Money & Banking

Covid ‘positive’: Banks see rise in digital transactions

G Naga Sridhar Hyderabad | Updated on August 16, 2020 Published on August 16, 2020

Step up offerings, encourage customers to use technology

The Covid-19 pandemic has boosted tech-driven offerings by banks and also led to a surge in digital transactions as customers stay away from branches.

The first quarter data provided by major banks confirm the trend.

A senior official of State Bank of India told BusinessLine that the share of alternative channels in the total transactions for SBI increased to 93 per cent in the first quarter ended June 30 from 90 per cent in the same period last year.

“We are seeing a lot of traction in the bank’s technology platform, YONO,’’ he added.

According to Rakesh Jha, CFO, ICICI Bank, over 90 per cent of savings account transactions in the first quarter were through digital channels. In the same period last year, the share of digital channels was 87 per cent.

“We have been able to connect to over four lakh customers on a daily basis using cloud telephony and voicebots to counsel them on using technology,” he said.

For Axis Bank, the market share in UPI transactions stood at 19 per cent for the first quarter while quarterly transactions were up 163 per cent year-on-year. The bank has seen traction not only in savings bank transactions but also in other areas. For instance, the share of digital channels in sourcing fixed deposits and personal loan disbursements stood at 75 per cent and 65 per cent, respectively.

“Covid almost has had the same positive impact as demonetisation,” said Prabhu Ram, Managing Director and Group CEO of Payswiff, a payment transaction solution provider, said. Even the traditional payments made in cash to the milkman and the paper boy have gone digital now because of the fear of touching currency notes due to coronavirus, he added.

The RBI’s advisory to use digital means and the Government’s measures, such as allowing Near Field Connectivity (NFC) that permits touch-free transactions on cards, are pushing retail customers to go digital.

Digital offerings

Banks are also stepping up digital offerings. HDFC Bank has launched Digitmat and ‘instant’ savings accounts. ICICI Bank has introduced the video KYC facility to on-board new savings account and personal loan customers.“Our digital trade solutions for corporates and SMEs have proved particularly relevant now,” the bank said.

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Published on August 16, 2020
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