Dr. Sanjiv Agarwal

With our Government’s focus on financial inclusion, introduction of cash for subsidy scheme (CDS) and issuance of unique identify cards based on ‘Aadhaar’,  the banking in India is going to witness a sea change this year. The changes will not only be by way of explosion of number of beneficiaries or customers but also in areas of products & services and technology driven services and applications by the banks.

Banking services will continue to get the desired boost with emergence of new opportunities coming from the raising middle class, rural affluence, growth of sectors like SMEs, services etc. and growth in education. The significant shift in consumer behavior, customer loyalty and customer preferences, all together would redefine the banking in present times. Services sector is growing by leaps and bounds. In our economy, 60 percent comes from services sector and bank will have to focus on this area. Unfortunately, bank finances in past have been more to manufacturing sector or in agriculture but banks will have to shift their focus to service sector which is the new growth area for India and banks. That’s where India is progressing, with more and more of professional services now in demand.

The new opportunities can be captured by the banks only by re-inventing their business models, by changing their vision and a new approach of doing business to ride on the next wave of innovation and opportunities.

The new age banking is not about banking across the counter. It is all about banking anywhere and any time from a distance. No physical interface required. While the banking is becoming hi-tech, it reduces the time, cost and errors. It enhances speed of transaction and money, besides efficiency. The latest example of use of technology is CTS where all cheques will be cleared electronically. What will be required is to align technology with products and enable people to use the technology to the best advantage. Unfortunately, this does not happen so effectively as is required. One should not forget that banks will continue to run on yet another important ware, the humanware, after hardware and software. We cannot ignore human element in banking but it has to change with the need of time and technology.

Banks will have to launch new and innovative need based customer friendly products and services, focus on existing and potential customers and new business models. Today, a young customer is technology friendly and would not like to visit the bank branch whereas people of our parent’s generation would like to see the physical entry of interest in pass book, visit branch and say hello to the manager and be contended. Both these type of customers have to be happy and served by the banks. That’s a challenge as well as an opportunity. Banks have to take care of demography and use IT tools so as to make banking efficient. Mobile banking is going to be a blessing to all of us in times to come.

Our banks, undoubtedly are all set to for new experiments, innovations and enjoy the consequent fruits of growth. In ultimate analysis, all customers will be benefitted.

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October 2021