Digital Banking - What Is It Really?Posted by Buckley Cote on March 23rd, 2021 If you're a banker, techie, agent or most of all a person in BFSI Segment, I'd take it for granted you must have heard the new buzz word "Digital Banking". In my circle, I did speak to several people and interestingly, no two persons appear to perceive this in same manner - well, that is kind of exaggeration, but you obtain the picture! This made me take a pause and think what this may mean to someone like me who is an insider in the industry, to answer if a colleague, friend, or someone at my box asks me relating to this. As a true CrossFit athlete I follow at least the first rule - tell everyone you come across about CrossFit. The reason I bring up CrossFit is not just because of my fascination or, even obsession. CrossFit is a little bit of complex and daunting to those uninitiated, but to put it simply it is strength and conditioning program, which optimizes fitness. CrossFit defines fitness itself with regard to 10 components - Cardiovascular Endurance, Stamina, Flexibility, Strength, Power, Speed, Agility, Coordination, Accuracy, Balance. But, typically in the event that you ask any of your friends what is fitness, you might get multiple responses. E.g. a runner will say capability to run half-marathon, or perhaps a weight lifter might say deadlift of at the very least 1.5 x body weight, or a guy into yoga might say doing 108 Suryanamaskaras. Well, each of them may be right in their own way. Your definition of fitness may be doing all of those, or you can just say I'm fit enough easily am able to do my 9-to-5 job without taking any sick leave within an appraisal cycle. On a single lines, banks could interpret Digital Banking in their own terms and similarly, people as if you and me could have formed some opinion predicated on our own exposure. Open Banking API Over the years, banks of all sizes and shapes optimized a whole lot by adapting to IT / ITES (IT Enabled Services) and they have achieved varied levels of success. However, due to insufficient focused and longterm approach, creation of disjoined systems, rapidly changing business and operating scenarios, etc., the intended goals might possibly not have been fully realized. Some of these "failed" initiatives might have been driven by the institution's urge to be an early adaptor of a technology or trend (betting on an incorrect horse). On the contrary, we might lose an enormous opportunity, if we don't recognize and bet on an absolute horse. So, the trick is betting on the proper horse, at a right time - i.e., when the odds are low. Typically, industries use what's called a Hype Cycle to judge a fresh technology or trend. Should you be interested to understand what is a "hype cycle", please see Gartner's methodology. I am going to try to string together some of the key aspects of Digital Banking, as unlike almost all of the buzzwords, it is neither an individual service nor a technology. Just around the time (2008-10) I spent about a year plus in Brussels, three big banks (Fortis, Dexia and KBC) which always came across as extremely risk averse bankers from the BeNeLux region, started facing major pressure and their value eroded significantly and triggered heated debates locally - who thought their money is definitely safe with the banks (either as a depositor or share holder). What really happened there, is quite complex. Key factors being, huge sovereign debt hovering between 84 to 99% of GDP, insufficient Government for 533 days, etc. These triggered liquidity issues. If you increase this other upheavals in the banking industry globally, it is easy to recognize that the "trust" within the system was under threat. How would we build trust? When you are transparent. Customers need (not need!) transparency in the whole system. Younger the client base, that need felt is more acute. This, when you look from the changing customer experience and expectations from retail industry (Amazon, Flipkart), transportation (Uber, Ola), food industry (Zomato, FoodPanda, ZaptheQ), you understand where in fact the banking industry is. Customers have reset the expectations with regard to value, experience, and options. THE MAIN ELEMENT takeaway for the banker - User Experience - rich, uniform, mobile (anywhere), secure, enhanced value.Like it? Share it! |