Digital attacker banks have demonstrated that they can delight customers, scale up quickly and expand into new products, geographies and customer segments. Digital attackers are lower cost, faster to innovate and can transform their traditional parents. As an alternative to embarking on a multiyear, hugely expensive systems transformation, some incumbent banks have launched attackers with the aim of transforming the core business.
Veblen effect is an abnormal market behavior where consumers purchase the higher-priced goods whereas similar low-priced (but not identical) substitutes are available. It is caused either by the belief that higher price means higher quality, or by the desire for conspicuous consumption (to be seen as buying an expensive, prestige item). Named after its discoverer, the US social-critic Thorstein Bunde Veblen (1857-1929).
Platformification is not a new concept but is has never been applied to the banking industry before. In essence, a platform is a place where producers and consumers meet to conduct some form of exchange such as they did in the markets of yore. Platformification without digitally open platforms will not help. Open platforms help in the evolution of ecosystems, where business models are heading towards. It can create a path for relationship-building with API providers and constructs a space for those providers to access a wider customer base.
Post COVID-19 lockdowns in India, thousands of daily wage labourers belonging to the unorganised sector have been leaving big cities in droves. They have no other alternative but to return to their villages though their future there is also bleak. Having no public means of transport, many have left on foot to remote places like UP, Bihar, and West Bengal from Delhi, Mumbai, Ahmedabad, etc. Some have taken rickshaws to reach their destinations.
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Payments are made using payment instruments. Cash, for example, is a payment instrument. So too are cheques. Digital payment is a way of payment which is made through digital modes. In digital payments, payer and payee both use digital modes to send and receive money. Innovation has been one of the biggest drivers for the growth of India’s digital payments economy. Along with the increasing adoption of smartphones, the availability of affordable mobile internet is doing wonders for the digital payments market in India.
LIBOR has been an endangered species for some time now. LIBOR, the rate that banks charge each other to borrow money, is slated to go by the wayside in 2021 and taking its place for USD will be something called the Secured overnight financing rate, or SOFR. Almost every part of the financial world is touched by LIBOR; it is plausibly the world's most important number.
It is often said that those who do not remember the past are doomed to repeat it. With economics it’s no different, considering the world has experienced dozens of crashes and recessions, undoubtedly caused by acquisitive traders and lawmakers with few memories of the past.
Despite several opportunities, banks face pressure from both external and internal forces that hinder full-scale digitalization. The complexity and width of digital initiatives vary upon infrastructure, customer preferences and policy framework of the region.