Infosys' flagship product Finacle, a digital banking solution suite, sees tremendous opportunities coming its way in helping global banks in their journey of scaling digital faster in the post Covid-19 world, a top official said.

Over the past two months, several existing banks that were looking to go digital in a phased manner during the pre-Covid-19 period have changed tack and are now keen on scaling their digital at a much faster way in the new normal created by this global pandemic, Rajashekara Maiya, VP, Global Head for Business Consulting, Infosys Finacle, told BusinessLine in a telephone conversation.

Big opportunities

“Banks have started getting adjusted to the new normal. Bank branches closing down across the world has led to banks looking at a faster way to digital channel. In Europe, it is expected that 30 per cent of bank branches will not open at all post the Covid-19 crisis. In US, more than 50 per cent of bank branches may not open at all. So it is more and more digital and that is why it is an opportunity for digitally ready solution providers like us to go and conquer the market,” Maiya said.

The ongoing Covid-19 pandemic has presented big opportunities — what Maiya calls as dual opportunity. The first is that existing banks facing legacy environment (where branches are now going to remain closed) have to scale up to deliver digital, and the second one is where pure digital banks offering digital only services will now look to become full fledged service providers.

Covid-19 impact

Asked how the current Covid-19 induced crisis was different for banks than the one seen in 2008-09 (the Global Financial Crisis or the GFC), Maiya said that the current crisis poses both liquidity and solvency risks for banks, while the GFC was more of a liquidity risk for them.

“Now in Covid-19 crisis banks are in a different situation because it is a combination of liquidity and solvency issue. After a series of measures post GFC by governments, central banks and the global institutions to boost liquidity, banks were prepared to take liquidity risk, but not solvency risk. This is the difference. Banks will now have to look at how they can survive in this crisis and sustain growth in coming days,” he said.

This crisis has given banks an opportunity to comprehensively look at transforming their legacy environment also in a ‘Big Bang’ digital way.

Opportunity to transform

Asked how banks can survive the Covid-19 pandemic, Maiya said that an analysis of last four financial crises and 16 market crashes in last 100 years has shown that financial industry got a positive opportunity each time and even that is getting proven this time too.

He said that banks would do well to look at moving into cloud, because their data servers and application servers are going to be on cloud.

“Cloud providers will take the responsibility of securing their environment because globally they are doing this and they will have lot more resources. It’s like shifting your (bank) risk to cloud service providers so that you can focus on core banking biz and security and data centre are taken care by somebody else. This is how I see things going forward,” he added.

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