Indian banks are getting digitally mature, but there is room for growth

After the Covid-19 pandemic, State Bank of India opened 78.6 lakh accounts digitally. That is one indicator of the digital maturity of Indian banks, but as a global study released this week points out, there are major lacunae as well, especially when it comes to personal finance management as well as value-added services.


The Digital Banking Maturity Report, released by leading consultancy firm Deloitte recently, sheds light on the increasing digitisation happening in banks across the globe as well as India. There is good news and bad news, with Indian banks improving their position from being the 19th globally last year to moving up four notches to No.15 this year.


The good news is that Indian banks, more or less, match up to the global average in most categories. Indian banks show their true nature in functions like new account opening, day-to-day banking, as well as expanding relationships, where they are way ahead of the global average. However, they seem to lag behind when it comes to services related to ending relationships (like, say, the digital features available for a customer to shut down his account online).


However, the key area where Indian banks could improve, according to Deloitte, is in areas like personal finance management, where the bank can provide features like categorisation of transactions and perhaps more importantly, spending limits.


“With India growing at this rate, personal finance management becomes very important,” Deloitte partners Himanish Chaudhuri and Vijay Mani said while speaking at a presentation on the report. “Gen Z, Millennials etc. would need these features for better financial dividends.”


While some global banks do provide features like this, only one out of the eight Indian banks surveyed was offering it here, Deloitte’s survey found. Deloitte did not reveal which bank it was, though they revealed that the survey featured both public sector as well as private banks, and excluded local divisions of international banks as they were accounted for in the global study anyway.


Beyond banking is another area where banks can increase their digital maturity and create significant value, Vijay Mani told THE WEEK. “This includes personalised non-banking offers and value-added services (such as offering tickets for cinema and theatre) based on customer preferences. This is an area where Indian banks can continually innovate, i.e. expand their offerings to include services such as automotive and real estate marketplaces, company registration etc.


As many as 344 banks across 44 countries were surveyed globally for this survey, including eight from India; and 1,208 digital functions were surveyed through the ‘mystery shopper’ approach.