How will digital transformation reshape the future of banking in India?

The pandemic has radically increased the speed of digitalization in the banking sector and financial industry by completely changing the trajectory of the BFSI sector. Digital transformation in the banking sector is way beyond simply transformation from the traditional mode to a digital environment. The banking sector is increasingly becoming a technology and data-driven business. Digital banking in India has significantly grown with massive adoption in recent years. The fundamental strategy of digitalization in the banking and fintech sector begins with analyzing consumer behavior, preferences, and demands. 

Transitioning from traditional to digital banking

Digital banking has evolved as an integral part of the Indian financial landscape. The digitalized financial journey majorly includes flexible and convenience banking as crucial components. Digital banking brings in the major benefit of accessing and accomplishing all traditional banking activities around the clock without visiting the bank in person. The number of digital banking users is expected to cross the 3.6 billion mark by the year 2024. This growth is majorly driven by the ongoing digital transformation in the BFSI sector that marks the transition from traditional to digital banking.

Fintech innovations in India, with the utilization of artificial intelligence and machine learning, introduction of blockchain technology, and the growing application of robo-advisory services, have reshaped the financial ecosystem. Thus, to stay updated with the rapidly changing market, banks are adjusting to new emerging technologies and operational approaches that could keep them informed throughout the client experience. 

Factors driving digitalization in banking

Discussed below are the major factors that are driving digitalization in banking: 

1. The need to improve customer experience:

In today’s quickly evolving market trend, seamless service delivery, high-end user experience, individualized product knowledge, accountability, and security are the key aspects of consumer satisfaction. For businesses to succeed in this cutthroat banking environment, a “customer-first” philosophy is now essential. Every organization in the BFSI sector at this point is looking to digitize their efforts and want customers to experience their services from the comfort of their homes. Digital interventions in the banking environment have enhanced customer experience and this trend will be prevalent across industries.  

2. Data protection:

Data protection is a significant factor in driving digitalization in banking as it is crucial to build and maintain customer trust. Banks are now using advanced software creation services to safeguard sensitive data and secure customer accounts from fraudsters, cyber assaults, phishing, and other threats. Mobile technology analysts and cybersecurity experts are among the top professionals hired by the BFSI segment. Threat remediation, proactive incident response and monitoring, data migrations, backup, and protection are among the biggest priorities for organizations. 

3. Quicker transactions:

In today’s digital era, consumers are no longer required to physically visit the bank to finish financial transactions. All banks have tried to bring every possible offering of theirs on a banking application and they’re doing well with it because of user-friendly interfaces that are easy to understand for customers of any age group. They can transfer money between their accounts, pay bills, and check the balance of their accounts using mobile and Internet banking services. They can obtain a loan without ever setting foot in a bank. Financial transactions are now quicker and simpler, thereby increasing convenience and efficiency for customers. 

4. AI support:

The positive impact of AI in Indian banking can drive massive changes by providing personalized financial support, proactive fraud detection and improving business models. The strategic utilization of AI technologies is enhancing employee and consumer experiences. In addition to offering customer support, personalized solutions and financial planning, AI support has also significantly increased security concerns. 

5. Keeping up with the competition:

Banks are continuously investing in digital infrastructure, exploring emerging digital technologies and adapting their business models to keep up with the competition. In today’s digital age, banks are trying to position themselves as innovative and customer-centric institutions. The increasing adoption of digital technologies has led to the emergence of fintech companies that are leveraging cutting-edge technologies such as Artificial Intelligence, Blockchain, Machine Learning, and the Internet of Things to offer innovative financial solutions to consumers. 

Thus, the changing face of the Indian banking sector is dynamic that is driven by technological advancements, innovation, digitization and a customer-centric approach. 

The rise in demand for skilled professionals

The growing industry usage of blockchain and AI/ML technology has enhanced mechanization when it comes to processing large amounts of data and completing transactions. As a result, the BFSI sector  needs experts who can assure compliance while comprehending the regulatory landscape. Additionally, expertise in digital platforms, innovative product creation, client relations, mobile technology analysis, and cybersecurity is essential. 

As businesses innovate and supply chains become more advanced, the demand for professionals to oversee and optimize resource management grows. Additionally, expertise in financial transaction management, risk management, and financial advice is essential, creating opportunities for wealth managers, insurance agents, financial analysts, and investment bankers. The BFSI industry offers a wide range of job possibilities for qualified individuals with diverse backgrounds and specialties.

You can also read: How analytics in banking and finance opens doors to lucrative job roles in banks.

Enhance your skill sets with an online MBA in BKFS from TAPMI

The willingness to learn, evolve with changing trends, and be open to new opportunities are essential for professionals in the BFSI industry. Through Online Manipal, you can get an online MBA degree from a premium university and upskill yourselves to be prepared for the evolving BFSI sector. An online MBA in Banking and Financial Services from T.A. Pai Management Institute is an advanced course designed to provide working professionals with up-to-date knowledge of the BFSI sector. The program provides an in-depth understanding of digital transformation in the banking sector, the development of blockchain technology and cryptocurrency, financial econometrics, and other new-age innovations in the BFSI industry. The program is specially designed to suit the needs of working professionals and gives them the necessary push to explore managerial and leadership positions in the new-age BFSI sector. 

Financial Accounting, Corporate Finance, Macroeconomics, Financial Econometrics, Organizational Behavior, FinTech and the Role of Emerging Technologies in Finance are a few of the subjects taught in the program to help professional learners get into leadership roles in the industry. The program assists learners to become future-ready professionals by choosing from the 4 industry-focused electives baskets, which include Analytics for Banking & Finance, Banking, Capital Markets, and Advanced Corporate Finance.

You can also read: How can TAPMI’s online MBA-BKFS candidates switch to managerial roles in the banking sector?

Conclusion

India is experiencing a revolution in banking and financial technology that is being driven by technological advancements. The digitalization of the Indian financial sector has been a transformative journey as it has changed how financial services are delivered and accessed. The Indian banking and financial sector is positioned for further growth and innovation with a digitally-enabled financial ecosystem. Professionals can benefit from the sector’s expansion by upskilling and acquiring specialized knowledge through the online MBA in BKFS program from TAPMI, which encourages industry integration.