With a populace of over 1 billion, India is an stellar environment for finance, with cutting edge technology leading the Indian financial scene into the future. India has over 32-thousand ATMs as of December 31, 2007, but an increasing number of customers are finding that the need to visit a bank branch or ATM location is not what it used to be, due to state-of-the-art technological advances.
Banks are moving toward allowing members to complete banking transactions using cellular telephones and other handheld technology. Banks, in the past, have utilized technology such as text messages to advertise promotions for customers, but electronic transactions will likely replace many types of cash transactions in India within the next few years. The use of technology in banking reduces transactions fees and reduces the need for quick branch expansion. Currently, almost 10% of all bank transactions in India are completed online.
This idea of handheld banking technology is called Mobile Banking, and it is predicted that mobile banking will revolutionize the bank industry in India and soon all around the globe. Already, 85-90% of mobile bankers do not use ATM or credit cards; they simply use their telephone to make transactions. The technologies utilized to make this style of banking possible is the same technology that runs ATM machines, although it is much less-expensive to maintain. India is definitely on the forefront of this rapidly growing area of finance.
An increasing number of Indians are also using the Internet for bank needs, however the majority of banking customers using the World-Wide-Web limit their activities to checking statements and assuring whether or not transactions have been completed. The web also allows bank users to interact with bank employees to ask questions and inquire about bank products and services, although this is not heavily used so far by Indian bank customers.
Traditionally, Indians have not garnered a great deal of debt, with consumer debt making up just 4% of the country's Gross Domestic Product, compared with over 60% for nations such as South Korea and Taiwan. Banks are eager to join in the increasing debt loads of Indian consumers. Like China and South Asia as a whole, India is one of the largest expanding areas for credit card, debit card, and cash card services, and surveys predict that the credit card market in this area will increase by 15-20% over the next three years. Indian houses currently save 28% of their disposable income.
The bank presence is expanding in India, as more global banks and financial companies rush to compete for the changing banking needs in the nation. Demographically speaking, half of India's 1.2 billion population are under the age of 25, so over the next many years, a big generation of people will be entering their earning years and will have many banking needs. The banks that find a way to provide the services Indian bank customers enjoy a windfall of new customers and profit in the years to come.