Tech-led innovation is transforming banking, says Ajay Rajan, Country head, Yes Bank

“India’s banking sector has been instrumental in elevating the country’s GDP from $250 Bn in the 1990s to $3.7 TN in 2023” - Ajay Rajan, Country head, Yes Bank


How has tech changed some of the legacy practices in the sector and improved productivity?

India is at the cusp of massive transformation in digital technology, both on the enterprise and consumer side. The scale of banking transactions has grown at a massive pace. For e.g. Indian banking coverage has increased from 27% in 2008 to 80% in 2017 and above 90% in 2023, all on the back of tsunami of digital revolution in India.

While this exponential spurt of growth has led to massive business opportunity, it has also led to pressure on legacy banking infrastructure. This has been compounded with the advent of new public digital infrastructure and new emerging technologies. Legacy systems for many institutions has become monolithic, complex, and in some cases unstable.

Most organizations have dealt with this phenomenon through a model of Retain, Transform or Drop. Old technology layers, monolithic middleware and duplicate systems are being dropped. Another dimension that technology has added towards productivity gains is ecosystem play.


What do you see as driving the next wave of innovation in the tech space?

India’s banking sector has been instrumental in elevating the country’s GDP from $250 Bn in the 1990s to $3.7 Tn in 2023. As the sector aims to support India’s grand vision of a $30 trillion economy by 2047, an estimated capital infusion of $2-2.5 trillion is required over the next two decades.

Banks will play a crucial role in channelizing the savings, enabling inward remittances, and extending credit to corporates. Technology-led innovation will transform these 3 key pillars significantly: Distribution, Risk Management and Customer Experience.


What are the three main challenges banks face with tech adoption and how has the industry coped with it?

Make vs Buy Decision, Legacy Systems, Return on Investment, Platformification, Use of Micro Services, Blockchain Technology Adoption have been some of the challenges.

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