India’s biggest bank is seeing a pronounced dip in the number of transactions at its branches and ATMs. “Out of 100 transactions at SBI, only nine transactions happen at the branch. Three years ago, during demonetization, transactions at ATMs were 55 percent of all transactions at SBI. That share has come down to 30 percent today,” said SBI Chairman Rajnish Kumar.
SBI’s mobile transactions overtakes other modes
Delivering the keynote speech at the Global Fintech Fest 2020, Rajnish credited the churn in numbers of the growing popularity of mobile and internet banking transactions. “For digital and mobile transactions, the number has gone up from 25 percent to 55 percent,” he said, “Internet and mobile transactions will go up further — mobile more than internet.”
However Rajnish admitted that the bright future of mobile transactions notwithstanding, a combination of physical and digital transactions, what he calls “phigital” transactions, will be the way forward for Indian banking. Without a robust digital banking system though, “it won’t be possible for the banking system to serve such a large customer base,” Rajnish said.
Quoting the example of SBI’s large-scale direct benefit transfers (DBTs) to 12 crore Jan Dhan accounts at the height of the COVID-19 Pandemic, Rajnish added: “Banks that do not invest in financial technology to enable transactions will not survive,” he added.
‘Fintech going beyond transactions’
It isn’t just digital platforms that make for the customer’s first preference when it comes to transactions. The SBI boss believes it is the be all and end all of any bank’s modern-day functioning.
“Tech has helped our banking correspondents or bank mitras manage 62,000 customer service points and play a critical role,” said Rajnish, “Interventions by Google, WhatsApp and Facebook have also begun changing the way transactions are being done including small-value and peer-to-peer lending, which ride on these platforms.”
Going digital has also helped banks deal with several back-end functions, like “the capability of an organization use data analytics, AI and machine learning models in lending, credit risk management, fraud prevention and business growth,” said Rajnish. While any talk about going digital is incomplete without acknowledging challenges on the privacy and cyber security front, Rajnish said that a strong and secure IT system would determine a bank’s digital capabilities.
First Published: Jul 22, 2020 7:55 PM IST
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