Bancon2012: A Curtain Raiser

The dazzling banking event BANCON 2012 that will be the scene stealer and hog the news over the weekend, in Pune began at 2.15 today on this pleasantly warm Friday afternoon. All roads led to J W Mariott, where the banking event was hosted by Bank of Maharashtra in association with Indian Bank’s Association, (IBA), with McKinsey & Company as knowledge partner. The compere, Darrpan Mehta took to the stage to introduce the distinguished panel, as they took their seats on the dias: Mr Narendra Singh, Chairman & Managing Director, Bank of Maharashtra, Mr. K Ramakrishnan, Chief Executive, IBA and Mr Jatin Pant, Director McKinsey & Co, Mr. C V R Rajendran, ED, Bank of Maharashtra.

To bring attention to this year’s theme, Innovating to unlock the next decade, he quoted Steve Jobs, “Innovation distinguishes between a leader and a follower” promptly sparking interest in the media about the weekend conference where banking heavyweights will assemble to exchange ideas.

Speaking on the occasion, Mr Narendra Singh explained how technological initiatives have brought in its wake, the problem of shortage of hands as well as handling data; its sheer volume and velocity and even the opportunity for leveraging it.

Next to take to the mike was Mr Ramkrishnan. He proudly stated how total industry assets had risen six fold between 2001-2010. He highlighted major shifts like the prolific spread of ATMs and mobile banking; growth of the middle class and increasing rural affluence, and lastly the growing demand for SME’s.

This was followed by Mr. Jatin Pant’s analysis. His presentation lucidly elaborated on a) the top 10 Indian banks featuring among Asia’s top 30 value creator banks in the next decade, b) Indian banking revenue pools likely to quadruple in the next 10 years.

An interesting Q&A round concluded the session.

Empowering India with Innovations in Banking

The urban Indian has never had it so good. Locate closest ATM on mobile, before leaving home for work or use a 19-inch touch screen to portray the transaction at hand. Most banks in India utilize biometric smart cards and POS devices for authentication and transaction which also connect rural masses. These technological marvels in banking empower the semi-literate farmer who merely tells the amount of transaction to acquire the money he needs; without the hassle of obtaining or maintaining a checkbook, which in today’s digital age appears prehistoric.

However, Harish K Murthi, Chairman, HMA STARware, the first company in India to sell ATMs to public sector banks, maintains that, “In technology, we have a lot of catching up to do.” He adds, “Korea hs over 2,00,000 POS terminals versus a mere 50,000 in our country.”

Almost 12 million users in Kenya, withdraw cash through their mobiles thanks to M-PESA. 

 In another part of  the world,  NFC Payments capability like Visa PayWave, Mastercard PayPass built right into the handset could be revolutionary for our 21st century, spelling the end of checks and possibly even cash. Whereas the most recently launched Square makes people and organizations, become instant merchants through their iPhone OS.

Banking towards a digital future

Welcome to the digital era where developing economies like India can leapfrog; using mobiles as technology springboards like their Singapore counterparts with their CashCard TopUp; simply a combination of a dual slot mobile phone, smart ATM card, and a HomeNETS PIN. The mobile has also been an instrument for women empowerment, like in Bangladesh, with the Grameen Bank & Grameen Phone project, providing credit to the poorest of the poor. Similarly, Pride Africa, a financial institution, provides access to credit to more than 80,000 entrepreneurs with its virtual information and services network and smart cards for SME’s.  Or take the case of ACCION International, one of world’s leading microfinance organizations which uses Palm Pilots to cut costs and time to make a microloan.

E-finance has also made inroads in the securities market especially retail where online trading has captured large market share. This rapid spread suggests e-brokerage is easy to introduce and market to users and cost reductions are quickly passed on to consumers. In Denmark, Netherlands, Norway, e-cards have replaced existing financial services. Venezuela, Ghana and Turkey have a similar story to tell with Mondex e-cash, a multifunctional purse that allows upto 5 currencies to be held at a time and can be used across open networks like telephony or internet.

 

Digitalised insuance? Asia’s fully online insurance product from DollarDEX helps DollarDex.com’s participating banks know more about what other banks are offering and also reduce cost of customer acquisition. Consumers now are at the epicenter of a digital finance revolution and can quickly discern which dust-gathering options add much value as social media or mobile applications. Many are disillusioned by their banks’ lack of real time support on their websites. In fact tech initiatives like Google Wallet have already begun to change the finance game. According to Brett King, digitalization implies banks have to rebuild marketing teams, define new metrics and deliver true 1:1 propositions. Or like co-operative banks in Poland discovered to their horror, be left out in the cold.