Two ways India’s banks can help with the government’s demonetization drive

india 500 1000 rupee note
Banks have always played a pivotal role in any economy. Their decisions have a major impact on our day-to-day lives and especially when a country’s economy is shifting gears.

India is currently going through a seismic upheaval with the withdrawal of the ₹500 and ₹1000 Indian rupee legal tender notes (dollar terms equivalent to $7.5 and $15). An interesting effect this decision to crack down on corruption and counterfeiting is its considerable boost to cashless transactions in the form of payment cards and mobile payments.

Indian banks need to recognise that their decisions can ease life of citizens and help the country to move faster on the path of digital banking.

Since the withdrawal,  ICICI, one of the leading private banks in India, saw a 100% jump in usage of debit cards and over 40% in credit cards. These payments are coming in restaurants, department stores and healthcare services.

However, as the shift has been so sudden there have been consequences. A CEO of a private bank noted, “a lot of people were using their cards for the first time, which slowed down the system as many people could not recall their debit card PIN.”

So what does this mean? Is this a problem or an opportunity for banks? It is a time when technology can help banks to provide relief to customers as well as acquire new customers. Here’s how:

A significant number of bank customers in India have either never used their debit card or have lost the pin after a long period of non-usage.

This is when issuer banks can provide customers a secure and certified service to receive a new PIN for their debit cards through digital authentication to let them start using their card instantly. This eChannel can be SMS, an app, or online.

As a customer (in any country!) wouldn’t you just love to walk into a bank, use a self-service kiosk to authenticate yourself, use an existing bank account, open a new one, and even issue a new ready-to-use debit card for yourself?

Most would certainly embrace such a scenario! At the back end, it requires a state of-the-art EMV instant issuance solution which combines ease of use with a high level of security.

But for customer it means the card is issued and activated on the spot and can be used instantly at her wish.

The benefit? A Win-Win Situation!

For customers, it can be a boon where they can either start using their existing card or simply get a new card on their own to use during the current cash crunch.

For banks, this means a lot more. This new service with the customer at its heart will result in a happy and satisfied customer base. This defines the business value. And attracting new customers through awareness of innovation is icing on the top.

If you would like to discuss a bit more about these solutions, do get in touch.

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