Indian banks are subjected to a lot of criticism in the last few years mainly on account of their Non-Performing Assets (NPAs) but they are also making a lot of innovations in terms of technology and emerging as global leaders, says K. Ramachandran, Senior Advisor- Banking Technology, Indian Banks’ Association (IBA).
Recently, while addressing a session titled “Digital Banking Beyond Payments” at 4th BFSI CTO Summit, organised by Elets Technomedia in Mumbai, Ramachandran said that Indian banks are leading across the world by their technology performances and changing the face of day to day banking.
Excerpts of his address are as follows:
Nobody can deny that Indian banks have been doing exceedingly well in areas focusing on technology in many unique areas.
On the foremost, by using eKYC and Aadhaar, banks in India have opened more than 150 billion accounts in a span of three-four years.
When we go to the international forum, foreign delegates get amazed on how India achieved the opening of such a large number of accounts and reached out to the masses across the country.
Everybody knows about the payment story in India. India is leading in the payments area whether it is IMPS, AEPS, BHIM, Aadhaar, BharatQR etc.
Out of these UPI has been one of the success stories with more than 800 million transactions in a single month. NPCI should be appreciated for the efforts taken with respect to UPI.
However, it is popularly speculated across media that banks are lagging behind in implementing UPI and companies like Paytm are leading the way. They forget that banks are main participants in UPI and without them, it will not be a success.
What these companies like Google and Paytm have done is leverage the backbone and put it across, marketed it amongst users.
The success of UPI has been mainly due to the portability across banks, virtual address and instantaneous credit. UPI has been a success story quoted across the world.
Not just in payments but the Indian banks have done extremely well across several other areas.
All the banking services are now available on a single mobile application. They have also tied up with various other wings such as insurance, mutual funds.
Going beyond banking they have also tied up with market players whether it is eCommerce players, hospitality, entertainment, travel etc. So, there is no need to go to any other application and you can just do a lot of things just by using one application. On the basis of this concept, only the State Bank of India has named its mobile application as YoNo-You Only Need One App.
Now other banks have also started providing similar applications.
Banks have also introduced Non-Card Based ATM withdrawals. This is a noble idea keeping the rising level of scheming frauds in mind. Here you can just go to the ATM and using your mobile phone to generate virtual card number and withdraw cash.
Indian banks also leading in the area of Artificial Intelligence. For handling millions of customer queries mostly the banks have put in chatbots for answering routine queries like balances, interest rates, statements, product details, placement of request like cheque books, cards.
You can achieve these all using chatbots. These chatbots are even named very interestingly. These chatbots are now upgraded to offer voice assistance and that too in multiple languages.
AI is also used in complex banking techniques such as monitoring banking transactions, pattern deductions, anti-money laundering, ATM surveillance etc.
The AI is helping the banks in differentiating between the people and keeping duplicity at bay.
Further, several back-office works have been automated by banks such as Form 15H and 15G with the help of Artificial Intelligence. It helps in reading the messages and authorizing the sender and updates the same in the core banking and also sends an acknowledgement. This has totally removed any need for human intervention.
AI applications are also used in retail lending for doing due diligence, creating credit scores, and reading documents through optical reading. Through this, they are able to send approvals within minutes.
I believe, in the next two years, banks will be doing the most in the field of Artificial Intelligence. And just like in Payments, Artificial Intelligence is going to lead the banks.
Indian banks are going to lead the world in terms of Artificial Intelligence just the way it is doing in the field of payments.
I am delighted to share that recently Delhi government has approved e-stamping which is helping the banks in generating e-guarantees. This move is significant as the lack of e-stamping was one of the major hurdles in the processing of guarantees and other documents.
With the tie-up between Stock Holding Corporation, Swift India and banks, banks now pay for the stamp duty stock holding and they get the digital block coding the number, remittance etc and this block is printed on the first page of the guarantee. So, there is no need to go to any other bank to collect the stamp paper. Each and every bank can start using this.