How technology enables the next generation of banking inclusivity

Alex Hamilton, deputy editor at FinTech Futures, spoke to Rajashekara V. Maiya, vice president and global head of business consulting at Infosys Finacle, on how agile can mean more than just technology.

Rajashekhara V Maiya,  Infosys Finacle

Banks with inclusivity in mind always aim for low-cost delivery to the customer – in what ways can cloud deployment or agile technology help them achieve this?

Inclusivity, by nature, brings in volume; it is not a high-value business globally. Hence, the per-transaction costs need to be highly optimised. This obviously leads to looking for alternative ways to manage the infrastructure.

Technologies such as cloud will allow these banks to be cost-efficient and asset light. Along with the usage of cloud, the banks also need to look for very nimble and agile ways of delivering financial services to their customers.

With mobile penetration predicted to reach record levels in emerging geographies, how crucial is it for new banks (and banks embarking on new projects) to be mobile-centric?

Global smartphone penetration is at around 60%, and feature phone penetration is around 50%. With reduced communication costs, storage costs, computing costs, and reducing smartphone costs, it has become imperative for all banks to look at the “mobile first” approach.

With the pandemic forcing bank branches to be closed due to lockdown, the demand for financial services to be delivered on mobile devices has increased significantly. We have seen a huge surge in mobile-driven banking services in many Asian countries. This is more pronounced in countries such as Vietnam, Indonesia, Malaysia, and India.

How can the scalability and flexibility of a core system enable new and inclusive banks to grow in scale?

Core processing systems have been built to manage scale. With an increased number of accounts due to inclusivity across Asia and Africa, the need for core processing systems to be robust and to perform at scale has only increased.

Then, with cloud technologies coming into the picture, providing the expansion, provisioning, and contracting on demand, banks need not create capacity on their own. We have seen such scenarios in India, where led by the government direction, banks have onboarded around 400 million customers in less than 24 months.

Similarly, demonetisation also resulted in massive digital onboarding of customers. Further, the pandemic has also forced banks to not only onboard new customers digitally but also serve them digitally.

Time to market is always a concern for those serving new customers in fresh markets, how can back-office technology enable it?

Banks need to adopt “customer first”, “mobile first”, “cloud first”, and “API first” approaches to succeed in such markets. Delivering financial services to customers 24/7 will lead to customer retention and advocacy.

Mobile delivery will reduce not only costs but also keep customers closer. Using cloud helps banks to be secure, transparent, and cost-efficient, and with a robust API strategy in place, banks should be able to bring in a whole array of “ecosystem” play to meet customers.

What characteristics and features should an inclusive bank, or new bank, look for in a banking technology partner?

The banks should look out for long-term credentials in delivering successful projects over the years. The technology partner should have long-term commitment to the industry, invest in R&D on a continuous basis, employ the best and deliver on schedule and on time.

It should also provide a pre-built platform, offer it on cloud, and deliver it on a subscription basis. Apart from this, the technology partner should also offer a flexible solution built on open technologies that cater to local needs to comply with regulations.

They should also help the banks move from pipeline business to platform business. In sum, the technology partner should enable the banks to transform better, innovate better, and operate better by providing better technology.