When Speed Will Be Of The Essence

With a QR code in everybody’s pocket, enhanced data mining abilities, predictive banking and speed of delivery will distinguish the winners from the also-rans

- Clifford Alvares

REST ASSURED THAT BANKS ARE morphing into technological service providers that will be compared to other service providers such as Ubers and Amazons where you can conduct multiple transactions, cross-border payments, investments, and insurance, all in a few seconds, where predictive delivery of banking products will reign supreme.

Financial services will transform itself from a utility model to a seamless service provider, if banks and financial services companies invest heavily in technology that is. It may not seem far away that financial services will be much like plug-and-play models. But is such a tectonic shift happening?

Let’s roll back. In its heyday, financial services made money from information asymmetry and tardiness in the process. Banks, on their part, reduced the problem of, say, transmitting money from one place to another. Banks relied on information arbitrage and were lending because people like you and me do not know whom to lend money to, or how to recover it, for instance.

“In the information economy, two transformational changes are beginning to play a big role in the way business is being conducted. First, the government effort in improving digital identity and the payments infrastructure has meant that process friction has reduced considerably. Second, greater digital access, increased volumes of data and information, and the democratisation of such information has resulted in a substantially reduced information asymmetry between providers and buyers of financial services. The impact of this has been reducing margins for participating institutions,” says Anand Natarajan, chief operating officer, Reliance Capital.