Innovation in Banking and Finance Segment for Deep Penetration in Indian Market
The banking and finance industry is experiencing a transformation due to changes in consumer needs, behavior, knowledge and preferences of its consumers.
Photo Credit : SHUTTERSTOCK,
Till the recent past, a majority of the Indian population was untouched by the concept of banking and finance. It was considered to be a redundant facility by many and unofficial moneylenders ruled the roost. We seem to have come a long way since then. Banking and Finance sector in India has grown by leaps and bounds, and in the recent era, Information Technology (IT) has had a 360-degree influence on the Indian banking scenario. The Banking and Finance segment has adopted technological innovations with vigour and the result is a radically altered way of doing business. It has allowed banks to wipe out the difference in time, distance and speed that impeded customer service in the past.
The world is evolving at a fast pace and innovation is the norm of the day. To attract customers, banks have to innovate and create products good enough for new customers and easy enough for the customers who are not tech savvy. Over the years, the Banking sector has undertaken various technological innovations in the form of electronic delivery channels, and the world has taken a quantum leap with the help of Electronic Banking. This leap can be measured in the form of anywhere, anyplace and anytime banking, introduced in the form of ATM machines, phone and mobile banking, internet banking, branch networking, satellite banking, card based delivery systems, electronic clearing systems (ECS) and Electronic Funds transfer system, to name a few.
‘Banking at your convenience’ has taken precedence along with a dismantling of the physical structure of banks.
With the creation of many applications, customers can have access to their accounts at any time. In fact, they can do transactions like transferring money from their account to another with faster and easy access. Through online applications, customers benefit from banking services at different locations: home, office, and even while traveling. With the advent of technology, transactions are more secured. Banks use a high level of security for all transactions – passwords for smartphone apps, limitations on payment per day for the credit card in order to prevent any kind of unwanted issues, online payment is secured by the banks with confirmations codes sent to your phone number. These services pull in the affluent people for the banking and finance segment.
Many banks form a partnership with other companies to target schools, hospitals and insurance companies to widen their reach. These partnerships reduce the cost of some services and attract many new customers who are looking for inexpensive possibilities.
The banking sector is also widening its reach in India due to various innovations and initiatives undertaken by the Government of India to include our rural economy in the loop. Most rural households lack access to reliable and affordable finance for agriculture and other livelihood activities. Many small farmers live in remote areas where retail banking is limited and production risks are high. NABARD has played an important role in the rural development in India. They facilitate credit flow for promotion and development of agriculture, cottage and village industries. Regional Rural Banks have also been created to serve the rural areas with banking and financial services.
Challenges in implementing the changes
The banking and finance industry is experiencing a transformation due to changes in consumer needs, behavior, knowledge and preferences of its consumers. Enhanced spending on infrastructure, speedy implementation of projects and continuation of reforms are expected to provide further impetus to growth. It has become the need of the hour to adopt a culture of continuous Customer Relationship Management, customer research, learning, and business innovation. The industry cannot afford to neglect these factors if it wants to operate at its optimum level. Markets and customer demands are changing and in this era of innovation, banks have to change their strategies.
The focus of the banking sector on deep penetration in the Indian market has come with its set of challenges. It starts with the choice of the right channel to introduce IT in rural areas, where people are least technologically inclined. The technological difficulties are many and security concerns for implementing these technological innovations have to be taken in careful consideration before going ahead with them.
Now, many banks use state-of-the-art technology to provide their customers with better value-added services tailored to their needs. The choice for the banking and finance sector was between survival and extinction. And, to survive in these turbulent times the sector had to embrace an innovative culture – which it has done with open arms.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house
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