India’s Digital Banking Juggernaut: Local Lenders Outpace World, Deloitte Reveals

According to the new Deloitte Global Digital Banking Maturity (DBM) report released today, Indian banks have surpassed the global average in digital banking services. Of the 40 total banks recognized as 'Digital Champions' worldwide, nine are Indian banks. This highlights the extraordinary speed at which India is pulling ahead in its digital transformation journey.

 

India's DBM Index improved dramatically from 43 percent last year to 59 percent this year, a remarkable increase of 16 percentage points. Day-to-day banking witnessed the most substantial enhancement, increasing by 9.8 percentage points, while expanding customer relationships improved by 3.4 points. Furthermore, Indian banks are now 20 percentage points above the global average DBM Index, excelling at collecting information, onboarding customers, and delivering the user experience as a whole.

 

The report credits these advancements to a favourable regulatory environment, adequate digital public infrastructure, an increase in investments, and growing internet and mobile penetration. Also following the adoption of various innovations (i.e., UPI, video KYC based on Aadhaar, etc) and integrations with platforms such as ONDC, digital uptake in the sector accelerated.

 

Himanish Chaudhuri, Partner and Leader - Financial Services Industry at Deloitte India mentioned that "India has asserted its rise as one of the new superpowers in its second year of participation, in the company of countries such as the US, China, Brazil, and the EU."

 

Regardless of the advances made, the report identified several challenges facing Indian banks such as macroeconomic uncertainty, growing deposit costs, and credit quality. However, digital banking is expected to build up speed, but further attention needs to focus on ecosystem and aggregation of accounts services.

 

Source: The Economic Times