India’s largest bank by assets, the State Bank of India (SBI), will be the first in the country to embrace branch-less banking by launching its digital-only bank, SBI Digi Bank. The move by India’s largest bank is significant, in a country that is exhaustingly reliant on banking at physical locations.
The digital bank will see a launch sometime in the next 3-6 months, according to a report in Indian daily the Economic Times.
The country’s largest lender is initiating its 100% digital banking endeavor within months of an unprecedented demonetization drive enforced by the Indian central government toward the end of 2016.
A source for the publication confirmed the digital-only offering, stating:
We are working on a digital-only bank where no individual will be visible to the customer and all transactions will be done with the help of apps, internet banking and mobile banking. It will be an omni-channel, omni-device digital bank which will be available to both new and existing customers.
The pioneering move by the government-owned bank is telling and represents a marked effort to switch over to a technologically-forward operating model in the banking industry. SBI’s counterparts in private banks – traditionally known to adopt the technology route first – are certain to follow SBI’s example in offering their services digitally. HDFC Bank, India’s largest private bank by assets, has already announced its artificial intelligence (AI) program that will see humanoid robots assist customers at physical locations.
The banking system in India, while functional, is heavily reliant on manpower and telecommunications. It’s often time-consuming and sees a lot of paperwork, rendering the entire system inefficient and frustrating to consumers who are short on options. New Fintech payment platforms are slowly gaining traction, enabling instant settlements and with rapid strides taken with customer support.
SBI’s Digi Bank is certain to help accelerate the process toward increased efficiency in the banking system through digitization.
The ET’s source further added that SBI Digi Bank will be universally accessible across all platforms as a device-agnostic platform that will use India’s Aadhar initiative – the country’s sweeping ID program – for the KYC process.
“So there will not be any paper, we will onboard customers online using e-KYC and all services will be provided digitally,” the ET source added.
A number of common banking features and services, including opening current and savings accounts, insurance products, loan offerings, mutual funds and more will all be offered at SBI’s Digi Bank. Infrastructural upgrades have already been made to support the digital-only bank. SBI’s 14,000+ branches across the country only recently improved its network bandwidth from an outdated 64 Kbps (dial-up standard) to a more-acceptable 2 Mbps link.
While India’s largest bank switches its attention toward digitization, a growing number of banks from the country’s private banking sector are looking toward blockchain technology, particularly in payments and trade finance.
ICICI Bank created a digital division to harness blockchain technology last year and soon revealed a successful pilot of blockchain transactions, one of which enabled a near real-time, cross-border remittance transaction to a partner bank in Dubai.
That effort was followed up by two other private banks, Axis and Kotak Mahindra, to reveal their own blockchain-based endeavors in implementing the technology in core banking processes. More recently, YES Bank, another private sector bank in the country announced its effort to introduce blockchain technology toward automation of vendor financing solutions.
Most notable of all, the research arm of India’s central bank deemed blockchain technology to have “matured enough” to be the platform toward the digitization of the rupee, India’s fiat currency.
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Last modified: May 21, 2020 10:04 AM UTC