After Demonetization in India that happened in November 2016, probably the next biggest compelling step towards a digital economy is driven by the efforts to tackle Corona Virus. Words like Social Distancing, Contactless Interactions, Hand Sanitization has had a ripple effect on banking practices. While the first one was man made, the second one is part of natural societal evolution, even though it should have been far less disastrous on humans.
With Cash and Cards becoming potential carriers of the virus, shoppers are turning towards contactless services like QR code based payments. PayTM, GooglePay, PhonePe etc. have suddenly taken the front seat. POS machines have been moved out and QR codes adorn the checkout counters in small and medium grocery shops.
Even while other industries are grappling to adjust their businesses to the virus outbreak and its aftermath, Banking industry is amongst the lesser affected vertical in our economy. Thanks to multitudes of Fintechs and government initiatives, we are reaping the benefits of a concerted regulatory effort to go Digital. It seems so far-sighted that India had implemented fund transfer mechanisms like IMPS, UPI that is now enabling contactless payments via QR, direct Subsidy Transfer using Aadhaar – Account number mapping, or even the FasTag initiative that helps in contactless toll collection on highways. Even at an international level, Apple’s decision of doing away with the physical card, unless on demand, suddenly seems prophetic!!
As the virus pandemic plays out and the dust settles down, onus will be on banks to revive the sagging economy. They will need solutions that help provide smoother Credit disbursals (Onboarding + sturdy Credit Scoring mechanisms), Personal Finance Management systems for better funds utilization to the common man, and do a rethink on card / cash based payment solutions.
With initiatives like Multi Bank Account Aggregation, OnBoarding with Alternate Credit Scoring, we at Clayfin look forward to jointly working with Banks on some of these solutions that will address the new and emerging problems and create a virus free Banking space.