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UPI, Open networks to accelerate India’s Banking transformation
June 14, 2023
India is poised for a transition from traditional banking to neobanking as it leverages the Unified Payments Interface (UPI) and open networks such as s Open Credit Enablement Network (OCEN) and Open Network for Digital Commerce (ONDC), according to a paper released by ASSOCHAM-PwC.
The rise of neobanking and embedded financial services (FS) represents a significant opportunity for India’s banking and financial architecture to embrace technology and elevate user experiences, the study says. By leveraging UPI and open networks, neobanks have the potential to revolutionise how financial services are accessed and consumed in the country.
From pre-approved Buy Now Pay Later (BNPL) instruments, travel insurance at boarding pass printing kiosks, automated cashback routing for micro-investments, and seamless credit for medical expenses, embedded financial services provided by nonbanks are going to be vital tools for unlocking the next phase of growth for Indian banking.
The paper identifies two strategies for growth that financial services players are exploring: participatory embedding and proactive orchestration.
Participatory embedding involves embedding FS within the customer journey or workflow controlled by partners. FS players design product offerings to adapt to real-time requirements based on available data. Interaction point coverage is crucial, requiring FS offerings to be embedded at high-volume and high-impact points. A dedicated ecosystem team, streamlined partner onboarding policies, and strong API tech capabilities facilitate smooth integrations.
Important Links:
- 4-IN-1 Professional Diploma in Banking, Financial Services & Insurance (PDBFSI): https://tscfm.org/courses/4-in-1-professional-diploma-in-banking-financial-services-insurance-pdbfsi/