SNAPSHOT
The payments bank and digital banking push in India may soon lead the bricks-and-mortar style of banking to an existential dilemma
R Jagannathan writes ……The nature of the banking game is changing in that lending and borrowing are fast becoming plain-vanilla activities loaded with risk and where margins may thin down as more players enter the picture. The real booty will come from using your customer database to cross-sell financial and other products for a fee, unencumbered by asset-quality worries.
Indian banking is currently overloaded with overheads – excess staff, costly branches, ATMs, and physical credit cards – when the digital world is making it possible to become a bank without any of these “assets” that could fast turn liabilities.
Masayoshi Son of Softbank is investing big in Paytm – with China’s Alibaba being the other big investor – precisely because he knows financial services are no longer about bricks and mortar, but bits and bytes.
Public sector banks are fast becoming a liability in this world of virtual bank