Category: Banking & Finance

Prashant Kumar, MD & CEO, YES Bank said that the “holy grail” of the financial sector was to currently make every customer engagement simple and straight-forward. Speaking at the ETCIO BFSI Conclave as the Keynote Speaker for the theme “Frictionless Future of BFSI”, Kumar spoke at length on the importance of the frictionless world for the BFSI sector, banks scaling out on the frictionless world and the digital strategy YES Bank was pursuing in partnership with FinTechs.

“Digital identity has largely replaced phygital activities in today’s world”
“Over the last decade and a half, when RBI introduced electronic payment mechanisms like RTGS and NEFT, the overall paradigm of extending services to customers changed. Internet banking came into the fore and eventually that is making way for API led transaction processes. The thinking has evolved and is being now likened to customer experience as well,” said Kumar, adding “Making every engagement with the customer as simple and straightforward is the current holy grail for the financial sector. Investment of new technologies and challenges, the digital identity has largely replaced phygital activities in today’s world specifically in financial services delivery.”

The MD & CEO of YES Bank, who was appointed to the top chair in March 2020, recalled “Being in the banking industry for so long, I have seen how the evolution of technology is facilitating in new ways to provide customers a frictionless experience, which I believe will become universal in future,” whilst noting “Mobile banking apps that provide quick access to glanceable information and allow the user to make transfers in a secure manner, biometric data used for authentication, location data from smartphones that can be used to ascertain that the user is identifiable at home or at the office, validations can be built accordingly around it, and some institutions have even started using facial recognition software for authentication.”

“Entry of agile, digital savvy disruptive brands in the market”
Prashant Kumar also noted that the aforesaid developments had led to a scenario of the customer spending lesser time to consumer the same services, with the motto of being quick, clean and precise. “These digital technologies all deliver an easier and simple experience, exploiting ubiquitous customer technology such as smartphones whilst eliminating the need for cumbersome peripherals like card readers. Using technology to provide a frictionless technology in this way will become key for financial institutions to differentiate themselves from the competition now and in the future,” said the MD & CEO of YES Bank, adding “More agile, digital saavy disruptive brands are rapidly entering the market and are using technologies to deliver frictionless experience. What was considering novel a few years ago is commonplace, and anything less deteriorates [the experience].”

“Creating a frictionless experience should not come at the cost of security and compliance”
Speaking on the new and established FinTechs and Neobanks, Prashant Kumar acknowledged that whilst Banks had a lot to learn from new players, it would not be at the compromise of security and compliance. Amplifying his thought further, Kumar noted “Some things that provide a smooth experience for the customer could throw up compliance challenges for the institutions. We can consider some examples such as biometrics and location data on customers which allow the institution to provide the user with a hasslefree experience,” The MD & CEO however added that in tandem with technology being more prevalent, data security and privacy would eventually become subject of increased attention and regulation.

Goal to become digital aggregator of India
“We at YES Bank see this expansion of connectivity as an opportunity to dramatically improve the client experience – this means extending the reach of banking solutions beyond the banks own channels and technologies. Incorporating them in day to day management functions, in this way the friction between corporates and banks are reduced, making impossible to tell where the bank ends and accounts operations begin,” said Kumar, adding “Already today, APIs are used retrieve account balances in real time, processing transactions at high speeds round the clock, provide enhanced information for reconciliation in real time and validating transactions under pre-set rules as in the case of cross border transactions, process vendor and dealer finance transactions, real time thereby facilitating faster churn in ecosystem.”

Elaborating further, Prashant Kumar said “Such innovations are making it possible to conduct transactions instantaneously, improving liquidity decision making and allow treasury to better support overall business strategies and objectives. For example, the use of APIs is allowing clients to initiate payments directly from ERPs, eliminating the need to log into a banking port. APIs are also enabling clients to access bank account information in real time, through their own system, saving time and effort.”

The MD & CEO of YES Bank echoed “In short, routine tasks will either become automated or made far easier to execute. As a result, the overall client experience will be greatly enhanced. Infact, the innovations on the API front at YES Bank has really helped catalyse an entire new banking industry in the country which is now able to offer these services, riding on the last mile APIs that banks provide them.”

Outlining the goals of YES Bank in the future, Prashant Kumar said “Our goal at YES Bank is to become the digital aggregator of India. A platform approach is the key to this strategy, the means to which a client can access YES Bank. API’s, internet banking, mobile banking, and connected banking are those components that would constitute the omnichannel platforms that we aspire to build and nurture,” noting “In order to support the facets, we are also augmenting internal systems but linking all our legacy systems through APIs.”