In the aftermath of Covid-19, businesses need to embrace digital, else run the risk of becoming a dinosaur.

Addressing stakeholders at the Global Fintech Fest, Arundhati Bhattacharya, CEO and chairperson of the Indian operations of software products company Salesforce. said that digital is no longer a nice to have thing but an imperative.

Bhattacharya, who was the former Chairperson of SBI, was referring to the future of banks, which are undergoing transformation, especially as a lot of fintech companies are eating into their pie.

Banks could be asset-light in the future and for achieving that objective, digitalisation is needed as data provides insights. “If you look at the processes of existing banks, data will give better risk management, opens up new market segments or gives them a picture of their lending scenario, with which one can manage NPAs better,” said Bhattacharya.

The problem, however, is that banks are constrained by mindset issues, as well as regulations, which come in the way of innovating new products or services. This has opened up opportunities for fintech ventures in India, with most of them being start-ups and they are putting pressure on banks to innovate. “Innovation is difficult and 8 times out of 10 you will fail. Failure is not given any credit within an organisation,” she said.

Changing interaction

In this scenario, Bhattacharya cited the example of SBI, which created a ₹200-crore fund, to partner with fintech start-ups to help them continue with their digitalisation push. “This was handled by a separate team, with a separate budget and SBI partnered with many start-ups to tap into opportunities. The ideal situation is where both of them get into partnerships” she said.

Banks’ strengths include people’s trust, which a fintech does not enjoy at present. Banks, on their part, need not reinvent the wheel and instead partner with fintech is specific areas.

So, will physical banks cease to exist if a person can do everything online? “Brick and mortar will be there as people trust banks but interactions between banks and people will change,” she said.

Bhattacharya also welcomed the Open Credit Enablement Network, mooted by former UIDAI Chairman and the key architect of Aadhaar, Nandan Nilekani as a game-changer in the lending segment. This needs to be seen in the backdrop of Covid-19 when many small businesses are struggling to stay afloat.

“What changes the game is access to credit, new markets, products. What is needed is a platform where the borrower gets the lowest price and the lender gets a good picture of the loans he is disbursing, which is very difficult in the current situation,” said Bhattacharya.

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