IMPACT OF EMERGING TECHNOLOGIES ON THE BANKING SECTOR

Abstract

Financial Services in India has undergone rapid expansion in the past few years in terms of both the strong growth of existing firms and new entities entering the market. The sector comprises of Commercial Banks, Non-banking Financial Companies (NBFC), Insurance firms, Pension Funds, Co-operatives and other smaller financial entities. India is expected to be fourth largest private wealth market globally by 2028. Technology in the banking sector has always existed and made things easier. Banks have enormously relied on technology to record transaction and process them. Technology has changed how banks used to function and introduced ways to ease the processes. With launch of ATM’s, Internet Banking, Debit & Credit cards and Mobile Banking the transactions became quicker and the frequency of visiting the banks reduced. As on March 31, 2019, the number of ATM’s in India increased to about 2,21,703 and are further expected to increase. The number of Debit and Credit cards issued around the same timeline were 925 million and 47 million respectively. The financial sector has seen drastic technology-led changes over the past few years. The IT departments are flooded with requests to improve efficiency and facilitate game changing innovation; while also reducing costs and continuing to support legacy systems. Technology will not only help perform the backend tasks i.e. supporting the process of transactions, but future technologies are much more customer centric, efficient and provide more secure & intelligent solutions. The technologies that are anticipated in the banking sector in the next five years are – Machine Learning & AI, Hybrid Cloud, IOT, Blockchain, Robotic Process Automation (RPA) and many more. Banking sector should adapt these technologies in key areas that help develop the customer journey including – Enhanced Customer Service, Online Banking, Quick Transactions and Detection of Frauds. The project talks about the emerging technologies and the current processes being followed in the industry and to identify the level of inefficiency in the sector and how important it is for the existing firms to adapt to changes and strike a balance between technology and manual intervention.