50% Indians Without Bank Accounts Represents a Revolution of Demand:
Dr Deepali Pant Joshi, RBI
CII-PwC report ‘Connecting the Dots: Wiring Business, Technology & Operations’ released
On a day that the Finance Minister of India, Mr P Chidambaram has called for a meeting of various national banks, the Confederation of Indian Industry’s (CII) 8th International Conference of the BANKing TECH Summit 2014 themed “Connecting the Dots: Wiring Business, Technology & Operations” got underway to discuss the opportunities and challenges the banking and financial services industry faces.
“Fifty percent Indians still don’t have a bank account. How do you allow this 50% to be part of the economy? You thus have a revolution of demand. How will you ensure that they can avail of banking services? How will you use technology to reach out to them and at the same time give a better and more user friendly experience – that is the biggest challenge and opportunity facing the Indian banking industry,” said Dr Deepali Pant Joshi, Executive Director, Reserve Bank of India (RBI).
Praising financial inclusion technologies like biometric micro ATMs, Dr. Joshi added, “In any banking system, security and interoperability governs most of our decisions and actions. Payments are the nerves and synapses of the nation because they allow transaction to flow through the economy and allow it to grow. For us at RBI the biggest regulatory challenge is how to ensure customer protection while encouraging innovation. At no time can safety be compromised. The integrity of your data is important to us. There is an urgent need to be ahead of the information curve and at the same time we have to move cautiously and calibrate our actions. There is a logic that governs our actions.”
Ms. Shikha Sharma, Managing Director and Chief Executive Officer, Axis Bank Ltd., presented the challenges from the banks perspective when she said, “Operational efficiency still remains the core of our work and takes up a lot of our focus and energy. Risk, regulatory compliance and customer experience are equally important. Then there’s data analysis. One can get lost in data or data can help you come up with insights that are extremely helpful. Then there is the risk to reputation. Over the years we know how to manage traditional media, but social media does not have editing and anyone can say anything. How do you react to it?
She went on to add, “Customers demand convenience. But that comes with risk factors. So how do you do a tradeoff between safety and convenience? That is a big challenge that all financial institutions are going through.”
Thomas Schickler, Global head of Liquidity and Investments, Global Payments and Cash Management, The HSBC Ltd., Singapore sent out a warning when he said, “There are many challenges we face as bankers. We are at a crossroad and the way we operate needs to change. There is asymmetrical competition. If we do not work fast enough to comply with regulations and provide meaningful interaction with customers at the same time we many lose market share to others.”
And this, he said, had to be done while facing tremendous challenges and pressures. He added, “The pace of change required by regulators is very difficult to keep up to. If you see all the demands, the requirements on us is phenomenal. While we cope with that, we also face significant pressures on interest margins. Technology keeps advancing and customers are smarter and their ability to find our price difference puts immense pressure on us.”
A CII-PwC (PricewaterhouseCoopers) report titled ‘Connecting the Dots: Wiring Business, Technology & Operations’ was released at the summit. Talking about the report, Mr. David Edelheit, Partner – EMEA & UK, Financial Services Technology Leader, PricewaterhouseCoopers, UK said, “In 2015, the key trends we will see are: building integrated payment hubs, data analytics, cloud enablement, consolidation of fraud detection systems and finally the advancement of the mobile agenda focussing on the consumer.”
Mr. Arun Jain, Chairman – CII BANKing TECH Summit 2014 and Executive Chairman, Polaris Financial Technology Ltd., said, “The challenge is, how do you keep pace with technological changes without compromising on quality, safety and convenience. How then do you connect these dots? This is both a big challenge and opportunity.”
The daylong banking summit was well attended by the captains of the Indian banking and financial services industries apart from the technology providers.
5th March, 2014