The global banking sector faced a new wave of change when the news of AntFinancial, Tencent and Xiaomi Corp. won virtual banking license in Hong Kong. Mobile cash is catching on in the world’s less advaced economies, in some cases, leapfrogging traditional banking. M-Pesa (Kenya) and Telenor Microfinance Bank (Pakistan) have set example of how unbanked citizens increasingly use phones to connect to the digital economy.
Modern digital technology has disrupted this legacy banking model on all levels, starting from enhancing customer experience to bring agility in the credit operation to streamlining back-office related activities, by simply leveraging on customer data. In a world where “data is king”, the cutting-edge technological inventions transformed the aura of banking services in the past two-three years. In India, ICICI Bank, HDFC Bank, Axis Bank and SBI are now deploying big data to customer profiling, collaborating with e-wallets to make the payment system more convenient, putting analytics into play in creating loan scorecards and gradually partnering with fintechs to leverage their technology for superior customer experience.
Bangladesh, albeit trailing far behind from neighboring India when innovation in banking service is in question, however, started making strides. The top banks of Bangladesh are showing an interesting trend in the commitment of organizational leadership for offering digital banking services. Few initiatives by local banks for instance, coming up with paperless e-loan for individual purpose, implementing blockchain technology (pilot basis) for trade finance, partnering with e-wallet (iPay and bKash) and so forth. Although regulatory challenge, for instance, eKYC is still there, the good news is it is being addressed from policy level. It is time regulators should undertake more “digital-friendly” initiatives so that local banks start putting data and technology into play to provide one-stop, paperless and on-the-go banking solution to its customers.