Digital Technologies are creating an unprecedented disruption across the banking sector. Digital technologies have radically transformed the way industry operates accelerating the shift to automation. The technological advancements are enabling the banks to meet the customer expectations delivering enhanced services. Digital technologies have unleashed the potential of the banking industry to enable 24×7 online access to the services.
Evolution of Digital Banking in India
In the late 1980s, the need for computerization was recognized in the Indian BFSI sector to deliver exuberant customer service. To address the introduction of computerization in the BFSI sector, the Reserve Bank of India set up a committee in 1988.
The banking industry transformed drastically from computerized records to digital banking. Post computerization, banks adopted core banking solutions to deliver service excellence. With core banking solutions there was a transition from branch banking to bank banking. Core banking solutions enabled banks to offer customer convenience through “Anywhere and Anytime Banking.”
The rising competition between private and foreign banks compelled the financial institutions to leverage digital services to stay competitive.
In April 2016, the Indian government launched the UPI system ensuring easy money transfer to and from banks. The dawn of the UPI system introduced Mobile banking in India that kicked up a digital revolution. Before 2016, mobile banking was offered only to account holders. In the present scenario, UPI made it easier to open an account and make transactions via a mobile phone.
For security reasons the government initiated the process to link the Aadhaar number with bank accounts to ensure the person who owns the account can only access it. Today, digital banking has made it convenient to create and access a bank account eliminating the need to visit the bank branch.
The introduction of UPI and BHIM by the National Payments Corporation of India laid the foundation of innovation in the domain of Payment systems.
Prioritizing customer needs to ensure a fast, accurate, and quality banking experience, the Indian BFSI industry is leveraging digital technologies to ensure an exuberant customer experience. Integrating digital technologies in the BFSI industry implemented electronic payments system, Time Gross Settlement, Cheque Truncation System, Mobile banking system, and internet banking.
What is the Role of Digitalization in Banking?
Digitalization has brought a great transformation in the BFSI sector. With Digital Banking Solutions, there has been a transition from manual to automation in the banking industry. The transition to digital banking services has minimized the errors caused due to manual intervention.
1. Enhanced Customer Experience:
The Digital Banking Solutions have enabled the banks to deliver an Omnichannel banking experience facilitating customer-centric services. Digitalization in banks offered analytical insights enabling products or services to be tailored to users based on their preferences, behavior, choice, and financial health.