The central bank digital currency (CBDC) is going to completely revolutionise the entire payment space in terms of how one makes a payment, just like UPI did, Debadatta Chand, MD and CEO of Bank of Baroda said. Banks, along with the regulator, are working on CBDC to create the ease of doing transaction that can be far better as compared to any other mode of transaction.
While speaking at the International Trade Fair and Conference for BFSI & Fintech Sector India (IBEX) conference he said, “When the UPI came, many doubted that if somebody is getting a credit why will they forego that and go for a direct debit into the account through UPI, but then every small ticket transaction moved to UPI. Why? Because of the ease at which the people are able to do the transaction. And when we talk about CBDC as of today, possibly still there are doubts in the mind, but we are confident that this concept is going to work successfully in India."
Talking about how the use of technology has brought about the ease of underwriting process of banks whereby banks are going end to end digital, he said, “The beautiful part of what is happening in banking is many of the underwriting processes we have are getting completely end to end digital. Already along with partners, we have made the agri credit delivery digital, we are going to do it for MSMEs and going to do more and more such products to have either end-to-end digital or assisted digital processes,” he said.
“I think as partners both operating the system, you as a tech partner, we as a bank, we have to talk about personalised services, omni channel integration, hyper personalisation, data analytics, cyber security integration, which is the next level of usage and I think all of us need to work to improve that,” Chand said.
Lastly, he also said that banks need to work towards bringing down cost-to-income ratios using the development in technology and new artifical intelligence models. He said, “I think you need to again slightly figure out how to reduce the cost to income to the banks. Particularly the usage like suppose I have taken a technology, and I am handling a business volume X and the cost is something, can I make it X plus Y so that my cost goes down.”