Monday, August 22, 2016

New Age Banking to Make Branches Redundant

Gone are the days when having a branch presence was a great competitive advantage for an established bank over a new bank. Technology is transforming the way people bank. With increasing adoption of internet and our country moving gradually towards cashless economy, each desktop or a mobile with internet connection becomes a mini branch wherein you can do virtually any internet banking transaction anytime, anywhere and from any device.

New age banks like YES BANK with just 900 branches commands a market value more than 6 times that of Bank of India with over 5000 branches. Clearly new age banks are leveraging technology to reach masses and the simplicity & usability of their front end (app or websites) get people do a banking transaction in fraction of the time compared to what is takes to do the same transaction in a branch. 

New age Banks

With such visible trend, every bank is trying to provide technology led customer experience by innovatively designing their websites and mobile applications. For example YES BANKs recently revamped its website and also launched, the first bank to use .bank domain. The website offer a consistent user experience optimized across all browsers, tablets and mobile phones. The unique feature of the website, which is not present in most banking websites in India, is that it offers personalized user experience based on your last visit, searched product, geography and time of visit. So you can start from the point where you left the website during your last visit.

With many in rural parts of the country not having internet connection, banks are innovatively trying to make banking services available to them as well, without having an extensive branch presence, through their basic mobile connection. For example YES BANK’s Star Star Bank facility. The customer can reach the bank by just dialing **2265 (star star Bank) which a generic number and very easy to remember. This kind of dialing facility is already popular in western countries and is expected to catch up in India as well.

So with technological disruptions happening fast and furiously, banks will have to do a lot more than just opening a branch in every nook and corner of the country. PSU banks particularly have to reduce the amount they invest in branch and increase their investments in technology if they have to stay relevant and competitive in this fast changing industry.

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