The Future of Banking

Banks were one of the first few service industries to bring in the use of technology in serving their customers. The first uses were around productivity enhancements, that being the prime purpose for which computing was developed — to automate repeated activities, which could be done with speed and accuracy not achievable through manual processes.

In context of India, the last 20 years have brought this experience to every bank customer and we have seen the transformation of bank operations, first with branch-based computing platforms replacing the bulky ledgers and then with technology-based channels coming to the forefront in the form of automations like ATMs, debit cards, Internet banking, mobile banking to name a few, changing the way how we look and deal with money and banking.

A quick glance across these two decades reveals the extent to which technology has influenced banking operations and customer experience. 1990s was the start of collaboration. With the advent of networks, banking applications moved from branch-based automation solutions to bank-wide automation offering anywhere banking, powered by fully networked RDBMS applications.

Late 90s saw the advent of global applications and banking products being offered by technology companies. Locally we saw Infosys Technologies offer the Finacle Platform starting 1999. Early 2000s, with databases being in place and a majority of banking transactions being managed on computer systems, the next transformation was from a basic MIS to Business Intelligence solutions that could analyse large amounts of data, correlate statistically and provide inferences to take management decisions.

Last few years have seen the advent of business process management. With the shortening product life cycles, competition to manage the customer experience and deliver innovative products with consistent quality, business processes have to be monitored in real time and tweaked to provide the strategic advantage.

Looking into the future, it is going to get even more interesting with technology innovations across computing, mobile platforms, convergence, data and social media shaping the customer experience.

To make an attempt to paint a canvas depicting this future experience, it will be like this:

• The Bank is always accessible to you through your tablet / mobile PC.
• The next generation of internet banking brings not just the service and transactional convenience but the whole ecosystem of your financial life together like financial planning, aggregation of all your relationships across the industry, financial and other products as per your preferences etc.
• You can speak to your bank relationship manager through a video call from your device and bank experts can similarly communicate and advise you wherever you are.

In case you prefer to walk into a bank branch, you are recognised automatically through RFID or NFC communication technology. The bank staff is presented with your snapshot — not just your account transactions or balances but analysed data to present your financial behaviour, your propensity to buy any other financial products, alerts to communicate important messages for you, etc. Your presence in the branch triggers alerts to any other bank staff that the bank wants to get in touch with you for advice or relationship enhancement. To transact the experience would move beyond debit / credit cards. You can just authorise payment from your mobile device powered by NFC (Near Field Communications) by pressing a button or replying to a message. This could be used to pay for your cab or to your grocery store.

Social media has influenced many facets of our lives and would be increasingly leveraged by banks to retain and acquire customers, improve customer experience, crowd-source ideas, build strong brand and focus on customer centricity. Social media will become a mirror to reflect what the customers think of the bank's product and services and what is working and what is not. It will replace the customer surveys and email based customer request systems and brings these interactions into real time.

Like we say, the future has already arrived, many of these technologies and experiences have already begun taking shape and being offered in some markets and by some banks. We will shortly come face to face with these offerings. From there on it is a matter of our own adoption of these offerings in our daily lives, for we decide whether we prefer to live in the past, present or the future.