The concept of Invisible Banking has been gaining traction and popularity with many of the industry veterans and Bankers using the same word alike- in retail or corporate banking space. With more and more digital modes of Banking options available, consumers
are unaware as to whether they are doing a banking transaction or a sale/purchase transaction or a payment transaction- there is a need for consumer and there is some application/UI provided to fulfil that need.
Prior to the origination of modern banking, one had to maintain a passbook/cheque book to do a banking transaction and visit the branches to which the customer has opened his/her account/ledger. There used to be huge ledgers for maintaining customer accounts
with manual posting and double entry accounting/book- keeping facilities.
The next generation banking moved the banking transactions outside the banking halls to ATMs and online banking where anytime and anywhere banking surfaced. However again it was restricted to cash withdrawals, bill payments and few service requests which
was relatively easy and convenient for the consumer. The banking branches were still popular and crowded with each branch/Bank trying to outdo the others and improve customer service/experience.
With the digitization and the acceleration impacted by Covid and with the offshoot of a mobile revolution in the last decade, consumer wanted all the activities – banking and lifestyle activities together with the touch of a button. Banks and technology
vendors were competing to get the share of this business- an embedded app and within that, purchase/sale/banking transaction/enquiry/payments has to be enabled which makes it easy and convenient for the consumer. Banks and technology vendors were vying to
build a commercial construct wherein Banks/IT vendors will obtain a fee based on the usage and volume of the transaction. The consumers were least worried about banks/technology and for services availed using the app, a fee will be charged which is communicated,
consented, and agreed upfront. The fee is likely to be distributed between service provider/ other players in the ecosystem and this model has been in existence ever since large tech companies of the likes of Amazon /Google introduced it. The valuation of
the app/company depends on the number of subscribers/consumers and their usage. The routing logic, the consumer behavior, the consumer preferences, the billing models, the billing patterns, the credit decision which could be influenced by AI/ML/anaytics and
other technology engines will remain in the background. The consumers will be influenced by the result and need not be oncerned about banking transaction or otherwise, provided security/risk and authentication are automated and seamless.
The newer technologies with AI/VR and IOT will ensure that the consumers are always connected and digitally enabled, and actions/events are triggered automatically based on the consent of the consumer. There could be checks, balances, security and risks
covered which is likely to be embedded with underlying modern technologies.
To conclude, the concept of banking will remain, but the delivery of banking services will move outside the commonly used modes of online and mobile towards daily use devices and lifestyle usage. It may reside hidden and invisible in every activity the
consumers are engaged but it will be a deemed banking transaction. The consumer need not visit a bank or a related bank website or a mobile app of the bank but it will be hidden inside the app which is sded for common activities and easily accessible – for
example , usage of commonly used whatsapp will have services which will get hooked /linked to multiple activities . The next generation applications /devices will be tailored to serve the lifestyle needs of the consumer with connected ecosystem and IOT/AI
enabled which will potentially trigger a banking transaction but albeit invisible. The road to Invisible banking has started and will evolve over a period of time and banks/technology vendors need to be wary of this change and need to strategize/visualize
their business accordingly .