Rajashekara V Maiya , Associate Vice President & Head – Product Strategy & Pre- sales, Infosys Finacle, in a conversation with Aamir H Kaki of Elets News Network (ENN) shares about Finacle’s digital and mobile banking solutions, how these solutions are revolutionising and powering the Indian banking industry and more
Finacle has revolutionised the era of Core Banking which is now seen as the initiation of digital banking. How Finacle is leading and powering the Mobile Banking Solutions which are getting into vogue now?
In the last two decades, Indian banking industry has seen a CAGR of 20 per cent, which is around five times the growth. In the same period, the deposit rate has grown 4.8 times, lending base 6.6 times, interest income 9.5 times and the network has increased almost 4.5 times. There is no parallel for such type of growth in any other industry in India as well as globally. However, the interesting fact is that such growth comes at less than five per cent of employee growth.
All the banks, be it public, private or foreign, have taken the transformation route for the core banking perspective and moved out of whatever they were earlier. Now, the way Indian banking industry is leveraging technology with online banking, real time, 24X7 banking, etc, there is no parallel. The core banking has given the platform to banks to centralised their operations and ensured that they have all their branches connected and interlinked.
With the Reserve Bank of India’s (RBI) clearing of opening the bank accounts for people who are 10 years and above, we have observed that a lot of young customers are getting on board for banking business as they are used to working on mobile, online, tablet, etc.
We are offering internet and mobile banking solutions to Indian banks from a long time now. Around a month back, the third version of our mobile banking solutions was also launched, which is basically to help the Indian banks to reach out to more customers and make sure that more and more financial services are delivered to them, every time. On the other hand, we are also witnessing that more and more power is increasingly passed on to the end customers so that they would able to transfer funds, book movie tickets, do transaction using mobile, etc. And we have already launched solutions to cater to these type of requirements.
Recently, the Indian banking industry has opened up for new players and entrants. The RBI has granted in principle approval for 21 aspirants, which is a mix of small finance banks and payment banks, many are from non-banking background. This has created an environment where lot more players are facilitating and helping the customers to conduct the transactions using the payment bank services.
However, in this scenario, you cannot have just one solution being offered to the banks for their end customers, but you need to provide a comprehensive end-to-end universal banking solution. This is what Finacle realised long time back and successfully launched a comprehensive universal banking solution, which caters to the customers in terms of deposit, lending, paid finance for corporate banking customers, treasury, CRM solutions, etc.
We have also launched digital commerce or digital wallet which is an important area where customers can convert their money into a digital currency and hold it in a mobile wallet for handling the transactions. For example, Airtel Money, which is being launched around 3-4 years back, is based on Finacle digital commerce solution.
With payment banks coming into picture, Finacle has launched end-to-end payment bank solution, which provide these banks to cater to real time payment, NEFT payments, RTGS payments, IMPS-based payments, etc. The adv antage of Finacle’s universal banking solution is that it contains around 22 distinct modules that cater to deposits, lending, mobile banking, internet banking, treasury, and many other aspects.
Tech companies are becoming New-Age Financial Platforms. With the re-engineering & re-architecting of Infosys which is happening under the leadership of Vishal Sikka pursuing the New+Renew theme, what specific winds of change are being blown into the Finacle Stable?
Vishal Sikka has been talking in the media about the core aspects of new and renew as a dual strategy for every organisation. However, most of the organisations that we have came across are struggling to handle this. As per the Gartner research, large banks spent almost 70-80 per cent of their IT budgets to keep the business running, and only 20 percent of it on innovation, differentiation, etc.
We have been jointly publishing a research report along with ESMA, for the last seven years. In the seventh edition of ESMA report, announced this month, we have spoken to banks in more than 60 countries on the challenges, concern and issues faced by them. About 80 per cent of the respondents said that they do believe that innovation is important and many of them they are increasing their investment on innovation. On the question of the biggest threats to banking industry, almost 45 per cent of respondents responded that their biggest threat is going to be FinTech companies and companies like Google, Facebook, Amazon.
Large banks spent almost 70-80 per cent of their IT budgets to keep the business running, and only 20 per cent of it on innovation, differentiation, etc
It is important to address those challenges and to adopt a dual strategy of renew and new. While trying to renew the existing processes, products, and people, banks need to invest in new strategy as well that brings in capability to innovate, create new things and deliver faster solutions to the market. Finacle, as an organisation, is committed to help the global banks in this renewal strategy by bringing in solutions like finacle end-to-end universal solution.
Finacle is now trying to re-invest and provide the capability to banks so that the dual strategy of new and renew is being delivered on the ground and they can also see the results for they are looking in terms of the change that is happening.