India ranks first in digital payments made globally: Report

Update: 2023-08-23 20:52 GMT

 Hyderabad: Online banking and the shift to a cashless society started approximately three decades ago in India. This year, 91 billion digital payment transactions have been recorded and today India ranks first in the number of digital payments made globally. This transition showcases the country's rapid embrace of digital financial services and underscores the importance of a customer-centric digital banking ecosystem, said a report by Backbase, a fintech company.

Backbase on Wednesday released the IDC Infobrief titled ‘Accelerating customer-centric transformation by balancing build and buy - A collaborative approach towards sustainable digital banking architecture’ via a virtual platform. The report draws insights from 125 banks and 316 chief information officers (CIOs) in the Asia-Pacific (APAC), including the Indian market, and offers a regional perspective on digital transformation.

The report said about 80% of digital engagement platforms built in-house with budgets over $10M face underperformance and have not yielded the desired return on equity (ROE) in their digital initiatives.

“Today banking in India goes beyond delivering a comprehensive portfolio of banking services. Consumers expect banking experiences to be on par with ecommerce and social media platforms. We empower banks to continuously calibrate new journeys and experiences around their customers,” said Riddhi Dutta, regional vice president, Asia, Backbase.

Despite having embarked on digital transformation since the 2000s, many banks in the APAC remain at an early stage, failing to fully capitalise on its benefits and deliver compelling digital customer engagements. “Building in-house has been a strategy by banks. But it is no longer feasible to deliver to the pace and scale that is required to be competitive. The complexities that come with the extensive amount of data layers, channels, features, upstream and downstream integration that needs to support legacy and modern systems is where in-house implementation breaks apart,” said Ashish Kakar, senior director of research, APAC, IDC.

By adopting a collaborative platform and building upon it, banks can achieve 40 per cent faster time-to-market, where digital engagement banking platforms can be launched within 11 months, as compared to the traditional 20 months with a full ‘build’ approach, it said.

Customers face challenges accessing multiple services through disparate interfaces, lack a unified view of their portfolios, and endure lengthy onboarding processes. The demand for instantaneous approvals and streamlined digital processes remains unmet, while personalised experiences, segmentation, and relevant promotions based on customers' lifestyles, life moments, and goals continue to elude them, the report said.

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