Smarter Banking

Royal Bank of Scotland is trying out a virtual chatbot, Luvo, which effortlessly responds to customer queries. Luvo , backed by artificial intelligence, also learns from successive customer interactions. The complex queries that it can't handle go to human staffers. Globally, banks are piloting many such bots, in order to save time, money and standardise the communication process.

In India, too, the digital wave is making traditional banking less relevant. In September, the country's largest private sector bank, ICICI Bank, became the first to launch its version of Luvo. It says over 200 robots are already doing over a million transactions a day. However, barring a couple of large players, most Indian banks are yet to wake up to the invasion of robotics in banking.

But it is not only the banks that are on their toes. Central banks around the world, too, are waking up to the need to create integrated payment infrastructure. In India, the big theme is interoperability. Banks can no longer run their digital offerings as independent fiefdoms. For example, Unified Payment Interface (UPI), launched by National Payment Corporation of India, allows all banks to use its services to transfer money to anybody with a bank account, anywhere, anytime. This can make digital wallets redundant. Yet another transformational project is the Bharat Bill Payment Services, designed to bring all utility service providers and banks under one roof.

Technology is making inroads into hitherto unbanked areas as well and helping people bank in a cost-effective manner. The new disruptors such as digital wallet players and payments banks are also set to scale up. Then there is a new breed of peer-to-peer (P2P) lenders globally that are bringing together investors (or lenders ) and borrowers. The RBI has been quick to notice this development and has come out with draft regulations for regulating such lending. Many P2P players are questioning the RBI's wisdom in regulating them. The jury is still out on this.

And last, but not the least, the disrupters/innovators are also challenging the might of central banks by launching their own crypto-currency or bitcoins. ~

@anandadhikari