Published in CXOToday. Rajashekara V. Maiya, Associate Vice President & Head – Finacle Product Strategy & Pre-sales, Infosys discusses major shifts in the banking scenario where CIOs need to effectively bank on digital strategies to remain profitable. An excerpt.

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Today most banks are turning to ‘digital’ technologies and practices, as they are looking to change their services from being transactional to relationship-based. That’s because every bank is focusing on enhanced customer experience. Likewise, banking CIOs are increasingly realizing that digital technologies are disrupting the way consumers interact with banks, and the way businesses are run.

What major tech shifts are you noticing in India’s banking sector? How different is it from the global banking scenario?

We are witnessing rapid technology changes globally, in the form of mobility, big data, social, wearables, cloud, block-chain and much more.These technologies are disrupting the way consumers interact with banks, and the way businesses are run. This evolution will continue to forever change the way we bank, for e.g. if we just take a look at mobility – By 2017 an estimated 1 billion people will use mobile banking globally. Mobile payments are expected to cross USD 1 trillion by 2015 and USD 2 trillion by 2017.

Five years ago, most of us would not have cared about blockchain technology virtual currencies and distributed ledgers. Even though we have only USD 3.5 billion worth of Bitcoins in circulation, the impact this technology will have in redefining the financial industry is immense. It’s therefore not a surprise that many large banks like JP Morgan, State Street, UBS, Royal Bank of Scotland, Credit Suisse, BBVA, Commonwealth Bank of Australia, Goldman Sachs and Barclays have come together to design business models around this. Even governments are taking an interest. Recently, the U.K. government announced that it would commit £10 million to support research in digital currency technology. What it means for banking is that we will continue to see the decentralization of controls, and power will continue to shift to consumers. We all have to start thinking about the mobile first world. The segment of one has truly arrived. We have to find ways to offer mass personalization – every product and services need to be contextualized to the consumer’s unique circumstances.

The above mentioned global tech shifts are equally applicable to Indian banking sector as well. However, the intensity, diversity and sophistication vary considering the demographic profile, urbanization, underbanked financial landscape, mobile penetration, and coverage of Aadhaar.

Do you see the role of the CIO changing in the banking sector? If yes, kindly explain.

Yes, we envisage that in addition the current role, the CIO will have to wear the business hat to leverage the global tech shifts to deliver customer experience, differentiated products & services. They will have to wear different hats of business, marketing, customer, partner and regulator and use that experience to build the IT landscape.

Are Internet and mobile banking replacing traditional banking? Please comment with an example.

In the Indian context, the sheer number of underserved banking population necessitates the need for providing financial services through alternate channels. There are 14 ATMs per 100000 adults in India, compared to more than 100 in advanced economies. Similarly, there are 12 commercial bank branches per 100000 adults compared to more than 40 in advanced economies. Fortunately, for India the digital revolution has helped the mobile and internet reach masses at lower costs.

This is an opportunity for banks to reach out to the underbanked. If you observe the growth story of many of the Indian private sector banks, they demonstrate the advantages of using the Internet and Mobile banking, in addition to traditional channels. ICICI bank is a classic example of leveraging the alternate channels to achieve growth and scale.

How is social media paying off for Indian banks?

India is one of the fastest growing when it comes to adoption of social media. The number of internet users grew at 33 percent in 2014 to 232 Million, we are the second largest market for Facebook with ~120 million users, largest users of WhatsApp with over 80 million active consumers, and fastest growing Twitter user base. With this trend, customers are demanding banking based on social media.We have seen many banks getting on to this bandwagon and offering sophisticated social media based banking around Facebook, Hashtag, Twitter and WhatsApp.

While it is still to be assessed from an ROI perspective, for banks it is a way to attract and retain customers, while reducing cost from a physical infrastructure point of view.

Are banks in India leveraging big data to increase revenues? If so, in what ways?

The IT transformation that Indian Banks have carried out in past one decade has demonstrated that there is no equivalent globally for such transformation. Total deposits grew by 4.8 times, assets by 6.6 times, interest income by 9.5 times and net worth by 4.5 times. However, employee strength has grown by only 5%. This is an incredible transformation of an industry.

Now that the transformation is behind these banks, it is time for banks to leverage the data across users, branches, customers, partners, products to generate online real-time insights to increase revenues. They can leverage the data to conduct customer analytics, product analytics, fraud intelligence, risk management and regulatory reporting. It can also be used for ‘right sell’, reduce NPAs, proactive and preventive maintenance.

What should be the key focus for banking CIOs in the coming years?

The CIO will have to invest in leveraging the data for analytics, using Cloud effectively, trying to convert the organization into a truly digital in every aspect, use automation to improve efficiency, leverage network effect by investing on Internet of Things (IoT). And create a zero distance to customers, partners, employees and regulators by effectively investing in technology.