How Digitalisation can Aid the BFSI Industry?

The 21st era is an age of constant changes. It is an era that has witnessed a lot of changes, along with their positive as well as negative after-effects. Most of these changes are driven by technology, the advent of which has changed the way we perceive the world.

Needless to say, technology has made life a lot easier in the 21st century. No longer do people have to be part of the long queues at malls or worry about booking their plane, train or bus tickets. Thanks to technology, all of this and much more are easily available just at the tap of their fingers. However, digitalisation is not just limited to changing the way one shops or books tickets, it expands way more than that.

Take education, for instance. The Covid-19 pandemic made people realize that schooling is not necessarily restricted to physically attending classes or sitting for exams. All of these can be done from the comfort of our homes, just with a digital communication tool like a smartphone, laptop or desktop.

Digital Transformation in Banking Sector

The BFSI, or Banking, Financial Services and Insurance is one sector that has a lot to do with the economy of a country. BFSI or banking is one of the strongest pillars of any economy. Thus, when technology took over to initiate the digital transformation in the banking sector, people had very high expectations.

Banking, in general, and without digitalisation, involved a lot of fussing over. People had to form long queues and spend long hours awaiting withdrawal or deposit of money. It was a tenuous task to fill forms, attach documents and then wait for several days, with several unsuccessful visits to the bank. Even the bankers had a lot of piling paperwork to get done with, and there was a lot of collected data that needed the attention of bank employees. Thus, digital transformation in the banking sector was aimed not only at improving the digital consumer experience but also that of the bank and its employees.

Digital transformation in the banking sector was first introduced in India towards the latter half of the 1990s. However, it was not until the Indian government announced the demonetization back in 2016 that the general masses started to make use of digital banking services. Before that, most of the Indian masses were yet to benefit from the perks of digital banking.

Banking is a very sensitive topic to some people, mostly because of certain traumatic experiences associated with it. Surely, if a person has all of his life’s savings in a bank account, he is bound to be cautious while dealing with that. Moreover, the older generation always goes by the proverb- All that glitters is not gold. It was tough for them to believe that technology could make all of this happen without any major drawbacks. They did not grow up seeing the perks of technology like we did, for them, technology was always associated with frauds and losses. Thus, most of them shunned away digital banking in the fear of losing out on their precious life savings.

But after the demonetization of the Rs. 500 and Rs. 1000 notes, it was getting difficult for people to pay for basic jobs like getting groceries or buying medicines. Initially, even ATMs had a withdrawal limit of Rs. 2000 due to the lack of new notes. That is when the Indian government stepped up the Digitalisation in India campaign that they had introduced a year earlier.

How does Digitalisation in Banking Sector help?

The digitalisation in banking sector helps all the people in the economy that are connected to banking one way or the other. Be it the consumers, the employees or the bank in general, everyone has a way to benefit from digitalisation.

Here is a gist of how the digitalisation in banking sector helps.

• Computation of Data: The employees of a bank have to deal with a lot of data. There is the history and present records of the consumers which need to be streamlined. There is information regarding several new schemes and that of their applicants. In addition to all of this and more, there is also a lot of paperwork that needs to be done. Digitalisation in the banking sector helps to arrange all of this in one place. It makes interpretation and modification of data easier, and also requires minimal or no paperwork thus, making the bank’s work easier. When all of the data is in one place, it also helps the bank to cater to the consumer needs faster, thus improving the digital consumer experience.
• Ease of Mobile Banking: Smartphones have solved a lot of our problems. It can be used for a lot of things- calling people, connecting on social media, and even attending classes and doing official work. Digital banking was another feather on the cap for the many efficacies of smartphones. Just with a few taps, people could easily pay for groceries, or even carry out successful bank-to-bank transactions right from their phones. This was just an added feather on the cap of smartphones, owing to the many efficacies that they offer.
• More Security with fewer Efforts: If you can remember, going to withdraw money from the bank involved a lot of careful planning for our parents. They had to make sure that they reached the bank early to be way ahead in the utterly long queues. Plus, there was always deliberate planning involved to thwart off the many fraudulent eyes that seemed to stay waiting to run away with all that money. But with digital banking, withdrawals and transactions require no queuing. Plus, UPI IDs and MPINs are an added security layer that helps make sure that no one else but the account holder is the one trying to access that particular account.

Thus, digital transformation in the banking sector has made the tiresome banking days a lot easier. If nothing else, it has made the bank closer to us, improving the digital consumer experience.