By Bharati Kumari
Banking is a rapidly growing industry in the booming Indian economy. The Indian banking sector is paving the way for neo banking, that provides complete digital banking experience through mobile applications. India also has one of the most docile and sound banking systems in the world.
As customers are making themselves comfortable transacting digitally, the number of digital solutions is increasing rapidly. The growth in the digital banking sector has given customers better choices providing them with ease and consistency. Smart payment wallet safely connected with smartphone plays a vital role for secured online money transaction.
The main goal of the neo banks is to provide solutions in ways traditional banks are lacking, as they are cheaper, faster and they can integrate the entire financial portfolio in one single platform. They also provide seamless customer experience.
The completely digital banking system opens up a wide window of advantages to a customer. The integration of technology and banking services has changed the banking industry making transactions more customer-oriented.
Neo bank transactions have become a popular trend. It provides a dashboard with an overview of every transaction and up to date balance. It also helps to manage finances, expenses, and savings and can be customized as per the requirements.
Security is the most concerning factor when it comes to digital transactions. Neo bank application implements 2FA (2-factor authorization), Biometric verification, RBAC (Role-Based Access Control), encryption technology along with other security measures to protect customer data. The applications are built to ensure compliance with anti-money laundering laws, complete privacy of customers, and to prevent cyber attacks.
In order to improve digital financial services, the RBI has taken several initiatives, including pilot projects to make at least one district of every state or Union Territory 100 per cent digitally enabled by March 2021. Forty-two such districts are part of this initiative, the governor said.
In the case of HDFC Bank, there were earlier episodes also. HDFC Bank has an overwhelming presence in the digital payment segment, in the internet banking segment. We have some concerns about certain deficiencies. It is necessary that HDFC Bank strengthens its IT systems before expanding further,” Das told reporters.
“We can not have thousands and lakhs of customers who are using digital banking to be in any kind of difficulty for hours together and especially when we are ourselves giving so much emphasis on digital banking. Public confidence in digital banking has to be maintained,” Das mentioned.
His comments came a day after HDFC Bank said the RBI has directed it to temporarily halt sourcing of new credit card customers and launches of digital business generating activities after recent outages in the private sector lender’s internet and mobile banking services.
The RBI Governor, meanwhile, stated hope that HDFC Bank management will work on the issue and urged other banks to also invest in technology pro-actively to remain competitive. As the regulator and the custodian of the digital payment segment in the country, I think the central bank also has to act and that is precisely what we have done,” he said.
India is becoming digital and providing customers with detailed, analysis-oriented all in one kind of banking experience. In India, Neo banks are already on the upsurge and they are intruding traditional banking models. The popularity of neo banking has increased in a relatively short span of time, and it is soon going to be the future of banking.
Photo credits- Bharati Kumari