Accelerating Growth In BFSI With Cloud-led Digital Transformation
The BFSI industry is embracing technology and increasingly relying on cloud-led digital transformation to reshape its future. In the post-pandemic world, migrating to the cloud seems inevitable as organisations across domains have stepped on the accelerator for digital transformation.
Banks, NBFC’s, Insurance firms, Digital Banks and Fintechs are transforming themselves into a completely digital business. The BFSI landscape is going through its fastest-paced revolution ever, powered by modern technology.
In a recently concluded roundtable organised by BW Businessworld with some of India’s leading honchos associated with the BFSI sector, a wide range of topics were discussed including the role of cloud in the expansion of BFSI, compliance, innovation, data insights, customer access and cyber-security. The session was moderated by T.G. Dhandapani, former Group CIO at TVS Motors and Sundaram Clayton group.
Role of emerging technologies in the growth of the BFSI sector:
Embracing futuristic technologies has gained remarkable momentum across the BFSI sector. Tina Singh, CDO at Mahindra Finance spoke in length about the importance of pushing technology innovation to better consumers’ experience.
She said, “In the past couple of years, scalability and availability have improved massively due to technological innovations and in today’s date, organisations can launch new service or a facility without any difficulty per se.”
Tina underlined how much easier it is now for a small start-up to join hands with big players.
She commented, “Earlier if any start-up used to come up with an idea, we were not sure whether they will be able to successfully integrate with us. Now what has happened due to cloud and other infrastructure services is that the entire ecosystem is now enabled.”
Gagan Singla, CDO at HDFC Securities believes that data quality is visible and interpretable with correct tools in today’s date.
He said, “Over the last five years, I can say that data quality was always hidden in unstructured formats of data visualisation - we just needed to have a closer look to make sense out of it. The way unstructured data is now handled through technology to bring out actionable insights, one does not need to spend years on data structures and data cleanliness.
Gagan praised the government for its initiatives which have helped in the digitalization of the BFSI sector.
He commented, “I appreciate the way the government has opened up so many things - for instance, KRA, Aadhaar, ease of opening accounts - to name a few. A lot of things in the past five years have changed drastically, disrupting the traditional financial processes, paving way for the fintech industry to grow.”
Key is providing unique and personalized solutions to customers:
When a customer reaches out to you with a service, they are looking for more than just a resolution to their problem.
Charu Mathur, CDO at IndusInd bank highlighted that a “customer-centric approach” is the way forward and the focus should be on providing a better experience for the clients.
Charu underlined, “It is increasingly becoming important to put ourselves in the shoes of the customer and think from their point of view and help them make decisions. For instance, if a customer wants to take a car loan, he is not thinking of the financial aspect only but about various other aspects including maintenance, accessories, insurance as well.”
She also mentioned that an important technological aspect which they are looking from a banking standpoint is composable banking.
“Till now, the core technologies are very much product-focused. However, technologies can be used to create new products in a similar fashion in which legos of different sizes and shapes are combined to make new designs. For example, your debit card can double up as your forex card when you travel abroad and it can again become a debit card when you are back in India – all from your mobile app,” she added.
Importance of Compliance in gaining new customers:
Compliance plays a very important role in the sustainable success story of any banking or financial system. It plays a major role in winning the trust of customers, investors and regulators.
Rishi Mathur, Chief Digital and Strategy Officer at Canara HSBC OBC Life Insurance that compliance is extremely important for the sustenance of an organisation.
Rishi said, “With the use of digital technologies, we are much closer to meeting the intent of compliance than before. We have seen positive benefits of digitizing our life insurance processes and accordingly, compliance and reporting are much simpler and enhanced. The regulator too is keen to actively drive usage of digital tools for compliance and reporting."
He also mentioned that the “digitalization of sales process and customer’s experience” has helped in ensuring their compliance and governance on these processes better than ever before.
Shiv Kumar Bhasin, CTO/COO at the National Stock Exchange of India said that the exchange itself is a quasi-regulatory body and has been going through a transformation phase for higher compliance as per SEBI prescribed guidelines.
He said, “We have to make the journey amplified for the stakeholders and for making that happen, one of the key areas is that all of these journeys have to be made with the stakeholders at the centre whether it is payment process, KYC etc.”
Shiv also mentioned that any kind of document required for a business process should become fully electronic as it will speed up the entire process.
Digital technology can help with accessing India’s rural and semi-urban market:
Anindya Karmakar, Head of Digital Transformation at Aditya Birla Capital rightly opened with the statement that rural India remained “the last bastion to be conquered” for financial services.
Anindya gave three major reasons why this frontier was not conquered till now – high cost, small ticket size and poor demand for financial service products.
All these reasons combined made no financial sense for tapping into the rural Indian market for a long time.
He highlighted, “The challenges of accessibility for the rural markets are getting addressed by affordable smartphones and explosion of the internet. More than a third of rural customers today have a smartphone.”
“Because of the cheap data plans in the country, one of the cheapest in the world, a third of the rural market has access to the internet. To enable commerce using smartphones and cheap internet, we now have online payment solutions, thanks to NPCI, UPI and Aadhaar enabled payment systems,” he added.
Anindya sounded optimistic about the digital accessibility of the rural economy. He said, “The rising prosperity due to the buoyant farm economy addresses the challenges of demand and ticket size for the rural markets. When you put all these factors together – smartphone, internet, payment systems, and rising demand from the largest customer base of the country, one can be highly optimistic about the rural economy. Improving digital literacy will propel this market to scale greater heights in the coming years.”
Cyber security threat to BFSI enterprises:
Cyber security threat continues to rise every year in both sophistication and frequency causing multiple challenges for the BFSI sector.
Mukesh Malik, COO at Aditya Birla Capital underlined the fact that all of us are facing cyber threats. He said, “Irrespective whether on-premises or on Cloud, cyber-security threats continue to impact organisations. It will become even more complex when over the next few years we move applications to a hybrid of different cloud platforms like AWS, Azure, Google and Oracle which will open up more access points over varied data networks.”
Mukesh mentioned that the remedy to the same is “cultivating the right talent”. He said, “This talent is scarce right now and there are a few handfuls of cloud services management companies who are helping us and we are highly dependent on them, over time we should invest in building our own talent.”
Mukesh also cautioned that failing to do so can lead to data leakages and excess payments.
The panellists concluded the roundtable by stating that the digital revolution has been accelerated by the pandemic and will continue to play a significant role in how things will shape up in the near future.
