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What is the Future of Bank Branches?

There are many Bank branches (Retail Banks) operating across India. Do we really need so many branches of the bank to tap customer base?

I personally feel going forward there will be following activities happening in the retail-banking arena

Consolidation of Banks will lead to better Service, reduction of operation cost by closing down branches and merging with nearby ones.

Innovative products / apps will be introduced like Google Pay (erstwhile Google Tez), Paytm to meet the customer demand.

• Artificial intelligence will play key role in customer handling, as we see few bank have deployed Chatbots to handle customer query and resolve them.

• Few Banks in India have even stopped accepting cash at the counter and they have replaced teller with CDM (Cash Deposit Machines) which operates 24/7.

• A unified Banking Gateway may be the future where customer of any bank can access his / her account in any specific bank. This will be future innovation in retail banking space, which needs more regulatory approvals, system integrations to provide safe and secure banking to customer.

Still Branches are required in rural area to tap the customer who still does not have a banking account. A unified banking gateway would help to reach the last milestone and provide banking services across the nation.

• Currently there are unified payment gateway in INDIA like BHARATPAY where bill payment are uniformly accepted across banks / Fintech Companies. This kind of innovative solution will enable to reduce cost, Reconciliation of account are fast and secure.

• In Future even Bank may expose their API’s to third party companies for accepting deposit on behalf of the bank, if regulatory approvals are in place. Currently as per Central Bank guidelines in India, Payments banks cannot accept fixed or recurring deposits directly from the customer.

• In Near future, we can see very few banking players having branches nearby your location as technology has improved and customer are operating their bank account 24/7 from their mobile / online banking platform.

Each bank provides same service to customer in different way to attract customer by way of digital innovation products, Doorstep banking, Mobile Banking, Internet Banking according to their Bank’s customer base. Still Bank needs to reduce operation cost by providing more innovative products, reduce employee cost and increase productivity and profitability wherever possible.

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Comments: (1)

Arunachalam N
Arunachalam N - Mindtree - Bangalore 31 August, 2019, 03:42Be the first to give this comment the thumbs up 0 likes

as expected a year ago....things has begin on bank mergers ....opportunites are created!!!!

https://www.livemint.com/news/india/pnb-obc-and-united-bank-to-be-merged-nirmala-sitharaman-1567158678718.html

Arunachalam N

Arunachalam N

Senior consultant

Mindtree

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Bangalore

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This post is from a series of posts in the group:

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?


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