With a populace of over 1 billion, India is an exciting environment for finance, with cutting edge technology bringing the Indian financial scene into the future. India has over 32-thousand ATMs as of December 31, 2007, but an increasing number of patrons are finding that the need to visit a bank branch or ATM machine is not what it used to be, thanks to exciting technological advances.
Banks are moving toward allowing customers to complete banking transactions using cellular phones and other handheld technology. Banks, in the past, had utilized technology such as text messages to advertise promotions for users, but electronic transactions will probably replace various types of cash transactions in India within the next several years. The use of technology in bank lowers transaction rates and reduces the need for quick branch expansion. Currently, nearly 10% of all banking transactions in India are completed online.
This idea of handheld bank technology is called Mobile Banking, and it is assumed that mobile banking will change the bank industry in India and eventually all over the globe. Already, 85-90% of mobile bankers do not use ATM or credit cards; they simply use their cellular to complete transactions. The technology utilized to make this style of banking possible is the same technology that runs ATM machines, although it is much less-expensive to maintain. India is truly on the forefront of this swiftly growing area of finance.
An increasing number of Indians are also utilizing the World-Wide-Web for banking purposes, however the majority of banking customers utilizing the Internet limit their activity to checking statements and assuring whether or not transactions have been completed. The web also allows bank customers to interact with bank employees to ask questions and inquire about bank products and services, although this is not greatly used so far by Indian bank customers.
Generally, Indians have not carried a great deal of debt, with consumer debt making up just 4% of the nation’s Gross Domestic Product, compared with over 60% for countries such as South Korea and Taiwan. Banks are eager to join in the increasing debt loads of Indian consumers. Like China and South Asia as a whole, India is one of the largest growing areas for credit card, ATM card, and cash card services, and surveys predict that the credit card market in this region will change by 15-20% over the next few years. Indian homes currently save 28% of their disposable income.
The bank presence is expanding in India, as more International banks and financial companies rush to compete for the changing banking needs in the country. Demographically speaking, half of India’s 1.2 billion population are under the age of 25, so over the next many years, a immense generation of people will be starting their earning years and will have diverse banking needs. The banks that find a way to give the services Indian banking customers enjoy a influx of new customers and profit in the years to come.
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