Catering to the Digital Indian: 10 Key Trends Reshaping Digital Banking in India for 2024 (2024)

By Puja Sharma

“In achieving our remarkable 43% UPI share in India, it’s all about strategic implementation, a forward-thinking mindset, and forging the right partnerships. Looking ahead, we see the future of banking transformation in India through embracing public digital goods, leveraging account aggregators for consumer-centric services, and exploring the potential of the Open Network for Digital Commerce (ONDC) for consumer-led transformation,” said Ajay Rajan, Head of Transaction Banking and Government & Multinational Business, YES Bank at the Cedar-IBSi Digital & Core Banking Summit, during the panel discussion on “Future of Banking—Catering to the Digital Indian”, moderated by Ramkumar Venkataraman, Senior Partner at Cedar.

Here are the key trends set to shape the digital banking landscape in 2024:

• Innovative Approaches to the Digital Rupee

Fraud management strategies ensuring the security of the Digital Rupee involve implementing robust fraud detection algorithms, enabling real-time monitoring for unusual patterns, and integrating multi-factor authentication for secure transactions; exploring blockchain technology to enhance security and transparency; and utilising smart contracts to automate transactions and reduce the risk of fraud.

• Omnichannel Experience

Creating a seamless customer experience means seamlessly blending online and offline channels, ensuring consistent services and information across touchpoints. Responsive design adapts the experience to different devices, while personalised interactions use AI to tailor services based on customer data. This results in a cohesive and customised journey across channels and devices.

• Accelerating Customer Journeys

Delivering a great customer experience (CX) requires a strategic approach. Businesses will use analytics tools to track interactions, identify critical touchpoints, and measure satisfaction. Quick resolution strategies address pain points, utilising automation for common issues. A customer-centric approach ensures ongoing optimisation by gathering feedback and regularly updating processes for a dynamic and customer-focused journey.

• Consolidating Critical Communication

Streamlining communication is crucial for a unified brand and customer experience. Businesses enhance interactions, improve response times, and provide personalised service by centralising channels and using AI-powered chatbots. Data analytics refines communication, tailoring strategies to individual customer preferences. These efforts create a cohesive and personalised approach, building stronger connections and reinforcing the brand in the digital banking landscape.

• Touchpoint Culture

Highlighting a touchpoint culture is crucial for digital banks, meaning prioritising every interaction with customers. Addressing training needs becomes essential to ensure a cohesive and customer-centric approach– involving equipping staff with the skills and mindset necessary to deliver a seamless and personalised experience at every touchpoint, fostering stronger connections with customers.

• Evolution of API architecture

In the realm of AI and ML, the evolution of API architecture within banks is steering towards uniform functionality. The critical trend emphasises that collaboration, starting from internal cohesion and extending to external partnerships, particularly with FinTech firms, is vital to enhancing and standardising API functionality in the banking sector.

• Cards Take Centre Stage

As cash disappers from the wallets, the next wave of innovation sees widespread adoption of debit and credit cards. UPI has transformed payments, with smartphones serving as identity and preferred medium, especially amidst diminishing attention spans. Banks quickly adapt, and FinTech make this digital reality a part of everyday life.

• User-Friendly Interfaces

Digital banks face unique challenges with no physical branches, emphasising the need for a user-friendly interface. They offer 24/7 communication, a contrast to traditional banks. All processes are exclusively digital, leveraging AI and ML for customer benefits and expanding into non-banking products.

• Transformative impact of Blockchain and (CBDC)

In the future of digital banking in India, key trends include the transformative impact of Blockchain and Central Bank Digital Currency (CBDC). Blockchain’s decentralised and secure nature promises to revolutionise banking, enhancing transparency and efficiency. CBDC represents a shift toward a digital national currency, reshaping traditional currency circulation. Integrating AI/ML technologies further optimises processes and enhances customer experiences. Additionally, Banking-as-a-Service (BaaS) is set to play a pivotal role, allowing non-banking entities to offer innovative financial services through collaboration with traditional banks. This strategic integration aims to create a more dynamic and customer-centric economic landscape in India.

• Regulators as Digital Disruptors

In Indian digital banking, government bodies and regulators are key disruptors, going beyond traditional oversight. They actively shape the digital banking landscape, driving financial inclusion and promoting digital transactions. Regulatory frameworks for digital wallets and payment banks foster innovation and competition, creating a dynamic financial environment. Additionally, these regulators ensure the security of operations, setting guidelines to protect customers, promote fair practices, and manage risks in the rapidly evolving digital financial space.

“In shaping the future of banking in India, we’re exploring innovative approaches with the Digital Rupee for robust fraud management, prioritising customers through an omnichannel experience, accelerating journeys with Customer Experience (CX) measurements, consolidating critical communication platforms, and fostering a touchpoint culture. These trends reflect our commitment to a seamless, choice-driven, and customer-centric banking experience.” Parag Deshpande, Head of Digital Servicing & CX, Axis Bank.