It Takes a Tap to Bank

Digital-only banks are making giant strides in India with millennials adopting the format faster than thought but regulatory uncertainties cloud their fate

- Madhuparna Roy Sukul

You can’t escape the long queue of people with each one of them waiting to ask a dozen questions to the man at the counter. No matter how hard it is, you have to fill up the small boxes using the best of your calligraphic skills on those rectangular pieces of paper if you want to square your deal. You can’t say no to a formal, official letter in black and white if you need to authorize someone to fill it in for you. And, lastly, you must practice your signature a hundred times if you want your cheque to be processed at one go.

That’s the bank pre-millennial Indians have seen and grown up with. All this was normal for them, all the sulking and cursing stowed in. As the pandemic split the world into two, many pre-Covid practices began transforming into their post-Covid neo-normal avatars. That made the beginning of a bull run for the digital-only banks.

The brick-and-mortar banks had been running the risk of losing customers with time mismatches and manpower issues adding to a rise in customer discontent. “It became important for banks to ascend with the next wave in banking, which scales the entire bank down to the size of an iPad, tablet or smartphone, and promises the convenience of having an entire bank on our fingertips,” says a study by Infosys. That is the world of digital-only banking.

A neo-bank or a digital-only bank operates exclusively online, using the internet and cloud computing. The pandemic-induced restrictions on mobility and social distancing fostered the growth of these neo-banks and their future is sealed with the digital disruption transforming our lives completely.