When compared to the last decade, when the IT industry provided software solutions meeting comprehensive banking needs, the trend in the current decade may be seen as a reversal. The core banking solution (CBS) with a centralized platform, along with channels built around the solution, just about met banks’ requirements in the last decade. Though there were functionality and technology gaps in the solution, most clients and banks accommodated them as something that would only come into the picture in the future and made do with work around approaches or manual processes. A few banks built the missing functionality through customization or procured a lighter peripheral or specialized solution from the market. However, a CBS with multiple modules and solutions with rich functionality helped banks to improve business in that era.
In the current decade, mobile and social media have paved the way for new technological advancements in this country. The youth or Gen Next are using mobile applications to connect to family and friends on a 24X7 basis irrespective of location. The smartphone, which was initially designed or used for voice services is being utilized for messaging/chatting/video/gaming /online shopping etc. Service providers have spread their mobile networks far and wide in the country. Multiple applications for online shopping, gaming, accessing social media, and so on can be downloaded or are inbuilt within smartphones and tablets, coercing the young to constantly use such gadgets. Accordingly, making bank accounts accessible on these devices is an imperative for the industry.
Internet-enabled mobile, tablets, smartphones and other gadgets provided quite a few options for customers to conduct banking transactions or business. Though the basic banking transactions remained the same, the customers were looking for convenient banking and on the go transactions. With social media influence on the younger generation being what it is, banks have to penetrate through this channel to acquire and serve customers. The advice and feedback provided through social networking websites like Facebook hold significant influence over Gen Next’s decision to start a new relationship or strengthen existing ones.
The generation which did banking transactions through the branch in the last decade moved to channels like ATM and internet, while the internet generation graduated to mobile and social. Gen Next now expects a banking solution to come with a multitude of downloadable or preloaded applications that can be used to transact through a handheld device.
The pioneers of online shopping are penetrating the market and are a potential threat to conventional shops and shopping malls, which sell a variety of goods. Gen Next prefers online shopping which is convenient, and offers multiple options at lower cost. Each transaction involves a banking element in the form of credit or debit card usage.
Though the IT industry saw this potential and worked on creating applications that could be accessed through social media and the internet, the marketing and deployment of such solutions and consequently their usage among banks, is only minimal. Either the developed applications are not user friendly or do not meet the comprehensive requirements. Based on the feedback from Generation Next, more and more users are likely to go the mobile way, easily making it the most popular or usable channel in the banking industry of the future. Today’s children are already tech savvy, being exposed to gadgets at a very early age, and are natural successors to Generation Next.
To conclude, banking applications developed for mobile should have essential features enabling transactions, while being highly navigable and user friendly. An application store or digital factory comprising multiple applications, which can be offered to different customer segments, should be available. These applications should have a common User Interface over the mobile /mobile banking platform and potentially be linked to multiple back end systems for transaction processing. This should be available 24X7 with no restrictions on transactions or timings. This will enable the next generation to experiment, transact and provide valuable feedback on the service offering through social media. There is a huge potential for IT vendors to develop solutions, which will change the course of banking in the near future. To this effect, the IT industry should align with the latest banking trends and needs to create a comprehensive solution and bridge existing gaps. A solution offering with rich functionality built on the latest architecture can make a market impact while enabling banks to connect to an exclusive clientele that is going to play a key part in setting new banking trends.