Banks can reduce 50 pc cost by going digital: ASSOCHAM

01 April, Chennai

Banks in India could reduce costs by up to 50 per cent on a per-transaction basis in the next few years by redesigning their processes and systems for the digital age, structurally changing their cost base and instituting more aggressive ongoing cost management processes, an ASSOCHAM-PwC study said Friday.

“Banks will have to make changes to the way they operate, including making the operating model agile so as to easily adapt to changing business dynamics as the people driving technological innovations at banks have grown up on technology that is different from what is prevalent in today’s times,” the study, titled ‘Logging into digital banking: Creating access, transforming lives,” jointly conducted by ASSOCHAM and PwC, said.

An ASSOCHAM release here today said “branch banking needs to undergo significant transformation.”

“As technology enables every aspect of banking to go online, and as cash usage falls away, traditional branches are no longer necessary”, it said, adding, branches may remain, but need to take many forms, from flagship information, advisory and engagement hubs (offering education, financial advice, full service capabilities and community offerings) to smart kiosks (offering service, sales, cash and video contact with a range of specialists), the study said.