The “demonetization” of the Indian economy has served as a real world example of the impacts to day-to-day lives of the population across all walks of life. The role of “money-changer” the MO of the financial institution network, and at least temporarily affording the FIs and consumers alike what a cashless, or reduced cash, economy will look like and how it will function.
By simply being more digital, banks cannot shrug off competition. Closing branches, adding more ATMs, and mobile and web banking alone won’t help. Demonetisation has probably opened anew avenue for banks to become more relevant to their customers with new financial technology (fintech).
Mercator Advisory Group agrees with the authors assessment in that FIs are well positioned to take a lead role in the economic functions, but will indeed need to focus more on delivering service and insights at the individual level. Facilitation of payments, as outlined in the article, will be less of a revenue generating activity for FIs. We agree FIs need to decidedly pivot to fulfill an expanded advisory role for their clients, leveraging their own access to broad financial data to make suggestions to clients to improve their financial wellness and in doing so establish a trusted partner relationship.
Overview by Joseph Walent, Director, Customer Interactions Advisory Service at Mercator Advisory Group
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