The competition by new technology firms will act as enablers as human mind/intelligence can't be replaced with machines
New age technology companies such as PayTm provide huge opportunities for traditional banking sector and will not create a disruption in the segment.
The old traditional banks especially public sector have not been able to use data analytics to understand their customer and do their profiling. For instance for a person who comes to a PSU bank for a home loan of Rs 50 lakh and another one for a home loan of Rs 5 crore, the treatment meted out to them is the same, Deepak Chatterjee, CEO, IIFCL said at a session in the Global Partnership Summit in the capital.
Companies such as PayTm can't be challengers to banks as banks can evolve and change and do anything but vice versa is not possible, i.e payment companies won't be able to do functions of banks, he said.
The panellists in the session were discussing whether bank is the right architecture as a financial institution or not. Many were of the opinion that in the next 15-20 years, banks will cease to exist as most operations would move online but few expressed views that banks will adopt new technologies and adapt to the change brought in by innovations and new technologies.
Ram Thothadri, Managing Director, Centricus said technology has different meanings for different people. Banks have played an important role in nation building.
PR Jaishankar, Chief General Manager, IIFCL said banks need to reinvent themselves and there is need for segmentation. Retail segment in the banking sector is facing challenge of disruption of technology.
Explaining how traditional banking has changed over the years, Chatterjee said in 70s, banks used to maintain ledgers to keep record of all transactions. But now, it has shifted to a paperless banking now. Similarly, they will now embrace new technologies and move ahead.
The competition by new technology firms will act as enablers as human mind/intelligence can't be replaced with machines. Experts also said cheque writing also needs to disappear. But for lower strata of society, banks will still play an important role as many still love to deal with cash.
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