Taking Technology to the Next Level for Enhanced Customer Experience


Last decade has seen the Indian Banking Sector experiencing a phenomenal growth in terms of business volume, number of customers, adoption of new technologies & alternate channels and introduction of new products and services. This has led to increased customer awareness, better banking outreach, enhanced customer experience and improved financial inclusion in the country. With modern banking being all about delivering secure and seamless customer experience, increasingly over technology platform is critical for success of a Bank. Technology has aided the banking sector in expanding its outreach as well as efficiency. Banks have found the enormous benefits of embracing technology in making their services more and more customer centric. Technology has made service delivery easy and convenient. Technology is a great enabler and is powering inclusive growth, using mobile to deliver financial literacy and access to small value financial transactions for those at the bottom of the pyramid. It also plays a key role in financial inclusion apart from serving tech savvy customers. Indian customers are getting more and more tech savvy. Banks are adopting new technology with customer as main focus. It is also being said that the Banks are now new technology companies.

Anytime, anywhere banking, using differentiated channels and technology, has enabled  multi-fold increase of reach in rural and remote areas. Already,  more than 22 crore bank accounts have been opened under the Pradhan Mantri Jan-Dhan Yojana, 14 crore insurance & pension policies have been issued to the people and Rs. 180,000 crore loans have been disbursed under MUDRA scheme, which have been an outstanding example of financial inclusion. With the emergence of a new class of banks—the small and payments banks—one of the biggest impacts of technology adoption will be rapidly accelerating financial inclusion by making last-mile access more cost effective and expanding the reach of banking to the unbanked.

The improving communication infrastructure, increasing competition from the tech savvy new generation private sector banks, rapid innovations in the ICT sector, particularly internet as well as nudging from the Reserve Bank, enabled the banks to catch up with the leaders in the banking sector as far as IT adoption in banks was concerned.

In the recent times, almost all the business activities in the banking industry have undergone rapid changes due to various factors with IT being the most significant. The banking products, services, processes, delivery channels, etc, have largely moved from physical to electronic. So we have come to a stage in banking, where IT is an enabler, one of the most important business drivers and also a crucial component of the business process itself. In a way a large part of the ‘Internal Transformation’ of banking organizations could be attributed to IT adoption. Further, as all the stake holders for banks, including the regulators, are adopting more and more technology platforms, banking sector has got an ideal IT ecosystem to flourish, so to say. Resultantly, now we are in a situation when not only the digital assets constitute a significant portion of a bank’s assets in comparison to the physical assets, its share is also growing day by day.



Ten Pillars of Banking Technology & Their Impact on Customer Service

  1. Core Banking Solution (CBS)

Core Banking Solution (CBS) is a networking of branches, which enables customers to operate their accounts and avail banking services from any branch on CBS network, regardless of where they maintain their account. The customer is no more the customer of a particular branch. Thus, CBS is a huge step towards enhancing customer convenience through ‘Anywhere and Anytime Banking’.

CBS provides the following benefits:

  • Anytime and Anywhere banking (online mediums / SMS)
  • Standardised, simple and automated processes
  • Increase in quality of the service provided to the customers
  • Timely and accurate information for management decision making
  • Strong audit and internal controls
  • Reduction in the cost of transaction and thereby improving operational efficiency
  • Paving way for new value added services thereby generating additional revenue

Banks have made rapid stride in recent years in migrating their operations to CBS Platform. Almost all PSBs, Private Sector Banks and Foreign Banks are now on CBS. Many Co-Operative Banks are also in the process of migrating their operations to CBS.

  1. ATM

ATM card is a convenient method to make payment and conduct other banking transactions. An ATM card can be extremely convenient as long as we track our purchases and cash withdrawals carefully. The ATM card can be used in a variety of ways that include:

  • cash withdrawal
  • payment for goods and services purchased
  • balance enquiry
  • account statement
  • deposit of cash and cheques
  • fund transfer between accounts

Banks have also issued large number of debit and credit cards to facilitate easy and fast banking transactions and migrate more and more branch transactions to alternate channels. Issuance of debit cards is much higher as compared to credit cards and they remain a preferred mode of transactions. Further, in a significant move recently RBI has allowed banks to offer a wide gamut of products and services like loans, credit cards and insurance through ATMs, which will go a long way in enhancing customer experience.

RuPay card is an Indian version of debit / credit card. It is very similar to international cards such as Visa / Master. National Payment Corporation of India (NPCI) initiated the launch of RuPay card in India. It was done with the intention to integrate the payment system in the country. RuPay debit card is similar to any other debit card. A person can access 1.45 lakh ATMs and 8.75 lakh POS terminals with this card across the country. It is also accepted on 10000 e-commerce websites. All major public sector banks, including SBI, have started issuing these cards to their customers. The card comes with a high end technology chip named EMV (Europay, Master Card and Visa) especially for high end transactions. It also has an embedded micro processor circuit with information about the card holder.  RuPay is critical for financial inclusion. Banks understand that there is huge business opportunity at the bottom of the pyramid- these are the people who have aspirations, who have surplus income and who also have credit needs. Due to lower transaction cost, facility of SMS alerts and reduced processing fee popularity of RuPay card is likely to increase considerably in the coming days.

  1. Internet Banking

Internet banking or online banking is an electronic payment system, which enables customers of a bank to conduct financial transactions on a website operated by the bank. It provides anytime anywhere banking facility to the customers. It also provides immense ease of doing banking transaction. Through, Internet banking a number of transactions can be performed, viz.

  • Fund Transfer
  • Request for Cheque Book
  • Request for Stop Payment
  • Request for Draft
  • Booking of rail / air ticket
  • Bill Payment
  • Tax Payment
  • Insurance Premium Payment
  • Opening of new Accounts
  • Online Nomination in Accounts
  • NPS Contribution, etc.

Internet banking is gaining popularity among the customers at a rapid pace. Banks are also making all efforts to woo their customers to internet banking, as transaction cost is very less in internet banking compared to branch banking. Further, banks keep making available a number of value-added services through this channel to keep their internet banking attractive to their customers.

  1. Mobile Banking

Mobile phones, as a medium for extending banking services, have attained greater significance because of their ubiquitous nature. The rapid growth of mobile users in India, through wider coverage of mobile phone networks, have made this medium an important platform for extending banking services to every segment of banking clientele in general and the unbanked segment in particular. Banks are permitted to offer mobile banking services (through SMS, USSD or mobile banking application) after obtaining necessary permission from the Department of Payment & Settlement Systems, Reserve Bank of India.

There has been significant advancement in mobile technology during the past few years with a growing convergence of web and the mobile. Driven by reduced calling rates, decline in handset prices and the expansion of network infrastructure, there has been a huge growth in the mobile market in India. As of February 2017, there are almost 1.18 billion mobile subscribers in India, which presents a unique opportunity to the banks to offer value added services to their customers. Banks now offer a comprehensive range of Mobile Banking Services to their customers with a number of value added features. This is the most convenient 24 X 7 Alternate Channel. With Mobile Banking Service now available on all 3 Modes (SMS, USSD, mobile banking application), each & every Customer can be provided the product.

Benefits to the Bank

  • Lesser transaction cost compared to Branch and other alternate channels
Channel Branch Banking ATM Internet Banking Mobile Banking
Approx Cost per Transaction Rs. 40 Rs. 18 Rs. 5.73  



  • Revenue generation through commission earned via m-commerce transactions
  • New medium to communicate with customers
  • Brand revitalization: Make it look more tech savvy
  • Reduced footfalls, staff can devote more time for business development & marketing
  • Customer satisfaction & higher customer retention.

Benefits to the Customers

  • Anytime Anywhere on the move Banking
  • Fast and Convenient
  • Highly Secured, all data through application is encrypted during transmission
  • Real-Time notifications of transactions in the account
  • Registration for Mobile Banking can be done very easily
  • Free of Cost by Bank. Customer has to Pay charges levied by Network Operator only

Ability to deliver Banking on mobile is critical to make banking affordable to the hitherto unbanked people.


Mobile Wallet is a reloadable virtual wallet which can be accessed using a mobile application in your mobile in which you load a certain amount in the account created with the Wallet Service Provider. One can use the money in the virtual wallet for spending at online merchant and offline merchants registered with the mobile wallet service. Everyone including Financial Institution, IT players and even Telecom Operators are now foraying into this interesting and booming field of mobile wallet. Mobile wallets will be the next wave in the payment technology, cashless payments and disruptive innovation since they offer the following benefits:

  • Mobile Wallet cannot be pick-pocketed as the digital money resides in the cloud/Bank servers and has second level authentication like PIN.
  • No need to have even bank account to purchase on the internet and shops. Mobile Wallets need not be linked with a bank account.
  • Mobile wallets are being integrated with NFC technologies so that the mobile wallets can be used like ATM cards at POS terminals in shops
  • Mobile wallets have been integrated with various payment gateway so that customers buying from merchant websites can pay through the mobile wallets via the payment gateway.

Mobile wallets in India are in their nascent stages and in future we can expect many path breaking innovations leading our way to a cashless digital economy and redefine our shopping experience

  1. TAB Banking

By harnessing technology, ‘Tab Banking’ eases documentation and reduces cost. A bank account can be opened in a jiffy through Tab banking. To enable field staff to offer deposit and credit proposal from a potential customer, even when he is on move and without the need to carry and fill in any physical document.


  • Customer convenience
  • Open account / provide loan approval at customer’s doorstep.
  • Capture images of customer and KYC documents, and Geo co-ordinates of property location.
  1. Cash Deposit Machine (CDM)

CDM is a Self Service Machine for deposit of cash (bunched notes). CDM allows the customers to make cash deposit through a bunch of loose notes up to 200 notes with a maximum limit of Rs.49900/- per transaction. The CDM will accept  Cash Denominations of Rs. 1000/-, Rs. 500/- and Rs. 100/- notes only. It increases convenience for customer by accepting cash deposit by validating and counting deposited currency, like a teller transaction. Currently Cash Deposit, Balance enquiry, Mini Statement and PIN Change transactions are available through CDM.

Benefits to the Customers

  • Self – Service process, Customers do not need to come to the branch for cash deposit transactions.
  • Amount is credited instantly to customer’s bank account.
  • Can Use Services after Branch Office Hour/Holidays. Available 24×7.
  • No Need to prepare vouchers.
  • No need to wait in the Queue at Counters.

Introduction of Aadhaar along with PMJDY has immense potential to make financial inclusion a great success. Aadhaar has brought three significant changes in banking operations:

  • Aadhaar is suffices for Know Your Customer (KYC)

The RBI has permitted the Banks to accept e-KYC as a proof of identification. It is a major step towards financial inclusion. It has undernoted three benefits:

  1. Earlier in the absence of documents people were unable to open account, now with e-KYC being an acceptable document for identity verification, account opening has become possible for a large number of people who were not having any other documents hitherto.
  2. This has reduced the costs of opening new bank accounts
  • This helps the banks in fraud prevention in a big way
  • Direct Benefit Transfer

Aadhaar enrolment in India has crossed 1 billion mark. Banks are able to make direct payment of various kinds of subsidies to the accounts of beneficiaries in Aadhaar seeded bank accounts. It has also helped in plugging the leakage. World Bank in its  World Develpment Report released in January 2016 has applauded,  India’s move to roll out Aadhaar to its citizen and said that it is worthy of replication by other countries as an example of technology leading to economic transformation. Though, in a recent ruling on Aadhaar, Supreme Court has said that Aadhaar can’t be made mandatory to avail government facilities, but on a voluntary basis if a person wants to submit his Aadhaar number, he can submit it to the appropriate authority.

  • Electronic transactions:                                                            

The UIDAI’s authentication processes allow banks to verify residents both in person and remotely. Rural residents will be able to transact electronically with each other as well as with individuals and firms outside the village. This will reduce their dependence on cash, and lower the costs for transactions. It will also reduce physical obstacles to accessing financial services.

  1. Social Media in Banking

The explosion of social media tools offers banks an unparalleled opportunity to easily and quickly build credibility and establish business relationships. There are many social media tools available, like Facebook, Twitter, Google+, LinkedIn, etc. An active social media presence allows a bank to get immediate feedback from customers and obtain new product ideas. It gives an alternative channel to the customers to perform many banking transaction like fund transfer, request for cheque book issue and account statement, etc. It also helps in addressing customer complaints promptly.

  1. Digital Branches

Moving ahead with digital banking initiatives and in line with the  government’s aim of reducing cash transactions, banks have recently started launching fully digital branches having ATM, Internet Banking Kiosk, CDM, Self Passbook printing Machines, GCC, PoS,  etc. in a bid to provide best banking experiences  to the customers. SBI has recently launched SBI InTouch branches in several cities and ICICI has also come up with fully digital branches. Leveraging technology, other banks are also coming up with similar branches to promote digital channel transactions. This is going to be a sustainable trend. All the banks are trying to ensure that the digital channels are efficient and accessible from various platforms to bring convenience. Digital payments are much safer than cheques which could get misplaced or signatures may not match.

Emerging Technologies

Cloud, Big Data & Analytics, Internet of Things (IoT), Near Field Communications and Blockchain Technology are going to be big Things in future

  1. Cloud

Cloud computing lets people use internet to tap into hardware, software and a range of related services on demand from powerful computers, usually based in remote locations. It is the emerging trend in banking sector as it scalable, efficient, cost effective and customer friendly. As far as data security is concerned, efforts are on to develop the right model to address the concern.

  1. Big Data & Business Analytics

Big Data is a broad term for data sets so large or complex that traditional data processing applications are inadequate to handle such data. An example of big data might be petabytes (1,024 terabytes) or exabytes (1,024 petabytes) of data consisting of billions to trillions of records of millions of customers. With the amount of data generated today, one would not be surprised that very soon all of us have to deal with Big Data in day-to-day operations. In the scenario, the new challenges would include data capture, data curation, search, sharing, storage, transfer, information privacy, analysis of data, etc. While BD throws up these challenges, the use of BD analytics in a meaningful way would offer a significant competitive advantage. It is a field which can be used by banks to further their business interest in the increased IT environment.

Business Analytics in general refers to the skills, technologies, practices for continuous iterative exploration and investigation of past business performance to gain insight and drive business planning. Business analytics can hold the key to better performance, informed decisions, actionable insights and trusted information. The important features of Business Analytics are:

  • Analytics provides valuable data for business decision
  • Banks can take 360 degree view of their customers.
  • New analytics techniques uses behavioral pattern and machine learning to help separate the real customers from the fraudsters and provides more seamless transactions and experiences.

Implementation of appropriate BD analytics by banks is going to be the key in achieving greater customer centricity and for acquiring a deeper understanding of customer needs given the proliferation of customers’ external data, such as, social media activities and online behaviour.

  1. Internet of Things (IoT)

The Internet of Things (IoT) is the network of objects that are connected to the net. Today, we are connected to internet through a personal computer, a laptop, a tablet or a smart phone. Very soon, we may have many more such devices like TV, media player, refrigerator, oven, toaster, air-conditioner, wearables, etc. These objects would be connected not only to the net but also to each other through it. What’s more, they would thus be able to communicate, i.e., share data with each other. A true Internet of Things is a coordination between multiple devices. IoT describes a world where just about anything can be connected and communicate in an intelligent fashion. In other words, with the Internet of Things, the physical world is becoming one big information system.

One study says world today has 15 billion connected devices and in the next five years the number may go upto 50 billion. In other words, with the IoT, the physical world is becoming one big global information system. For banks the IoT will deliver an unprecedented level of data and data-driven customer insight. This will allow banks to provide their customers a truly bespoke experience with insights, advice, and offers that reflect the day-to-day events in customers’ lives. The IoT is the key factor that will enable a bank to fully transform into a bank of things.

  1. Near Field Communication (NFC)

Contactless payment is the new trend in the Payments industry worldwide. NFC (Near Field Communication) is a wireless technology that enables a variety of contactless applications, such as payments. Contactless payment card enables the consumers pay with a simple tap of their card.

The NFC enabled terminal transmits payment details without the need to swipe the card. It’s an ideal alternative of traditional, cash-heavy environments where speed is essential—fast food restaurants, gas stations, pharmacies, and convenience stores, among others. The major benefit to the customers is convenience and reduction in the transaction time thus reducing queues and waiting time for the customer at payment counters. Contactless card offers a very easy, fast & secure way of payment.

  1. Blockchain Technology

Blockchain is a network of computers, all of which must approve a transaction, that has taken place before it is recorded, in a “chain” of computer code. A major advantage of blockchain is that it can enable faster payments. Cryptography is used to keep transactions secure and costs are shared among those in the network. The technology is likely to be used to distribute, verify and record a wide-range of financial services, making the financial system more decentralized. Some risks will be eliminated, while some new risks will emerge.

Government & RBI’s Initiatives towards Digital Banking

The Government & the RBI are proving great enabler of tech adoption. They have created conducive policy and regulatory framework to promote technology in Banks and to reach out to hitherto financially excluded segment of customers, thereby tapping the enormous opportunities at the Bottom of the Pyramid by bridging the urban-rural digital divide.

The recently launched Prime Minister Digital India initiative aims at integrating the government and related departments and the public with the objective of making public services available to citizens electronically by reducing paperwork. The Digital India initiative aims at creation of nationwide digital infrastructure (broadband / high speed internet), delivery of government services digitally and also increasing digital literacy. This initiative will bring in enormous opportunity for banks to innovate and expand services to vast majority of rural population though electronic deliverables.

Deepak Mohanty committee set by RBI to prepare a five year financial inclusion strategy, suggested low cost mobile solutions for last-mile delivery of banking products and proposed that the government marry mobile technology with Jan Dhan Yojana.

Security Risk & Measures of Mitigation

Rapidly evolving technology poses some challenges as well. On the one hand technology has made banking easily accessible and convenient to the large section of the society, while on the other hand security risk has also increased in the cyberspace considerably. The major security threats that the banks face are: Hacking, Spam, Phishing, Spoofing, Social Engineering, Session Hijacking, Malwares, Spywares, Denial of Services (DoS), Distributed Denial of Service (DDoS), Masquerading, Eavesdropping, etc.

Banks are taking a number of measures to meet the challenges arising on account of cybercrimes, like regular testing of their security architecture, installation and updation of antivirus on all compuers, regular updation of softwares, installation of Intrusion detection System (IDS), vulnerability and assessment testing,  introduction of Active Directory Service (ADS) and Bometric Authentication, physical access control, appointment of Chief information Officer ( CIO), regular training of the staff members and increasing awareness among the customers. Banks need to increase  spending on cyber security, not only to protect themselves from existing cyber threats but also from emerging challenges in virtual world.


Internet is transforming consumer behaviour in India. India has been ranked as the 3rd largest digital population worldwide by Internet lifestyles. The country has around 432 million Internet users as on December 2016. Rapidly falling smartphone prices, continued investment in 3G and 4G technology infrastructure and cheaper high speed internet access are likely to spur the digital banking growth.

Similarly, e-commerce offers a great opportunity for banks to find new growth driver. Today’s banks reside in customers’ pockets, on their mobile phones. This is an opportunity for the bank to find new growth drivers.  Consumers are increasingly embracing technology for their basic banking needs, especially driven by rise in e-commerce. According to an Assocham-pricewaterhouseCoopers study, very shortly India’s e-commerce could rise beyond $100 billion mark.

A robust grievance redressal mechanism always increases the confidence of the customers in the system and this precisely has happened in the banking sector. The automation of complaint resolution mechanism has enhanced the customer experience considerably. This has reduced the need of manual intervention in lodging a complaint. It has also reduced the customers dependency on current branch to lodge a complaint. They have the liberty to lodge the complaint from anywhere anytime online as per their convenience.

Owing to automation, now Banks can track the status and address the complaints in a more effective, efficient and professional manner. Controllers can monitor the status on a real time basis, which results in speedy resolution of complaints.

The biggest impact of technology will be the ability to personalize the delivery of products and services to the customers. Data analytics is an integral part of this ability to customize. Increasing use of unstructured data generated from social media, will vastly add to behavioral understanding and prediction. In future, the engagement between bank and technology will be multi dimensional. In the wider banking context, technology is enabling more effective, lower cost delivery of corporate financial services, facilitating rapid and seamless payments, enhancing the retail customer experience and increasingly allowing increased access to financial services among the hitherto excluded. Many services can now be delivered in real time including credit assessment and loan approvals. Increasing penetration of internet and mobile connectivity will permit delivery of an ever widening suite of services “on the move”.

In an environment where delivery of financial services will become increasingly commoditized, customer experience will become the differentiating norm for a preferred service provider. The ability to tailor financial solutions to customers across multiple platforms will unleash a wave of product innovations and thereby demand for financial services.

Direct transfers to bank accounts coupled with the range of services, envisioned in the government’s Digital India programme, will drive customer adoption and promote a savings culture. Partnerships between these specialized entities and universal banks will effectively leverage their networks to deliver financial services, including micro-credit.

Technology has made banking easy and hassle free for the customers and opened up new business opportunities for the banks, but there is a need of better synergy among various channels like branches, alternate channels, BCs and CSPs to leverage the optimum benefit of technology. In the coming days, better networking, connectivity and broadband facility in rural and far-flung areas will help banks to achieve rapid financial inclusion. Technology will facilitate affordable and low cost banking transactions to the masses. This will enhance banking penetration in rural and semi-urban areas. Banks also need to promote the role of innovation in developing a payment system which is affordable, interoperable, sound, efficient, safe, secure, inclusive and accessible.

Customers are increasingly weaving their digital and physical worlds together, with transactions conducted using multiple channels. Competition from unconventional entities will quicken the pace of technology innovation. Collaboration between banks and the retail ecosystem will also deepen to provide customers with a bouquet of products. Through partnerships and acquisitions, banks will integrate financial services, wallets, payments, shopping services etc, to deliver an enhanced customer experience.

The world and customers are moving much faster than our technology. Therefore, to improve operational efficiency and customer service, we have to be on our toes and build our both physical and digital capabilities to not only match but also to exceed their expectations.


  1. rbi.org.in
  2. Times of India dated 30.04.2017

About the Author

Deenanath Jha
C.M. (Research)
SBIICM, Hyderabad


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