Banks go digital to maintain social distancing in post Covid world

Banks are increasingly turning to digital and contactless facilities as they gear up to service clients in a post-Covid world.

With the national lockdown in place for over two months, many banking services have been impacted and customers have been staying away from bank branches to avoid crowds and practise social distancing.

Though banks had already moved to a “phygital” or physical and digital approach with mobile and internet banking, many are exploring new contactless facilities as they try to resume full operations.

“The need to service, acquire customers, reduce NPAs, understand risk better, regulatory compliance, continues to be there,” Sashikumar Sreedharan, Managing Director, Microsoft India, told BusinessLine.

Zero-touch systems

Banks have been in the process of digitalisation for the last several years but Covid-19 is set to turbo-charge tech adoption. Some branches may need to close temporarily, some will be operational with reduced working hours and in some cases employees will be asked to work from home.

“All this will fuel the need for different kinds of systems not envisioned before, such as ‘zero touch’,” according to Sreedharan.

If banks are looking at delivering a large percentage of their services solely through digital channels, then systems need to undergo changes, say industry watchers. All this is leading towards a contactless society post Covid-19 pandemic that will change the way human lives interact, ensuring minimal human intervention.

Bankers confirm that they are already seeing a big shift to digital and online banking channels and this trend is likely to continue in the months to come. In recent weeks, lenders like Kotak Mahindra Bank and RBL Bank have launched contactless services for account opening and KYC.

Some banks have also rolled out video conferencing facilities, for customers, with relationship managers. “We discourage our representatives from visiting customers and most customers also do not want to physically meet any one in the current situation,” noted a bank executive.

Regulatory technology (RegTech) start-up Signzy, which works with a number of public and private sector banks, launched, last month, a video conferencing tool for secure communication between banks and customers.

“Collection of documents, consent or signing, and video or in-person verification are the three Lego blocks and combining these can lead to digitising any process, from giving a loan. These can lead to end-to-end digital transformation for the bank,” said Ankit Ratan, Co-founder at Signzy, adding that the current situation is making banks realise that they need to digitise at a much faster pace.

“Across banks, there is a clear trend to digitise as many processes as they can as they no longer see the branch as a key element to banking,” he said.

Sanjay Gupta (India Head), Vice-President and India Country Manager of NXP, a semiconductor manufacturer, is of the view that contactless is the way forward, especially when people are wary of sharing currency notes. “Contactless payments such as using near field communication (NFC) technologies for payments will be the norm,” he said.