Market Scenario

Indian Banking Sector- Overview

The Indian economy is on the brink of a major transformation, with several policy initiatives set to be implemented. Enhanced spending on infrastructure, speedy implementation of projects and continuation of reforms are expected to provide further impetus to growth. All these factors suggest that India’s banking sector is also poised for robust growth as the rapidly growing business would turn to banks for their credit needs. As per the Reserve Bank of India (RBI), India’s banking sector is sufficiently capitalised and well-regulated.

Banks have the unenviable task of meeting stakeholder, regulatory and customer expectations whilst complying with stringent new requirements that are gradually taking shape in line with the compliance to Basel III norms. Banks will need to seek more innovative ways of creating operational efficiencies, market differentiation and each bank will need to undertake a deep-dive analysis of its businesses and extract benefits to satisfy all stakeholders. Further, top management will be under pressure to make prudent judgements to reinforce systemic controls. This will need increased dependency on modern technologies driven by IT & investments to be able to manage the kind of data population.

Digitisation of banking operations will potentially transform the business models of the banks operating in India fuelled by the government focusing on a digital India and e-governance.

Payments are an area which is experiencing innovative disruption. With the entry of new payment banks, the landscape is changing and payment solutions are being upgraded constantly to provide cost effective and scalable digital solutions.

  • Mobile Banking - A sharp rise in the smartphone usage in India has led to the launch of mobile apps
  • Social media services and analytics –banks are increasingly using these platforms to analyse customer needs, sentiments and improve customer satisfaction.
  • NFC and biometrics – India’s biometrics market is projected to grow at a CAGR of over 35% from 2015 through 2020
  • Personal finance management – many banks have launched their applications for the android and the iOS platforms
  • Technology spend in Indian Banks to grow by 14% annually
  • P2P funding digital platforms – crowd sourcing is one of the emerging ways of raising capital using online platforms
  • Banks to invest $1 Million in Blockchain Technology in 2017 and expect to see the mainstream adoption by 2020
  • Wearable technology in the banking sector is a growing trend