‘Banking will evolve into banking as a service’: Prasanna Lohar, Digital Head of DCB Bank

The banking industry is being disrupted in many ways, be it through rapid digitalisation or integration with the fintech ecosystem. Indian banks are leaving no stone unturned to create a big impact and achieve operational excellence. In an interview, Prasanna Lohar, Vice President - Digital, Innovation, and Architecture, DCB Bank spoke about how emerging technologies like blockchain and artificial intelligence (AI) will reshape the banking industry and how the bank is constantly looking to enhance customer experience with its innovative approaches.

Looking at technological advancements today, what does the future of banking look like?

We have evolved from branch banking to today’s era of internet and mobile banking, where everything is centred around customer experience. We are in a highly competitive market where every bank is vying for the same customer. Banks that will adopt the right emerging technologies in the right time will get an edge over others. 
For example, with the adoption of AI and data strategies, we know about the interest of the customer who is getting served by many banks, and offer our products and services. Then there are millennials, the future customers, who have a different need and approach towards banking. Emerging technologies will help us to create banking for millennials.

In the coming years, banking will be omni-channel everywhere. And technologies like 5G, wearables, augmented reality, virtual reality, and edge computing will be heavily adopted in future. With the help of technological advancements, banks are also looking at nurturing others pillars, like process and people advancement for better compliance and security.
This is where technologies like AI, blockchain, and big data are being researched and implemented to create 'smart banks'. 

Then there are concepts of API banking, open banking, and Automation, which are picking up gradually. Most of the banks will undergo transformation using these technologies and lead us to an era of Variable Banking or Conversational Banking.

What should a bank’s digital transformation story be today?

At DCB Bank, we have been at the forefront of adopting digital and disruptive technologies such as cloud, blockchain, AI, open banking, big data, and robotic process automation (RPA). Some of the non-critical systems like learning management systems or Video KYC are hosted on the cloud. As the technology matures, along with better regulatory compliance, banks should gradually move their core applications to the cloud as well.  

To create a seamless customer journey, banks should build their journey on robust architecture with ESB (Enterprise Service Bus), Data, Automation, cloud and API Strategy. The ESB will have flexible architecture, enabling communication between multiple applications and easy integration with other systems. The whole connected banking concept will gain momentum in the days to come.

Do you see blockchain technology disrupting or transforming banking?

Blockchain is a foundational technology, just like the internet. For banks, the best way is to start with small use cases and keep an eye on larger examples or consortium-based use cases, like cross-border payments, trade finance, Central Fraud Registry, decentralized KYC, etc.

Some of the use cases of blockchain in the banking industry can be Anti-Money Laundering (AML) data being shared among the banks, central fraud registry mechanism and cross-border payment among others. Having said this, blockchain technology will not suffice on its own. It has to work cohesively with other technologies like Web, Mobile, AI, RPA, and API. Blockchain will help create a smart bank. 

The Account Aggregator Framework, introduced by RBI, is one of the best use cases of blockchain, as it involves multiple parties with better data integrity and security among all stakeholders. As the framework works on a consent mechanism, which is built on blockchain, it will lead to an enhanced customer experience.   

How should banks enrich the experience for their digital customers?

For any bank, customer experience should be the first priority and it’s driven by many factors, starting with employee experience, technology adoption, better compliance, and industry partnerships. Banks should have an omnichannel strategy to listen and serve customers at the branch or through internet, mobile, conversational banking services, branches or contact centres. Each channel has its own importance to onboard, serve and engage customers.

Going forward, banking will be available everywhere and it will evolve into ‘marketplace banking’. Banks are slowly showcasing their APIs and data in a secure manner for customer servicing, on-boarding, and engagement. Customers will aspire to get a banking experience from banks as well as from non-banking platforms, like entertainment, media, food, and travel apps.

This will require a lot of integration between banks and partners, which is a tedious process and takes a lot of time. This is where we will see the evolution of ‘banking-as-a-Service’ model-based platform.