What is next for banks post-pandemic in India?
It is no surprise that more societies are adopting cashless methods of transactions, and organisations are embracing digital integration. Those in Financial Services, especially banks, will need to evaluate the need for their physical branch networks and their importance moving into a post-pandemic world. Will the physical branches be used for sales points or service centres or will the adoption of digital systems and operations allow greater degrees of self-service, enhanced product functionality, and fulfilment, and a new approach to selling and advertising to attract customers?
Digital payments have become the backbone of keeping economies alive. As we start to enter an era where physical cash is no longer ‘king’– many are worried about spreading or retrieving the virus and from handling money. Contactless payments, as well as online purchases, have surged as a result of the pandemic. With traditional bank models being questioned as less than operational during a pandemic, the demand for stronger digital adoption will be needed to ensure that banking can resume BAU without the physical presence of bank branches.
The rise of digital payments can be seen across the globe, but one country, in particular, has led to the trend of digitally enabled payments. How should Indian banks adopt digital transformation?
Cashless societies are growing globally
COVID-19 has promoted cashless societies as the use of digital payments has increased and looks like it is going to stay. Not only are individuals more prone to adopt digital transactions for ease, but they are also adopting them in hopes they will not catch or spread the virus by handling money. Contactless payment has increased by 23% during June-July, 2020, with UPI rising by 43%, card usage increased by 40%, and net banking seeing a growth of 10%. Raising the maximum spend in India, in hopes that this will aid the curb of the virus. According to the Reserve Bank of India, digital transactions in the banking space are expected to increase by four folds during FY21-22, to the extent of INR 8707 crore. In the medium term, the outbreak could in principle lead to both higher precautionary holdings of cash by consumers and a structural increase in the use of mobile, card, and online payments. These high-impacting evolutions are taking place in India, as customers no longer physically visit banks, Indian banks have reported an influx of digital payments, some even experiencing a 60-70% increase, as we speak.
FDI is in India’s digital sector is booming
Earlier in July of this year, Google announced a $10bn investment in ‘digital India’. This will take place over 5-7 years by way of equity investments, partnerships, and other arrangements to “accelerate digitisation” in the country. It is evident that India is seen as the next potential digital hub and with this investment, offers unique services to the 500 million active internet users in India. Such a rapid change is also visible through global platform majors investing in Telecommunication networks for digital networks as a key neural system of India.
New banking realities Indian banks will have to face with the help of contingent workforces
Given the economic implications of the pandemic on organisations, many in India are turning to the contingent workforce to not only help with additional demand placed on their businesses but also digitalise systems and operations in a more cost-effective manner. More and more companies are turning to contingent workers to help on a project basis, which saves organisations an immense amount of time and money to future proof their organizations and ensure their digital payment processes are developed.
The value of a contingent worker extends beyond simple cost savings. They possess the niche skillset required to get your internal processes and systems fully digitised and enable seamless digital payments to take place so BAU can resume should another global health crisis such a pandemic occur.
In a post-COVID-19 world, Indian organisations will have to digitally transform not only their internal systems but their payment systems as well, to adjust to new market norms. Cashless societies could soon become realities, with global trends in digital payments thriving. Bank branches will serve as obsolete as many will rely on digital baking to control their finances.
Businesses will now also turn to the contingent workforce to help guide and manage the transition into new market models and develop new strategies to allow them to survive COVID-19’s impacts on the economy. Now more than ever we will start to see the rise of remote roles being placed especially with the additional demand for roles needed in digital payments.
 “Google Announces $10bn Investment in India.” BBC News, 13 July 2020, www.bbc.co.uk/news/world-asia-india-53391466. Accessed 13 July 2020.