How are Indian Banks rising to the COVID-19 Challenge

By Venkatramana Gosavi, Senior Vice President and Global Head of Sales, Infosys Finacle

When the COVID-19 pandemic hit us in March this year, it created massive disruptions across all businesses. The RBI issued a notification to banks on ‘Operational and Business Continuity Measures’ to enable banks to manage the impact of pandemic better. Apart from measure for Business Continuity Plan (BCP) and training/sensitization of staff, one significant aspect that it spelled out was to encourage customers to use digital banking facilities as far as possible. While banks have already been making great strides on the technology adoption front, this notification from the RBI will further spur digitization efforts.

We’re already seen how technology has played a role in helping us embrace the new normal. In banking too, customers now want to be able to conduct their banking transactions completely online through digital channels. By making this easier for customers, banks have a huge opportunity to renew and strengthen their customer relationships and play an integral role in simplifying their lives.

There is an opportunity to transform every stage of the banking customer lifecycle be it onboarding, selling, or service and engagement.

Onboarding
In banking, getting a new account has always been rather complex, with the prospective account holder being required to submit hard copies of their documents or be physically present at the bank branch. Given the regulatory constraints as well as additional checks and balances required to enable paperless onboarding, banks were reluctant to implement this. Digital-born banks such as digibank and Paytm were exceptions here.

Now, with the COVID-19 pandemic, digital and paperless onboarding is no longer just a ‘nice-to-have’. Instead, it is now a critical requirement for getting new customers on board. Banks are acting swiftly on this. RBL Bank launched an instant digital bank account opening capability with a video KYC process, enabling completely paperless onboarding from anywhere in India. Kotak Mahindra Bank too extended a digital account opening platform – 811, to enable opening of new salary accounts for its corporate customers.

While, this is still largely an urban phenomenon, we do have examples such as Shivalik Bank, which enabled digital onboarding for underserved customers. Cooperative banks serving rural customers will need to build a technology foundation before digital onboarding becomes a reality in rural markets.

Also, digitization of banking customer onboarding is unlikely to be effective if the existing physical process is simply moved online. Instead, the process needs to be reimagined from scratch in order to make it frictionless, contactless and completely digital.

Service and Engagement
In the wake of the pandemic, almost all major banks in India encouraged their customers to use digital banking features. This helped ensure uninterrupted banking experience at a time when they were advised to stay indoors.

Banks are also exploring new channels to engage with customers. For instance, ICICI and RBL banks announced WhatsApp banking services directed at seniors and rural customers who might not be conversant with online banking. Customers can now avail basic banking services via their WhatsApp Messenger app. Similarly, IndusInd’s ‘IndusAssist’ chatbot launched pre-COVID enables financial and non-financial banking transactions on Amazon Echo and other Alexa-enabled devices using voice commands. With call centers being down during the lockdown, RBL saw its Chatbot traffic go up manifold, especially for basic queries. With chatbot accuracy exceeding 80 percent, chatbots as well as interactive voice response (IVR) systems are set to become the norm.

In addition, virtual branch banking options that enable customers to get one-on-one service online will reduce dependence on physical branches. The current scenario has also necessitated flexible working hours to spread customer footfall and rotating staff to maintain social distancing norms. In addition, ‘visit by appointment only’ policies in critical areas have become critical.

The India Post Payments Bank, which offered cash delivery services during the pandemic is an excellent example of leveraging a physical network in conjunction with digital tools. With its AePS facility, India Post delivered a massive Rs. 412 crores in over 21 lakh transactions just between March 24th and April 23rd. The cash was delivered by postmen/women across India, mostly in rural and unbanked areas. We can expect to see more such integrated offerings in the future too.

Selling
For any bank, the ability to sell its products to new and existing customers is central to meeting its growth objectives. While most banks have not used digital channels optimally for sales, now is a great time to do so.

Whether it is about nudging customers to save more, giving sound and timely investment advice, or providing alerts on payment due-dates, AI has a huge role to play in enabling these seamlessly.

In addition, banks now have an opportunity to play a larger role in the primary lives of customers by enabling more easy payments for necessities such as utilities, mobile recharge, or even insurance premiums. Paytm, for instance, is driving greater financial inclusion by enabling and encouraging people to use online financial instruments in their everyday life.

For banks, partnering with FinTechs in categories such as payments, onboarding, credit underwriting and collections, could help them quickly to enable contactless services.

The Way Forward
We’re a few months into the COVID-19 pandemic and it is now clear that its impact is going to be long lasting and severe. With a massive number of business failures and job losses looming, there will certainly be great pressure on banks to manage solvency and liquidity risks.

In these trying times, it will be more critical than ever to keep the focus on deeper customer engagement with technology investments and digital transformation efforts. When all this is over, we will find that that the winners will be those banks that have reimagined simple, intuitive, digital-native and ecosystem-driven customer journeys for better customer engagement. While uninterrupted 24 X 7 banking digital banking services will be a given, the real differentiator for banks will be their ability to play a more integral role in their customers’ lives.

Now is a good time to prepare for that.