As the wave of digital disruption began redesigning most sectors of the economy, banking was one of the earliest to adopt large-scale transformations. Traditional banking evolved into digital banking in sync with the emergence of advanced mobile technology. Smartphones gave the essential support to this development, driving a paradigm shift in the way businesses were done for ages, and bringing the entire banking operations at fingertips.
The Covid crisis since last year paved the way for digital disruption to gain momentum and make inroads into our everyday life. Digital banking came of edge, in step with the most other digitally restructured businesses.
Fino Payments Bank is one the earliest entrants to the digital or neo bank arena. Fino was originally formed as a domestic remittance and payments company under the guidance of ICICI Bank. It later became an independent entity specialising in domestic remittance and digital payments. The idea was to make banking simple and convenient through a mix of physical and digital platforms. It strategically leveraged technology and partnerships to create an anywhere-anytime banking experience, according to Managing Director Rishi Gupta.
Banks are increasingly beefing up their presence in the online realm and today one can open a bank account from home. The necessity to conduct banking remotely, even more during the pandemic, gave this new category of banks a renewed vigour.
According to Forbes, by 2030, banks will be invisible, connected, insights-driven and purposeful.
“Leading banks will use technology and far deeper customer insight to insert financial services at the customer’s moment of need, often at the expense of brand visibility.”
According to global consultancy firm KPMG, the banking industry of 2030 will look very different from what it is today – some of what will be evolutionary and some will be radically different. “We are confident that the landscape will be far more competitive, efficient and innovative in delivering consumers ‘autonomous experiences’ that are not possible today,” it says in a recent report.
Experts predict that by 2030, digital payment transactions will touch $856.6 billion in India. The 2010s was the decade for emergence and growth of digital payments in India, with the government using such payments to push its financial inclusion agenda.
“Technology has the power to reach the remotest of places and build solutions that are not viable for legacy institutions and fintech will become increasingly inclusive in the next 10 years and its implementation in the banking sector will expand to population that is banked,” says Dilip Modi, Founder of Spice Money.
According to PwC, banks and non-banking financial companies have increased their focus on providing integrated solutions. The realm of digital payments have evolved from being a cost centre for banks. It is now a revenue centre and a crucial lever for customer acquisition. Financial companies have started offering services like lending, wealth management, microinsurance, and use of data analytics to offer for more customised solutions for customers. The pandemic has triggered a transformation in payments, and customers are expected to increasingly opt for contactless, QR and mobile or wearable-based digital payment modes, PwC says.
“Within the next 10 years, nearly all banks will either partner with fintechs or acquire players to enable digitisation and transformation of customer journeys across B2B, B2C, C2B, and even C2C. Banking products, business models, and profitability will also mirror this reality,” says Global PayEX Chief Revenue Officer Narayan ‘Naru’ Ramamoorthy.
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Digital Payments Space in India 43% CAGR in 10 Years
Revenue Outlook for Payment Players Rs 2,937 billion by 2024-25 from Rs 1,982 billion in 2019-20
Growth for UPI 414% CAGR until FY20
Preferred Payments Product Person-to-Merchant (P2M) Payment
P2M Share in UPI Transactions 40%
Outlook for UPI Seven times growth by 2025