Digital Transformation in Banking: Pandemic-led Acceleration

Updated On : April 2022

Banking in today’s era is anytime and anywhere banking. The Indian government has been aggressively promoting digital India which is cashless transactions. The Launch of Unified Payments Interface (UPI) and Bharat Interface for Money (BHIM) by the National Payments Corporation of India (NPCI) are significant steps for innovation in the current payment system. Digital transformation in the banking sector has fundamentally changed how banks should operate and how they should service their customers. They aim to provide fast, accurate, and quality service to the consumers and hence are becoming more and more personalized with time.

Pandemic has affected a lot of the way people execute things in their life, right from shopping, and working to banking specifically. The solution to this was undoubtedly going towards digitalization. With lockdowns being imposed and the security of our health getting worse, people have preferred net banking and carrying out every single banking activity at the tip of their fingers.  India’s banking sector is set for robust growth. Banks that undertake this transformation can expect reduced costs and streamlined processes. 

The future of digital banking is placing its customers at the center of every digital strategy and banks must instrument these from today to be able to seamlessly integrate them in the coming future. The software products and solutions made for the smooth functioning of banks have already caught the attention and are the future of banking. The process of work must be shifted from Manual to Digital to save time and for error-free work. The use of AI, AR, distributed ledger technology, and automation will further personalize the process of banking. 

Benefits of a Digital Transformation in Banking

Easy and Convenient - You don’t have to carry Cash in your pocket, all you need for making the payment is a debit/ credit card or your smartphone.

Tracking Transaction History - Banks app has all your transaction history to help you with all your incomes and expenses. You don’t have to remember things; just open an app and you have all the information at your fingertips.

Discount from taxes - To encourage digital payments government has announced many discounts like a waiver of service tax on the use of credit or debit card for payments up to Rs 2,000.

Minimal Risk - Digital payments have less risk involved if used wisely, not sharing your OTP or account password with any other Individual are a few of the safety measures to be followed by everyone.

To conclude, COVID-19 has accelerated the digitization of banking as customer expectations change during the pandemic. This potential digital change, brought forward by the pandemic, will also help banks cope with the tougher operating environment the pandemic has brought.

In the longer term, it will be a fundamental step in boosting profitability and returns in the sector. the future of banking is filled with digital transformation in almost every vertical, and the sooner the adaptation is implemented, the better banks will be able to compete.

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