Presents

DIGITAL BANKING ECOSYSTEM

OCTOBER 2023

Powered By
INTRODUCTION

Digital Banking goes beyond being just a collection of elements; it involves a

comprehensive integration of technology components aimed at achieving
optimal business efficiency and delivering desired business outcomes. This
Banks Fintechs
integration encompasses the use of digital channels such as mobile banking,
internet banking, and various digital platforms for delivering banking products
and services and conducting banking operations. This shift in banking practices
has profoundly changed the dynamics of interactions between customers and
banks. The emergence of digital banking has not only enabled customers to The ascent of fintech has prompted banks and lenders to re-evaluate their
perform a wide range of banking transactions but also to conveniently and technological infrastructure and a digital suite of platforms, including the
securely access and consume banking products, all from the comfort of their adoption of the right backend systems based on microservices and the
own location. This transformative approach to banking has not only improved potential replacement of their core banking systems. For instance, Unity
accessibility but has also significantly increased operational efficiency within Small Finance Bank has implemented a microservices-based Core Banking
the financial sector. System (CBS) from M2P.
EVOLUTION
The substantial surge in transaction volumes facilitated by the Unified
Payments Interface (UPI) has compelled banks to undergo a significant digital
infrastructure transformation.
Transformation is exemplified by the accessibility of apps like Paytm and
Google Pay to even small-scale vendors and tea sellers, many of whom
maintain their accounts with banks in tier 3 and tier 4 cities. Prior to UPI, these
individuals primarily dealt in cash and required minimal banking services.
However, with the simplification of payment collection through UPI, these
banks are now directly impacted in terms of their Core Banking Systems (CBS).
Banks are rapidly investing in technology-powered DIY journeys to meet
changing customer expectations for banking services, influenced by fintech
contributions. Government initiatives and regulations, recognizing digital
banking as a distinct form of banking, drive heightened demand for these
services in India's digital banking landscape.
Despite substantial progress in digital banking, a persistent challenge is the
conversion of traditional banking infrastructure into robust digital systems. Many
banks choose to revamp existing infrastructure rather than building entirely new
systems, expanding customer touchpoints. However, maintaining consistent
customer engagement can be a challenging task.
Another challenge lies in addressing the disparity in tier 3 and tier 4 cities, while
digital banking has spurred inclusivity and heightened demand, these regions have
yet to fully realize the potential of basic banking services. Bridging this gap and
ensuring widespread access to digital banking services in these areas will be
pivotal for fostering further growth and inclusivity.
Now, let's explore the key ecosystem participants
BANKS
Driving Digital Strategy as Business Strategy

Banks enhance retail banking, allowing customers to open and manage
accounts and perform transactions beyond regular banking hours. They play a
central role in the digital banking ecosystem, safeguarding funds, facilitating
secure transactions, and providing the foundation for digital financial services.
In the near future, banks are poised to expand their offerings within their digital
banking platforms, recognizing them as pivotal tools for customer acquisition.
Banks will likely take cues from neo-banks in their approach to segmenting and
personalizing digital banking services, encompassing categories such as -
Retail, SME, Teens, and more.

Banks aim to create a comprehensive Digital Banking Platform that acts as a

customer acquisition and onboarding engine, fosters lifelong customer Digital bank
engagement, and delivers all services, rather than merely developing mobile
banking as an alternative channel. Retail MSME Corporate Inclusion Women Teens

FINANCIAL INSTITUTIONS
BANKS SMALL FINANCE BANK PAYMENTS BANK FOREIGN BANKS
CBS
Core to Digital Transformation

Core Banking Systems (CBS) play a critical role in supporting fundamental banking CBS
operations, including customer account creation, secure data storage, and real-
time fraud prevention measures. To enhance their digital capabilities, banks are
increasingly turning to dual-core platforms designed to efficiently handle digital
workloads while tailoring products to specific market needs. Many cooperative
banks are grappling with outdated and safety-deficient technology stacks, making
integration a daunting challenge.

Legacy Style application Service oriented Architecture - application

However, in response to growing digital adoption by customers and government Includes all Core banking Services is structured as a collection of services

initiatives to digitize cooperatives, significant transformations are expected in the in a single, fully-integrated Ensures that even if one element fails, the

software others don’t

near future. Modern CBS providers are now offering modular stacks that have Potential single point of failure Agile and easy to integrate
Less expensive to implement and maintain
evolved from traditional in-house monolithic architectures to more agile, Resistant to Cloud Deployment

microservices-based solutions would accelerate growth and revenue.

Monolith Architecture Microservices Architecture
OMNICHANNEL PLATFORM
Build Right Customer Interface

Omni-channel banking platform providers play a pivotal role in digital banking by
enabling seamless customer experiences across multiple channels and devices.
They integrate various banking channels, such as mobile banking, online banking,
ATMs, and branches, to provide customers with consistent access to their
accounts and services
As the need for personalized and convenient banking experiences continues to
grow, the future of omni-channel banking platforms lies in leveraging emerging
technologies like artificial intelligence, machine learning, and data analytics to
deliver hyper-personalized services, predictive insights, and real-time
engagement. These platforms will continue to evolve, offering enhanced
security measures, expanded customization options, and deeper integration
with emerging fintech solutions, ultimately shaping the future of digital
banking.

Online Banking Mobile Banking IVR System Social Media ATMs OMNI CHANNEL BANKING
Portal

Video Banking Open Banking Chatbots

LOS/LMS
Redefining Lending Technology

Loan Origination Systems (LOS) and Loan Management Systems (LMS) play a vital role in
LOS/LMS
the landscape of digital banking. LOS is dedicated to enhancing the customer experience
by simplifying the loan application process, while LMS takes charge of overseeing the
borrower's entire journey from initiation to loan fulfilment. These systems are pivotal in
ensuring operational efficiency by reducing errors, preventing payment delays, and
automating repetitive tasks for financial institutions.

Moreover, new age LOS and LMS platforms are designed to support scalable cloud
deployment, offering both product-specific and agnostic configurations. They boast high
modularity, allowing for seamless integration with various components within a financial
institution's technology stack. This integration encompasses both downstream and
upstream systems, encompassing Core Banking Systems (CBS), accounting software,
and consumer-facing applications. As digital banking continues to evolve, LOS and LMS
will remain indispensable tools for optimizing loan processes and delivering superior
customer experiences
CRM
Integrated customer life cycle management

CRM tools serve as a critical component, providing a comprehensive 360-degree view of

CRM
customer profiles, thus enabling banks to access a comprehensive overview of all the
products and services utilized by their customers. These tools empower support teams
by centralizing customer data, streamlining assistance to be efficient and personalized

CRM tools prove invaluable in capitalizing on cross-selling and upselling opportunities for
banking products

CRM providers are yet to make significant inroads into this segment. The demand for
plug-and-play CRM solutions is steadily rising, driven by banks and financial institutions
seeking to bolster their digital acquisitions. Additionally, banks are exploring the
integration of Artificial Intelligence and Machine Learning (AI/ML) into CRM software to
enhance customer interactions and deliver seamlessly personalized services.
API MANAGEMENT
Gateway to Digitization & Open Banking

API management platforms, including Enterprise Service Bus & API Gateway, has been
API MANAGEMENT
instrumental in driving digital banking and fostering innovation in India's financial landscape.
With banks embracing an API-centric approach and opening up their services to partners,
customers, and novel business models.

API gateways serve as crucial infrastructure for secure and scalable API management. They
facilitate open banking, enhance customer experiences through features like account
aggregation and personal finance tools, enable embedded banking in collaboration with
fintech and non-bank entities, and create new avenues for distribution. By centralizing API
management through gateways, banks can ensure control, security, and robust monitoring
and analytics, especially as digital adoption continues to rise. In essence, API gateways will
expedite the integration of APIs into banking, enabling fresh partnerships and experiences,
thereby establishing themselves as the cornerstone of India's digital banking evolution in the
forthcoming years.
BUSINESS PROCESS MANAGEMENT
Drive Automation

Business Process Management (BPM) entails optimizing operational processes by

BPM
automating tasks, reducing errors, and improving efficiency to enhance customer
experiences and achieve cost savings. It leverages technology and may include AI and
automation to streamline workflows and ensure regulatory compliance.

These platforms will be pivotal in automating and optimizing key banking processes, such as
account opening, loan processing, and customer onboarding, as banks seek to enhance
customer experiences and operational efficiency. They will digitize manual tasks through
emerging technologies which will reduce paperwork, minimize errors, and expedite
decision-making, resulting in faster and more streamlined banking experiences for
customers.
ANALYTICS
Making Good use of Data
The analytics stack has become central to the overarching digital banking
strategy for banks in India. From onboarding to underwriting, a multitude of use
cases are being propelled by Artificial Intelligence and Machine Learning (AI/ML)
technologies. Analytics tools encompassing speech, text, optical character
recognition, and facial expressions are being widely employed within the Banking,
Financial Services, and Insurance (BFSI) sector.
Furthermore, BFSI is embracing data streaming and real-time analytics,
facilitating real-time data ingestion and cloud integration.
ANALYTICS
RPA
Plugging Automation Gap
Robotic Process Automation (RPA) primarily enables automating routine and
repetitive manual tasks and processes. This technology aids banks in
diminishing the hours and resources dedicated to such tasks, subsequently
enhancing employee productivity.
Some of the key use cases encompass customer onboarding, where it validates
entered customer data and information, as well as downloading Mutual Funds Net
Asset Value (NAV) feeds from the Association of Mutual Funds in India (AMFI).
Moreover, RPA is instrumental in automating the uploading and downloading of
regular reports, facilitating seamless sharing and reminders, further streamlining
banking operations.
RPA
ACCOUNT AGGREGATOR
Empowering Banking Data Access

AAs facilitate the consolidation and real-time sharing of users' financial data, with their
AA
explicit consent, to authorized financial institutions. Acting as intermediaries between
financial information providers (FIPs) such as banks, insurance repositories, wealth
supervisors, etc and financial information users (FIUs), AAs collect data from FIPs and share
it with FIUs. This process empowers lenders and other financial institutions with
comprehensive insights into borrowers and customers. Furthermore, AAs significantly
enhance the customer experience by simplifying the loan application process, offering a
single-window system for accessing financial data, and eliminating the need for extensive
manual documentation.

Loan Portfolio Takeover Early Warning System Risk Tolerance & Appetite
Use Cases

Customized Offerings Credit Monitoring Customer Identification

Cashflow Analysis 360 Degree Tax Planning Customer Upgradation

Credit Scoring Cash Flow Analysis Group Offferings

INDIA STACK
Role of Public Digital Infrastructure

The India Stack, a combination of Open APIs utilizing government infrastructure,
digital identity, and consent-based banking data access, has revolutionized the
accessibility and delivery of financial services. It has significantly widened financial
inclusion by providing digital ID cards, people who do not have a credit history or
who live in remote areas can use nationally recognized ID data to access financial
services. As a result, individuals in both the formal and informal economies find it
easier to access financial services.
India Stack promotes the use of open-access software standards for digital
payments. This allows seamless transactions between banks, fintech firms, and
digital wallets.
India Stack has encouraged the adoption of digital payments in a country where
retail transactions were traditionally cash-based. India Stack has played a
significant role in expanding access to financial services in India, boosting
economic development, stabilizing incomes in rural areas, and supporting the
growth of businesses in the informal sector.
Regulatory sandboxes to encourage experimentation and collaboration between
startups and established financial institutions to enables the testing and
refinement of new technologies
Retail Payments MSME Lending Fraud Risk Management

Remittance Payments Insurance Market

Layers Central Bank
Presence-less Layer
Identity Layer
India Stack

Paperless Layer
Cashless Layer

Consent Layer

Tax Layer GST , E -Way Bill , E - Invoice

KYC/BUREAUS
Simplifying KYC & Data Access

KYC/Bureaus serve as a vital layer to enable Open Banking by offering a comprehensive

KYC
set of APIs for a wide range of banking use cases. These APIs are seamlessly integrated
into customer journeys during the onboarding processes, providing real-time validation of
data and information. Additionally, bureaus act as repositories for storing credit behavior
and data pertaining to individuals and corporates, generating credit scores that are
instrumental for financial institutions in their credit assessments.

Furthermore, KYC/Bureaus streamline customer onboarding and management by

facilitating various checks, including KYC verification, fraud detection, credit
assessments, anti-money laundering (AML) checks, and regulatory reporting, ultimately
enhancing the efficiency and security of digital banking operations.
AML & FRAUD RISK MANAGEMENT
Securing the future of Personal Data

AML/FRAUD RISK MANAGEMENT

As banking systems have moved online, so too has fraud, with fraudsters developing their
own digitized methods of stealing customers’ identities and gaining access to their
personal accounts

Digital banking is taking payment transactions completely online, ensuring security and
preventing fraud will be of paramount importance. Banks will now focus on implementing
advanced security measures and fraud prevention technologies to safeguard consumers Regulators are actively working on initiatives to protect customer data
and businesses from potential fraudulent activities. and build their trust in digital services by releasing diverse regulations,
they are urging banks to design and adopt an appropriate fraud risk
Given the large influx of customer details and payment data received by banks daily, they management framework outlining all processes related to how fraud can
will require strong AML/FRM solution providers with incorporated emerging technologies be identified, assessed, mitigated, and monitored.
such as AI/ML algorithms to monitor data patterns, detect anomalies, and issue warnings to
businesses regarding potential risks.
TRADE FINANCE & TREASURY MANAGEMENT
Simplifying Trade Finance processes

Trade Finance and Treasury Management segments in digital banking in India are presently TRADE FINANCE / TREASURY
characterized by the dominance of incumbent players, with substantial transformation yet to MANAGEMENT
occur. The adoption of treasury platforms has been on the rise, driven by the advantages of
enhanced liquidity management and the ability to optimize capital availability.

The burgeoning demand for improved forex management and the utilization of APIs-based
services will prompt a transformation in treasury solutions, leading to the adoption of cloud-
based microservices architecture.

As trade flows continue to grow, there will be a heightened demand for digital trade finance
solutions. In response, many banks are poised to upgrade their trade platforms, transitioning
from legacy, cost-intensive IT solutions to more agile digital alternatives.

Example

Implement Integrated corporate banking

solutions
CONCLUSION
The digital banking landscape in India has experienced a substantial shift, Going forward, advanced technologies will shape digital banking solutions.
Real-time payments, AI-driven predictive services, interactive UI/UX are some areas banks are exploring. Strategic bank-fintech partnerships will lead to
co-creation of innovative products, Data analytics capabilities will personalize offerings. Focus on security and privacy will increase trust in digital
banking.

The question remains how will the future evolve around Digital Banks and Fintechs? What approach will fintech follow if the banks use their digital banks
platform?

Traditional Banking Modern Day Banking

Banks Fintechs Customers Banks Digital Bank Customers

(Backend) (Frontend) (Backend) (Frontend)

Fintechs
as Enablers
 ABOUT US

The Digital Fifth is Asia's 1st Fintech & Amongst the largest
players in this segment
Digital Finance Consulting & Advisory firm. in Asia

The fintech space is evolving rapidly, and we are committed to

empowering this growth as active enablers within the ecosystem. Organiser of Bharat
Fintech Summit, one of the
We were among the first to offer fintech consulting, catering our largest & most impactful
solutions to the BFSI segments such as Banks, NBFCs, Fintechs, Fintech events in India.
Wealthtechs, Regtechs and Insurance organisations. We are
dedicated to creating and rendering the most apt methodologies for Committed to improving
financial institutions and startups. regulatory policies to
enable customer-
centric innovation

1st in India to offer

practical & industry-first
training programs in
Fintech & Digital Finance

The Digital Fifth Fintech Consulting | Partnerships

Consulting | Partnerships|| Training
Training | Recruiting
 CONSULTING SERVICES
Digital Advisory Services
Benchmark service for digital maturity models and digital platforms
Digital strategy and roadmap development
Digital Journey Design for Banking / Financial Products and Services
Program Management for Digital Transformation Initiatives
Digital solution model development and platform evaluation
Open Banking Advisory Services
Development of open banking strategy and roadmap
Develop Neo Bank/Digital Bank model and partnership
API management and technology consulting services
Embedded Finance advisory
Digital Research & Content Management
Deep segmentation and technology research and report development
Content-based growth and marketing revitalization
The Digital Fifth Fintech Consulting | Partnerships
Consulting | Partnerships|| Training
Fintech & Start-up Advisory Services
Business Building and Go to Market Strategy and Roadmap
Technology architecture and CTO consulting services
Developing business and platform models for embedded finance
Partnerships connect with lenders, FIs
Security & Compliance Services
Development of information and cyber security policy framework
Technology risk management service
Technical governance and compliance
Compliance Advisory on Data privacy & Protection Services
Technical Due Diligence
Assessment of the technology stack and SWOT analysis.
Identifying and addressing potential technology pitfalls.
Analysing the performance, scalability, security and future potential of
technology assets and overall business.
Training | Recruiting
MEET THE TEAM

We are working towards our dream of “Changing the way money

moves”. Along the journey, we have added services over the last 12
months like
Embedded Finance Strategy - Execution and Scaleup
Digital Product Management
Compliance services including Digital lending guidelines, IT
outsourcing, cybersecurity etc
With a focussed team, we are scaling our capabilities and capacities
- Slowly and Steadily.

meet the founders

Sameer Singh Jaini Shashank Shekhar Sreekant Rudrabhatla

Founder & CEO Cofounder Co-Founder, Head - Sales
Head of Consulting and Partnerships
 COMING UP - BHARAT FINTECH SUMMIT’24
The Bharat Fintech Summit is envisioned as a two-day industry conclave dedicated to fostering meaningful
discussions and deliberations on the ever-evolving landscape of the BFSI sector, with a specific focus on digital
transformation it is being conducted at JW Marriott, Sahar on 7th-8th Feb 2024.

OUR PAST SPEAKERS

4000+ 250 ANUJ RANJAN

General Manager, Fintech Division
Reserve Bank of India
DILIP ASBE
MD & CEO
NPCI
PRAVEENA RAI
Chief Operating Officer
NPCI
T KOSHY
MD & CEO
ONDC
ANKUR SAMBHAR
Executive Director
JPMorgan Chase & Co
RAMESH LAKSHMINARAYANAN
CIO, Group Head IT
HDFC Bank

Delegates Industry Speakers

48 4 B.G. MAHESH ANJANI RATHOR AJAY RAJAN

MAYURESH KINI RAJEEV AHUJA
Panels Tracks
DEEPAK SHARMA Head of Transaction Banking & Supply Chain Business,
Co-Founder Chief Digital Officer Influencer Strategy, Bullion & TASC CFO & COO Executive Director
President & Chief Digital Officer
Yes Bank PayU Credit India
Kotak Mahindra Bank Sahamati HDFC Bank RBL Bank

60 32
Workshops Demos ANURAG SINHA RAHUL KHANNA SHALINI WARRIER NIRAV CHOKSI RAKESH KAUL ANSHUL SWAMI
Co-Founder & CEO Co-Founder & Managing Partner Executive Director Co-Founder & CEO Executive Director & CEO MD & CEO
FPL Technologies Trifecta Capital Federal Bank CredAble Clix Capital Shivalik Small Finance Bank
Stay Connected
Be a part of our Whatsapp community and get Don't miss out on the best job opportunities from
regular Fintech & Digital Finance industry updates. Banks and Fintechs.

JOIN THE COMMUNITY NOW JOIN OUR GROUP FOR REGULAR JOB ALERTS

TheDigitalFifth.com youtube.com/c/thedigitalfifth

linkedin.com/company/thedigitalfifth twitter.com/thedigitalfifth

This publication contains general information only and is posted merely for educational and informational purposes. It is not intended as a substitute for
professional advice. Should you decide to act upon any information in this document, you do so at your own risk.