Financial Chronicle: Vice President of Cognizant Business Consulting Says Banks That Crack the Code on Customer Value will win the Digital Banking Race

“Retail banks across the globe have adopted digital technologies—be it internet banking or mobile/smart phone banking—to improve operational efficiency as well as the ability to manage customers,” writes Sandy Gopalan. “With digital banking penetration of just 15-18%, India still has a lot of ground to cover. However, the fact that India has the highest internet user base after the U.S. and China, and very high mobile phone penetration also represents an upside for banks.” Excerpts:

Digital technologies present a huge opportunity for Indian banks to not just deepen customer relationships, but also expand their customer base. Digital banking is also turning out to be a very effective tool to increase customer base.

Digital banking does provide convenience, but in order to broaden its appeal, banks must come up with a compelling value proposition for their customers.

The current value proposition for internet banking or mobile banking is convenience, while banks benefit from lower operational costs and an intimate knowledge about their customers.

With “Digital India”, banks will have a great opportunity to overcome regulatory barriers, access a wealth of technology emanating from the vibrant start-up sector, and rise up to the changing needs and expectations of an increasingly digital-savvy population. However, to really make the most of this opportunity, banks will need to answer the client’s question “what’s in it for me” and that must go beyond convenience. Charging nominal fees for in-person or physical transactions to increase the use of digital banking is not the answer.

It must be remembered that Indian customers are extremely value conscious and will come onboard in large numbers only when they see unquestionable value, like they are beginning to do in the case of e-commerce. Banks that are able to crack the code on customer value will eventually win the digital banking race. For others, it will continue to be a mirage.”

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