For NKGSB Bank, a multi-state bank having its area of operation in the states of Maharashtra, Karnataka, Goa Gujarat, Madhya Pradesh, and Union Territories of Daman and Diu including others, technology usage assumes a new meaning.
The COVID19 pandemic has led to an increase in the adoption of digital banking services due to limited interaction with people. Cashless transactions have been on a constant rise and this has become the new normal for people across different sectors.
According to a survey conducted on online payments in India in 2020, 31 percent of the households stated that they had mobile banking apps on their smartphones. However, 32 percent of the households stated that they used digital payments in their everyday life, a Statista report added.
India’s digital banking platform market is growing at a high CAGR because of the rapid digitisation and growing adoption of advanced technologies. Also driving the market’s growth is the increasing use of these platforms by small and medium-sized businesses.
A recent study, conducted by the strategic consulting and market research firm BlueWeave Consulting, revealed that India’s digital banking platform market was worth USD 776.7 million in the year 2021. According to the study, the market is estimated to grow at a CAGR of 9.8 per cent, earning revenue of around USD 1,485.5 million by the end of 2028. The growth of the Indian digital banking platform market can be attributed to rapid digitization and growing adoption of advanced technologies, such as cloud computing, the Internet of Things (Internet of Things), Artificial Intelligence, and so on.
Additionally, government initiatives, such as Digital India, are also playing a crucial role in boosting internet accessibility among its citizens, expanding the consumer base for the digital banking platform market. However, high data-security concerns and risks of cyberattacks and fraudulent activities may act as a restricting factor for India’s digital banking platform market, BlueWeave Consulting added.
Technological advancements in Banking
In the backdrop of all the above, some of the key technology trends driving banking and financial services include Open banking, which is an emerging trend that enhances customers’ experience in the sector.
“Technology has changed the way we look at the banking industry. It has evolved way beyond extending just a banking experience to users at their fingertips with efficient delivery channels,” said Amit Jaokar, CDO & CISO, NKGSB Bank.
Further, it aids financial institutes in boosting the constantly changing needs of its users as per their requirements. This comes with the experience of a one-stop solution to all their financial transactions by collaborating with different fin-tech companies & platforms which reduce the clutter for the end-user.
Secondly, deploying AI is helping institutions in fraud detection.
“Implementation of AI in organisation will help in minimising the business expenses in the long run. With improved & collaborated overall customer experience & introduction of applications such as Chatbots and Roboadvisors and other advancements,” points out Jaokar.
Cloud computing services have tremendous potential in the banking sector to make their systems quicker, more flexible, and receptive to the requirements of their clients. Banks can adopt cloud-based tools to rapidly present new features in versatile banking applications or distinguish fraud. They can assist the financial area with reducing expenses and increasing adaptability, allowing more customers and organisations that need access to banking to utilise financial services.
Blockchain technology is going to be adopted by various organisations in the near future. According to a Gartner report, many new innovative companies will use it and at least one business created using this advanced technology would be worth $10 billion by 2022. By 2030, it could be used as a foundational technology for 30 per cent of the global customer base.
By 2025, blockchain would add a business value that will grow to over $176 billion. This would increase further to $3.1 trillion by 2030. It simply shows the unfolding potential.
“Blockchain guarantees the accuracy of the data, making it simpler for banks to identify misrepresentation of the data further enabling the system to detect and eliminate frauds at early stages. With the possibility to diminish functional expenses while further developing efficiencies, blockchain will be a likely distinct advantage in the coming future,” said Jaokar.
He further explained that the combination of Augmented Reality and Smart machines in the banking industry will enhance the customer’s banking experience at all levels and will give the consumer freedom to operate all the banking facilities at their ease anytime, anywhere.
Safety of Data in Banks
Banks and other financial institutions deal in millions of transactions on a daily basis & it holds critical value. Securing data whether its customer’s data or any other important data which banks possess is very important and vital which is why banks have to follow a 360-degree approach to ensure that at any cost security breach does not take place internally or externally.
The security of data is ensured in various ways that include encryption that helps in protecting private information, sensitive data and thus enhances secure communication between all the parties.
“At the point when your information is encrypted, even if an unauthorised person gains access to it, he isn’t able to read it, further reducing the risk of data misuse. Next comes the Open Source Cyber Threat Intelligence (CTI), the banking sector faces risk of threats specific to the financial industry. The expertise to share data in regards to these dangers and work together to relieve them is essential in eliminating such financial threats,” said Jaokar.
Some of the other areas include security assessment as a part of which all banks and financial institutions should work together with data risk security advisors to study their security system and data risk. Hardware Security Modules (HSM) secures digital keys and sensitive data such as e-signatures by encryption and decryption functions in a secure, tamper-resistant device. Limiting the data access, “it doesn’t make any difference the number of system policies and security systems are set up, just give admittance to the people who need it,” Jaokar added.
He further added that all personal devices should be restricted to the company’s network. Similarly, plugging any third-party devices or peripherals into company devices/networks should also be controlled at all levels. It is also important to educate employees and customers on fraud prevention with the best practices regarding data protection. In case a breach occurs, the authorities know what to do and how to handle the situation.