B Swaminathan | IMAWS
The pre-epidemic challenges of the traditional banking business model have been exacerbated by the COVID-19 crisis, including revenue pressure, low profitability (due to low-interest rates and high capital levels), tighter regulation (following the previous financial crisis), and growing competition from shadow banks and new digital entrants. Banking Industry is at present on the threshold of more opportunities for playing a significant role towards the revival and sustainable development of the Economy. The Government can provide the required enabling environment for a robust Banking sector.
Here is what some of the tech leaders from the leading banking sector has to share about how the forthcoming year will be there for the industry as a whole.
Raghunatha Reddy, Executive Vice President and Head IT, UTI Mutual Fund
Many banks will become pure technology businesses by 2023, taking advantage of their sizable client bases and distribution networks to provide digital solutions. Digital business models will influence future banking industry developments. Changes in consumer behavior and preferences for many traditional financial services are already being brought about by digitalization. The digital transition has also sparked a fresh round of rivalry among established service providers. To compete, banks are under increased pressure to transform into “digital first” businesses. Customer experience is currently one of the most important differentiators for the BFSI sector, where product penetration is high and product innovation is quite challenging. The industry is at a critical juncture to make business “digital at the core” and to do this, a strategy with customer experience at the core is essential.
Dhanasekaran Sivaraj, Chief Technology Officer ,Belstar Microfinance
The banking sector will enter a new stage of high-quality development and see its business environment improving persistently, the credit supplied more precisely and directly, the retail business further transformed, the inclusive finance and green finance advancing steadily, the diversification and internationalization going deeper and the financial service ecosystem upgraded on all fronts through digitalization. The global banking sector will see uncertainties hovering through 2023, with weaker profitability that curbs the capital adequacy enhancement and expansion of assets and non-performing loans still under pressure.
PalanikumarArumugam, Information Security Expert in BFSI Sector
Digital transformation will drive the BFSI sector deeper in 2023. More new technologies will be adopted, and customer experience will be improved. Regulatory requirements also increased which is not avoidable for the sector.The cloud is one of the key elements of digital transformation. In the post-pandemic era, cloud adoption picked up considerably, and it will continue to be a major focus area in 2023. There was some hesitancy at first, considering the overall information sensitivity, but it is now fading with the secure environment that the cloud provides and organizations embracing the shared responsibility model. Due to digitalisation and regulatory requirements, the bank needs to invest more on digital expenses.
Data Privacy and Data Protection will be more critical for banks in 2023. Protection of sensitive customer data is a primary goal of most regulations. These regulations commonly mandate that a bank implement certain security controls, processes, and procedures intended to protect the sensitive data entrusted to the organization. Developing and implementing a regulatory compliance strategy is an important first step toward securing a bank’s systems against cyber threats. Regulatory requirements outline the minimum-security standards that financial institutions need to meet and can build upon to protect themselves against modern cyber threats.
Praveen Paulose, CEO & MD, Celusion Technologies
With the budget announcing its point of focus on the financial sector, the increased adoption of digital technologies such as mobile banking, AI, and blockchain in the banking industry will ensure massive growth in the banking sector in Asia. Growth in mobile banking: With the rise in smartphone usage and better internet connectivity, high focus on 5G services apps the use of mobile banking will continue to grow in Asia, changing the way people access financial services.
Increased M&A activity: Mergers and acquisitions (M&A) activity is expected to increase in the Asian banking sector, as banks look to expand their market reach and gain access to new technologies. Compliance with regulatory requirements: Banks in Asia will need to stay abreast of changing regulations and ensure they are in compliance with new requirements, particularly in areas such as anti-money laundering (AML) and cybersecurity. Rise of neobanks and fintechs: Neobanks and fintechs are expected to continue to gain market share in the Asian banking sector, offering new and innovative financial services that challenge traditional banks. Simplified KYC process is going to ensure seamless onboarding experience for the customers.
