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N. Surekha et al.

Keywords Blockchain technology · Internet of Things (IoT) · Smart contract ·

Swoc (strength weakness opportunities and challenges) analysis · Banking

1

Introduction

At 2030, I would say that you probably have two billion people that will be using day to day

banking services, independent of banks–Brett King

Digital Transformation across the globe has disrupted all the industries, specif-

ically the banking sector put up in second place behind telecommunication [1].

The underlying reason for this transformation is Fintech industries with new market

entrants challenging mainstream markets [2]. Competitive atmosphere along with

customer expectations forced the banks to focus on product and service innovations

that led to a global rise of cashless payment. This is further driven by supportive poli-

cies from the government, changing consumer behavior, and ease of use of technol-

ogy. Presently, the banking sector is in a situation to adapt to new digital ecosystem by

leveraging new digital technologies like Blockchain Distributed Ledger Technology,

Crypto currencies, IoT, Application Programming Interface (API), Artificial Intelli-

gence and Analytics thereby reinventing themselves and focusing customer-driven

enterprises [3]. The plunge for digital payment arises from technology companies and

e-commerce giants such as Google, Apple, Facebook, Amazon (GAFA). The ongo-

ing pandemic has made it inevitable to shift to a safe and secured blockchain enabled

contactless payment system. Global digital payment methods can be done through

Unstructured Supplementary Service Data (USSD), Aadhaar enabled Payment Sys-

tem (AePS), Unified Payments Interface (UPI), Mobile Wallet, Bank Prepaid cards,

Point of sale (PoS), Internet banking, mobile banking and Micro-Automated Teller

Machine (ATM). Thanks to strong two-factor authentication, people believe that risk

and fraud are less and countries like Sweden (Mobile BankId) allows consumers to

authenticate with a few finger taps for digital payments. According to the Reserve

Bank of India (RBI)[4] in 2019 the volume of financial transactions through UPI has

surpassed credit or debit card transactions. In this space of digital payments another

innovation is to move from P2P (Purchase to Pay) payments to C2B (Consumer

to Business) and B2C (Business to Consumer). App-based payment gateways such

as Tikkie & MobilePay are testimonies for such services where customers get paid

faster through Whatsapp irrespective of whom they bank with.

The need for short-term financing has brought into the forefront concepts such

as “Pay Later” and “Customer Credit Offering” that has garnered huge attention

in emerging Asian markets especially in India and China. Pay Later is a system

wherein the consumer does not pay a fee or interest, instead the merchant does it

and Customer Credit Offering is where the customer pays interest and the merchant

is free of charge [5]. Machine Learning (ML) and Artificial Intelligence (AI) are

integrated with pay later solutions which help the lender to verify credit worthiness

and background check at a faster rate with low risk. According to a study by Boston