Page 46 - Banking Finance November 2021

ARTICLE

PHYGITAL

BANKING: WAY

AHEAD FOR

INDIAN BANKING

INDUSTRY

T he banking sector has witnessed a massive internet banking and personalized banking with visiting a

branch for cash withdrawal/deposit, locker operations and
transformation in the last few years. The shelf life
any other such requirement. Phygital Banking is making
of physical banks has reduced immensely. In last
5 years or so the internet explosion in India
marked the watershed moment which initiated inroads to take banking operations to a new dawn.
the radical shift of things from physical to digital. Increasing Need for Phygital Banking
numbers of Fintech apps and neo-banks have more or less The banking sector has been progressing in terms of
replaced traditional banking, at least in urban India. technology and therefore, digital customers want real-time
solutions for their problems. The Covid-19 pandemic is
Phygital Banking: ushering in a new, digital-oriented way of life for many
people. Under lockdown restrictions, digital became the
The word Phygital is a blend of two words i.e. Physical and
primary channel for retailers, doctors, governments,
Digital. So phygital Banking is a form of banking that
property, auto sales and banks. Now, the consensus is that
combines the comfort of digitalization with the trust of
many consumers will take a long time to return to regular
presence of a brick and mortar bank branch. It is a model
physical engagements - and some may not come back as
that integrates convenience banking, mobile banking,
this has become the new normal.
About the author But banks should not be tempted to ditch their physical
presence altogether. This is because one would be reluctant
Nilotpal Banerjee to put all the hard-earned money to a bank that is present
Chief Manager - Faculty only virtually and not physically. If a bank has many branches
Union Bank of India in operation, it boosts the confidence of customers on that
STC Powai, Mumbai bank. A good portion of customers still want a physical

46 | 2021 | NOVEMBER | BANKING FINANCE