The banking and securities sector in India has continued to investment in digital business. In India, spending on information technology (IT) will total $11 billion in 2020, a 9.1% increase year-on-year, according to the latest forecast by Gartner Inc, global research and advisory company.
Banking and securities companies are investing in emerging digital technologies, such as artificial intelligence (AI) and blockchain, not only to create new product offerings but also to respond to evolving customer demands. “As an example, the transition to a cashless society aided by newer digital payment channels is creating opportunities for new digital technology investments in the sector,” said Ali Merji, senior research director at Gartner.
Respondents to the 2019 global Gartner CIO Survey identified AI and Machine Learning (ML) as the top game-changing technology at 27% followed by Data Analytics, including predictive analytics at 20%. “CIOs in this sector continue to adopt digital technologies that will improve existing products and services. Technologies such as biometric authentication, machine learning, chatbots are increasingly preferred by CIOs to deliver an enhanced user experience and enable digitalization of the sector,” said Merji.
According to Gartner, biometric technology will impact up to 20% of banking organisations in the next two to five years. “In India, biometric technology adoption saw a boost after the introduction of Aadhaar, a unique 12-digit identification number that links citizens’ bank accounts to their biometric data and mobile numbers,” added Merji. Biometric authentication such as touch ID is a common way of using passwordless authentication and is widely deployed in mobile banking.
Biometrics eliminate the hassle of remembering passwords and makes the banking experience more secure and seamless. This is one of the key factors that influenced 83% of surveyed global CIOs in the banking and securities sector to indicate that they will continue investing in biometrics with either the same level of investment or by going beyond the current level in the next two years. Seven in 10 Indian financial services firms are actively experimenting with biometrics or have already deployed it in their organization in some capacity, said Gartner.
According to the 2019 Gartner CIO Survey, technology leaders in banking place a higher priority on legacy modernization than do technology leaders in other industries. While user-facing digitalization efforts are critical to delivering a complete digital experience to customers, digitalization of internal processes is necessary to support this initiative. Gartner says that of the total technology investments being made in the Indian banking sector, 23% are for digitalization of internal services. This investment is expected to grow 9% over the next two years.