So much attention these days is focussed on how vehicle-hailing app companies such as Ola are transforming transportation. But Ola offers a lesson beyond impacting how we think about getting around Delhi or Mumbai.

Vehicle-hailing app companies have managed to win customer loyalty without actually having to take the risk of commanding the inventory. That is transformative.

Can banks be so revolutionary?

Access to tools There are powerful new tools at bankers’ disposal such as better use of big data and analytics. By 2020 there will be more than 44 zettabytes (a measure of storage capacity that is 2 to the 70th power bytes) of data, 35 per cent of which will be considered useful for analysis in 2020, according to Accenture’s TechVision 2016.

Companies are increasingly using intelligent automation to handle such data — machines to create scale, speed and the agility to cut through complexities that humans can’t duplicate.

They are also leveraging new technologies. For example, blockchain, which uses cryptography and a distributed messaging protocol to create a shared ledger between trading counterparties, has the potential to transform trade settlement, wealth management and trading itself. In February, Bank of Tokyo-Mitsubishi UFJ (MUFG) unveiled a digital currency nicknamed ‘MUFG coin’ that aims to replicate the peer-to-peer (P2P) exchange and mobile wallet functionality of bitcoin, but without relying on the bitcoin blockchain’s distributed network.

But the new tools and tech do not have to be a whiz-band dramatic solutions to radically change how people bank.

Here in India, Kotak Mahindra Bank is India’s first bank to now enable small funds transfer without internet connectivity.

All you need to do is download its app, which enables cashless transactions by enabling customers to transfer up to ₹2,500 per day. State Bank of India, through its new brand, sbiINTOUCH, has enabled the ecosystem for buying cars and education loans and is leveraging analytics for targeted offers on self help devices.

sbiINTOUCH is an example of where banks should be focused. More digital banking — straight through processing, user-friendly experience, interactive content and gamification to drive and cater to self-driven customers — makes particularly sound sense enabling better customer experience with shorter queues and faster processing, allowing the staff to focus on advisory and value-added services and bringing down the whole cost of operations through digitisation of processes.

That extra robo-step But India’s banks also need to be focused on more than just offering online and mobile deposits, payments and loans. They should be going that one step further, thinking outside the box, just as vehicle-hailing app companies have done.

Robotics is a prime example of this. Robo-advice may so far have only gained a miniscule share of assets under management (AUM) globally, but it presents investors with a possible price reduction of as much as 70 per cent for some services, according to Accenture research. And it presents banks with new avenues to streamline and simultaneously improve services.

That is a compelling business reason for why we expect the use of robo-advice to increase across the industry.

Discount brokers are already using robotics to expand their customer base. Last year, Hong Kong-based brokerage 8 Securities launched a robo adviser called 8Now!, available in Hong Kong and Japan, targeting retail investors with a minimum $88 initial investment.

We forecast that insurance companies may take advantage of it to expand their services to wealth management for existing clients while allowing agents to maintain their focus on insurance sales.

Robotics doesn’t take away the human element — you will still need the advisor to reassure clients through difficult markets, persuade clients to take action and synthesise different solutions — but it potentially increases the output of the bankers who are required.

It’s all about figuring out how robo-advice can complement and enhance relationships.

India’s banks need to continue to build their basic digital services but they also need to start leveraging intelligent automation and new technologies such as blockchain. This would be good for the customers (offers them faster and better service), good for the banks (expands their coverage) and it’s cheaper for everyone.

If that’s not compelling reason enough, consider this: If there is one absolute lesson you can take from these app companies it is that if banks don’t jump on this bandwagon, someone else may beat them to the punch.

The writer leads Accenture’s financial services business in India and is head of sales across the Asia-Pacific

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