This is an excerpt from the interview with Rekha Pillay Yadav, CEO of Sumeru Enterprise Tiger in which she shared her views about digitalization in retail banks and the way ahead. This is the first of a series of interactions with Ms. Pillay in which we will get her views on how retail banks can transform their business digitally.
Interviewer – The Indian banking sector has seen a lot of thrust towards digitization after the demonetisation drive of 2016.r. Given this development, what aspects in your view, should financial institutions keep in mind, to ensure a seamless banking experience?
Ms. Pillay– Before we discuss this topic there is one distinction that one must make between two commonly used words – digitization & digitalization. This distinction will put many things in perspective. Digitization is a simple step of digitizing information that is present in analogue or physical format. For example, scanning an application form is digitization. Taking digital photo of a person is digitization. But what we are interested in is the word digitalization. Because digitalization has a connotation of transforming an entire process. So if you smartly put series of digitizing steps together which leads to remarkable change in the effeciency of a process, that will be digitalization. And that is a useful phenomenon. So our discussion is on digitalization.
The tragedy is that even today, when one walks into a Bank in India, to avail consumer or commercial banking services, there are several paper forms to fill, and one must carry copies of various documents. To automate and enhance efficiencies, several banks have invested in digital customer acquisition, believing that by handing a tablet to the sales staff, the organization and the process is now digital. That’s where the gap lies, organizations need to understand that to be truly digital complete customer experience must be digital – the entire process must be digital end-to-end. Halfway digitalization is like a cake that is half baked, you can’t consume it much. Right?
There is a lot of emphasis on digitization, without focussing on changing the entire experience. Let me give you an example, if you walk into a bank can go to a customer acquisition executive with a tablet, put in your Aadhar Card Number and expect the “form” to auto-populate, the answer is no, right. The reason is because no one has done it, no one has thought about it. The Bank’s staff will have a tablet, but the fact is it is merely a replication of the paper form and the customer is still going to have to type in relevant information, e, whether handwritten or with the keyboard of the tablet.
So, what is digitalization with this example as the background? Digitalization is enhancing customer experience and making it easy for the customer to do business with the Bank and vice-versa, by effective use of technology. That is true digitalization.
If there is data available in a public API, it should be extracted and made available to make your customer’s life easy. Would it not be a better idea if he/she is not required to carry pictures or photocopies of documents? One can simply click a photograph on a mobile device (or the bank’s tablet)-which everyone is so comfortable doing–and upload that in the application form? This the very first step, post which the communication black holes come into play. How quick is your communication? If you are still a black hole, a person who applies for a mortgage loan has no visibility at all of his application form and/or its progress, unless an agent decides to call up. This is where the complete process needs to be digital and thus enhance customer experience.
In my opinion, there is a lot more to be done if you truly want to get digitalized.
There is a lot happening in India, and some areas have progressed a lot more than others, for example payment digitization. When it comes to money movement, Indian banks have made great strides – people can pay via mobile wallets and sophisticated banking apps, which is a great improvement. However, when it comes to simpler transaction with high volumes, how digital are banks? If a customer is delinquent or if a customer is applying for a loan, if he still needs to give a cash or a check to repay his instalment or pay his application fee, then you are not digitalized. The funny thing is, even when a collection agency has collected a check for a delinquent instalment, paper checks still follow – the manual process of getting scanned, using a traditional scanner, and then going through an operations team somewhere. In a more efficient set-up, all that a collection agent needs to do is take a picture through a smart phone app and send it all the way out to operations digitally. That’s all that needs to be done. Paper checks don’t need to move around and manual transfers anything don’t need to happen.
As I said earlier, banks have done a lot on the payments front, but need to do a lot more on the operations side of things. Even more tangible changes are needed in the business lead management side. I tell you, go to a website of a bank, and try it, and I have done it myself. Click/tap the “contact us” link. Tell me what you get? Some banks will just give you an email ID and a number to call to. Of course, some of them, do not even provide that. So “contact us” is giving branch information, a central tele-calling information or an email ID. Another bank may replicate that entire paper based app form on the webpage. If someone were to run analytics on that page, they will be surprised to learn what the drop rates are. If the Business Head were to compute the ensuing revenue loss, the numbers will be interesting enough to take note of. This is the reality. So, do you believe that your customer is going sit and type in your website and press submit. Look at your drop rates and then ask yourself.”
To become truly digital, look at all aspects of your business, and see how you can reduce time, and therefore be more responsible to your customer
… to be continued
Rekha Pillay Yadav
Founder & CEO, Sumeru Enterprise Tiger
Rekha Pillay Yadav is the Founder & CEO of Sumeru Enterprise Tiger. She is a Chartered Accountant with over 20 years of experience in leadership positions in the Banking and Financial Services Industry. She has worked with Citibank, Bank of America and Arthur Andersen and was previously the Head – Compliance & Control and Head – Credit & Risk, for CitiFinancial India.