The traditional Banking style of a customer waiting at the counters is slowly fading with the pervading new technology in banks. The fintechs, who are defining the new payment norms at their platforms in an effective way, is a cause of concern for boards of commercial banks. They are not only eating the lion’s share of cake in small and busy platforms of various commercial transactions, but also throwing a huge challenge at the Big Brothers’ payment methodology itself in the banking sector.
Modern day banking has been helping the customer through online banking made available on his desktop or mobile. Every banking customer was offered internet banking which offers wide range of facilities like online fund transfers, making deposits as per their requirement and meeting the exigencies of remittances etc. No doubt, it is a welcoming pattern to ease the convenience of banking. But, it doesn’t stop there. Nowadays, a customer is seriously looking forward for banking in his every step, which was not the pattern a decade ago. Now, even the chaiwala or the vegetable vendor is able to do his business online effortlessly thanks to the emergence of fintech companies.
The existing players in the banking arena are finding it challenging everyday to face competition from new players, but still they are not leaving any stone unturned in building niche banking models to attract the customers and to meet their ever-changing needs.
The ease of transacting has been a gamechanger as far as these fintech companies are concerned. Though these small players are not posing any big challenges to regular business at commercial banks, they are certainly making a serious dent to their profitability through their remittance mechanism and transfer of funds to third parties.
Though there has been an explosion as far as technology is concerned, there have been several hurdles in the way of modern day banking. Some of the serious threats posed by the technology advancement in modern day banking are:
Cybersecurity and fraud prevention in digital banking
Cybersecurity remains a major challenge for all banks. With the rising number of digital transactions, the threat of cyber attacks has grown multi-fold. According to a latest study, cybersecurity is the number one risk for the global banking industry. Banks are nowadays investing heavily in digital banking platforms to strengthen them with the use of advanced technology available in the most dynamic market. Banks are also educating their customers on how to protect information about their accounts and to save themselves from becoming prey to fraudsters.
Customer trust
Winning customer trust is the main factor that contributes to the growth of any organisation. Banks are no exception to that. In the areas of digital banking, winning the customer trust and retaining it is the biggest challenge as the bank has to ensure a solid platform which is not just hassle-free, but also one that can counter attacks by cyber criminals.
Regulations of the land
Regulations, which are in force in a particular country, have to be meticulously followed by tech-driven banks. In the name of going digital, they cannot override the statutory norms of that particular country. This can can only invite penalties. This is very very crucial for their growth and penetration in overseas markets.
Adaptability to change
Adaptability to change overnight may be the norm at times for these technology banking heroes. There may be a great advancement which is introduced in the market, but in a very few days, it may be challenged by other competitors in the market. So, you should be able to change quickly and adapt to the change to withstand the competition. There are challenges for new generation banks, but digital transformation has taken place on a continuum globally. It is going to be the future. Let us invite the changes and enjoy the fruits of modern day banking at our finger tips.
GV Sastry
Deputy General Manager
State Bank Staff College, Hyderabad
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