Federal Bank: Banking the ‘Phygital’ Way

Pitchai Mahalingam
Pitchai Mahalingam, Head – Operations & Transaction Banking, Federal Bank

Technology gives the edge to be more flexible and transparent with customers. We, at Federal Bank, consistently work on offering innovative products and services by leveraging the latest technologies to capture the business in the competitive marketplace, says Pitchai Mahalingam, Head – Operations & Transaction Banking, Federal Bank, in conversation with Elets News Network (ENN).

How would you define Federal Bank’s philosophy– Digital at the fore, human at the core?

The banking industry is at the cusp of digital disruption. In a way, to embrace the ensuing digital wave, the bank pivots all its services on the theme “Digital at the Fore and Human at the Core”. We are at the forefront of adopting new digital technologies/ advancements, benefitting our customers. We are witnessing a steady growth in customer adoption of digital channels and services. Mobile Banking adoption has reached all-time high, evidencing the increased popularity and patrons. Our merchant and Corporate solutions have received an overwhelming response and more such services are on the anvil. We ensure that our digital offerings are strongly complemented with the hallmark of relationship management and customer service that the bank is renowned for. That is how the theme “Digital at the fore, human at the core”.

How do you look at the significance of Phygital Banking?

Phygital Banking approach is a mix of physical and digital touch points. Digital Banking can take away the routine transactions that do not need human intervention. But the physical aspect will evolve for more complicated transactions requiring some judgement. Simple straightforward transactions like retail payments can be initiated through our retail platforms (Fednet and Fedmobile) and can be processed straight-through. But for transactions like the investment in mutual funds, insurance, etc., our customers would require advice from our accredited and trained advisors.

In the corporate world, while the basic payments and trade finance transactions initiated through our Transaction Banking platform (Fed e Biz) can be processed digitally, the customers are assisted by our Trade HUBs and CCSCs for complicated ones.

Do you think it is challenging to offer digital banking across all branches in India?

Advancement in new technologies, availability of bandwidth, mobile revolution, etc., have enabled digital banking to grow substantially. But if we compare the knowledge-level and comfort-level of using new technologies and devices between urban centres and rural centres, there is still a gap. Any bank having branches in cities, towns and villages will have to adopt Phygital Banking not only to serve different customer needs but also based on the acceptability.

What measures does the Federal Bank take to ensure implementation of Phygital Banking?

Federal Bank has evolved from physical banking to digital anchors. We have key differentiators that ensure the implementation of Phygital Banking. Few of the indicators can be understood as:

  • We have more than 1,250 bank branches located at all types of centres across the length and breadth of the country.
  • We offer full-fledged state-of-the-art omnichannel internet banking platforms for retail, SME and corporate customers.
  • We offer mobile banking platforms for various products and services.
  • We extensively use data analytics for customer experience optimisation and product innovation.
  • We have created an open API platform for product and process innovation, which is enabling us to create a strong ecosystem to connect with Fintech partners and customers.
  • We use digital solutions for account opening, credit sourcing, underwriting, etc.
  • We extensively use RPAs for automating operational processes.
  • All these above digital facilities are well communicated to our customers through our branches and relationship managers.
  • We also offer physical banking facilities through our branches, ATMs, cash recyclers and kiosks.
  • We continuously work on migrating the customers from using physical channels to digital channels.

How do you look at emerging technologies like Artificial Intelligence, Machine Learning and bots? How are they adding to the makeover of Indian banking in terms of transformation?

The goal behind these technologies (AI, IoT, ML) is to have devices that self-report in real-time, improve efficiencies and bring information to the surface more quickly instead of depending on human intervention. Bots help in creating customer loyalty and satisfaction.

 Nowadays, the consumers are demanding for more individualised experiences as they become more technologically savvy, they are eager for personalised offers too. Through bots, we can keep a track of our customers and their needs which ultimately results in product innovation.

These technologies give us the exact defined results based on a data-driven approach. We, as humans, have some limitations which can easily be mitigated with the help of artificial intelligence resources with more accurate results. For large banks like us, these technologies help us in targeting our consumers in the best possible way in the marketplace. Without these technologies, one cannot get into the deep insights of their end-user hence limit the scope of improvement or innovations. These technologies also help us in automating painful manual processes, enabling in error-free processing and cost reduction.

What new technologies does your bank implement to offer various products and services?

Technology gives an edge to be more flexible and transparent with customers. We consistently work on offering innovative products and services, by leveraging the latest technologies to capture the business in the competitive marketplace.

  • Blockchain – Cross border remittance and microfinance
  • RPAs – For automating manual processes
  • AI / NLP Bots – for back office and customer-facing services

Primarily known as an NRI bank, what initiatives are taken at your end to take banking to the underbanked segments?

We are not just an NRI Bank, we are a full-fledged commercial bank offering all the services. Yes, we pride ourselves on our NR customer base and that 15 percent of India’s inward remittances are processed through us. We have also implemented blockchain and UPI 2.0 technologies for handling remittance business. We have more than 1,250 branches and many of them are located in semi-urban and rural areas. While we offer high-end products to our customers, we also offer banking services to underbanked segments like micro finance, gold loans, agriculture loans, etc. We also use digital solutions for these segments other than the branch and —business correspondent channel.

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