18 February 2018
Sameer Singh Jaini


Sameer Singh Jaini - www.TheDigitalFifth.com

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Disruption in Retail Banking

Growth in internet and mobile technologies has transformed many industries and economies. The market forces and competitive landscape has completely changed in many sectors. iTunes has fundamentally changed music industry, Amazon has driven most big brick and mortar book sellers out of business, Expedia is one of the worlds' biggest travel company….. the list goes on. Internet and mobile technologies are big disrupters for most industries. What started (and tapered a bit!) with the dot com boom of 2000 has become a lethal threat to most business models today. Powered by mass adoption in mobiles phones, proliferation of smart phones and cheaper band-width, internet and mobile technology have changed many industries. The banking industry in has been dominated by a handful of big global or regional banks for 100s of years. While the credit crisis has shaken this industry, the core market forces for the industry have not changed. Will Innovation in Internet and Mobile technologies disrupt retail banking? Will there be 5 new names in global top 10 retail banks in 2020?

To Hell with Digital

26 May 2017  |  10282 views  |  1

Industries of the future would come out of amalgamation of current industries, which were essentially built in Analog world. All success stories of Digital world have been about re-imagining of the current industries by Digital mavericks. 

Customers, as of today, have to install multiple applications for handling financial relationships (typically 2 / 3 bank apps, 1 / 2 mutual fund apps, 1 /2 brokerage apps etc). Unification of entire financial services under one application is the first and foremost need of the customers. This will help the customer in taking right decision and will increase convenience.

The Banking App

Single mobile & digital platform for entire Financial Needs would help in simplifying customers life. This platform would be similar to UPI platform in India and will help in simplifying banking for the masses. 

How do we get there?

Authentication layer:

-      Authentication of each user will get centralized with Biometric platform (Aadhaar in India). There will be a trusted authority for authenticating all customers and with those credentials, customers will be able to access all banks / financial institutions.

Business layer:

-      Central bank would have to issue Open API requirements to banks akin to PSD2. Similarly, relevant regulatory authorities would be issuing API requirements for Insurance, Mutual Fund, Brokerages etc.

-      Software providers / Banks / Fintechs would create mobile / digital applications for customers.

-      Key facilities that would be available in the application:

o  Entire financial status of the customer (Banking accounts, loans, mutual fund, insurance etc) across all banks / nbfcs / insurance / mutual fund / brokerages / rating agencies

o  Embedded Analytics for decision making for investments or even for taking loans. This potentially will provide the best insights for “What people like you invested in”

o  Full Payments, Investment and Insurance capabilities

o  Seamless integration (SDK / APIs) with E-Commerce Platforms / P2P loans platforms

o  Advisory interface with Financial Advisor’s platforms

o  POS / ATM service for handling P2P transactions

When "The Banking App" will be created, individual bank applications would lose traction. Bank's ability to directly manage the customer will be disrupted.

Many of us are still underestimating the impact of Digital and are saying "To Hell with Digital". Digital journey may not be easy or even successful for most and we will continue to see many massive failures. However, Not taking Digital journey is the surest way to Hell as Disruption Tsunami is anyway on its way...

TagsRetail bankingInnovation

Comments: (1)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 29 May, 2017, 17:33

While the idea of an aggregator app has always sounded great on paper, they face the following unresolved questions in actual practice: (1) Who will own such an app? (2) What's their business case for developing and marketing such an app? I hope you're not suggesting that customers will be willing to pay for such an app (3) Who will take responsibility for any data breach? (4) For precisely the reason you've pointed out - loss of customer relationship - member banks and FIs will actively stonewall such an app (as they've reportedly done UPI and BharatQR).

PFM / MoMMA apps in USA already do much of what your Aggregator Banking App is spec'ced to do. A couple of apps have tried to aggregate Uber / Ola / Meru and other cab apps in India. The closest we've come to a cross-FI app in India is BHIM. Despite the drive for #CashlessIndia and all the fanfare surrounding its launch and the subsequent publicity for it, its adoption has already hit a plateau with around 30M users.

Maybe because of the aforementioned challenges or otherwise, I can't think of a single aggregator app that has managed to go mainstream. But I'm happy to be corrected.

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Digital strategist focusing on removing friction across Financial Industry and Fintechs. I work with Financial Institutions as well as Fintechs for establishing their digital strategy in alignment...

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