By Preethi Menon, VP - Enterprise Applications, Clover Infotech
Headquartered in Mumbai, Clover Infotech provides the best in class technology solutions & services across the spectrum of industry verticals in the areas of technology consulting, application implementation, middleware services and database management.
Demonetization has been one of the most trending words in India – over the last one week. Like most Indians, I thought long and hard about it. What stuck with me is Demon. I searched the meaning of DEMON. ‘An evil spirit or devil, especially one thought to possess a person or act as a tormentor in hell’ said one meaning. ‘A forceful or skilful performer of a specific activity’ said another.
I believe in this act of DEMONetization also, we have a skilful performer with a positive intent to save the nation of the evils of black money. We also have millions of evil spirits who were hoarding unaccounted cash worth billions in their closet. On a serious note, Demonetization and the suddenness with which it hits India is admirable. It created a string of admirable paradoxes. The man with no money was most content and the ones with a lot of cash were most worried.
Less than five percent of India’s 1.3 billion people pay taxes hence, the government is always strapped for cash. As per estimates, the government would collect nearly $50 billion in the coming days. Banks have collected nearly $25 billion in deposits and several people will be forced to open a bank account.
Cashless - An Imperative
If cashless is the way to go for our economy, this week (and a few more to come) is a pilot run and we are getting hands-on training. With ATMs witnessing the longest queues ever, people have no option but to take refuge in the convenience of cashless payments. e-Commerce start-ups have seen a huge surge in registrations and usage. It’s refreshing for them to get paid in advance as against cash on delivery. Most of them are offering further incentives to pay online.
Impact on IT Services
The popularity of ‘Digital’ as a keyword has been increasing with each passing year. With cashless payments gaining prominence, it will open a host of avenues for interesting startups that are coming up. Slonkit, for example, is probably the only app which targets parents to enable their teenaged children to go cashless. It works in the form of a payment card linked to a mobile application, available on android and iOS. Through the app, children can learn expense management, budgeting and the art of making the most of their money.
On the enterprise side, demonetization will open the doors for banks, insurance companies and other financial service firms to further embrace innovation and new-age payment solutions. One click payments, near field communications, mobile wallets, banking on the move, telematics, and IoT related services will all come into prominence. The digital services and underlying application services that IT service firms offer will also undergo a major transformation. The most impacted will be the following areas:
Design, UI and UX: As the ‘bottom of the pyramid’ markets start accessing financial services through mobile devices, it is important that information should be rendered in a manner that is understood by all people. Thus, technology and solutions must render the most seamless experience for dealing with/purchasing financial services on mobile. The design, UI and UX teams in sync with technology teams should be able to make mobile apps easily downloadable irrespective of the strength of the internet connection. This will ensure that ‘last-mile’ reach is attained and ‘financial inclusion’ gets a huge fillip.
Process Transformation: The whole experience around banking, financial services and insurance would change. For e.g.: Telematics would ensure that the entire process of insurance claims undergoes a transformation. It is a mechanism where insurance premium is tightly aligned with driver behaviour, usage patterns, time of the day when the car is driven, type of roads frequented, etc. Accordingly, the process of underwriting gets transformed as it is based on monitoring of the car through digital and technology means, storing of this critical data (often using cloud-based storage) and analyzing the data and related parameters to arrive at a very customized insurance premium for cars.
Analytics: With the proliferation of data, opinions, feedback and reviews on social media sites, blogs, forums, micro-blogging platforms, there would be a major transformation in the way the generated data is consumed. Through various models of predictive analytics, the financial services firms would be able to understand consumers and their behaviours better and customize their offerings to enhance loyalty and brand recall.
Enterprise Applications: The enterprise applications must gear up to give a 360-degree view to the customer, especially in financial services. They should also render the services seamlessly across devices, hence responsiveness would become a hygiene factor. Further, the demand from applications, whether web or mobile, would be to also enable smart segmentation and targeting, positioning services contextually, and manage the web and digital assets seamlessly from an administration standpoint. Digital transformation solutions such as Oracle Webcenter is hence, gaining a lot of traction and is becoming popular among IT decision makers.
There is no doubt that demonetization is a masterstroke by our PM and it will give a huge fillip to nabbing tax evaders, accelerating financial inclusion in India and helping India to become a cashless economy. However, it is also fascinating to live this watershed moment in India’s history wherein the entire country will now ride a technology and innovation wave and usher in remarkable innovations in digital payments, on-demand access to services and last-mile connectivity.