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3 Major Impacts Digitisation Will Have On Banking Industry In 2017

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December 07, 2016 – Comments (0)

 

The fact cannot be denied that the digital revolution has overhauled and modernised the way we lead our lives. Certainly, significant improvements have been made in the way we communicate, how we work, and the way we apply for loans.

Digitisation has really left a mark on the banking industry. Banking was once considered a monotonous activity and it was also one of the inefficient sectors as well. But, now the banking sector has received a facelift and all credit goes to digitisation. There are various services such as – e-KYC, online banking, and paperless approvals that have really changed the way people used to have interaction with the banking and other non-financial institutions. One of the significant benefits has been the sharp reduction in the loan processing, mainly one of the important loans – the Home Loan.

It is everyone’s dream to have their own home even though they have to pay a little extra for that. Before you go through the loan process, it is imperative you have prepared yourself both financially and mentally. A few years back, the whole process of applying for a home loan was quite laborious. Even if you have done all your documentation right, the process can easily take two or three months. But, today you don’t have to wait more than one week in order to have your home loan approval. In fact, you can even get an approval within a day and the distribution of the loan amount takes one week only.

 

Once digitisation took over, the banking industry witnessed various new and improved trends and the immense rise in the demand of home loans is one of them. It is not limited to home loans only, more and more people are demanding for a hassle free and swift way of going about the loan process. With the help of digitisation, now the banks are able to process more home applications than before.

So, let us now examine the impact of digitisation on the banking industry –

Big Data Analytics –

Data analytics is one of the facets of digitisation. Loan approval includes analysis of varied elements such as – your job nature, your income, your age, and the brand value of the company, etc. If you are of the view that the bankers really consider these elements, then you are wrong. Your details are added to the software which helps in determining your eligibility. Eg, The best part of tech-based online emi calculators is that you can depend on it and there are fewer chances of errors as well. These tools help in studying various trends and make a prediction of the consumer need patterns. With the help of mental preparedness, banks have the advantage of making advanced strategies.

Nowadays, you can have the idea of what can be the returns when you invest any certain amount or which investment options can prove fruitful. This type of analysis really helps you and at the same time proves profitable for the bankers as well.

2. Paperless Transactions –

Even you have gone through the banking-related documentation and it is surely an exasperating experience. In the past, bank representatives used to take extra hours to cross-check the documents, thus leading to a delay in the loan approval process. Such a behavior can devastate anybody’s dream of owning a home. Then paperless transaction was introduced and it was not less than a miracle. With the help of paperless banking, you can now actually do all your banking tasks without taking any pain.

There are few banks that are currently dependent on the paperwork otherwise the trend of going paperless is fast catching up. Once in full swing, the service will really help in speeding up the home loan process.

3. Information Sharing –

In the older days, banking was believed as complicated as a rocket science. At that time, the internet was not popular. People became familiar with banking more by having personal interactions. People were forced to make decisions on incomplete information. But, digitisation has removed this entire information gap.

Today, every bank has its website and has holistic information about their offerings and other information that can prove beneficial to you. In addition, there are various finance blogs, from where you can have all the important information you need before taking an important decision.

Then you have Aadhaar-based eKYC, OTP, mobile banking, and the standard text messages to make you informed about the new happenings and what you should know before you choose any loan or any other financial services. The best part is that now you can apply for a home loan from your mobile phone as well. Talking from a lender’s point of view, digitisation has really helped in streamlining the whole process and help in making the banking organisational structure leaner.

It can be concluded that digitisation has really helped in bringing transparency in the banking system. Though we have talked more about Home Loans here, digitisation has also affected other loans such as Personal Loan, Car Loan, and Education Loan.

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