State Bank of India (SBI) has signed a memorandum of understanding (MoU) with IIT Kharagpur for collaborative research and running proof of concepts. SBI has a wider programme includes ideation, incubation, experimentation and commercialization of new technology driven products and services for the banking sector.
IIT Bombay has a similar MoU with SBI and had signed in July. Both parties will identify FinTech start-ups that have products or applications that cater to the financial sector. The bank will provide a platform for testing and piloting such products and check for any specific business linkages. Additionally, the lender said that it may invest in the startups and IIT Bombay’s Society for Innovation and Entrepreneurship (SINE) will help in initial screening for technical competency, product road map and innovation subject.
In June, the bank also said that it would set aside Rs 200 crore for a startup fund . At the time, SBI chairman Arundhati Bhattacharya said that the bank would give assistance of Rs 3 crore to Indian registered companies to develop innovations in the fintech space.
SBI joins a growing list of banks which are offering assistance to fintech companies:
– In June, foreign lender Barclays opened a fintech innovation centre in Mumbai called Rise. This is Barclays’ sixth Rise site globally, following the London, Manchester, New York, Cape Town and Tel Aviv hubs.
– While HDFC Bank selected products from five fintech companies to be deployed in the bank as part of its Digital Innovation Summit.
– In April, ICICI Bank hosted an ‘Appathon’ where the bank gave access to more than 200 APIs from the ICICI Group to developers to create products.
In an earlier interview, Bhattacharya said that the bank is aiming to push for 80% of their transactions to be on digital channels. This would entail that the bank pushing customers to give up cash and adopt transactions on Point of Sale machines.
For the quarter ended June 30, SBI said that 78% of of its transactions are happening on digital channels. It needs to be noted that SBI classifies digital differently and it includes net banking, POS transactions, mobile banking, kiosks and ATMs and cash deposit machines. The percentage for the various channels stood at:
– Net banking (18.45%)
– POS (6.16%)
– Mobile banking (2.07%)
– Kiosk (7.66%)
– ATM and cash deposit machines (44.05%)
– Branch banking stood at 21.6%