Financial Foresights April 2017 Digital Banking New horizons in a cash-light India Financial Foresights Editorial Team Contents Jyoti Vij [email protected] 1. PREFACE . 2 Anshuman Khanna 2. INDUSTRY INSIGHTS . 3 [email protected] n Digital Banking - Transforming India ? . 5 Bhaskar Som Supriya Bagrawat Country Head [email protected] India Ratings & Research Advisory Services n Digital Banking & Technologies of Tomorrow . 8 Amit Kumar Tripathi Rajiv Anand [email protected] Executive Director & Head – Retail Banking Axis Bank n Digital Banking - An Indian Perspective. 12 Raghavendra Bhat M. About FICCI General Manager Karnataka Bank FICCI is the voice of India's n Making Banking More Human . 15 business and industry. K P Sunny General Manager, Digital Banking, Strategic Initiative & Optimization Established in 1927, it is Federal Bank India's oldest and largest n Digital Banking in India . 18 apex business organization. Prasanna Lohar Head Technology – Innovation & Architecture FICCI is in the forefront in DCB Bank Limited articulating the views and n ‘SMART Digital Banking Platforms’ for Enriched Customer Experience and concerns of industry. It Growth . 24 services its members from the Murali Mahalingam Industry Director, Banking & FS Indian private and public SAP corporate sectors and n Digital Banking - New Horizons in a Cash-light India . 28 multinational companies, AKS Namboodiri General Manager IT & IRMD drawing its strength from Dhanlaxmi Bank Limited diverse regional chambers of n Smart Apps & Bots – The New Face of Indian Banking . 31 commerce and industry Shantanu Sengupta Managing Director & Head - Consumer Banking Group across states, reaching out to DBS Bank India over 2,50,0000 companies. n New Horizons in Less Cash India. 34 Deepak Sharma Chief Digital Officer Kotak Mahindra Bank Disclaimer n Digital Banking – The Holy Grail for the Banking Industry . 36 All rights reserved. The Sujatha Mohan Head, Digital & New Initiatives content of this publication RBL Bank may not be reproduced in whole or in part without the 3. FICCI'S DATA CENTRE. 39 consent of the publisher. The n publication does not verify Equity Capital Markets . 40 n any claim or other Mergers & Acquisitions . 43 information in any n Debt Capital Markets . 45 advertisement and is not n Loan Markets. 47 responsible for product claim n Project Finance . 49 & representation. n Investment Banking Revenue . 51 Articles in the publication represent personal views of the distinguished authors. FICCI does not accept any claim for any view mentioned in the articles. Financial Foresights 1 Financial Foresights Editorial Team Contents Jyoti Vij [email protected] 1. PREFACE . 2 Anshuman Khanna 2. INDUSTRY INSIGHTS . 3 [email protected] n Digital Banking - Transforming India ? . 5 Bhaskar Som Supriya Bagrawat Country Head [email protected] India Ratings & Research Advisory Services n Digital Banking & Technologies of Tomorrow . 8 Amit Kumar Tripathi Rajiv Anand [email protected] Executive Director & Head – Retail Banking Axis Bank n Digital Banking - An Indian Perspective. 12 Raghavendra Bhat M. About FICCI General Manager Karnataka Bank FICCI is the voice of India's n Making Banking More Human . 15 business and industry. K P Sunny General Manager, Digital Banking, Strategic Initiative & Optimization Established in 1927, it is Federal Bank India's oldest and largest n Digital Banking in India . 18 apex business organization. Prasanna Lohar Head Technology – Innovation & Architecture FICCI is in the forefront in DCB Bank Limited articulating the views and n ‘SMART Digital Banking Platforms’ for Enriched Customer Experience and concerns of industry. It Growth . 24 services its members from the Murali Mahalingam Industry Director, Banking & FS Indian private and public SAP corporate sectors and n Digital Banking - New Horizons in a Cash-light India . 28 multinational companies, AKS Namboodiri General Manager IT & IRMD drawing its strength from Dhanlaxmi Bank Limited diverse regional chambers of n Smart Apps & Bots – The New Face of Indian Banking . 31 commerce and industry Shantanu Sengupta Managing Director & Head - Consumer Banking Group across states, reaching out to DBS Bank India over 2,50,0000 companies. n New Horizons in Less Cash India. 34 Deepak Sharma Chief Digital Officer Kotak Mahindra Bank Disclaimer n Digital Banking – The Holy Grail for the Banking Industry . 36 All rights reserved. The Sujatha Mohan Head, Digital & New Initiatives content of this publication RBL Bank may not be reproduced in whole or in part without the 3. FICCI'S DATA CENTRE. 39 consent of the publisher. The n publication does not verify Equity Capital Markets . 40 n any claim or other Mergers & Acquisitions . 43 information in any n Debt Capital Markets . 45 advertisement and is not n Loan Markets. 47 responsible for product claim n Project Finance . 49 & representation. n Investment Banking Revenue . 51 Articles in the publication represent personal views of the distinguished authors. FICCI does not accept any claim for any view mentioned in the articles. Financial Foresights 1 Preface inancial Foresights, the flagship quarterly publication of FICCI’s financial sector team, provides a platform to industry, policy makers and other stakeholders to exchange ideas and views on important financial Fsector developments in the country. The current issue of the publication focuses on the topic: ‘Digital banking - New horizons in a cash-light India.’ and presents insightful write-ups contributed by industry leaders from the digital banking space. As you go through the pages of this edition, you would see that all our authors agree that innovation is increasingly becoming a part of the banking system in India. Yes, the speed with which different banks are moving in this direction may vary, but there is agreement that there has to be a well thought out strategy to deliver services to customers in a more efficient manner and at a time and place of customers choosing. There are three trends that are shaping the future of the digital banking space in India. First, is the rapid growth of the more nimble Fintech players that are working to deliver services in a manner never seen before. Banks will have to work alongside such players to improve the customer facing side of their business as well as their own Industry Insights internal processes. Second, the experience of customers in other industries be it e-commerce, healthcare, education or transportation is improving at such a fast pace that they are now expecting similar delivery and interface even in the banking industry. Third, and this perhaps is the most important, is the whole push government is giving to digital economy in the country and which itself is inducing a change in consumer behaviour and making customers ask for more convenience from their banks. While on this subject, one must mention that the way India Stack has developed, we can see this is one of the most transformative platforms created anywhere in the world for delivering services including financial services to people in a very transparent manner. UPI, BHIM app or the Aadhar based payment systems which may not even require one to have a phone for carrying out some of the banking transactions is a fascinating story to follow in itself and the government deserves full credit for ushering in such great innovations in the Indian marketplace. Our authors talk about this and other developments such as ‘wearable banking’, ‘predictive banking’ etc. – all of which are destined to change the face of banking in coming times. In this issue, our financial sector team has tried to highlight the prospects of Digital banking in India and we hope that you will find it an interesting read. We are thankful to all our contributors for sharing their views, insights and perspectives. It is through such a collaborative effort that FICCI facilitates pushing the knowledge frontier for all stakeholders and bringing to light some of the key issues that merit debate and discussion. As always, we look forward to your feedback. With best wishes Dr. A. Didar Singh Secretary General FICCI Financial Foresights 2 Financial Foresights 3 Preface inancial Foresights, the flagship quarterly publication of FICCI’s financial sector team, provides a platform to industry, policy makers and other stakeholders to exchange ideas and views on important financial Fsector developments in the country. The current issue of the publication focuses on the topic: ‘Digital banking - New horizons in a cash-light India.’ and presents insightful write-ups contributed by industry leaders from the digital banking space. As you go through the pages of this edition, you would see that all our authors agree that innovation is increasingly becoming a part of the banking system in India. Yes, the speed with which different banks are moving in this direction may vary, but there is agreement that there has to be a well thought out strategy to deliver services to customers in a more efficient manner and at a time and place of customers choosing. There are three trends that are shaping the future of the digital banking space in India. First, is the rapid growth of the more nimble Fintech players that are working to deliver services in a manner never seen before. Banks will have to work alongside such players to improve the customer facing side of their business as well as their own Industry Insights internal processes. Second, the experience of customers in other industries be it e-commerce, healthcare, education or transportation is improving at such a fast pace that they are now expecting similar delivery and interface even in the banking industry. Third, and this perhaps is the most important, is the whole push government is giving to digital economy in the country and which itself is inducing a change in consumer behaviour and making customers ask for more convenience from their banks. While on this subject, one must mention that the way India Stack has developed, we can see this is one of the most transformative platforms created anywhere in the world for delivering services including financial services to people in a very transparent manner.