies and the impact is expected to bewidespread. Banking and financial services are just one of the many otherindustries that will be experiencing the impact. With a combination ofencryption technology and OTPs, biometric authentication is forecasted tocreate a highly-secure database protecting it from leaks and hackers attempts.Financial services in India are exploring the potential of this powerfultechnology to ensure sophisticated security to customers’ account and capital.### 10. Wearables:With smartwatch technology, the banking and financial services technology isaiming to create wearables for retail banking customers and provide morecontrol and easy access to the data. Wearables have changed the way we performdaily activities. Therefore, this technology is anticipated to be the futureretail banking trend by providing major banking services with just a click ona user-friendly interface on their wearable device.These are some of the recent trends in the banking and financial sector ofIndia and all these new technologies are predicted to reshape the industry ofbusiness and money. The future is going to bring upon a revolution of sortswith historical changes in traditional models. The massive shift in thelandscape has few challenges. Nonetheless, the customers are open to bankinginnovations and the government is showing great support with schemes like “JanDhan Yojana,” which aims at proving a bank account to every citizen.Meanwhile, the competition from the foreign and private sector banks havestrained the government regulators, nationalized banks and financialinstitutions to adopt new technology in order to stay relevant in the race.