Trend in Banking

More customers today are increasingly demanding a higher quality of service and ease of use from their banks. Today evolving regulatory reforms around capital and risk management are also being addressed. The losses suffered during the financial crisis have turned the betterment of banking operations into a strategic requirement.

The following global technology trends are expected to drive increased investment in technology:

Increased focus on next-generation remote banking solutions
Drive towards core banking platform replacement
The increased role of business intelligence and analytics in transaction monitoring
Increased focus on enterprise payments hubs in payments processing

Domestic Trends

India’s economic development and financial sectors liberalization have led to a changeover of the Indian Banking sectors over the past two decades. Asset quality and profitability have improved notably and the system has become more commercially oriented.

Indian banks were not much impacted by the financial crisis due to their relative isolation and some counter-cyclical measures, which were implemented by the Reserve Bank of India in the Mid-2000s. Over the past year Indian banks have encountered challenges such as high inflation that led to tightening monetary policy, due to which a pressure is put on borrowers, especially in weaker sectors.

Liquidity and Funding are relatively strong features of the Indian banking systems as the Loans/Deposits ratio is under 80% and the banks are required to hold large amounts of Indian government bonds. Their access to offshore funding is constraints by India’s just investment grade sovereign rating.

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