India is innovation

The last decade has seen the transformation of India. India today is at the cusp of a paradigm change in its growth trajectory. Innovation in deploying technology is now allowing Indian banks to disrupt the financial services landscape at diametrically opposite ends of the spectrum- in international markets and rural India. India is growing with its service sector boom. It is all because of our innovativeness and acceptance to change. Our knowledge sector is increasing as it requires very less capital and infrastructure is not constrained for this sector. This sector requires high intellectual capital in which India is very rich compared to other countries.

After the opening of the economy our indigenous companies had to compete with global companies. Now our domestic companies have become strong and ready to compete with any company at any place. That is clear from the mergers and acquisitions of Indian companies in overseas markets like US, Europe. We have used technology in an affective way to overcome our deficiency in infrastructure. Banks usually require large physical network. But the new generation banks have used the technology to compete with the PSBs and are increasing their market share each quarter.

Now a day Banks are serving most of the customers in technology-enabled channels rather than the traditional way of branch service. This is not only giving quality service to the customers but also decreasing the cost for the banks. The rural India has not much experienced the power of technology in banking. Now banks are moving towards rural as per the guideline of RBI. To remain profitable even by serving the rural population banks are going their with advance technological platform. This will reduce their cost-to-serve. They are innovating the way to remain profitable after serving this area which is very expensive for banks in terms of cost-to-serve.
This is the analysis of an Article by Mr. K V Kamath which came in Economic Times on 9th November,2006.