Page 38 - Banking Finance August 2019

ARTICLE

OPEN

BANKING,

THE NEW

PARADIGM?

I ndian banking system is among the most convenient determine the credit worthiness of their customers. Some

and trusted in the world, but banking as we know is
other trends are elaborated below:
changing dramatically with the rise of connected digital
ecosystems and new incumbents such as digital banks
and fintechs both large and small. Fintechs have the Shifting consumer habits
The current generation of customers and the millions of
advantage of offering personalized services that traditional internet users in India are so used to personalized
banks do not have the flexibility to offer. These new entrants experiences offered by digital applications from the comfort
have superior capabilities as at the end of the day, their core of their homes that they dread a visit to the bank or taking
focus is technology and they invest significantly in hiring physical copies of their documents and bank statements in
talented engineers for developing unique digital experiences. order to avail financial services. Fintechs appeal to the new
generation by designing apps and web experiences with the
In order to serve their customers, fintechs rely on digital customer in mind. This creates a seamless and personalized
technologies to make data-driven decisions. For example: experience which lead to greater engagement as well as
micro-lending startups rely on leveraging digital footprint of increased customer loyalty.
their customers, bank statement analysis in-order to

Decoupling of banking
About the author In the past, banks used to be the only gateway for availing
a multitude of financial services, new incumbents are
Ashwini Kumar Singh unbundling banking services and specializing in a particular
Chief Manager (Research) domain.
State Bank Institute of Credit and Risk Lending to thin-float customers
Management, Gurugram (SBICRM)
P2P lenders are connecting lenders who previously put their

38 | 2019 | AUGUST | BANKING FINANCE