GlobalData Plc

Indian banking system is among the most convenient and trusted in the world, but Indian banks can do more to put consumer centricity to the core of their strategy and make open banking the obvious path to prosperity, says leading data and analytics company GlobalData.

According to GlobalData’s Retail Banking, Customer Insight Survey, 2017, India has taken several measures including granting new banking licenses to stir up competition, introducing the unified payment interface (UPI) to ensure inter-operability across the new eco-system, and demonetization to increase digital payment volumes and set up a supporting infrastructure for open banking.

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To accommodate that increase, the government implemented a standard set of APIs (Aadhaar, eKYC and DigitalLocker, etc.) and even rolled out its own payment app–Bharat Interface for Money (BHIM)– in late 2016, to enable payments from any bank 24/7 in real-time and expedite the move towards a ‘presence-less, paperless, and cashless service delivery’ system.

These initiatives have resulted in dramatic improvements across key indicators. As a true measure of openness, around 270 million Aadhaar-driven bank accounts were opened and digital payment volumes soared to all-time highs. However, with such rapid digitization inevitably come growing pains.

Stephen Walker, Digital Banking Analyst at GlobalData, comments: “As more banking happens outside of proprietary banking apps, authorities must continually re-calibrate regulatory policies and frame risk-based thresholds for new entrants to keep cybersecurity vulnerabilities in check and maintain consumer confidence.”

There are data management challenges too to contend with. Mining data from traditional sources as well as from e-commerce purchases, utility payments, social media and electronic payments will have particular applications for India’s SME sector, most of whom presently obtain financing from the informal sector.

Walker continues: “The APIs available through India Stack are at various stages of maturity, some are still being refined, and not all have been subject to nation-wide education and awareness campaigns. The authorities should consider the Competition and Markets Authority (CMA) -type approach as in the UK to strengthen open banking led by the top eight banks and/or FinTech firms by market share.

“To stay ahead in the game, banks should put consumer centricity to the core of their strategy, build close relationships with partners (vendors and FinTech) and create integrated digital infrastructures. They will have to tap into the available consumer data to plan new products, services and business models. After all, innovative and infrastructure-lite business models are now more possible in India than anywhere else in the world.”

Analysts available for comment. Please contact the GlobalData Press Office at

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