During the BFSI & FinTech Summit 2025, Neeraj Sahai, the President of Dun and Bradstreet International, gave an informative speech on the revolutionary change in the banking industry - a process that was significantly influenced by the power of technology and the changing demands of the customers.
The Rise of Digital Banking
Neeraj has described the history of banking as being in four ages. Banking 1.0 was based on the physical branch as the customers had no other touchpoints until the 1960s. Banking 2.0 has brought the self-service age, which started off in 1967 when ATM machines were introduced and then in the 1990s with the establishment of online banking. The banking 3.0 revolutionized the entire accessibility - with mobile technology and cheap data, post 2007, customers could bank anywhere and anytime. The future of Banking 4.0 characterizes the next phase of this development, which is real-time, contextual, and frictionless interaction, not tied to physical distribution networks at all.
Interestingly, Sahai indicated that all these phases still remain in the present-day financial world. Certain banks are still entrenched in the Banking 1.0, which provides only branch networks. Those with less online services are still in the Banking 2.0, and most are in between 2.0 and 3.0, working hard to achieve real seamless mobile experiences. The institutions around the world that have been able to completely shift to Banking 4.0 have transformed the way customers engage with the organization and how they receive services by completely switching to an entirely digital ecosystem.
Sahai emphasized that the upcoming years will be an inflection point in the banking industry. Those that do not revolutionize face the same situation as the formerly popular brand names, such as Blockbuster, Kodak, and Nokia. Although the majority of banks have developed gradually over time, transforming the old, branch-centric systems into online settings, the limitations of this design approach as a derivative cannot be overlooked. It maintains financial exclusion, particularly to the unbanked, who frequently have to spend a day without income just to open an account or to get credit at a branch.
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India’s Digital Finance Revolution
The next phase of progress to the Banking 4.0, he said, requires a first-principles reinvention of banking. Interestingly, developed economies are not leading this leap, rather, emerging economies like India, Sub-Saharan Africa, and Bangladesh are doing so, with the pioneers of fintech, including M-Pesa, Paytm, and bKash, having driven mass financial inclusion. Mobile money accounts now surpass traditional bank accounts in 23 out of 42 Sub-Saharan African countries and users are resorting more to mobile wallets in order to save their money and even borrow it.
With references to world cases, Sahai has pointed out MYbank in China as an example of Banking 4.0 innovation. The institution provides over 53 million SMEs with collateral-free loans, which the institution finances in a mere 3-minute process, approves loans in 1 second, and does not need any human intervention. MYbank has facilitated 75% of its borrowers to take their first bank loan by using knowledge graphs to map supply chain networks and evaluate creditworthiness, and has only a 1.5 non-performing loan ratio.
APIs Transform in Corporate Banking
The global institutions are reinventing corporate and SME banking with embedded finance and API-centred ecosystems. As an example, the Bank of America has experienced a 51 percent increase in corporate customers using its CashPro API solutions in the last year, which is the evidence of how digital connectivity transforms the interactions between clients and banks.
Turning to India, Sahay highlighted that the digital infrastructure that is publicly available in the country is offering a powerful push towards such transformation. Systems like Aadhaar, eSign, eKYC, and video KYC have minimized the cost of identification by 99 percent, improving the speed of access and inclusion of finances. There are also innovations such as UPI, OCEN, and Account Aggregator framework combined with predictive analytics that are driving a transformation of asset-based to cash flow-based lending, opening new credit opportunities to both individuals and businesses.
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Shaping Next-Gen Financial Services
Sahai concluded by stating that the old traditional benefits of scale and low-cost capital are being reduced. The new pillars of competitiveness have taken their place; agility, personalization and smooth digital interaction have become the new pillars. The message was simple, innovative, adapting banks will shape the future, and those that will not change will be left as a memory of the past.
About The Author:
Neeraj Sahai, a leading global provider of business decisioning data and analytics. He brings decades of leadership experience in the global financial services industry, with a track record of substantially improving business performance. Neeraj has successfully driven growth and change throughout his career, most recently as President of Standard & Poor’s (S&P) Ratings, where he initiated the transformation of the business and improved margins by 25% in one year.
