COVID-19 AND THE ACCELERATION OF DIGITAL BANKING IN INDIA: CHALLENGES AND OPPORTUNITIES

Abstract

The COVID-19 pandemic has significantly accelerated the adoption of digital banking in India, transforming the landscape of the financial sector. As lockdowns and social distancing measures were implemented, the need for contactless transactions and remote banking services surged, compelling both banks and customers to embrace digital platforms. This rapid digital shift has brought about numerous challenges and opportunities. On one hand, it has driven financial inclusion by extending banking services to previously unbanked populations through mobile and internet banking. On the other hand, it has exposed vulnerabilities in cybersecurity, digital literacy, and regulatory frameworks. Banks have had to innovate swiftly, enhancing their digital infrastructure and services to meet the growing demand for online banking, digital payments, and virtual customer support. Moreover, the pandemic has spurred the growth of fintech companies, which have played a crucial role in providing agile and innovative financial solutions. However, the digital divide remains a significant barrier, as rural and less tech-savvy populations face challenges in accessing digital banking services. This paper explores the dual facets of the digital banking transformation in India during the COVID-19 era, analysing the obstacles encountered and the potential pathways for sustainable digital growth in the banking sector. By examining case studies and industry reports, this study provides insights into how Indian banks can leverage digitalization to enhance resilience, inclusivity, and customer satisfaction in a post-pandemic world.