Skip to main content

Banking in 2020


Henry Ford once remarked, "It is well enough that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."


Looking back at the banking landscape of India in the 1980s, I recall, as a child, how visiting a bank was quite the expedition. Bank officers, with their domineering demeanor, seemed to lord over people's finances, dispensing money as though it were a favor. Customers often spent hours in line, awaiting a summons from the teller—akin to a capricious deity—who delighted in power plays, ill-timed breaks, and even abusive language. This was tolerated because banks, under state control, were heavily regulated. Despite the benefits of state ownership, like financial inclusion and risk mitigation—which, if absent, could spell disaster for banks as witnessed with some international banks—it also quashed the entrepreneurial drive vital for national progress. The scarcity of banks left people with little choice.


The narrative changed dramatically by the late 1990s. With deregulation, the banking sector underwent a transformation, and customers emerged empowered. Banks became attuned to customer needs, offering on-demand drafts, telephonic loans, and various incentives—just for opening a savings account or applying for a card. This period also heralded the introduction of novel products and technologies. Banking terms, once arcane, entered common parlance; acronyms like LAP, BIL, PIL, or HL became familiar to the average person—concepts perhaps nonexistent in the '80s.


By 2015, the rise of fintech had already necessitated a new evolution in banking. The combination of analytics, finance, and technology has become a powerful and dynamic force, transforming the once complex jargon of banking into today's common language. New entities such as payment banks, small finance banks, processors, and M-wallets are set to become commonplace in a few years. The traditional banking model may struggle to fully withstand the impact from the influx of alternative financial systems that are poised to compete with it. I believe we are in for a significant surprise, as the sometimes hegemonic and discerning approach of traditional banking towards customers will be overturned by nimble, technology-driven alternative banking models. I can't recall the last time I went to a bank branch to withdraw cash in the past decade, and I wouldn't be surprised if personalized credit card delivery or loan disbursement becomes a sub-two-minute end-to-end process well before 2020... a revolution is unfolding tomorrow morning.

Comments

Post a Comment

Popular posts from this blog

The rope trick!

Life is akin to a 100-meter sprint; it's brief, so let's make it sweet. When you think about it, what's so serious about life? Whether it's the seven ages of man or our Hindu philosophy of ashramas, the journey is swift and decisive. Life has its own design, with the beginning and the end being remarkably similar, like two ends of a rope. You are born a child and die almost as one. You arrive with nothing and leave with nothing for your final destination. Yet, everyone must play their part in this rope trick—let life ascend to its highest level. It's not about money or fame. It's about being a good son, daughter, father, mother, friend, brother, sister... What's more pleasurable than being with your loved ones, sharing joy, laughter, sorrows, and even money and fame? Home is where the heart is, and my heart is with those I love. What use is money and fame if it can't be shared with them? This rope is uneven, filled with knots that must be untied together...
Post a Comment
Read more

Utopian thoughts !

For nearly a decade, I resided in what one might call a Utopian realm, if such a place truly exists... where people cherished virtue, where perfection was the norm, where speaking the truth was a sign of strength, where candor was celebrated, where honesty earned rewards, where humility was honored, where kindness was expected, where humanity was the only faith, where integrity was esteemed, where ethics ran deep in our veins, where life was about generosity, where friendship meant sharing, where love was abundant and free, where every citizen was kin, where words like war, enemy, and hatred were absent from our vocabulary... This is where I lived for nine years... until I awoke to a world that taught me survival of the fittest... and so, I emerged from my slumber.
Post a Comment
Read more

7 ages of a man !

Years have passed, yet I cannot forget the poem I read in my 7th grade. Back then, it held only academic significance, aimed at affecting my grades. Subconsciously, it deeply touched my mind, body, and soul. Now, with a 3-year-old child and having lost my father at 62, its relevance has dawned on me. As my father lay on his deathbed, my child's visits sparked a twinkle in his eyes, an innocence matching that in my child's gaze, both unaware of life's impermanence. In his final days, my father became as frail and vulnerable as an infant, signalling the last of man's seven ages. I, too, am traversing these stages, anticipating the transitions that complete life's full circle.
Post a Comment
Read more