All Posts in Banking

|In: Books|Last Updated: | 0 Comments

What is one thing that comes to our minds when we refer the term banking? An immediate picture that we visualize is about customers lined up in different queues for getting their banking work done – a brick and mortar banking experience where long waits are normal to get queries sorted and numerous follow-ups and visits to the bank branches for document submission, etc. are regular features. The list can be endless but the picture being portrayed may not be relevant to the Banks of today since Digital Banking is changing the face of banking.

Image Source

Now  touch a button and you would come to know whether you are eligible to apply for a home-loan of ‘x’ amount or what should be your ideal investment approach to save taxes. Though there are some banks that like to reinvent the technological wheel, banks like HDFC Bank have pioneered to transform into a Digital Bank via partnerships, in-house innovations, and building products with a customer-centric approach. HDFC Bank is India’s largest private-sector bank and a bank that it too big to fail as per the Reserve Bank of India [RBI].

How did HDFC bank manage to transform itself from a Lifecycle bank to a Lifestyle bank?  How did the bank shape its digital journey? What are some of the innovations from the largest bank in India by market capitalization? If you are curious to know the behind the scene transformation story, you must grab a copy of HDFC Bank 2.0: From Dawn to Digital by renowned journalist Tamal Bandyopadhyay.

Aditya Puri, the MD of HDFC Bank also considered as Bachchan of Indian banking is one man who led this transform from forefront. He has been at the helm for 25 years; his journey in HDFC Bank started way back in 1994 when he joined as India’s Chief. The book captures the bank’s journey under the leadership of Aditya Puri. Tamal Bandyopadhyay combines his financial knowledge, eye for detail, and excellent storytelling style to create a vivid portrait of India’s most valuable bank and its path to the future.

The book is divided into three sections

  • The Digital Journey
  • The Flashback
  • The Puri Legacy

In the year 2015, dramatic changes were happening in the financial services sector due to simultaneous trends in technology, regulation, and markets. The rise of the smartphone, India’s unique ID system Aadhar, and payment innovations like Unified Payment’s Interface [UPI] were creating a branchless distribution channel. This was the time when the Reserve Bank of India [RBI] issued license to many new banks dedicated to payments to bring in fresh, technology-savvy competition. It is around the same time i.e. September 2014 when seeds of transformation were sowed in HDFC Bank. It was time to be disrupted or become a disruptor!

Aditya Puri had made a trip to the Silicon Valley, a year earlier in September 2014, to have a bird’s-eye view of the innovations and developments in the Valley. The idea was to gauge the kind of impact technology has on the finance and banking sector. The lesson learned was that the team at HDFC Bank had to roll-up their sleeves to lead the digital disruption in India. The top-guns in the bank were convinced that to shape the ideas at a lightning-fast speed, they had to act and execute like a startup.

They worked on a series of strategies to reduce the turn-around time involved in core banking systems like loan processing/approval, a recommendation of useful products based on customer’s profile, accelerated funds transfer, mobile banking, shopping, etc. Digitization would not only enhance the overall customer experience but it would also reduce the operating costs.

It is important to note that before leveraging digital technologies, HDFC Bank came up with the idea of ‘missed call banking’ in the year 2013. Though HDFC Bank was not the inventor of the technology, it was the first to implement it at scale!  The strategy ahead was to provide speed, use technology to do credit & risk management at scale, improve customer experience using Artificial Intelligence [AI] & Machine Learning [ML], leverage the power of Aadhar [eKYC, UPI, etc.] and other elements of the India Stack.

This led to the development of products like Chillr [money transfer over the phone using an App], EVA [Electronic Virtual Assistant]; a chatbot to handle queries from customers, migration from internal systems of record to platforms so that the bank can provide API [Application Programming Interface]. series of innovations enabled the bank to launch new products in the consumer banking & loans category for both urban & rural customers.

[L-R] Nandan Nilekani, Tamal Bandyopadhyay and Aditya Puri at the Bengaluru Launch

HDFC bank also came up with the idea of SmartBuy where everything [traveling, shopping, etc.] was available at one place. The bank did not charge a commission from their sellers since the intent was to increase the overall customer base and provide a gamut of services to its customers.

The book touches upon many such innovations, some of them were developed in-house and many were developed by partnering with start-ups & leading companies in banking & finance software. This might be of huge interest to entrepreneurs, management professionals, CEOs as well as engineers who want to execute things at scale. It also walks us through the leadership style of Aditya Puri, his customer engagement skills [even at a grassroots level], his Lucky-13 team  that built the bank and, finally, how a big organization [like HDFC Bank] can achieve wonders by becoming agile in changing the business environment.

The Flashback section also talks about the initial days of the formation of the bank, how Deepak Parekh hand-picked Aditya Puri for the important job, and more.

We had an opportunity to attend the launch event of the book in Bengaluru where the author, Aditya Puri, and Nandan Nilekani were present. Aditya Puri shed some light on his personal life as well and how he manages to have work-life balance even at his position. It was fun as well as insightful to attend the event. Along with the knowledge that we gained, we also got a signed copy of the book!

Have you read the book ‘HDFC Bank 2.0 – From Dawn to Digital‘; do leave your biggest learning from this immersive read.

|In: Technology|Last Updated: | 0 Comments

Synechron, Inc, he global financial services consulting and technology services provider, in partnership with Efma, has released a report revealing that C-suite banking executives largely believe that the future of the bank branch is bright, with the proper investment into digital transformation.

Image Source – Digital Banking

The World Branch Report 2017, entitled Digital Branch Transformation – The Evolution of Branch Banking surveyed decision-making bankers from across the globe in order to examine the role bank branches play in the current digital era and in a time of mobile-first thinking, and gather insight into where branch banking is trending. As a leader in digital branch transformation, Synechron sought to focus around four key areas, including the current market perception of the bank branch, where banks are investing in branches, how new technology can enhance the branch model, and what role staff will play in the bank of the future. Some key findings include:

Survey shows 88% believe physical branches add value to customers and will play a role in the future of banking.

Nearly a quarter [24%] intend to increase their branch network and invest in changing the model, yet nearly one in four [39%] said they plan to decrease their branch networks whilst investing in change to the current model.

63% of respondents are planning to change their branch model in line with digital transformation.

Over recent years, the number of bank branches have been in steady decline with significant closures across the US, Europe and the UK. However, this new research suggests that 88% of the bankers surveyed believe that physical branches add value to customers and will continue to play a significant role in the future of banking.

Retail and Consumer Bankers are predominantly looking towards technology to improve the in-branch customer experience and evolve the role of their staff as opposed to motives around reducing cost and reducing FTEs.

The top focus area for branch transformation as identified by those surveyed is to improve customer service/engagement, which 42% identified as a priority, followed closely by the evolution of the role of branch staff [40%]. This, however, is followed closely by introducing digital interactive experiences [38%]and self-service automated technologies [36%].

The bank of the future will continue to have a physical presence, as 97% of bankers agree that only people can bring an emotional connection to the bank, and their role will be focused on bringing the relationship connection with the bank. However, 62% of respondents are planning to reduce overall headcount in bank branches. While the traditional branch model historically was centred around transactions, the branch of the future will evolve to serve as an advisory service hub, complimented by digital experiences and employing bankers with specialized skills that combine sales and service responsibilities.

David Horton, Head of Innovation, Synechron, said

Bank branches have played a critical role in the development and success of retail banking in modern times and they will continue to play an important role, but our new report with Efma shows that the model must change and adapt to support today’s digital customer. Through digitization, the bank branch can reinvent itself to improve the experience for the customer while maintaining the personal and emotional connection which many customers value so highly.

The coming years will prove significant for retail banks as they look to evolve their value proposition, acquire new customers, and retain existing one’s through a culmination of digital and physical services.

Vincent Bastid, Efma Secretary General, said

We are at a digital crossroads within the banking industry, and while digital and emerging technologies are taking the lead, our survey with Synechron confirmed that banks still value the physical bank branch, and are looking for ways to merge the two experiences to gain the best outcomes for both banks and their customers. Prioritizing digital is no longer a ‘nice to have’ addition to a bank, but is critical in shaping their future strategic bank initiatives and the future of customer experience in the branch.

The complete report can be accessed here

|In: AI|Last Updated: | 0 Comments

Accenture has released Accenture Banking Technology Vision for 2017, an annual report that draws on the analysis of an advisory board of more than two dozen individuals, interviews with technology luminaries and industry experts, and results of a survey of more than 600 bankers.

Image Source – AI

In the next stage of artificial intelligence adoption, banks will use AI to help understand the intentions and emotions of customers and enable better interactions, according to the report from Accenture.

According to the report, more than three-quarters [78 percent] of bankers globally and 87 percent in India believe that AI will enable simpler user interfaces that will help banks create a more human-like customer experience. In addition, four out of five global respondents [79 percent] and almost nine out of ten [87 percent] of bankers in India believe that AI will revolutionize the way banks gather information and interact with customers, and three-quarters [76 percent globally] and 83 percent in India believe that within three years, banks will deploy AI as their primary method for interacting with customers.

According to Piyush Singh, MD and head of Accenture Financial Services group in India

Indian banks are embracing digital solutions for interacting with customers; the next step is implementing the enabling power of artificial intelligence [AI], such as identifying consumer preferences and then reacting with insight and emotional intelligence. In addition to gaining insights, banks could transform customer experience and improve operational efficiency. However, the challenge will be how quickly banks can implement these new technologies as banks continue to face legacy issues with their existing IT set up. This would require a C-suite-led impetus to embrace new technologies.

The theme of this year’s report, Technology for People, is a call to action for bank executives to design technology to help align their products and services with what consumers want in near real-time. In traditional banks, basic transactions continue to migrate from physical to digital channels, leading to major changes as banks redesign their branch networks and enhance their digital footprint. Four out of five bankers surveyed [80 percent] globally as well as India expect AI to accelerate technology adoption throughout the organization, providing their employees with the tools and resources to better serve consumers.

As with previous Technology Vision reports, Technology Vision 2017 is structured around key trends informed by the research.

The five trends identified in Technology Vision 2017 are

  1. AI Is the New UI [Experience Above All]
  2. Ecosystem Power Plays [Beyond Platforms]
  3. Workforce Marketplace [Invent Your Future]
  4. Design for Humans [Inspire New Behaviors]
  5. The Unchartered [Invent New Industries, Set New Standards]

The Design for Humans Trend indicates that the key to increasing the quality of customer experience lies in the ability to adapt for unique customer behaviors. The report finds that while human contact is diminishing in terms of volume, the quality and importance of human touch points will increase. For instance, one-third [34 percent] of the bankers surveyed globally and almost similar number in India [33 percent] said they plan to use a detailed understanding of human behavior to guide new customer experiences. And while nearly nine in 10 bankers [89 percent] said they believe that their customers are satisfied with their bank’s use of personalization, two-thirds [67 percent] globally and in India claim they struggle to understand their customers’ needs and goals.

As reported in the Ecosystem Power Plays trend, banks are increasingly integrating their core functions with digital ecosystem platforms in an effort to manage more broad-based consumer relationships. Nearly all bankers surveyed [98 percent] said they believe that it is ‘somewhat’ or ‘very’ critical to adopt a platform-based business model and engage in ecosystems with digital partners, with one-quarter [25 percent] of global respondents and 40 percent of India respondents saying their organizations are already taking aggressive steps to participate in ecosystems.

Many banks are already giving authorized third-parties access to account data and aggregated card profiles to benefit customers. Banks recognize that it is critical to participate in these ecosystems, but it comes at a cost. Three-quarters [76 percent] of respondents globally and four out of five [80 percent] in India said that participating in these ecosystems would require giving up control in favor of an overall better outcome- such as speed, agility and access to new customers- and that same number believe that chosen partners and ecosystems will help determine their bank’s competitive advantage moving forward.

Methodology

Accenture’s Technology Vision is developed annually by the Accenture Labs. For the 2017 report, the research process included gathering input from the Technology Vision External Advisory Board, a group comprising more than two dozen experienced individuals from the public and private sectors, academia, venture capital firms and entrepreneurial companies. In addition, the Technology Vision team conducted interviews with technology luminaries and industry experts, as well as with nearly 100 Accenture business leaders.

In parallel, Accenture Research conducted a global online survey of more than 5,400 business and IT executives across 31 countries and 16 industries to capture insights into the adoption of emerging technologies. The banking industry report is based on responses from 579 respondents at banks in 31 countries across North America, Europe, Asia-Pacific, Africa and South America. The goal of the survey was to identify the key issues and priorities for technology adoption and investment. Respondents were mostly C-level executives and directors, with some functional and line-of-business leads, at companies with annual revenues of at least USD 500 million, with the majority of companies having annual revenues greater than USD 6 billion.

|In: Technology|Last Updated: | 0 Comments

The Banking and Finance sector (BFSI) is witnessing one of its most interesting and enriching phases. Apart from the evident shift from traditional methods of banking and payments, technology has started playing a vital role in defining this change. The phenomenal swing from offline payments to online payments over the last two decades has been aided by mobile apps, plastic money, e-wallets and bots. Now, the use of Artificial Intelligence (AI) in BFSI is expediting the evolution of this industry.

Source – LiveMint

AI enables a computer to behave and take decisions like a human being. Coined in 1956 by John McCarthy at MIT, AI was little known to the layman and merely a subject of interest to academicians, researchers and technologists. However, over the past few years, it is more commonly seen in our everyday lives; in our smartphones, shopping experiences, hospitals, travel etc. The BFSI sector uses AI because of its inherent advantages-efficiency and faster processing, accuracy, daily application & data availability. Here are some artificial intelligence technologies and what they offer for Banking and Finance.

Machine Learning, Deep Learning, NLP Platforms, Predictive APIs and Image and Speech Recognition are some core AI technologies used in BFSI today. Machine Learning recognizes data patterns and highlights deviations in data observed. Data is analysed and then compared with existing data to look for patterns. This can help in fraud detection, prediction of spend patterns and subsequently the development of new products. Key Stroke Dynamics can be used for analyzing transactions made by customers. They capture strokes when the key is pressed (dwell time) and released on a keyboard, along with vibration information. As second factor authentication is mandatory for electronic payments in India, this can help detect fraud, especially if the user’s credentials are compromised. Deep Learning is a new area in Machine Learning research and consists of multiple linear and non-linear transformations. It is based on learning and improving representations of data. A common application of this can be found in the crypto-currency, Bitcoin.

Adaptive Learning is another form of AI currently used by Indian banks for fraud detection and mitigation. A model is created using existing rules or data in the bank’s system. Incremental learning algorithms are then used to update the models based on changes observed in the data patterns.

Natural Language Processing (NLP) is the ability of a computer to understand human speech as it is spoken. In India, ICICI has started using NLP for sentiment mapping. It is predicted that the NLP market will reach USD 13.4 billion by 2020 at 18.4% CAGR. NLP and AI bots may also be used for Whatsapp-based banking, similar to how WeChat is used for banking in China. Voice Recognition used for secure banking transactions can take payment security to the next level.  The Santander Group, based in Spain, has already announced the usage of this feature in their app. Similarly, AI can be used to answer customer questions as well. Swedbank uses Nina (a web assistant) to artificially interact with customers and build loyalty.

Banks across the globe, including India, are increasingly providing Spend Analysers and Smart Wallets as value added services to customers, helping track expenses and understanding spending patterns. The lending industry can also use AI to derive user needs, borrowing patterns and the payment sequence, making lending a less risky proposition. Predictive APIs can be used for detecting frauds and for speech/voice recognition.

In India, one can see increased momentum for research and funding of AI start-ups. According to CB Insights, venture capitalist funding in AI firms has increased from USD 415 million in 2012 to USD 2.38 billion in 2016. Image recognition, product and service discovery chat bots and developer tools for enterprises to create their own AI systems are some technologies that start-ups are focusing on.

In the gamut of BFSI and the imminent marriage of Fintech companies and banks, using AI becomes all the more significant to accelerate change and improve customer experience and design. Soon we will see Advanced Robotics being implemented, Digital becoming mainstream, Blockchain playing a key role in payments and regulators turning to technology. With Asia taking the lead in technology innovation and playing a prominent role in the world of payments by 2020, BFSI should accelerate the adoption of AI and make it the core engine for business transformation.

About the author

Sanjay Goswami is the VP-Software Development at Worldline India, a leader in payment and transaction services. At Worldline India, Goswami leads product development, technology and competency building with a focus on new and emerging businesses and innovation. Prior to Worldline, Goswami has worked with reputed companies like Samsung, HCL, CSC and Syntel Inc. Sanjay is a BE graduate & has completed the Executive General Management Program from IIM, Bangalore.

|In: Technology|Last Updated: | 0 Comments

Axis Bank, market leader in travel currency cards, have announced the launch of Axis Forex Online, India’s first comprehensive online retail forex solution to empower customers to transfer funds online in more than 100 plus currencies across 150 countries.

Axis Forex Online, in addition to online outward remittance, would also provide door step delivery of forex cards and foreign currency cash, the same day to all resident Indian individuals.

[Image Credit – AxisBank]

Speaking on the occasion, Sidharth Rath, President & Head, Treasury, Corporate & Transaction Banking, said

This innovative offering from Axis Bank, Axis Forex Online is aimed at providing our customers as well as non-customers the ease of making outward remittances, purchasing forex cards and foreign currency cash, all at the click of a button. Unlike conventional modes of remittances, this facility offers a greater degree of convenience to users, with transparent rates and higher transaction limits. And all this can be done by them from the comfort of their home or office.

Axis Forex Online compares favourably with existing alternate options available for outward remittance on virtually all parameters – ease, speed, efficiency and cost effectiveness. The remittance procedure is a simple three step process – register oneself, register the beneficiary and make payment online. Once the one-time self-registration is completed and verified, the user can register multiple beneficiaries and effect money transfer instantly. An existing customer can also use the online outward remittances facility via Axis Bank Internet Banking and transfer money from any Bank account in India to any Bank around the world.

Education, Family Maintenance, Leisure & Travel, Medical and Health care have been observed to be the segments widely used for foreign currency outward remittance.  Axis Forex Online will allow users to remit up to USD 25,000 in a single transaction and limit the retail outward remittance to USD 250,000 per annum. 

About Axis Bank

Axis Bank is the third largest private sector bank in India. Axis Bank offers the entire spectrum of services to customer segments covering Large and Mid-Corporates, SME, Agriculture and Retail Businesses.

With its 2,805 domestic branches (including extension counters) and 12,631 ATMs across the country, as on 31st December 2015, the network of Axis Bank spreads across 1,796 cities and towns, enabling the Bank to reach out to a large cross-section of customers with an array of products and services. For more information, please visit AxisBank.

|In: Banking|Last Updated: | 0 Comments

Few weeks back, HDFC released PayZapp, India’s first 1-click mobile-pay solution & now, IndusInd Bank has joined the foray of integrating banking services with Social Media Platforms. IndusInd Bank has launched yet another Customer Responsive service called QuickPay, wherein IndusInd Bank customers can send money instantly to their personal contacts and/or business parties through SMS, E-mail and social media platforms, without having the beneficiary Bank Account details.

The sender can simply go to the bank website and transfer money to the recipient instantly, by just filling the E-mail Id or Mobile Number of the receiver. Moreover, customers can choose to send E-Gift Cards through the QuickPay platform to anyone, anywhere, anytime.

IndusInd_Pay

How Quickpay works

An IndusInd Bank customer can initiate a Quickpay transfer from the bank’s website or using the Net Banking instantly with a personalized message and with the choice of greeting. The sender gets a ‘Quick code’ that is shared with the recipient for completing the transfer. Quickpay happens via NPCI’s Immediate Payment Service [IMPS Person to Account] that is instant and 24*7.

While launching the service Ritesh Raj Saxena, Head – Savings, Digital & Payments Business, IndusInd Bank said

IndusInd Bank’s QuickPay service is aimed at delighting the customers in the digital age. Today’s young & digitally savvy customers expect payments to happen instantly & seamlessly. This service empowers IndusInd Bank consumers to send money to anybody, anywhere on a real time basis via social platforms. Bank will also soon launch its Wallet based payment App.

To experience QuickPay,please visit this link. For more information on QuickPay, please visit the following link.

About IndusInd Bank

IndusInd Bank, which commenced operations in 1994, caters to the needs of both consumer and corporate customers. Its technology platform supports multi-channel distribution network. For more information, please visit IndusInd.com

|In: Android|Last Updated:

In December 2014, HDFC Bank launched its “Go Digital – Bank aapki mutthi mein” campaign on the banks of the Varanasi river with an aim to provide holistic banking services in all possible digital channels. Today, HDFC Bank provides 175+ banking transactions through its Net banking platform and 80+ transactions through Mobile banking [Mobile and Tablet apps]

With the launch of wearable devices & potential demand for wearable devices in India, consumers are highly likely to add yet another digital interface – a wearable device – to their current portfolio of devices. A banking experience on a personalized wearable device would take the consumer’s interaction with the bank to a whole new level.

HDFC_Bank

Hence, HDFC Bank thought that it was the opportune moment to introduce a new category in digital banking, leveraging the emerging wearable platforms, and becoming the first bank in India to launch Watch-Banking for Apple Watch.

Why Apple Watch?

HDFC Bank is starting with the Apple Watch and aims to provide banking services through all wearable devices across platforms like iOS and Android.

We have started with Apple Watch since it is designed from ground up keeping in mind what the user would want to do with such a device in a jiffy. HDFC Bank’s App has been made keeping this in mind and the features are chosen accordingly.

Features of HDFC Bank Watch Banking

HDFC Bank will provide a total of 10 banking transactions in the current launch phase. Some of the features include:

  • View Account Information
  • Bill Payments, Recharges
  • Hot-listing facilities
  • Locate nearest branch/ATM/offer
  • Request statement/chequebook etc.

Moreover, HDFC Bank’s Watch-Banking does not require our customers to download a separate App. Customers can activate Watch-Banking from an upgraded version of HDFC Bank’s Mobile-banking App itself!

Security features and how will it work?

HDFC Bank brings in the same level of high security of its Mobile Banking App to its Watch Banking experience.

  • Any user information or data flow that happens, it if from the mobile phone to the bank’s secure servers. The watch is merely a projection device
  • For added security, there is a watch banking PIN that the user himself sets during the one time set-up process. This can be done only after entering his customer id and password known only to the user.
  • Additionally the Apple watch itself has a pass-code lock just like other iOS devices.

You can see the HDFC watch-banking in action below

If you have  already tried the HDFC watch-banking app, please share the experience in the comments section!!