How will technology transform the future of banking?

Y. B. Chavan, Nariman Point, Mumbai : On 7th of May 2017 the National Conference on Urban Co-Operative Banks was held in Mumbai. The agenda of this event was to Understand the challenges faced by the UCBs, the Legal and Policy Issue of the UCBs, the RBI Regulatory changes required for the UCBs, the future of UCBs in the Global prospect the Technology Upgradation & Challenges.

This one-of-a-kind event brought together industry experts as well as innovative business leaders in financial services, technology, research and development who addressed and provided updated information and solutions to the challenges faced by the Industry. CEO at Nelito Systems Pvt. Ltd. was one of the Panellist for "Technology & Future Banking" discussion session.

During the discussion he in emphasized on what the cooperative banks can do using IT to grow, in spite of their various constraints. He also put light on the current realities for Co-operative banks. As IT is becoming too complicated most of the coop banks feel overawed by it. There is a limited technical depth of the team and this usually is exacerbated by their location, which in many cases is in smaller cities and towns. Further due to regulatory restrictions many are not allowed to offer even mobile and internet banking, without meeting certain size criteria.

One of the major challenge is opening branches in large cities is very expensive, and is not viable anymore and lack of attention from large IT companies. The Large banks undercut cooperative banks by giving loans at lower interest rates, which cooperative banks cannot match up too. Another challenge is that many co-operative banks are using IT systems and core banking systems which were purchased 10 years back, and were designed for branch banking hence cannot handle increased loads and integrations with so many new payment systems.

He also shared his thoughts on what can they do to grow, in spite of these constraints. In view of more and more digital channels and consequently increased transaction volumes, review the current CBS load handling and integration capabilities, and evaluate if there is a need to change. He also stated that in today's digital world co-operative banks need to choose the right IT partner who is agile and open doors to multiple solutions. The IT partner should be capable to make the current digital technologies work for cooperative banks in a practical way. If RBI puts restrictions on Mobile and Internet banking they should explore Doorstep banking which is also known as BC Banking or Tab banking where there is no such restriction, there.

The discussion indicated the need to explore alternative revenue sources beyond normal lending like Microfinance, Banc Assurance, selling mutual funds, etc. and these business models can be facilitated by Doorstep Banking.

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