Challenges to Next Gen Banking

8/3/2019 Challenges to Next Gen Banking

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Challenges toNext Generation Banking

Anirban Mukherjee (Roll No.56)

Jayesh Kamble (Roll No.36)

Muralidharan R (Roll No.58)

Nirmal Pattnayak (Roll No.74)

Sameer Kasawkar (Roll No.120)

Sanjay Pednekar (Roll No.77)

Yogesh Gupta (Roll No.122)


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India : DemographicChallenges India is the only Country where the

working population would increase forthe next twenty years

Estimates of United Nations suggestthat by 2041, working age populationin India will increase by 312 million,while in China it will decline by 126

million. Creating gainful employmentfor this order of new entrants to thelabour market is a daunting challengebut not impossible.


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India : DemographicChallenges Indias Current Growth Rate is around

8% and it is expected to be around10% during 12th Five Year Plan

With this growth rate Indias share inWorld GDP would go up from currentlevel of 2% to 10% by 2030.

While Services form a major part of

our GDP at 65%, it would be achallenge to absorb the hugeworkforce. Focus needs to be diverted

to industry and agriculture.


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Major Challenges for the bankingSector

Change in customer service delivery

Change in product design and

manufacturing

Change in product availability anddistribution

Change in risk and credit decisioning


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Customer Service

Close Relationship between a Customer

and Profitability

Customer Centric Institutions are a mix

of highly profitable customers providing

todays profit and those with a calculated

potential of growth

Goal of Financial Inclusion


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Customer ExpectationsKeep your Customers Happy and Survive

Shifts in demographics, income, attitude and

behaviour, in addition to easily accessible

information, are empowering customers to

demand greater autonomy, responsiveness

and transparency from their banks.

Freedom of Choice

Personalised Products

Shift Loyalties


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Customer Expectations

Channel Amplification

Service Accessibility

Customer Serviceability

Data Privacy and Security

Customer Expectations


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Customer Imperatives


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Channel Amplification

Better Communication : Increase Profit

Potential

Better Mobility : Increase Competitive Agility

Better Customer Insight : Find new

Opportunities

Magnify Existing Channel Offerings (ATMs,

Kiosks, Mobile banking)


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Simplified BankingExperienceCustomer Demands would be for :

More Choice in terms of Product

Selection Simplified Banking Forms and

Procedures

Prompt Services and Alerts through

Multiple Channels

Zero Tolerance to Hidden Charges and


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Risk Management

With reference to the overall risk

management challenges the risks, a

bank may face, can be divided into three

categories :

Operational Risk

Credit Risk

Market Risk


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Managing Operational Risk

As Operational Risk management is centralized functionto ensure quality of data and standardized reportingacross the organization. This will require technologysolutions to meet the operational risk challenges inenterprise-wide deployments, data security and identitymanagement.

It is also felt that that advanced and sophisticatedsystems should be introduced to ensure that suspiciousevents which can lead to fraud can be tracked andlogged.

Incident/Event should also be tracked in a similar

fashion. Tools can be used to derive patterns and analysis of

such events using data mining techniques to manageoperational risk.


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Managing Credit Risk

Credit Risk is the most important riskcomponent of a bank as it has directimpact on the banks books

Banks needs to look beyond CIBIL forcustomer credit worthiness and shouldlook into creating a more matureinformation system and rating model.

Financial Innovations needs to becautiously used and a detailed impactstudy should be done before banks gofor enhanced exposure


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Managing Business or MarketRisk

The role of technology was identified tobe of paramount importance inmanaging business risk. With all

requisite information available, systemsare in place to generate ad-hoc reportsand single source of truth can bemaintained. This would help

organization not only to managebusiness risk but also providecompetitive advantage which businessintelligence, analytics and data mining

techniques.


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BanksWay Ahead

Providing a Simplified, yet fully loaded

banking experience is the need of the hour

for the banks. Banks will need to take the

participative view of the customers and

design banking processes, products and

channels in such a way that bankingexperience remains easy and simplified and

at the same time can offer world class

products and services at competitive prices.


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Conclusion

The economic downturn coupled with the growing

competitive environment has led to a new era of

consumerism.

The long term success by any bank cant be achieved

without the development of new business ideas,

innovative products and services and customer

retention.

Banks would have to instill in their DNA the enablement

of a positive and consistent customer experience that

would transform them to a trusted partner.


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Documents

Challenges to Next Gen Banking