Case in point is the concept of ‘Banking-as-a- Service’ – API banking-led solutions that redefine the bank’s role as a platform to connect various players in the digital ecosystem, embrace a quick plug-&-play model and reinforce value proposition in a fiercely competitive environment. At YES BANK, since inception, we have leveraged technology and innovation as key pillars in our vision of offering a superior banking experience. YES BANK was the first bank in India to successfully implement innovation in Supply Chain Finance using Blockchain and API Banking. The bank’s interest in Blockchain was owing to the technology’s potential of ushering an era of efficient processes thorough transparency, speed, security & seamless connections in order to maintain records & make quicker transactions. We wanted to create a Blockchain banking solution for our customers which would have immediate, measurable impact and provide a quantum leap compared to the current process. We evaluated multiple use-cases involving use of Blockchain for banking and consequently, we were the first in the industry to implement a multi-nodal Blockchain transaction to fully digitize vendor financing for one of our corporate customers. The carefully curated exercise of the bank by collaborating with external stakeholders not only resulted in demonstrable real-time increase in productivity in customers supply chain financing process but is also helping us boldly experiment with new-age technology and find leverage through collaborations.
Bracing for an advanced consumer society – Being agile and thinking ahead of times
The digital transformation and ‘connectedness’ of consumers and devices alike is creating sinks akin to the primordial soup for digital life to go through myriad evolutionary peaks. Digital disruptions are not as much a product of consumers adapting fast to technology as are of incumbents not responding quickly and lacking the ‘sense of urgency’ to match the pace of change.
Timely and effective response to challenges thrown by the digital environment affects not only the bottom line but also to a large extent the very survival of the business itself. The primary difference between organizations that run with a robust technology foundation versus nontechnology- oriented organizations, is the ability of the former to operate in a lean & agile manner making changes to processes, systems and products quickly and embrace the idea that technology is at the core of strategy implementation.
In light of the makeover that economies globally are witnessing, Indian economy is growing by leaps and bounds; a strong growth trajectory that hasn’t seen major troughs including the 2008 global meltdown. India is bracing herself to be a global super power on the backing of a favorable demography. Digital technology is adding God speed to the entire economic growth and transformation process.
The launch of ‘Digital India’ initiative, especially Aadhar platform benefiting more than a billion citizens with unique identity, Jan Dhan for financial inclusion and National Payments Corporation of India (NPCI) introducing India Stack to build APIs for collaborative development and market introduction of banking services, beguiles a metamorphosis of the country’s digital landscape for better service delivery and governance. It also opens umpteen opportunities for incumbents and new entrants to make their mark; given the environment, a model that fits perfectly is that of collaboration between fintech start-ups and banks.
While banks bring on board vintage with rich industry knowledge, experience and regulatory know-how, fintechs are primarily a mix of innovation, agility and lean structures for quick go-to markets. With the currently forward-looking regulatory environment, a pro-innovation administration at the helm and quick adoption of technology by customers, alliances and relationships built between the start-up ecosystems and banks would go a long way in benefiting the banking industry, more so customers in the long-term.
Rana Kapoor MD & CEO Yes Bank and Chairman Yes Global Insititute, writes this piece for FICCI’s FIBAC 2017 Knowledge Paper.