Page 48 - Banking Finance November 2021

ARTICLE

a low-priority destination for most of the people, will likely banking, ensuring cyber security and enhancing the digital
to struggle to remain equally significant. experience of the customers will transform a conventional
bank into a Digital one. The addition of human interaction
Banks must break out of the traditional branch model and to this digital transformation is what takes banking to a
focus on how to deliver specific, high value, physical whole new level.
interactions and experiences that can complement a digital
banking core. In true complementary fashion, digital Here banks can learn from the digitalization of other
technologies should also be used to augment physical industries such as manufacturing, consumer packaged goods
experiences and make services faster, more secure, and and utilities. Across these, we see an increasing focus on
more convenient. This is the essence of a true phygital technology innovations related to voice as a channel, AI-
strategy. powered chatbots, augmented reality, social virtual reality,
hyper-personalization, gamification, secure video
According to an article in The Hindu Business Line, ACI interactions, digital ecosystem plays and others.
Worldwide released a new report that indicated more than
70.3 billion real-time payments transactions were processed India's journey of creating a digital financial infrastructure
globally in 2020, a surge of 41 per cent compared to the has been characterized by collaboration between the
previous year. This comes as the Covid-19 pandemic government, the regulator, banks, and fintech. This has
dramatically accelerated trends away from cash and helped to advance the country's goal of enabling financial
cheques towards greater reliance on real-time and digital inclusion and also provided rapid payment digitization for
citizens. The pandemic has further accelerated the adoption
payments, according to the report.
of digital payments with many first-time users adopting
According to the report, India retained the top spot with digital payments and significant uplift by merchants. Apart
25.5 billion real-time payments transactions, followed by from the conventional online services like internet banking,
China with 15.7 billion transactions. The report speculated mobile banking etc. there are many steps which are being
that by 2024 the share of real-time payments volume in taken by individual banks as well as central bank RBI under
overall electronic transactions will exceed 50 per cent. This EASE agenda of Ministry of Finance, GOI.
will further touch 71.7 per cent by 2025.
"Dial a Loan", Digitally-enabled doorstep facilitation for
Way Ahead: initiation of retail and MSME loans.
If we look at the prospect of banking, phygital could well be "Door Step Banking", An initiative for delivering few
the most acceptable and safest mode of banking for many selected banking services at the door step of the customers.
consumers as it provides a comfort factor as well as efficient "Straight Through Processing", an end to end online
digital banking practices. Banks are expected to leverage processing of MSME loans upto Rs 5 Cr and linking the server
the trust of a physical network and the power of digital to with bank's core for smooth flow of data.
equip the customers to manage their money.
Conclusion:
If banks can amalgamate the two well, this hand-holding Telescoping into the future, Phygital Banking will be the most
will enable the customers to bank confidently without any acceptable and safe banking activity for a large number of
apprehensions. The cost-efficient, scalability, and the fact customers since it gives space to both the comfort factor
that it removes the barriers in banking, thereby allowing and efficient digital banking practices. Relying on the
more people to bank, will cause more adoption of this form extremism of one concept is of no use but the amalgamation
of banking in the future. of both will help us move onward. The need of the hour is
the transformation of physical banks into Phygital ones to
Digital is springing high but it doesn't mean that physical establish humanized digital experiences.
banking will not be in the state of need. The first step of
Phygital banking is that all brick and motor banks should opt References:
for digital banking with the implementation of cutting-edge Websites: www.moneycontrol.com
technologies for its operations. Incorporating Artificial : www.weforum.org
Intelligence, Distributed Ledger Technology (DLT), open Article : The Hindu Business Line article dated 31.03.2021

48 | 2021 | NOVEMBER | BANKING FINANCE