Phygital Banking A Crucial Balancing Act for Indian Landscape :: March-April 2019

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Phygital A Banking Crucial Balancing Act for Indian Landscape

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Contents Cover Story

march - april 2019

45

08 Phygital Banking – A Crucial Balancing Act for Indian Landscape

Industry Perspective ‘Banking in India is Drastically Transforming with Digitisation’

26 Federal Bank: Banking

the ‘Phygital’ Way 12

Kewal Handa Chairman, Union Bank of India

‘Technology Can Combat NPAs Menace in Banking’

with Big Data Analytics 14

Programmes, A Necessity for Every Bank’ 16

Tech-Revolution’ 18

Sunil Soni General Manager-IT, Punjab National Bank

Industry Speaks 20

36 Transforming Lending with

the Power of Cloud

Abhijit Shah Chief Technology Officer, DCB Bank

‘Banks Must Innovate to Stay Relevant as Technology is the Future’

Biju K, Head, Operational Risk and Chief Information Security Officer (CISO), Federal Bank

66 ‘Banks in India Ready for

Ritesh Pai Chief Digital Officer, YES BANK

‘Technology, Innovation Defining New-Age Banking in India’

Kersi Tavadia Chief Information Officer, BSE Limited.

34 ‘Cyber security Preparedness

Dinesh Menon Chief Marketing Officer, State Bank of India

Yes Bank Redefining Customer Experience with Digital India

Pitchai Mahalingam, Head - Operations & Transaction Banking, Federal Bank

30 BSE: Combating Data Threats

Mrutyunjay Mahapatra Managing Director and Chief Executive Officer, Syndicate Bank

State Bank of India Innovating for Banking Excellence’

Conference Report

Sarbpreet Anand Global Head - Cloud Business, Nucleus Software

24

T V Ramana Murthy GM-IT, Bank of Maharashtra

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Cover story

march - april 2019

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Cover story

EDITORIAL march - april 2019

Phygital Banking – A Realistic Solution for Indian Banking Moving on from traditional banking to digital banking and now creating space for the Phygital banking, the Indian banking system has certainly evolved incredibly. With the objective of making the customer the king and the banking a hassle-free exercise, India is witnessing a new dawn.

As the banking transformation is coming up with new systems or methodologies to make it least cumbersome, even with processes like assisted banking or mobile banking, the banks are certainly scripting a new definition of India world over.

Understanding the ground reality and empathising the customers’ basic challenges in getting used to of technology in a short time, in urban as well as rural India, the banks are relying upon ‘Phygital Banking’, a mix of physical and digital banking.

In this light, our cover story ‘Phygital Banking – A Crucial Balancing Act for Indian Landscape’ explains the role of financial institutions in retaining a right balance between physical and digital services for effectively touching customer experience, operations, and delivery.

This special issue of the magazine also highlights the role of inspiring leaders across the Banking, Financial Services and Insurance (BFSI) sector. A special focus has been laid on experts belonging to the banking and finance industry, who have shared their pearls of wisdom in terms of vision, challenges and finest practices suitable for emerging opportunities.

Since it is the second edition of ‘India’s Inspiring Leaders’, we have tried to cover crucial developments occurring around the sector, from experts’ perspectives.

This issue features interviews of Kewal Handa, Chairman, Union Bank of India, Mrutyunjay Mahapatra, Managing Director and Chief Executive Officer, Syndicate Bank, Vivek Gupta, Deputy General Manager and Chief Information Security Officer, Allahabad Bank, Dinesh Menon, Chief Marketing Officer, State Bank of India, Sunil Soni, General Manger-IT, Punjab National Bank, T V Ramana Murthy, GM-IT, Bank of Maharashtra, Kersi Tavadia, Chief Information Officer, Bombay Stock Exchange, Manishi Chatterjee, General Manager-IT, IDBI Bank, J N Mallikarjun Rao, CISO, Syndicate Bank, Biju K, Head, Operational Risk and Chief Information Security Officer (CISO), Federal Bank, S Sekar, General Manager and Chief Information Officer (CIO), Karur Vysya Bank, Topendra Bhattacharjee, Head-Digital Banking, RBL Bank, Abhijit Shah, Chief Technology Officer, DCB Bank, A Ramesh Kumar, Founder Chairman, Swarna Pragati Housing Microfinance and President, Laraksha Social Impact Trust and Jaya Vaidhyanathan, President, Bahwan CyberTek. Our latest initiative The Elets BFSI Gamechanger Summit, Goa is a unique residential and networking conclave. It is intended to not only focus on significant topics encircling the BFSI sector but it also offers long-lasting networking opportunities for all participants while spending leisure time in scenic Goa. The magazine also features a special report of ‘3rd BFSI Leadership Summit, Mumbai’, which touched upon some of the key topics namely the importance of cybersecurity and risk management framework, transactions in the phygital world, secure technology interventions and many more.

The summit held its own significance with the presence of Rajagopal Devara, Principal Secretary (Reforms), Finance Department, Government of Maharashtra. Among other distinguished personalities were Dr Sanjay Chahande, Deputy Director General, UIDAI, Government of India; Arijit Basu, Managing Director-Commercial Clients Group & IT, State Bank of India; K. Ramachandran, Senior Advisor-Banking Technology, Indian Banks’ Association; Satish Pillai, MD & CEO, Transunion CIBIL; and Ashish Chauhan, MD & CEO, Bombay Stock Exchange.

With such a bouquet of special features, articles and interviews of top-notch banking experts, we hope our latest endeavour would evoke an invaluable response of our esteemed readers.

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Dr Ravi Gupta Editor-in-Chief The Banking & Finance Post Magazine and Founder Publisher and CEO, Elets Technomedia Pvt Ltd

Cover story

Phygital Banking A Crucial Balancing Act for Indian Landscape In today’s banking industry, maintaining a rhythm between physical and digital entities at all critical interaction levels is a necessity for ensuring a positive customer journey. Financial Institutions that can strike a right balance between the both can effectively touch customer experience, operations, and delivery and are successful in thriving in a fast-changing world.

On the basis of experts’ opinion, Rashi Aditi Ghosh of Elets News Network (ENN) explores this vitality of the phenomena called Phygital Banking.

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March - April 2019

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I

s digitisation the first priority?

The Banking, Financial Services and Insurance (BFSI) sector in India is transforming rapidly, and digitisation is leading this significant change. One of the major catalysts behind this growth is government’s flagship scheme Digital India. Through Digital India initiative the Government is boosting the usage of digital payments across the country.

New-age start-ups and digital payment firms, through their agile models and seamless customer experience, are fast gaining popularity among not just the millennials but older consumers as well.

This is giving a tough competition to traditional banks.

To maintain its reputation amongst its customers and sustain the competition, banks are now refurbishing their ways to interact with the customers. However, the biggest challenge here is the lack of digital awareness across the customers Connect with us on

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present in both urban and rural India.

While one segment is keen to go digital, a major portion of the country is still underbanked. This therefore calls for striking a balance between the physical

and are only comfortable with face-toface interactions. “When we look at phygital banking, we should look at how the banking system

Bringing investments pertaining to phygital banking can be a crucial step for driving digital adoption and building a seamless customer experience. and the digital services offered by the banks.

Experts across the sector opine that although digital is the new reality, human interaction remains the vital mode for the banks to build trust, credibility and provide related advisory services. Some customer segments still depend on traditional banking methods The Banking and Finance Post

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has evolved from physical to digital banking. Earlier, in a bid to complete every banking formality, every consumer had to visit the bank physically which is not the case in digital age. But despite the digital interventions the penetration of technologies among the rural populace is still a challenge,� says Salahuddin Choudhary, Vice President & HeadElectronic Payments- Information March - April 2019

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Cover story

Technology, IndusInd Bank Ltd. Banks are now looking forward to adopt a hybrid approach that combines digital and personal interactions and therefore create a more responsive and cost-effective distribution model.

“Phygital banking is a Siamese twin of physical and digital banking. Phygital mean synergy between physical banking and digital banking. Many banks already have a vast foot print of physical banking and are continuously expanding to cater to the needs of various customers.

Adoption of digital financial technologies such as AI, Big Data, more APIs, tech convergence, etc., is required in a big way to satisfy customers and at the same time for reducing costs. And, banks have already invested in this direction and continuously do it in future,” according to Naga Mallikarjuna Rao Junnuri, Chief Information Security Officer, SyndicateBank.

“Phygital will have less staff and more automation. A controlled approach and regular monitoring is required for ensuring right balance between physical and digital expansion,” adds Rao. Phygital Banking -- The Significance?

Being ‘Phygital’ is a perfect amalgamation of digital and physical services across all channels and operations.

In a ‘Phygital’ bank all interactions are powered by digital to have intelligent, context aware conversations (a technology where Chatbots look back into history and determine the most accurate response) with the customer as a bank and not as siloed individuals or channels.

In each interaction today’s Phygital Bank, embeds Artificial Intelligence (AI) powered bots and intuitive user Interface (UI) to break the cognitive, language and literacy barriers to increase end-to-end seamless interactions for all customers.

“Most of the banks started their digital transformation journeys by migrating customers to digital, right-sizing their 10

March - April 2019

A research by Accenture (a global management consulting and professional services firm) reveals that, on average, omnichannel (Phygital) customers generate twice as much revenue, achieve 30 percent more cross-selling and experience one third as much churn as branch-only customers. Serving these omni-channel customers through a phygital experience should be a key component of banks’ distribution strategy. branch networks and investing in new capabilities. However, many of these banks are yet to realise the full benefits of these transformations. Banks need to offer customers unique, convenient experiences tailored to today’s fast-moving, digital lifestyles. Banks can do this by investing in technology that lets the branch bridge the physical and digital worlds — creating a seamless and integrated ‘phygital” experience’,” says T V Ramana Murthy, General Manager-IT, Bank of Maharashtra.

“For banks, creating a truly phygital experience means building a connected customer and employee experience that brings physical and digital channels

together. Rather than invest in ‘shiny objects’ or point solutions, banks should focus on technologies that can achieve the goals such as enhanced customer experience, enhanced employee experience, increased efficiencies and cost savings etc.

Through a phygital transformation, banks can lower costs by reducing real estate expenses and more efficiently leveraging their employees. Further, investing in phygital helps banks optimise their distribution networks, reduce cost-to-serve, increase revenue and improve customer engagement,” he adds. Most of the lenders (traditional banks) kicked-off their digital journeys by shifting customers to digital, rightsizing their branch networks and making investments in alignment to new capabilities. Considering the present requirement of the customers in mind, banks are required to offer their customers with unique, convenient experiences tailored to today’s fast-moving, digital lifestyles.

“In today’s era, the biggest question is will the digital survive without physical services? It is evident that in a country like India, digital services would always need a push from physical techniques. For the next few years, both the modes have to co-exist because the aim is to reach the last-mile and several people across rural India still need physical assistance to complete banking formalities,” says Gautam Anand, Senior Vice President and Head Mobility, NetBanking, BillPay & Direct Pay, HDFC Bank Ltd. Banks can do this by inflating their investments in technology that enables them align the physical and digital worlds—developing a seamless and integrated “phygital” experience.

Phygital offerings are critical to a bank’s success. A research by Accenture (a global management consulting and professional services firm) has revealed that, on an average, omni-channel (Phygital) customers generate twice as much revenue, achieve 30 percent more cross-selling and experience one third as much churn as branch-only customers. Serving these omni-channel customers through

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•

a phygital experience should be a key component of banks’ distribution strategy.

prefers branch banking. And, the experience of branch banking in itself has a lot of transformation avenues. Creativity will drive this new store-like experiences, using Internet of Things (IoT), Artificial Intelligence, AR/ VR (Augmented Reality and Virtual Reality) technologies. These digital-branches are expected to have less branch staff and more self-service,” says Abhijit Shah, Chief Technology Officer, DCB Bank.

“Be it digitisation or phygitisation, all the financial institutions are functioning at a different-level of service disbursement.

When we talk about offering digital services, we will have to analyse the services imparted uniformly across all the cities, towns or villages. The level of its implementation entirely depends on the intensity available for customers across the country,” says Pinak Chakraborty, Senior Vice President of Technology Digibank, DBS Bank.

For financial institutions, enabling a truly phygital experience refers to develop a connected customer and employee experience that brings physical and digital channels together.

The digital landscape has exploded to a level where every phase of customer life cycle from customer on-boarding, customer retention to doing more with customers, can be completely digitised, without any need for customers to ever see the branch.

Even the millennial customers are expecting branchless banking. While this is true for Urbans, the Rurals are far behind this expectation curve. Though adoption of digital is happening in rural markets, the need for physical branch is not yet eradicated.

There is a segment of customers which still Connect with us on

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Benefits of Phygital Banking: • Enhanced customer experience: Techniques such as in-branch video and staff tablets will support branch staff to offer an omni-channel experience to the customers.

Moreover, bank branches can create self-service phygital experiences by syncing ATMs, staff devices and digital/mobile apps together for a seamless customer journey.

• Enhanced employee experience: An omni-channel CustomerRelationship Management (CRM) system can help a branch staff with ability to get a single-click access to a customer’s transaction history.

With that knowledge and technique, branch staff can better avail the next best opportunity to sell and offer further personalised and high quality customer support. Furthermore, enhanced front-end systems and dependable cross-channel knowledge management tools help employees

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swiftly access the needed information.

Increased efficiencies and cost savings: Digitisation of front-office and automation through robotics, as well as new technologies that ensures faster account opening and servicing reduces processing times and save on Full-Time Equivalent (FTE) cost — both in the front and back office. With the help of this technology a customer can now avail the service instantly.

It will also promote paperless technologies and reduce material cost and improve accuracy.

“Physical transaction is all about removing friction from the customer journey. When we are removing friction we would still need some amount of physical intervention. That need could arise from regulation and legislation of a country,” says Pitchai Mahalingam, Head - Operations & Transaction Banking, Federal Bank.

“Federal Bank is highly evolved from physical banking to digital anchors. We have key differentiators that ensure the implementation of phygital banking. We have more than 1,250 bank branches located at all types of centers across the length and breadth of the country. We also offer full-fledged state-of-the-art omni-channel internet banking platforms for retail, SME and corporate customers,” he added.

Bringing investments pertaining to phygital banking can be a crucial step for driving digital adoption and building a seamless customer experience. Banks can accelerate their digital transformation further by ensuring that every employee understands the vitality of the new customer experience, as well as the interaction the technology is supposed to built-up.

With the assistance of phygital transformation, banks can bring down costs and reduce real estate expenses. It will also help them in efficiently leveraging their employees. Investments pertaining to phygital will assist the banks optimising their distribution networks, curtail costto-serve, increase revenue and improve customer engagement.  March - April 2019

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Industry Perspective

‘Banking in India is Drastically Transforming with Digitisation’ With the rise of digitisation and growing usage of smart phones, banking operations by and large can now be performed anytime, anywhere. Customers have access to banking apps on Mobile and computers and they are now spending less time on visiting banks, says Kewal Handa, Chairman, Union Bank of India, in conversation with Elets News Network (ENN).

How new-age technology such as Artificial Intelligence, Machine Learning or Blockchain is helping the bank in streamlining its services? Is technology implementation helpful in curbing the menace of NPAs and cyber threats?

All new technology, if used wisely, helps in strengthening the system, improves efficiency and provide more security to the data. It reduces the risk of cyber hacking and provides a secure channel.

Kewal Handa Chairman, Union Bank of India

Digital transformation is bringing a paradigm shift across the banking sector.

As a Public Sector Bank, how exciting or challenging is this transition?

It’s both exciting and challenging. It offers an alternate platform to reach larger population at substantially reduced costs and is most efficient in delivery.

However, the product has to be friendly, easy to navigate and simple to operate.

Promotion of the product and its safety and security are quite challenging.

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March - April 2019

Would you like to tell us about your branchless banking initiative? How far has it succeeded in reaching every doorstep?

With digitisation and the use of smart phones today banking operations, by and large, can be done from any place and any time. We have all our apps on mobile phones and computers, and customers are now spending less time on visiting banks.

New technology, if used wisely, helps in strengthening the system, improves efficiency and provide more security to the data.

It reduces the risk of Cyber hacking and provides a secure channel.

Financial inclusion is significant for a country like India. How does Union Bank of India (UBI) maintain the alignment between digitisation and underbanked rural areas of the country?

We are very focused towards our efforts in terms of financial inclusion. We use various methods and tools to reach out to both urban and rural population. We generate awareness and also enrol them through various schemes.

How do you ensure holistic development of people through your Corporate Social Responsibility (CSR) initiatives especially in rural areas?

Most of our CSR is targeted to the needs of underprivileged population. Through proper schemes and monitoring we ensure that more and more benefits reach them. Sustainability and implementation is critical part of our concept and projects.

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Industry Perspective

‘Technology Can Combat NPAs Menace in Banking’

Tech-innovations are capable of bringing about a revolutionary shift in Non-Performing Assets’ management in our country. Our NPA tracker, at Syndicate Bank, has been put in place field functionaries for monitoring the follow-up of NPA accounts says Mrutyunjay Mahapatra, Managing Director and Chief Executive Officer, Syndicate Bank, in conversation with Elets News Network (ENN). ability to conceptualise and implement transformation, bring innovation to reality, connecting with the people at grassroots, managing shareholders, customers and regulatory expectations synergistically have been the major excitements in the last six months that I have been with the Syndicate Bank.

Mrutyunjay Mahapatra Managing Director and Chief Executive Officer, Syndicate Bank

You have been a part of India’s largest lender. How challenging or exciting is it for you to be associated with Syndicate Bank now?

It is both challenging and exciting. My experience with the State Bank of India (SBI) for over three decades provided me with the foundational inputs for facing any challenge and make it exciting as a personal and professional new venture. As the head of Syndicate Bank, one of the really venerated names in the Indian banking industry, there is a lot that I can do.

In SBI, I led and ran various business and functional verticals from credit to International banking to digital. Here, I am responsible for everything. The 14

March - April 2019

What major changes did the bank witness in terms of retail quality post your appointment?

In Retail, the quality shifts are in revamping products, processes and building partnerships. In products, we are targeting loans that are capital lite and low risk weightage.

We have strengthened our presence in the Housing Loan segment with the formation a dedicated Housing Loan vertical and special focus on targeting affordable housing and tying up with builders for project approvals and appointing home loan counselors. We have reviewed and tweaked all retail loans to reduce Turn Around Time (TAT) at branches and Retail & MSME Loan Centers (RMLCs).

We are also mapping key customer journeys to ensure end-to-end digitisation in retail products. Our `Feet on street’ Sales Saathi App is also being leveraged for driving sales apart from ramping up of our sales team at regional offices. We are working on partnerships for cooriginations and adopting best practices, we are training employees in modern and

millennial oriented customer service and bringing digital and user experience in all customer facing channels, be it digital or brick and mortar.

Kindly apprise us about the new deployments in terms of technologies.

Utilities like Loan Origination System (LOS) - Loan Application Processing System, Non-Performing Assets (NPA) Tracker, Early Warning Signals (EWS) have been significantly enhanced and revamped. Bank’s website, Internet Banking and Mobile Banking have already been decluttered. For older application versions of modules like internet banking and mobile banking, new and market leading products from reputed organisations like Oracle and C Edge Technologies have been contracted.

Our Core Banking System (CBS) is also undergoing a major version upgrade.

Process has been started to enhance and upgrade our Data Warehouse Project into a market leading Data Mart and Data Lake capability to serve our business aspiration of being a data and analytics driven bank.

We have also recently launched `Live Chat’ through which our customers can chat with our Contact Centre Executives 24X7 for their queries.

We are significantly enhancing our data capabilities. Many of the new initiatives are taken by our employees under an ‘Internal build’ programme’ or under Fintech collaborations, under which we are

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Industry Perspective

working with about six fintechs who are doing major work for us.

Internal hackathons, innovations, working with new technologies like cloud and Bot and AI are coming in a big way.

How significant are the deployed techinnovations in controlling NPAs? It is a known fact that technology and data analytics need to be leveraged to identify red flags and early warning signals. Tech innovations are capable of bringing about a revolutionary shift in NPA management in our country. Our NPA tracker has been put in place for field functionaries for monitoring the follow-up of NPA accounts. Our online One Time Settlement (OTS) portal ensures both transparency and speed.

We are deploying a world class solution for Early Warning signal. Our Sales solution has been integrated with NPA tracker to provide synergy between sales and recovery staff.

What are your Plans in terms of capital conservation? What would be the major areas of concern for the rest of 2019?

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We are mapping key customer journeys to ensure end-to-end digitisation in retail products. Our `Feet on street’ - Sales Saathi App is also being leveraged for driving sales apart from ramping up of our sales team at regional offices. and conserve capital judiciously has been implemented with corporate credit to A and above entities moving up significantly by nearly 8 percent in the last three quarters and we propose to continue the risk mitigated growth approach.

For conservation of capital, we are also planning our credit growth in such a way that advances that carry low capital requirements like-Home loans, retail credit, advances guaranteed by Central /State Governments, advances with financial collaterals and advances to top rated borrowers grow. We are also concentrating on NPA reduction of high value advances. On deployment front, our focus is on SLR investments and investments with low Modified Duration to reduce the specific and general risk capital requirement of the bank, so that The Banking and Finance Post

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we require minimum regulatory capital on MTM losses.

The major areas of concern, for rest of 2019, will be increasing and sustaining the bottom line to compensate the loss of last two years for return on equity for shareholders, and provide actionable guidance and execute on it.

Our immediate goal therefore is substantial growth in business levels.

The next point of concern is keeping NPA levels manageable as we grow, without repeating the mistakes of the past. The emphasis would be to bring down NPA percentage as a parameter in every business unit. We shall also be concentrating on increasing our MSME where our performance has been less than satisfactory.

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Industry Perspective

State Bank of India

Innovating for Banking Excellence The State Bank of India (SBI) has always been at the forefront of adopting technology to deliver better customer experience. It launched India’s most comprehensive digital platform that offers not just banking services, but also lifestyle and utility services, all under one roof, says Dinesh Menon, Chief Marketing Officer, State Bank of India, in conversation with Elets News Network (ENN).

Post-merger, the State Bank of India (SBI) is now the biggest bank of the country. How challenging is it to work with such a big entity?

Any large organisation, the world over has its own challenges. That said, how smoothly and successfully an organisation functions depends on two key aspects -- organisational culture and, more importantly, the leadership team’s clarity of vision and guidance.

At SBI, when the merger happened, we were well-prepared to merge with our associate banks from all aspects as a dedicated team was set up to ensure it, went off smoothly. Key elements in a merger include seamless IT integration, managing different work cultures, procedures and policies and most importantly, being sensitive to people who would come into the merged entity.

SBI had all of these taped up and there was hardly any glitch in the merger.

Working for a large entity is indeed challenging. To begin with, one has to be pretty clued into what all is going on across the organisation, manage/ align with varied stakeholders, set expectations of what you can deliver / can’t deliver.

SBI holds a lot of popularity among the older populace. What measures did you initiate to attract the younger generation towards your bank?

By virtue of its legacy, SBI certainly 16

March - April 2019

Dinesh Menon Chief Marketing Officer, State Bank of India

enjoys loyal patronage of a significant section of the older populace. But it is a wrong notion that it does not attract the younger generation. That said, it would be fair to say that brand SBI indeed faces competition in the urban markets when it comes to attracting urban millennials.

We have always been cognizant of the fact that for us to be relevant to the youth, we need to adopt new technologies to deliver better/ smarter customer experiences…which is what the younger generation gravitates to. In

November 2017, we launched India’s most comprehensive digital platform that offers not just banking services, but all financial services and lifestyle services as well, all under one roof.

Right from the brand name YONO (You Only Need One) to its persona, the tonality of advertising, we have adopted a youthful attitude in positioning YONO as a youthful and new-age brand. The best testimony of this attempt is the downloads and growth in monthly activities we are witnessing among the youth.

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What are your views on fintech industry?

How has it changed the marketing functions across the BFSI sector?

The Fintech Industry has been one of the most telling and visible manifestations of technological disruptions in India. It has redefined the BFSI landscape and put the customer in the sweet spot – both from a CX perspective and from a value perspective.

Suddenly, traditional finserv marketers have a new category of competition to worry about which not only includes the new age start-ups, but established giants like Google, Amazon, Apple etc. It has changed the marketing function on many counts – ranging from product proposition, delivery and experience design. A large influence of the fintech revolution has been the increase in both, digitisation and smarter use digital marketing as well.

How different is SBI as compared to its private counterparts from marketing point of view?

The SBI is perhaps the biggest and most

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By virtue of its legacy, SBI certainly enjoys loyal patronage of a significant section of the older populace. But it is a wrong notion that it does not attract the younger generation. visible advertiser in the BSFI sector.

Since it is the only brand that caters to the widest cross-section of our populace, we have had to and continue to keep experimenting with new ideas. Over the past three years, we have made concerted efforts in trying to be not just relevant, but both contemporary and unique in our communication. We have invested in creating unique properties such as the Yono 20 under 20 and Numero Yono. We have increased our investments in digital marketing to better the ROI. The marketing & advertising industry has taken note of the change that brand SBI has brought about in its marketing over the last couple of years, with even a few awards coming our way, especially

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for our initiatives in digital marketing.

Cybersecurity holds a vital place in today’s digital banking era. How to spread awareness in this regard through marketing?

Cybersecurity is very central to the growth of digital banking. Every bank, in collaboration with the IBA should stay invested in enhancing awareness among users on a continuous basis, which would help allay fears among users. There should be severe punitive action for cyber fraudsters so it sends a serious message.

People should be made conscious of dos and don’ts when using digital banking.

Banks should commit to this firmly on a sustained basis for digital banking to become common place and for it to thrive.

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Industry Perspective

Redefining Customer Experience with Digital India Being the leaders in digital payments, YES BANK is committed to the twin national agenda of Financial Inclusion and Digital India. Our idea is to bring futuristic technologies into banking and make life easier for customers, says Ritesh Pai, Chief Digital Officer, YES BANK, in conversation with Elets News Network (ENN).

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• Ritesh Pai Chief Digital Officer, YES BANK

Financial Inclusion plays a pivotal role in India’s banking strategy. How does YES BANK support this cause in the digital era?

At YES BANK, we believe that the true power of digitisation lies in making a difference to the lowest common denominator in the society and we remain committed to the twin national agenda of Financial Inclusion and Digital India. YES BANK as a leader in digital payments has taken several laser focused initiatives for financial inclusion such as: • Digitisation for Integrated Child Development Scheme (ICDS) - YES BANK has developed an end-to -end solution for automating fund disbursement thereby ensuring timely payment to the end consumer 18

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and easy reconciliation.

Digitisation for ASMITA Scheme - YES BANK partnered Government of Maharashtra for developing the ASMITA App and mobile wallet to entirely digitise the subsidy payments and facilitate distribution of napkins across the State. Digitisation of the entire process is aimed at increasing sanitary napkin usage in the state from 17 to 75 percent.

Creating a Cashless Ecosystem at AIIMS Rishikesh - YES BANK has digitised all types of cash payments on the premises of AIIMS, Rishikesh, making it the FIRST AIIMS campus to go fully cashless.

Enabling Smart Cities -YES BANK launched Unified City Smart Card, a cashless payments solution for Nashik City in partnership with the Nashik Municipal Corporation (NMC). The card, linked to UPI and digital wallet, supports QR, Bharat Bill and Aadhaar enabled payments. Moreover, the bank re-engineered existing processes and automated them to remove manual interventions.

Enabling PIN-less Aadhaar ATM service - YES BANK partnered with NEARBY Technologies, Fintech to offer AEPS solutions and the innovative ATM NEARBY services to customers across India. Using the PayNEARBY mobile application on a smart phone, a retailer can become an Aadhaar ATM / Aadhaar Bank Branch for cash withdrawals and

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deposits by a customer. In total, YES BANK clocked 2.9 million transactions valuing 6.9 billion from all the AEPS Partners.

Digitisation of Yellow RevolutionYES BANK has implemented an end-to-end supply chain automation solution linked to digital payments for the Maharashtra State Rural Livelihood Mission (MSRLM).

The unique solution is designed to automate the entire supply chain management from procurement to distribution to facilitating instant digital payments for various stakeholders involved. The joint initiative will help in increasing the production and supply of eggs across Maharashtra state, whilst augmenting income generation capacity of stakeholders and providing a transparent low-cost process for procurement of quality product.

Digitisation of Fair Price Shops (e-PDS Programme) - Under the programme, YES BANK will onboard 40 percent of all Fair Price Shops in Maharashtra, spanning 12 districts like Palghar, Thane, Pune, Kolhapur, Latur etc. benefitting more than 20,000+ ration shop owners and over 70 lakh citizens. The bank will engage Fair Price Shops to provide banking services such as small-value cash deposits into any bank account including Domestic Remittances and withdrawal from any bank account via Aadhaar Enabled Payment System (AEPS).

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The bank has partnered with Government of Maharashtra for empowering ration shops. Tell us about the project and its progress.

Establishing its leadership position in digital payments yet again, YES BANK is proud to partner Government of Maharashtra to further the state’s financial inclusion programme while helping augment income of Fair Price Shop owners. The bank remains committed to improving last-mile inclusion and translating financial access into enhanced convenience and usage for smoother delivery of Government to Citizen (G2C) services through simple digital solutions. The bank will engage Fair Price Shops to provide banking services such as small-value cash deposits into any bank account including Domestic Remittances and withdrawal from any bank account via Aadhaar Enabled Payment System (AEPS).

This joint initiative with Government of Maharashtra will help Pradhan Mantri Jan-Dhan Yojana (PMJDY) users who have a card but do not necessarily have access to POS machines or ATMs, to easily access funds from their bank accounts to buy daily essentials with a simple biometric authentication. The programme aims to digitally empower 20,000 plus ration shop owners in Maharashtra to increase revenue opportunities by extending last-mile banking services to 7,00,000 plus citizens.

YES BANK has joined hands with 14+ Smart Cities. How are you promoting Digital India through this?

We are pleased to partner with several smart cities municipal corporations to augment delivery of G2C services and fast-track merchant payments through digital payment solutions and offer enhanced convenience of financial transactions. The bank has partnered with Smart Cities like Nashik, Udaipur, Puducherry and Diu to provide various Digital Banking solutions like smart cards, wallets, end-to-end G2C service automation etc.

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Also, as a part of its newly launched YES SCALE Smart City Accelerator, the bank is inviting startups from around the world to collaborate with technology leaders like Bosch and Dell EMC and work on problem statements provided by respective Smart cities viz. Gurugram, Chandigarh, Rajkot, Surat, Vadodara, Aurangabad, Nasik, , Warangal, Karim Nagar and Puducherry. With these partnerships, we re-affirm our commitment to the Government’s initiative of propelling digital payments in India.

What are your views on BharatQR? Do you think it is a secure mode of transactions?

Interoperability and Standardisation are two key aspects for any payment system to become popular. Bharat QR

on a POS terminal. With some more technology intervention this can also be achieved in coming months.

Technologies namely Blockchain, Artificial Intelligence (AI) and Machine Learning (ML) are transforming banking in India. How is your bank implementing these?

We are focusing on something that we call as Future Now. The idea is to bring futuristic technologies to the present banking system and make life easier for customers and we are working on many such projects. For instance- YES BANK was a pioneer in introducing enterprise blockchain implementation for supply chain financing in India.

YES BANK is now redefining several steps in the customer journey through

YES BANK has developed an end-to-end solution for automating fund disbursement thereby ensuring timely payment to the end consumer and easy reconciliation. has both the ingredients and can enable merchants to accept payments through Debit, Credit Cards and UPI in a safe or secure manner.

YES RoBOT, India’s first chat bot application furthering not just customer query resolution but also facilitating transactions.

Advent of Bharat QR has enabled Banks to take merchant acquiring solutions to a new set of small merchants who otherwise cannot afford costs of operating a POS terminal and largely use cash for transactions.

Another project the YES EEE project is part of YES Bank’s efforts to utilise data to increase customer satisfaction and drive engagement. It takes the form of a customer engagement programme for the relationship managers at banks, giving them a communication point for the customer.

With Bharat QR, these merchants can be on-boarded with a near-zero onetime cost and zero operational costs and will enable merchant to accept payments digitally from any customer having a major mobile banking applications or a UPI app. While we have come a long way in creating a payment infrastructure in the form of Bharat QR to take digital payments the mechanism to confirm transaction to the merchant is not as seamless as that The Banking and Finance Post

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Recently, YES BANK also launched Datathon, India’s first bank-led data driven innovation challenge, aimed at augmenting YES BANK’s embedded data analytics & ML units to drive rapid prototyping of AI/ML based products, optimise digital product suite, and enhance product/service design and delivery, in an accelerated 100-day period.  March - April 2019

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Industry Perspective

‘Technology, Innovation Defining New-Age Banking in India’ Technology is taking centre-stage to fuel customer experience. Big-data and Deep Machine Learning are being extensively used to understand a customer and the context around him/her. To stay ahead in competition, exponential technologies like Deep Machine Learning, Artificial Intelligence, Automation and Digital Workspaces are helping organisations come up with innovations, says Abhijit Shah, Chief Technology Officer, DCB Bank, in conversation with Elets News Network (ENN). transfers, Aadhaar-based payments, is way ahead than what West has been aspiring to achieve.

While the Payment Services Directive (PSD2) has been a mandate in Europe, many Indian banks have emerged as leaders in Open Banking without any mandate. Not just the setup for open banking, but they have been able to rollout complex multi-entity business models leveraging their API-platforms to integrate Fin-techs, Identity providers, Regulators and Retailers. Indian banks are actively exploring Blockchain based solutions for International remittances, Syndicated loans, Know Your Customer (KYC).

Abhijit Shah Chief Technology Officer, DCB Bank

How significant is the role of emerging technologies in Indian banking institutions?

A decade ago, one would have believed, Indian banks are following the large global banks in terms of innovation. However, the scenario has drastically changed now. The evolution of digital landscape in India is at a faster pace than the West. The payment revolution that has erupted, with Unified Payments Interface (UPI) based money 20

March - April 2019

How do you rate India’s readiness as far as implementation of Artificial Intelligence (AI), Machine Learning (ML) or Blockchain in banks is concerned?

To stay ahead in competition, exponential technologies like Deep Machine Learning, Artificial Intelligence, Automation (AI and Natural language processing based Chatbots, Digital Self-Service) and Digital Workspaces are helping organisations come up with innovations.

Technology is taking the centre-stage to fuel customer experience. Big-data and

Deep ML are being extensively used to understand a customer and the context around him/ her better and provide an experience on the channel he/she prefers at a specific time in a day. The content here is hyper-personalised to his/her context.

It is an omni-channel experience that cuts seamlessly across channels in realtime and has a convenience-based and frictionless experience with advanced biometric security. The idea is to provide intelligent self-service based on self-learning capabilties.

Over the next five years, the customer experience shall get more interesting, we shall be witnessing user interfaces based on voice, gestures, Augmented Reality (AR), Virtual Reality (VR), eye-ball movement, finger ring-based payments and interactive holographic mannequins getting introduced. Most of these themes are in labs or pilot stages but will hit the production soon.

What are your views on Phygital Banking? How to strike a balance between physical and digital banking in your organisation?

The digital landscape has exploded to a level where every phase of customer lifecycle from customer on-boarding, customer

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retention to doing more with customers, can be completely digitised, without any need for customers to ever see the branch.

Even the millennial customers are expecting branchless banking. While this is true for Urbans, the Rurals are far behind this expectation curve. Though adoption of digital is happening in rural markets, the need for physical branch is not yet eradicated.

There is a segment of customers who still prefer branch banking and the experience of branch banking in itself, has a lot of transformation avenues. Creativity will drive this new store-like experiences, using Internet of Things (IoT), AI, AR/ VR technologies. These digital-branches are expected to have less branch-staff and more self-service.

What security measures are implemented by banks to curb frauds?

Would you like to share a few instances pertaining to this?

Measures like Anti-spam, Endpoint Connect with us on

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Artificial Intelligence based cybersecurity solutions are taking the centre stage.

Cybersecurity solutions that use Artificial Intelligence and Machine Learning are based on the historical data from prior cyber-events to dynamically detect and respond to newer but somewhat similar attacks. protection, Network traffic monitoring, Encryption, Application whitelisting are already in place for most of the banks.

Even with these measures in place, banks would still need to be in a continuous improvement mode. Financial institutions have invested and are investing in forward looking cybersecurity technologies.

Industry has moved on from Preventive security measures to Predictive measures and now moving towards Prescriptive models.

Artificial Intelligence based cybersecurity

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solutions are taking the centrestage.

Cybersecurity solutions that use Artificial Intelligence and Machine Learning are based on the historical data from prior cyber-events to dynamically detect and respond to newer but somewhat similar attacks.

This principle applies not only to all the stages of security like, threat prevention, threat detection, threat response but also in threat prediction. With all this in place, no bank can still claim, they are threat-proof. ď‚— March - April 2019

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Industry Perspective

‘Tech Investment is Inadequate,

People’s Empowerment Vital’ Implementation of technology and innovation has always been a challenging task, particularly when you are doing a new project. Not only the unforeseen challenges, there are major chances of the opposition.

For smooth tech-implementation, we at Syndicate Bank treat our vendors as partners and put our heart and soul to resolve any issue in project management, says Atul Kumar, General Manager-IT, Syndicate Bank, in conversation with Elets News Network (ENN). construction and farm equipment. Tell us about the venture and its progress.

In February this year, Srei Equipment Finance Limited, a wholly owned subsidiary of Srei Infrastructure Finance joined hands with stateowned Syndicate Bank to jointly provide financing for construction and farm equipment.

Under the arrangement, Syndicate Bank would leverage on its low-cost funds and co-lend equipment loans with Srei Equipment at a mutually agreed rate. The tie-up is going very well with Srei.

Atul Kumar General Manager-IT, Syndicate Bank

Technology is playing a vital role in reinventing the banking sector.

How do you utilise tech-innovations in curbing the menace of NonPerforming Assets (NPAs)?

Technology plays extremely important role for detection and early warning of NPAs. It would be impossible to think of handling NPA without a robust technical platform. In fact, our 22

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bank is one of the first Public Sector Bank (PSB) to start online real time NPA tracking after we moved to Core Banking System (CBS). Also Syndicate Bank was pioneer in CBS and the journey started way back in 2001.

Srei Equipment Finance Limited recently collaborated with Syndicate Bank to jointly offer financing for

Tell us about project Ananya. What role does it play in the improvement of CASA (Current Account, Saving Account) growth?

Project Ananya encompasses four pillars namely: Business Process Reengineering, Digital Banking, Sales & CRM (Customer-Relationship management) and Human Resource Development. All the pillars are critical and relevant for any organisation’s growth. It is a technology enabled transformation process. All the four pillars are significant and extremely important. We could do changes at the branches, establish National Processing Centers for Account opening, Retail and Micro Small and Medium Enterprises

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(MSME) Loan Processing Centers, stateof-the-art Contact Center with 10 regional languages. All this has helped bank to become a better bank in every sense.

Technology implementation requires a lot of awareness generation. How do you overcome this challenging task?

Technological implementation is always a challenge as unforeseen challenges crop in, particularly when you are doing a new project, the challenges are enormous. We treat our vendors as partners and put our heart and soul to resolve any issue in project management. To keep motivating our younger generation is always a challenge. We try to mix work with pleasure. We organised an interdepartmental cricket match which was appreciated by the youngsters very much. Today, we have a good number of young bankers. Our presence in social Connect with us on

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Digital Banking encompasses all the latest technology including RPA-based reconciliation, APP-based Point of Sale Machines, Use of Blockchain etc. media has also helped in improving our brand image.

technology is not going to help. We need to empower our people as well.

Tell us about the bank’s Business Process Reengineering (BPR). How is it streamlining your internal process?

BPR needs to be done constantly. In the past, systems were manual and now total automated procedures: we need to change every manual process to automated one and that is why BPR is critical. In fact most of the organisations face problem in transition. All the three pillars namely People, Process and Technology are equally important. Only investing in

What technologies do you use for boosting the usage of digital banking?

Digital Banking encompasses all the latest technology including Robotic Process Automation (RPA) based reconciliation, APP based Point of Sale Machines, Use of Blockchain etc. As a bank we are trying to get into every aspect for top-end digitisation. We have already completed Exchange to Exchange (E2E) digitisation for MSME loans as well. ď‚—

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‘Banks Must Innovate to Stay Relevant as

Technology is the Future’ Banks need to offer customers unique, convenient experiences tailored to today’s fast-moving, digital lifestyles. Banks can do this by investing in technology that lets the branch bridge the physical and digital worlds — creating a seamless and integrated “phygital” experience, says T V Ramana Murthy, GM-IT, Bank of Maharashtra, in conversation with Elets News Network (ENN). analytics, to recommend personalised, contextual products and services to individual customers. Besides generating revenue, banks could also leverage AI to price their products, such as mortgages and personal loans, more effectively and fairly by personalising interest rates based on a customer’s credit score and risk profile.

T V Ramana Murthy GM-IT, Bank of Maharashtra

Several new technologies such as Artificial Intelligence, Blockchain and Cloud are gaining popularity across the banking sector. How do you perceive these implementations?

With the world being digitised and customers expecting better and faster service, time has come for the banks to adopt innovation and handle some of the processes over to the technologies like Artificial Intelligence (AI), Blockchain and Cloud to keep up with the changes.

Banks can improve sales by employing a combination of AI technologies, such as machine learning and predictive 24

March - April 2019

AI-based solutions for KYC/AML adherence, fraud detection and regulatory compliance can analyse transaction data in real-time to identify suspicious patterns of activity.

Machines can learn continuously from past performance to reduce false positives and negatives. During risk assessment, banks can leverage artificial intelligence to analyse historical transactions and calculate risk exposure at a transaction-level.

Blockchain, as a technology, is quite powerful. It holds the potential of being applicable in a large number of use-cases. It’s a data structure that allows storing data in a decentralised manner. The specialty of this technology is that it provides high data security as a virtue of the way it is implemented. Implementing Blockchain technology in banking sector can solve multiple challenges by facilitating faster, secure, and more transparent transactions. The biggest advantages of Blockchain for the banking industry are Fraud Prevention, Forex Volatility, Resilience

in the banking sector, reduced time for processing etc.. Thus, this technology holds the potential to address several limitations of the current banking processes by streamlining, simplifying, modernising, and enhancing the traditional soiled design of banks.

Cloud computing is an internet-based model for delivering information technology (IT) services. It employs a network of remote servers that enable IT resources to be centrally pooled, rapidly provisioned and quickly redeployed. Cloud computing offers an asset-light and low-cost operating model to banks by offering the option of outsourcing a number of non-core activities. Some of the major banks in India are already collaborating with technology companies for implementing cloud computing in their system. The sector is expected to witness an increase as pressure to maintain profitability increases on Indian banks amid increasing capital provisioning requirements of Basel III and Indian Accounting Standards.

However, data privacy remains a concern and many banks prefer private clouds over public clouds for data storage.

Digital banking is significant but majority of the Indian populace reside in the rural areas with extreme challenges. What measures are ensured by your bank for bridging this gap?

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The biggest challenge for digital banking in rural areas is erratic internet connectivity, fear and habits of relying on cash for transactions.

The task to digitise rural India might be challenging, but not impossible.

However, the increased smartphone adoption, reductions in the prices of telecom data use and favourable regulatory policies have created the baseline infrastructure required for a leapfrog growth in digital payments.

Bank offered easy-to-use payment products and interoperable payment platforms such as Unified Payments Interface (UPI), BharatQR, Aadhaar Enabled Payment System, among others digital banking services such as National Electronic Fund

digitalisation to rural banking.

Phygital banking is getting a lot of attention across the industry. How vital is its role?

Most of the banks started their digital transformation journeys by migrating customers to digital, rightsising their branch networks and investing in new capabilities. However, many of these banks have yet to realise the full benefits of these transformations.

Banks need to offer customers unique, convenient experiences tailored to today’s fast-moving, digital lifestyles.

Banks can do this by investing in technology that lets the branch bridge the physical and digital worlds — creating a seamless and integrated “phygital” experience. For banks,

Banks can improve sales by employing a combination of AI technologies, such as machine learning and predictive analytics, to recommend personalised, contextual products and services to individual customers.

Transfer, Real Time Gross Settlement, Debit and Credit Cards, Mobile Banking, Inter Bank Mobile Payment System etc., Bank engaged Business Correspondents (BCs) for providing banking services at locations other than a bank branch/ATM particularly in rural areas. BCs enable a bank to provide its limited range of banking services at low cost. They hence are instrumental in promoting financial inclusion and digital banking.

Other measures include creating awareness among people on importance of digital banking services, reaching out to the schools and colleges where the students can understand it easily and convey it to their family members like making payment of electricity bills, transferring funds and different kinds of online payments and thereby helpful in implementing the Connect with us on

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creating a truly phygital experience means building a connected customer and employee experience that brings physical and digital channels together.

Rather than invest in “shiny objects” or point solutions, banks should focus on technologies that can achieve the goals such as enhanced customer experience, enhanced employee experience, increased efficiencies and cost savings etc.

Through a phygital transformation, banks can lower costs by reducing real estate expenses and more efficiently leveraging their employees. Further, investing in phygital helps banks optimise their distribution networks, reduce cost-to-serve, increase revenue and improve customer engagement.

Which technologies have you deployed for controlling NonPerforming Assets?

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Following technologies are in place to curb the menace of NPAs: 1. Mobility application for Branches/Zones/Head Office to assist in daily monitoring of NPA 2. Internal web-based applications for credit monitoring/recovery of NPA, potential NPAs for current month, fresh slippages for current month, SMA0 , SMA1, SMA2, Stock statement expiry cases, working capital limit expiring in next 30 days, turnover comparison on working capital etc.

3. Due date alerts to borrowers for renewal of documents & insurance 4. Early Warning System to help in identification of financial stressed account in its current portfolio, generation of warnings during loan application and evaluation 5. Various internal dashboards on details of progress in NPA Recovery, Sectoral Analysis of Stressed Accounts 6. Online One Time Settlement (OTS) portal 7. SMS to borrowers for EMI reminders What innovations have you planned for the year ahead?

Some of the innovations planned for 2019 are: Continuous optimisation of Cyber Security Operations Centre (CSOC) with state of the art technologies in order to further strengthen the Cyber Security Posture.

Reducing manual work by implementing Robotics Process Automation (RPA), so that human employees can focus on more complex banking operations work, human interaction, and decision-making by way of automation of certain processes wherein repetitive and labourintensive tasks are involved.

Additionally, exploring implementation of Blockchain solutions, Mobility Device Management Solutions etc.  March - April 2019

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Industry Perspective

Federal Bank:

Banking the ‘Phygital’ Way Technology gives the edge to be more flexible and transparent with customers. We, at Federal Bank, consistently work on offering innovative products and services by leveraging the latest technologies to capture the business in the competitive marketplace, says Pitchai Mahalingam, Head - Operations & Transaction Banking, Federal Bank, in conversation with Elets News Network (ENN). physical aspect will evolve for more complicated transactions requiring some judgement.

Simple straightforward transactions like retail payments can be initiated through our retail platforms (Fednet and Fedmobile) and can be processed straight-through. But for transactions like investment in mutual funds, insurance, etc., our customers would require advice from our accredited and trained advisors.

Pitchai Mahalingam, Head - Operations & Transaction Banking, Federal Bank

How would you define Federal Bank’s philosophy– Digital at the fore, human at the core?

The banking industry is at the cusp of a digital disruption. In a way, to embrace the ensuing digital wave, the bank pivots all its services on the theme “Digital at the Fore and Human at the Core”. We are at the forefront in adopting new digital technologies/ advancements, benefitting our customers. We are witnessing a steady growth in customer adoption of digital channels and services. Mobile Banking adoption has reached all-time high, evidencing the increased popularity and patrons. Our merchant and 26

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Corporate solutions have received an overwhelming response and more such services are on the anvil. We ensure that our digital offerings are strongly complemented with the hallmark of relationship management and customer service that the bank is renowned for.

That is how the theme “Digital at the fore, human at the core”.

How do you look at significance of Phygital Banking?

Phygital Banking approach is a mix of physical and digital touch points.

Digital Banking can take away the routine transactions that do not need human intervention. But the

In the corporate world, while the basic payments and trade finance transactions initiated thorough our Transaction Banking platform (Fed e Biz) can be processed digitally, the customers are assisted by our Trade HUBs and CCSCs for complicated ones.

Do you think it is challenging to offer digital banking across all branches in India?

Advancement in new technologies, availability of bandwidth, mobile revolution, etc., have enabled digital banking to grow substantially. But if we compare the knowledge-level and comfort-level of using new technologies and devices between urban centres and rural centres, there is still a gap. Any bank having branches in cities, towns and villages will have to adopt Phygital Banking not only to serve different customer needs, but also based on the acceptability.

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What measures does Federal Bank take to ensure implementation of Phygital Banking?

Federal Bank has evolved from physical banking to digital anchors. We have key differentiators that ensure the implementation of Phygital Banking.

Few of the indicators can be understood as: • We have more than 1,250 bank branches located at all types of centers across the length and breadth of the country.

• We offer full-fledged state-of-the-art omnichannel internet banking platforms for retail, SME and corporate customers.

• We offer mobile banking platforms for various products and services.

• We extensively use data analytics for customer experience optimisation and product innovation.

• We have created an open API platform for

How do you look at emerging technologies like Artificial Intelligence, Machine Learning and bots? How are they adding to the makeover of the Indian banking in terms of transformation?

The goal behind these technologies (AI, IoT, ML) is to have devices that self-report in real-time, improve efficiencies and bring information to the surface more quickly instead of depending on human intervention. Bots help in creating the customer loyalty and satisfaction.

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their end-user hence limit the scope of improvement or innovations.

These technologies also help us in automating painful manual processes, enabling in error-free processing and cost reduction.

Nowadays, the consumers are demanding for more individualised experiences as they become more technologically savvy, they are eager for personalised offers too.

Through bots, we can keep a track of our customers and their needs which ultimately results in product innovation.

These technologies give us the exact defined results based on data driven approach. We, as humans, have some limitations which can easily be mitigated with the help of artificial intelligence resources with more accurate results. For large banks like us, these technologies help us in targeting our consumers in the best possible way in the marketplace.

Without these technologies, one cannot get into the deep insights of

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product and process innovation, which is enabling us to create a strong ecosystem to connect with Fintech partners and customers.

We use digital solutions for account opening, credit sourcing, underwriting, etc.

We extensively use RPAs for automating operational processes.

All these above digital facilities are well communicated to our customers through our branches and relationship managers.

We also offer physical banking facilities through our branches, ATMs, cash recyclers and kiosks.

We continuously work on migrating the customers from using physical channels to digital channels.

What new technologies does your bank implement to offer various products and services?

Technology gives an edge to be more flexible and transparent with customers. We consistently work on offering innovative products and services, by leveraging the latest technologies to capture the business in the competitive marketplace.

• Blockchain – Cross border remittance and micro finance • RPAs – For automating manual processes • AI / NLP Bots – for back office and customer facing services Primarily known as an NRI bank, what initiatives are taken at your end to take banking to the underbanked segments?

We are not just an NRI Bank, we are a full-fledged commercial bank offering all the services. Yes, we pride ourselves on our NR customer base and that 15% of India’s inward remittances are processed through us. We have also implemented blockchain and UPI 2.0 technologies for

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We have more than 1,250 branches and many of them are located in semiurban and rural areas.

While we offer high end products to our customers, we also offer banking services to underbanked segments like, micro finance, gold loans, agriculture loans, etc. handling remittance business.

We have more than 1,250 branches and many of them are located in semi-urban and rural areas. While we offer high-end products to our customers, we also offer banking services to underbanked segments like, micro finance, gold loans, agriculture loans, etc. We also use digital solutions for these segments other than the branch and business correspondent channel.  March - April 2019

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Industry Perspective

‘India Slowly Progressing Beyond Brick and Mortar Banking’ In a country like India, Brick and Mortar concept of banking is the most preferred mode and it would dominate for many more years. However, the digital adoption and its acceptance level is also inflating amongst customers by leaps and bounds. A perfect balance between the two is what the market would aim for in future, says Manishi Chatterjee, General Manager-IT, IDBI Bank, in an interview with Elets News Network (ENN).

Manishi Chatterjee General Manager-IT, IDBI Bank

IDBI Bank is now a private entity after LIC acquired its stake. How will it change technology overview across the lender?

The bank is declared a private entity by the Reserve Bank of India (RBI) with regard to regulatory aspect. The bank always worked with a professional approach in every front including the technology front.

Even as a new entity the bank’s technology focus is market-driven and with best of the possible breed.

The due diligence process of the lender would not change across the industry and it would focus more on automating the process towards Straight Through Process (STP) and keep the trends to absorb more and more cost-effective and data-driven technology 28

March - April 2019

The regulations in Cyber Security are off late increasing which is forcing the bank to take care of the customer data in the bank’s Data Centre. Challenges are enormous as it would entail cost and compel the banks to implement the most up to date security infrastructure both to cover the outside perimeter and inside the perimeter of the bank. with increased Return on Investment (ROI).

Non-Performing Assets (NPAs) are a major concern across the BFSI industry.

What role will technology play in curbing this menace?

Our bank would focus more on curbing NPAs with the help of technology and for the same, the Analytics-driven approach

with cognitive capabilities would be adopted. We have already initiated many steps on this front.

What are your views on Brick and Mortar mode of banking? Is India ready for digital adoption across banks?

In a country like India, Brick and Mortar concept of banking dominates and it would dominate for many more years to come. At a parallel level, the digital adoption is already increasing and the acceptance level is also inflating amongst customers by leaps and bounds.

A perfect balance between the two is what the market would aim for in future.

There is a need for giving more focus on the security of the data by adopting appropriate technology with proper understanding.

How stringent are the regulations in India in terms of cybersecurity? What are the challenges and strong points?

The regulations in cybersecurity are off late increasing which is forcing the bank to take care of the customer data in the bank’s Data Centre. Challenges are enormous as it would entail cost and compel the banks to implement the most up to date security infrastructure both to cover the outside perimeter and inside the perimeter of the bank. The strong points are that by implementing the latest technology in cyber security, the bank would at least move towards a few steps ahead in protecting the customer data. 

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Industry Perspective

Karur Vysya Bank Embracing Innovation for Ensuring Customer Satisfaction The Indian banking industry is keen to adopt digital innovation but several customers still ask for face-to-face meetings. While we cannot say ‘no’ to any customer, we educate them regarding the flexibility and convenience of using use tech-led banking, says S Sekar, General Manager and Chief Information Officer (CIO), Karur Vysya Bank, in conversation with Elets News Network (ENN). home loan in 20 minutes too. We have so far implemented 24 products under retail loans category and five products under commercial category purely end-to-end online including documentation.

S Sekar General Manager and Chief Information Officer (CIO), Karur Vysya Bank

There is a vogue of technology implementation across the banking sector. Where do you see Karur Vysya Bank in terms of innovations?

While every organisation is concentrating on digital adoption, we have quietly implemented booking of all retail loans under digital technologies, end-to-end.

For instance, a customer under the selfservice model can submit a vehicle loan online using his mobile in 10 minutes and the sanction can also be achieved in another five minutes time. Similarly, for a Connect with us on

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What are the major threats faced

by Indian banks in terms of techdeployments? How do you overcome these challenges?

The biggest threat faced by the Indian banks is the cybersecurity threat. While the Industry has opened up for digital innovation, the associated threats are also on the higher side. We have designed a rugged cybersecurity framework in consultation with regulators and implemented the same and of course lot of awareness and discipline support is also required from the users and we are fortunate to have the same.

Despite rising usage of digital banking, consumers still rely on face-to-face meetings in terms of big investments.

What should be done to enhance people’s faith on tech-led banking?

While we cannot say ‘no’ to any customer who is interested in face-to-face meetings, however, we educate the customers regarding the flexibility and convenience of using tech-led banking.

What are your views on the Indian regulations with regards to technology and its role in the banking sector? What The Banking and Finance Post

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Banking is a highly regulated industry and while we are free to implement any technology for the benefit of customers it should be under the regulator defined framework only. are the areas that need to be revisited?

Banking is a highly regulated industry and while we are free to implement any technology for the benefit of customers it should be under the regulator defined framework only. But these stringent measures are necessary considering the sensitivity of our industry. I feel that security should be further tightened to ensure the confidence reposed by our customers.

What innovations have you planned this year?

Our innovations will continue to be around digital innovations and strengthening our cybersecurity. We strongly feel that availability of service to our customers always is paramount than anything.  March - April 2019

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Industry Perspective

BSE: Combating Data Threats with Big Data Analytics At Bombay Stock Exchange (BSE), we have set up a pragmatic Data Governance Policy in place. We have implemented Big Data Analytics for managing high volume data. The journey of Big Data at BSE has been continuously evolving with implementation of new technologies together with security and data access management, says Kersi Tavadia, Chief Information Officer, Bombay Stock Exchange, in conversation with Elets News Network (ENN). technology enabler leader.

It is a CIO who converts technology solutions and strategies into business opportunities in a financial industry.

BSE has set these examples in multiple forays, such as, Implementation of 24 X 7 Cybersecurity Operations Centre, Big Data implementation, Use of Artificial Intelligence and Machine Learning in its Surveillance function and many more.

Kersi Tavadia Chief Information Officer, BSE Limited.

How significant is the role of a Chief Information Officer (CIO) in comparison to other C-Suite contenders in a financial entity?

In the financial industry, CIO has to play a dual role of understanding its core business and driving the business with the help of IT strategies and IT technologies.

In fact, CIO is the only person who has the crucial business knowledge and Information Technology insights and this unique knowledge and experience makes a key differential as compared to other C-suite contenders. To aptly put in a simple word, CIO is a business first and 30

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How are you improving your hold on insights and data governance? What technology have you implemented for this?

At BSE, we have set up a pragmatic Data governance policy in place. The key essence of Data governance at BSE are; 1. Identifying Data 2. Mapping Business owners to Data 3. Identifying criticality of data with segregation tagged 4. Setting different parameters for data management and its use 5. Continuously improving data quality BSE has implemented Big Data for managing data. The journey of Big Data at BSE has been continuously evolving with implementation of new technologies together with security and data access management.

What role is Cloudera Enterprise

playing in driving your data-oriented decisions in real-time?

BSE in its BigData implementation has used Cloudera solution for analysis and security purposes.

The major use of Cloudera has been made in the areas such as: 1. BSE implemented near realtime prediction of rumours using cloudera platform by applying Artificial Intelligence and Machine learning techniques.

The above solution eliminates manual process of keeping a watch on social mediasites like Twitter, Facebook and on news websitesrelated to BSE listed companies onpossible rumours.

The dashboard enables BSE surveillance team to view the abrupt price movement of BSE listed companies due to the possible rumour published in various social media.

BSE is now in a position to: a. Provide advanced statistics and machine learning based content identification model b. Interface with BSE’s dashboard and raise alerts on content c. Take necessary action to confirm the rumours by interacting with the respective company on BSE listed companies

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Industry Perspective

c. Encryption Data Encryption (Data at Rest) by creating encryption zone d. Auditing Comprehensive auditing using Cloudera Navigator What new innovations have you planned for 2019?

Technology is now touching every aspect of our life, be it social or business. The blend of this use is guiding technology to evolve. With regards to Financial Industry, in the year 2019, the major drivers of technologies are:

2. The real-time dashboard helps our business team insights into trading activities and trends. BSE trading platform generates 20K transactions per second which we captured using Open source technology STREAMSETS and then push the data downstream into KAFKA messaging technology and the ingested data getting enriched with SPARK. Finally this high volume data getting stored in high performance storage engine KUDU. We use open source IMPALA query engine and build our dashboard using tableau.

3. Monitor High Algo Order to Trade Ratio.

For the huge volume of orders generated

by Algo trading, BSE Surveillance team proactively monitor each and every member trade to order ratio and alerts each participating members in case of breach of set ratio.Using Cloudera platform and applying decision tree mechanism BSE generates alerts dash board in real time.

BSE, Asia’s oldest and the fastest stock exchange in the world, generates a large volume of 400 GB of data every day.

How do you strengthen you security posture keeping this volume in mind?

Goals for data management systems, such as confidentiality, integrity, and availability, require that the system be secured across several dimensions.

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Bombay Stock Exchange plans to leverage its experience for better use of society and financial industry in specific. On this front, BSE has already entered into Memorandum of Understanding (MoU) with different service providers and it is in advanced stage of setting up Cyber Security infrastructure for their members as a service. of both general operational goals and technical concepts, as below: a. Authentication Implemented KERBEROS Authentication Model b. Authorisation SENTRY Authorisation for user access control

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• Real-time analysis The system/ technology that will facilitate information on demand with near real-time basis is going to be a massive enabler for business opportunities and survival.BSE is planning to implement a open source technology that will provide access to this information from different systems/ application viz. Central Log management and Analysis.

•

Artificial Intelligence (AI) and Machine Learning (ML) We will continue to extend our use of AI and ML in application of different business processes, optimisation and automation to gain the competitive advantage.

•

Strengthening Cyber security infrastructure Bombay Stock Exchange plans to leverage its experience for better use of society and financial industry in specific.

On this front, BSE has already entered into Memorandum of Understanding (MoU) with different service providers and it is in advanced stage of setting up Cybersecurity infrastructure for their members as a service.

• Launch of new products BSE plans to strengthen its current position as well as venture in new opportunities by introduction innovative products in Commodity segment, Mutual Funds, Insurance, etc. This will entail more investment opportunities to investors at large.  March - April 2019

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Industry Perspective

‘Internal Awareness,

Timely Upgradation Vital for Banks Against Threats’ Allahabad Bank is implementing data/ information security through continuous improvement and enrichment of processes. Necessary level of awareness is being created among employees for prudent handling of data/ information during processing, transmission and at rest (storage), while keeping a vigil on activities, which may impact bank’s information security, says Vivek Gupta, Deputy General Manager and Chief Information Security Officer, Allahabad Bank, in conversation with Elets News Network (ENN).

Systems, Finance, Compliance, Risk, Security etc are thus more effective than the traditional in-charges, who were assigned the role based on their allotment of the portfolio/ department/ cadre/ pay scale. C-Suite Officers are holding direct responsibilities and are interacting directly with RBI, Govt., Board, Committees.

The regulator also prescribes the role and responsibilities of C-Suite officers in banks and expects the implementation to be in true spirits, without dilution of the objectives.

Vivek Gupta Deputy General Manager and Chief Information Security Officer, Allahabad Bank

C-Suite Officers are emerging as the new gamechangers across the BFSI sector. How significant is their role in Public Sector Banks?

Chief Officers in various verticals of Public Sector Banks are the most experienced executives who are key decision-makers, and also entrusted with highest level of responsibilities. They act as C-Suite Officers, irrespective of their cadre or pay scale and discharge their duties with their actual command and expertise in the respective domain.

C-Suite Officers are directly responsible for their functional area viz. Information Security, Technology, Information 32

March - April 2019

They are better able to explain issues, being faced down the line, to discuss practical solutions and decide a proper execution plan. The change in management methodology and practices is now clearly visible in BFSI sector. In case of public sector banks, the same wave of change is being experienced and it may be further strengthen, with empowerment and direct involvement of C-Suite Officers in decision making, providing more autonomy for pro-active actions.

A quick and meaningful recognition and reward system for holding extra key responsibilities by C-Suite Officers would not only make the system more effective but would also set a positive view, thereby more competent people would come forward for such roles.

Thus C-Suite Officers are proving themselves as gamechangers across the BFSI sector, including in Public Sector Banks!

How vital is building an effective Data Loss Prevention Programme for a bank?

Banks are dealing with huge stock of data covering customers’ Personally Identifiable Information (PII) data, their financial and other transactional data. This data is primarily of proprietary, confidential and sensitive category.

Bank’s systems are accessible not only from branches but also through internet, though selectively. Management Information System (MIS) and Report Servers also contain huge chunk of past and current data, both of private and confidential in nature.

Many services in banks are either outsourced or involve processing of data through external entities. Even audits are to be outsourced for external and independent assurance. Though NonDisclosure Agreements (NDAs) are executed in all the cases and due diligence is exercised, there is always rise in surface area of data and information sharing, as the data is handled by various users, systems and processes at all the respective entities.

The data is real “crown jewel” for any organisation and it is the “oil” which is

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Industry Perspective

Social media provides vital insight into customer’s preferences, expectations and creating such channel dedicated to handle customers investment and service related requests, account management for payment solutions would result in effective asset management for business. used, every now and then, processed and reprocessed, time and again to derive more business and more profits! Data is the basic building block of information, on which we all survive through various means of processes and lookouts.

However, losing this vital data/ information is just a matter of unplugged small gaps in controls and within minutes, huge chunk of data can be leaked through various ways and means, as systems are connected with network, selectively enabled with USB/ CD/ DVD drives and having internet connection.

Data can be pilferaged through e-mails, malware attack, unpatched vulnerabilities in systems, gaps in configuration rules and disposal of old media/ devices/ systems.

In addition to the above highly sensitive data like passwords, logs, configuration files, firewall rules etc, are another set of key information, liable to be protected with utmost care and at all costs.

Therefore, a robust Data Loss Prevention Policy and Solution should be carefully built in banks and any gaps or scope for Data Connect with us on

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Leakage should be blocked as a mission of Information Security, though ensuring that legitimate users are not at discomfort.

Similarly, all the users should also be very mindful in dealing with data, as data leakage is a huge risk for any organisation, especially for banks who deal with public’ money. A detailed and conservative approach for data loss prevention, unqualified support of top management in achieving the same through all the stakeholders, strict and periodic focused audits against data loss/ leakage should be conducted.

The data classification policies and rules should be updated, as and when required.

Additionally, a solution with enterprise level implementation of DRM (Digital Rights Management) would be a step ahead, but the huge costs needs to come down and there should be more industry players to offer practical enterprise level solutions, suitable for BFSI sector.

What measures and mechanisms did Allahabad Bank deploy to secure data and information?

Security is always implemented through all the layers involved. Security is also meant to be upgraded with pace of time, matching with discovery of newer risks.

Allahabad Bank has recently implemented Cyber Security Operation Centre with 12 solutions viz SIEM, DLP, WAF, DAM, PROXY, PIM, VAS, NAC, MDM, Anti APT, EPP and Anti DDoS. The purpose of information security is to provide reasonable assurance of protection to information assets of the organisation, in which data/ information is a prime object.

The bank has disabled USB ports for media access in all the systems, except for authorised systems for bonafide need of media access. Bank has also implemented Domain Policy for login which also ensures that unauthorised software cannot be used.

Systems IPs binded with original MAC are whitelisted to access outside the local offices, even for intranet.

The bank is also ISO27001 certified for ISMS practices at DC and DR centres.

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What role does Cloud in business play in risk mitigation?

Implementation of centralised controls and recovery methods are used in Risk Mitigation approaches in computing environments.

Cloud Computing provides various means of use of vast IT Infrastructure, Process, Administration, Security Controls with required segregation of data, security of data, systems/ processes etc.

Therefore, ensuring standard checklist based controls, high standard of encryptions, deploying best administrators and adopting best industry standards is much easier and affordable. Scalability, cost reduction, pay as per use are other intangible benefits of cloud computing.

How important is social media in ensuring asset management for business?

Usage of social media has very rapidly evolved in recent years and users of banking services are not an exception. Social media provides an escalated level of interaction between bank and the customers.

Social media provides vital insight into customer’s preferences, expectations and creating such channel dedicated to handle customers investment and service related requests, account management for payment solutions would result in effective asset management for business.

With self servicing model of Apps/ Internet enabled services, the cost to organisations has also come down drastically. There is no need for opening offices/ braches to run the business. Presence of variety, quality, ease and innovation of internet/ app based services are key differentiators.

Digital marketing is very dynamic and quick due to social media. Thus, in a hyper connected world, where customers are already inter-connected with various social media & e-commerce options, they can “make or brake” any online business in almost no time, based on sharing of their experience not only among themselves, but also online with Government, Regulator and Competitors already available on social media, as people are the main asset of any business.  March - April 2019

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Industry Perspective

‘Cyber security Preparedness Programmes, A Necessity for Every Bank’ With the rapidly rising significance of technology, ensuring adequate Cyber Security preparedness at the banks on an ongoing basis is extremely crucial.

In this aspect, CISO’s role is very critical as he is responsible for establishing an adequate Cyber Security programme and coordinating with the compliance aspects to the bank’s policy across the organisation, says Biju K, Head, Operational Risk and Chief Information Security Officer (CISO), Federal Bank, in conversation with Elets News Network (ENN). extremely high. Several factors like the fast changing banking landscape, huge adoption of technology, varying customer preferences, changes in regulatory regime etc. are having a huge impact on the operational risk.

Biju K Head, Operational Risk and Chief Information Security Officer (CISO), Federal Bank

How vital is the role of Operational Risk Management (ORM) in banks?

Risk Management is a complex function at banks. Though thrust was on credit and market risk in earlier days, operational risk was subsequently identified as a separate class by Basel itself. As the name says, operational risk is the risk of loss resulting from inadequate or failed internal processes, people, systems and or from external events. Unlike other risks, operational risk is highly dynamic, very difficult to quantify and the impact can be 34

March - April 2019

How do you handle the Operational Risk?

The three lines of defence model is the effective way of handling operational risk. In addition to this, regular monitoring and risk assessments, timely identification of incidents and deployment of appropriate control measures are needed on an ongoing basis for effective risk management.

Automating this process is very essential and helps to have a close track on the issues, progress achieved etc. on an ongoing basis.

How crucial is CISO for banks? What innovations have you implemented being a CISO of the Federal Bank?

With the rapid surge in usage of technology, ensuring adequate cybersecurity preparedness at banks on an ongoing basis is very crucial.

CISO’s role is very critical in this aspect and is responsible for establishing an adequate cybersecurity programme and coordinating the compliance aspects to the bank’s policy across the organisation.

We focus on ensuring continuous monitoring of our assets to protect against

any kind of attacks. Integrated Security Operations Center (SoC) is established in this regard, which focuses on timely detection and corrective actions.

What are your views on Phygital Banking? How is Federal Bank matching the alignment between physical and digital banking?

Phygital is an essential part of today’s banking. We are digital at the fore and human at the core and effectively fuse technology with the personal touch.

We have a good inhouse technology team and also teams up with digital partners to provide our customers a world class banking experience.

Customers can avail an array of online services from account opening to availing loans. We use latest technologies like blockchain to implement quicker and safer transactions. End to end systems integration, use of Application Programming Interface (APIs), BOTs etc helps us to make the processes effective and reduce the cost How is the bank dealing with NonPerforming Assets (NPAs)? Have you done any major technology implementation in this regard?

Business intelligence and data analytics supports the collection and recovery teams to identify early signs of delinquency. The team does the necessary follow ups accordingly and minimises the possibility of moving to NPAs. 

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Transforming Lending with the Power of Cloud Let us take a look at how some of these translate into supporting the critical business drivers in lending today.

Sarbpreet Anand Global Head - Cloud Business, Nucleus Software

Businesses all over the world are taking advantage of the tremendous benefits that cloud technology brings. In fact, the global market for cloud computing is expected to grow from $272 billion in 2018 to $623 billion by 2023, according to an industry report.

The cloud market in India is also expanding quickly and expected to grow to $7.1 billion by 2022, as mentioned in a NASSCOM report. The financial services industry, powered as it is by IT, is rapidly adopting cloud technology.

The disruptive wave of digital transformation that is sweeping the financial services segment draws a lot of its power from cloud. FinTechs are founded on the unique combination of advancements in technology and innovative business models.

As startups, the FinTech companies have benefitted greatly from the agility, flexibility, modularity, scalability, security and cost optimisation offered by cloud technology.

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1. Business agility: With the customer driving the agenda for experience, lingering volatility in economic scenarios and prevailing dynamism inthe business landscape, lenders need to be agile to align quickly to the evolving market needs. New products have to be anticipated, designed and launched in minutes and not months. Any changes in the regulatory regime have to be adhered to ahead of the timelines.

2. Personalised customer experience: We are long past the days of ‘one fits all’approach.

Today’s customers expect to be offered products and services tailored to their specific needs, delivered at a time and place they choose, using their preferred channels.

Customers today are offered numerous options to choose from. Personalised and unique experiences across the loan lifecycle can be used as a source of competitive advantage.

3. Lean model: As profit margins are squeezed, focus shifts to leaner operations and cost optimisation. While the FinTech firms adopted this approach due to the resource constraints, the success of this model has emphasised the need even for the larger organisations to revamp their processes and benefit from the digital and lean

model. Considerations include API based external interfacing, integration of disparate systems, seamless adoption of new channels, streamlining of workflows, removal of paper based processes and continual fine-tuning of the overall design.

4. Real-time processing: Customers today expect their loan application processes to be simpler and easier, with approvals coming through in hours. In many instances, the trend has now shifted to instant approvals and that too without compromising on the comprehensiveness of the credit assessment. With an entirely digital process, not only is each customer interaction inherently faster but the speed of processing also unlocks additional capacity without requiring any more investment. Hence the lenders can process more applications and grow the business further without increasing costs.

5. Intelligent decisions: The explosion in the growth of data has opened up opportunities for lenders to integrate data driven insights into their business processes to improve the effectiveness of areas such as marketing, customer acquisition, servicing, cross-sell, credit risk management and collections.

The success of new-age lenders has proven that the combination of digital operations powered by cloud technologies has helped them attain their ambitious business objectives.

Many of them have established

benchmarks for speed, high quality customer service and increased transparency, which help set them apart in a crowded market place. For example, Quicken Loans, an innovative digital mortgage lender, which had less than one percent market share of retail mortgage originations in 2008, rapidly grew, reaching 6 percent in 2017 and went on to overtake the third largest Bank, Wells Fargo, to become the leading direct-toconsumer mortgage lender in the United States.

At Nucleus Software, we have a deep understanding of the complex requirements of the banking and financial services industry because we have spent more than three decades helping some of the world’s most innovative financial services companies leverage advanced technology to achieve their business objectives.

We combined our business and technology expertise to create FinnOne Neo, the 10 time winner world’s best-selling lending solution, which is helping companies shape the future of retail and corporate lending worldwide. The solution, which can also be deployed on cloud, covers the entire loan lifecycle from origination to servicing and collections across multiple channels and supports a comprehensive range of loan products.

(Spl. Note: Views expressed are a personal opinion of Sarbpreet Anand, Global Head - Cloud Business, Nucleus Software.) 

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Industry Perspective

‘Ensuring Right Balance in Physical, Digital Expansion Vital for Banking’ Several banks in the country already have a vast footprint of physical banking.

They are continuously expanding to cater to various customers’ needs.

Adoption of digital financial technologies such as AI, Big Data, more Application Programming Interface (APIs), tech convergence, etc., are required in a big way for customer satisfaction and to reduce cost, says J N Mallikarjun Rao, CISO, SyndicateBank, in conversation with Elets News Network (ENN).

In the era of information security, how significant is the role of Chief Information Security Officer (CISOs)?

CISO plays a very significant and visible role in risk reduction in business strategy implementation of an organisation. Information security is an important slice of CISO’s functional cake. CISO should be a high-level counsel to the Board on the one hand and a point of contact for seeking compliance by Government/ regulatory authorities on the other.

J N Mallikarjun Rao CISO, SyndicateBank

Implementing tech-innovations are significant but safety is a major responsibility. How is SyndicateBank dealing with this?

True. At our bank, we have robust information systems’ risk management framework to facilitate the integration of security requirements which controls the enterprise architecture, Software Development Life Cycle (SDLC) processes, acquisition processes, and systems engineering processes.

First comes ‘the need’ for a specific technology and then ‘the risks’ involved.

The risk management is where the risks are reduced and the business needs are fulfilled.

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CISO plays risk management as well as compliance roles, at the same time donning the cap of ‘business enabler’.

Personally, I feel CISO is a business executive who understands technology risks and keeps ‘residual risks’ to the bare minimum.

How do you view the concept of Phygital Banking? Is there a need to also maintain fair balance between physical and digital services?

Phygital banking is a Siamese twin of physical and digital banking. Phygital mean synergy between physical banking and digital banking. Many banks already have a vast footprint of physical banking and they are continuously expanding to cater to the needs of various customers. Adoption of digital financial technologies such as Artificial Intelligence (AI), Big Data, more Application Programming Interface (APIs), tech convergence, etc., is required in a big way to satisfy

customers and at the same time for reducing costs. The banks have already invested in this direction and continuously do it in future. Phygital will have less staff and more automation.

A controlled approach and regular monitoring is required for ensuring right balance between physical and digital expansion.

How stringent are the legislative measures pertaining to cybersecurity in India? Is upgradation required?

The legislative measures are reasonably good. However, they are to be updated for securing from emerging risks.

The National Cyber Security Policy 2013 by Department of Electronics & Information Technology (DeitY) aims at protecting public and private infrastructure from cyber attacks.

Information Technology Act, 2000 provides protection from various cyber crimes such as unauthorised access, denial of service attacks, phishing, identity theft, disruption, etc.

What new innovations have you planned for 2019?

As discussed above, adoption of innovative digital technologies to deliver quality to the customers is one thing. Introducing automation in banking using data analytics, AI, Robotic Process Automation (RPA) to speed up administrative tasks and free up human resources and enable them to engage with customers for delivering more personalised customer service. 

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SPECIAL FEATURE SPECIAL FEATURE

THUMBAY GROUP BUILDING FUTURISTIC Business Model in Education, Healthcare & Research With over 5,000 employees, the Group today operates in multiple brands across 20 sectors including education, healthcare, medical research, diagnostics, retail pharmacy, health communications, retail opticals, wellness, nutrition stores, hospitality, real estate, publishing, technology, media, events, medical tourism, trading, and marketing & distribution.

Dr Thumbay Moideen, Founder President, Thumbay Group

Thumbay Group Catering to millions of people world over in various fields such as medical education, healthcare, and research, Dubai-based global conglomerate Thumbay Group has gradually evolved as a giant brand since its establishment in 1998. With Gulf Medical University (GMU), Thumbay Medicity and the Thumbay network of academic hospitals and clinics, the group’s foray into healthcare ecosystem is worth taking note of, writes Elets News Network (ENN).

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From a single entity company to a globally established player in many prominent sectors including healthcare, Thumbay Group has come a long way

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“We stand apart as we dispense medical services, and are one of the best. We are involved in a whole range of healthcare-related issues comprising treating patients to teaching doctors and indulging in professional research. None can match us. Though we may not be as big as others, we are invincible,” says Dr Moideen.

“At Thumbay, we are developing an effective and reliable network of healthcare services ranging from hospitals to clinics, pharmacies and laboratories where patients can repose their trust,” Dr Moideen adds.

CARVING NICHE IN HEALTHCARE LANDSCAPE

riven by a futuristic medical education model, stateofthe-art facilities and cuttingedge research, Thumbay intends to significantly bolster healthcare delivery system in the UAE and its adjoining region.

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Dr Thumbay Moideen, the Founder President of this iconic business group, has a vision to have global presence and scaling up business to the tune of 10 X in next few years. In addition to emirates of the UAE, the Group now also boasts of a presence in India and Africa, along with upcoming projects in the Europe.

The Gulf Medical University (GMU) was Thumbay Group’s first venture. The need to take care of the clinical training requirements of GMU led the Group to foray into healthcare, giving birth to the first private academic hospital in the country– Thumbay Hospital, Ajman, in 2002.

It was followed by the establishment of a network of academic

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hospitals and clinics under the healthcare division, with presence at multiple locations in the Emirates of Dubai, Sharjah, Ajman, Fujairah, Ras Al Khaimah and Umm Al Quwain. A state-of-the-art research facility was also set up at GMU. Education, Healthcare and Research became the core sectors of Thumbay Group.

Subsequently, the Group started diversification, mostly venturing into areas related to its core sectors.

Outside the UAE, the Group established an academic hospital, pharmacies, and diagnostic labs as well as an outlet of Blends & Brews Coffee Shoppe in Indian city of Hyderabad.

Its educational/healthcare projects are at various stages of completion in various countries across Africa and Europe.

Dr Moideen, who remains abreast of developmental issues, believes sky is his limit. Mentioning about his pet project, he says ‘Thumbay Medicity’ in Ajman has medical university campus, housing facilities for staff, faculty and students, as well as specialized academic hospitals and other medicare accessories.

Talking about the nature of his role, a modest Dr Moideen says, “I’m just a facilitator. My goal is to see success is achieved and the lofty objectives we have set are met. I have a great team, and they are good leaders in their individual capacity.

We brainstorm on a regular basis, and I try to facilitate things at my end. It goes without saying that the project is close to my heart.”

OTHER OBJECTIVES l The Thumbay academic hospital network will have a total of

1,000 beds in the UAE, 1,500 beds in India, and 750 beds elsewhere in Gulf and Africa by 2023 l Gulf Medical University (GMU) is soon to add engineering and management courses l Plans are afoot to open three new University Campuses across three countries l To add 25 labs, 100 pharmacies, 40 Zo & Mo optical outlets (100 Blends & Brews coffee shops, 25 Body & Soul health clubs, 50 Nutri Plus Vita stores) Connect with us on

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THUMBAY GROUP TO GO PUBLIC BY 2023 In addition to its new and upcoming healthcare projects across the world, Thumbay Group is keen to acquire existing hospitals, either on long-term lease or on management basis.

THUMBAY MEDICITY: REDEFINING STANDARDS OF EDUCATION, HEALTHCARE, AND RESEARCH Thumbay Group’s success stories in its core sectors of medical education, healthcare, and research has given shape to ‘Thumbay Medicity’ in the UAE to serve 20,000+ people daily, with advanced facilities.

Built with an investment of over a billion Dirhams, the Medicity is spread over one million square feet and has a built-up area of 1.1 million square feet.

A regional hub of futuristic medical education, state-of-theart healthcare and cutting-edge research, Thumbay Medicity is one of the latest additions to the UAE’s healthcare sector; the first such project in the private sector. Located in Ajman emirate, this Meidcity features advanced technology and global expertise. It will be officially inaugurated soon.

Thumbay Medicity houses the Gulf Medical University, Thumbay University Hospital, Thumbay Dental Hospital and Thumbay Physical Therapy and Rehabilitation Hospital and outlets of Thumbay Pharmacy and Thumbay Labs, in addition to Body & Soul Health Club and Spa, Thumbay Food Court, Terrace Restaurant, Blends & Brews Coffee Shoppe, and the Thumbay Housing Project to accommodate 2,500 staff and students.

Gulf Medical University– The biggest private medical university in the region with 6 colleges and 26 accredited programmes: Ranked among the top 50 medical universities in the region, Gulf Medical University (GMU) boasts of advanced training/teaching facilities, international collaborations with more than 60 partner universities worldwide and a full-fledged elets_bfsi eGov Magazine

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GULF MEDICAL UNIVERSITY (GMU) A Vision for Distinction in Medical World

Be it State-of-the-art training/teaching facilities, international collaborations and recognitions, a full-fledged academic system, and newly launched programmes and colleges, have consolidated GMU’s stature and fame as the most sought after medical university in the region for cutting-edge medical education.

Gulf Medical University – Ajman, one of the most popular medical education destinations in the Gulf region, has emerged as the biggest private medical university in the region with addition of new programmes, prestigious regional and international collaborations, multiple global accreditations, increasing student numbers and its transformation into the region’s only private Academic Health System.

BACHELOR S & MASTERS PROGRAMMES The Gulf Medical University comprises six colleges, offering 26 accredited programmes. The undergraduate programmes include Bachelor of Medicine and Bachelor of Surgery, Doctor of Dental Medicine, Doctor of Pharmacy, Bachelor of Physiotherapy, Bachelor of Science in Healthcare Management and Economics, Associate Degree in PreClinical Sciences, Bachelor of Biomedical Sciences, Bachelor of Science – Medical Laboratory Sciences, Bachelor of Science – Medical Imaging Sciences, Bachelor of Science – AnesthesiaTechnology and Bachelor of Science in Nursing.

Masters programmes include: Joint Masters in Health Professions Education with FAIMER, US and CenMEDIC,

INTERNATIONAL COLLABORATIONS GMU enjoys a robust collaboration with 60+ prestigious universities around the world, such as the University of Arizona, Virginia Commonwealth University, Medical College of Wiscons in Milwaukee -USA, University of Saint Joseph School of Pharmacy in Connecticut, German Heidelberg University, American University in Cairo, University of Ghana, Medical University of Lublin, Tokyo Medical & Dental University, etc., as well as research institutes such as the Gustave Rossi Cancer Research Institute – France.

ADVANCED TEACHING / TRAINING TECHNOLOGIES An important aspect that differentiates GMU is its use of the latest technologies in teaching and training students across all majors, to ensure their workplace readiness once they graduate from these institutes. One of the most prominent uses of technology in teaching is the Virtual Patient Learning (VPL), a simulation programme that enables medical students to diagnose, treat and observe a patient’s progress, based on Artificial Intelligence technology.

academic health system.

diseases, and an advanced ‘DentalStem Cell Bank’.

Thumbay University Hospital– The biggest private academic hospital in the region: Equipped with the state-ofthe-art facilities, the 500-bed hospital offers quaternary care facilities through 120 clinics, a first-of-its-kind special robotic pharmacy and a radiology department with PET-CT scan.

Thumbay Physical Therapy and Rehabilitation Hospital – The biggest state-of-the-art rehabilitation hospital in the country: It features advanced technology like Zero-gravity Treadmill, Wearable Technologies, Hydrotherapy Pool, Neuropsychology, Advanced Robotics, Hi-Performance Training Gym, Driving Simulation, Full Body Cryotherapy Chamber, Applied Virtual Reality, Speech Therapy, etc. Operating in collaboration with internationally renowned Villa Beretta Rehabilitation Center, Italy, it is attached to Thumbay University Hospital, with 50 dedicated beds. It has a unique ‘Therapeutic Garden’, for earliest recovery in a holistic manner.

Thumbay Dental Hospital– The biggest academic dental hospital in the region: Attached to the College of Dentistry, Gulf Medical University (GMU), the hospital has 60 dental chairs. Specialisations include General Dentistry, Endodontics, Paedodontics, Periodontics, Invisalign, Veneers & Lumineers, Dentures, Crowns and Bridges, Simple & Complicated Extractions and Hollywood Smile and a dedicated Central Sterile Services Department (CSSD) for infection control. The upcoming facilities include stem cell treatment for dental 42

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UK; Master in Public Health in collaboration with The University of Arizona, United States; Executive Master in Healthcare Management and Economics; Master in Clinical Pharmacy with Virginia Commonwealth University, United States & Clevel and Clinic Abu Dhabi; Master of Dental Surgery (Endodontics); Master of Dental Surgery (Periodontics); Master of Physical Therapy; and Master in Environmental Health & Toxicology.

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Thumbay Research Institute for Precision Medicine– Leading research in cancer biology and immunology: In collaboration with France, Poland and South Korea, the institute has three [ bfsi.eletsonline.com ] Asia and the Middle East’s Leading Portal on Banking and Finance Sector

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ACADEMIC HEALTH SYSTEM The Gulf Medical University Academic Health System (GMUAHS) links healthcare, medical education and research functions on its own. Part of GMUAHS are the Thumbay Hospitals and Thumbay Clinics operated by the healthcare division of Thumbay Group at multiple locations in Dubai, Ajman, Sharjah, Fujairah, Ras Al Khaimah and Umm Al Quwain, as well Thumbay Hospital – Hyderabad, India.

The latest additions to the GMU Academic Health System includes Thumbay Dental Hospital – the first private dental hospital in the country and the largest academic dental hospital in the Middle East region’s private sector, as well as Thumbay Physical Therapy and Rehabilitation Hospital – the biggest and most advanced hospital for physical therapy and rehabilitation, the recent additions to Thumbay Group’s academic hospitals.

RESEARCH With research being a vital strategic aspect of GMUAHS, the Thumbay Research Institute for Precision Medicine leads research in the field of cancer biology and immunology, with international collaborations with France, Poland and South Korea. In terms of advancing healthcare practices in the UAE and globally, GMU has launched three medical researches: Cancer Immunology and experimental oncology; Tumor genetic instability and immunogenicity; and biomarkers and functional genomics.

FUTURISTIC MEDICAL EDUCATION “The Gulf Medical University is the medical university of the future,” says Prof Hossam Hamdy, the Chancellor of GMU. “It aspires to transform into a research-based university by 2025.”

ongoing research programmes including cancer immunology and experimental oncology; tumor genetic instability and immunogenicity; and biomarkers and functional genomics.

Thumbay Labs– The largest network of CAP-accredited private diagnostic labs in the region with international presence: Thumbay Medicity houses the central reference lab of Thumbay Labs, with the state-of-the-art facilities for neonatal screening, next generation sequencing and genomics.

Thumbay Pharmacy– One of the fastest-growing retail pharmacy chains in the UAE with international presence: A full-fledged Thumbay Pharmacy outlet is operational at Thumbay Medicity. The pharmacy chain has tied up with Gulf Medical University (GMU) for training and employment of the students of the College of Pharmacy, GMU.

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GMU attracts students from across the globe. The university has a strength of approximately 2,000 students, from over 80 countries.

With each passing year, the student strength is soaring. The well-organised alumni network has professionals, pursuing successful medical and healthcare careers around the world. Further, the Gulf Medical University’s enhancing stature is evident from the regional and international recognitions it keeps receiving.

In 2017, GMU featured among top 50 medical universities ranking in the Middle East, and bagged Gold at the prestigious Sheikh Khalifa Excellence Awards, 2018. The university has also secured top positions in e-learning regionally and globally at the Wharton QS-Stars Reimagine Education Conference & Awards 2018 in the USA, in addition to obtaining 5-stars in teaching and community engagement by QS. The university also received the prestigious Dubai Quality Appreciation Award this year, for the 2017 assessment cycle.

With such an inspiring list of features bespeaking the university’s significance, the Gulf Medical University (GMU) is today a major charm all around. Today, it witnesses an unprecedented demand for admissions, drawing top-class students from different parts of the world. All wish to pursue futuristic medical education courses in GMU’s colleges and institutes.

According to Dr Moideen, Thumbay Medicity, with an investment of more than a billion UAE Dirhams (over 18.77 billion Indian rupees), is the result of our continued efforts to bring the best of healthcare to the region, making it a hub of world class healthcare with state-of-the-art technology, experienced medical practitioners and superior facilities.

“As one of the most sophisticated medical cities in the region, Thumbay Medicity offers end-to-end tertiary and quaternary healthcare services to patients, with an improved access by way of strategic location and affordability,” he says.

With a total area of 1 million sq. ft. and built-up area of 1.2 million sq.ft., Thumbay Medicity will serve 20,000+ people daily.

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CONFERENCE report

From L to R: Dr Ravi Gupta, Editor-in-Chief, The Banking & Finance Post Magazine, Founder Publisher & CEO, Elets Technomedia Pvt Ltd, Dr Sanjay Chahande, Deputy Director General, UIDAI, Government of India, Rajagopal Devara, Principal Secretary, Department of Finance (Reforms), Government of Maharashtra, Arijit Basu, Managing Director-Commercial Clients Group & IT, State Bank of India, Ashish Chauhan, MD & CEO, Bombay Stock Exchange, Satish Pillai, MD & CEO, Transunion CIBIL, K. Ramachandran, Senior Advisor-Banking Technology, Indian Banks’ Association, Sabyasachi Goswami, SVP - Head Sales & Strategy, Perfios, launching the special issue of The Banking & Finance Post magazine at 3rd Elets BFSI Leadership Summit.

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Embracing Future with Digital Banking and Innovations

s India is steadily emerging as a major digital economy, particularly being witnessed in the banking and finance sector while influencing a billion plus population, it was a perfect occasion to organise the 3rd Elets BFSI Leadership Summit in Mumbai.

through Innovation in Physical & Digital Services: Reaching Citizen at the Last Mile through Phygital, Protecting Your Mobile Workforce and Securing Your Data in Today’s Connected World, Leaders’ Conclave: What Comes First for NextGen Banking & Insurance-Innovation or Legacy?.

Speaking at the summit, attended by top-notch bankers and solution providers from the industry, Rajagopal Devara, Principal Secretary (Reforms), Finance Department, Government of Maharashtra, opined India holds huge potential in terms of digital banking.

Among other topic of discussions were -- Innovation led BFSI Transformation: Importance of Cyber Security and Risk Management Framework with Zero Trust, Transactions in Phygital World: Essential Pre- Requisites for Administrating Online and Offline Transactions, Reaching Out to Citizens Through Secure Technology Interventions in NBFCs, MFIs and Housing Finance Companies and The Next Big Things in BFSI Sector: AI, Machine Learning, Chatbots, IoT and Blockchain.

Organised by Elets Technomedia and supported by Finance Department, Government of Maharashtra, the summit witnessed the august presence of several eminent leaders namely Dr Sanjay Chahande, Deputy Director General, UIDAI, Government of India, Arijit Basu, Managing DirectorCommercial Clients Group & IT, State Bank of India, K. Ramachandran, Senior Advisor-Banking Technology, Indian Banks’ Association, Satish Pillai, MD & CEO, Transunion CIBIL, Satish Pillai, MD & CEO, Transunion CIBIL, Ashish Chauhan, MD & CEO, Bombay Stock Exchange and many more.

The impressive congregation of experts saw deliberations upon many significant topics such as Financial Inclusion 46

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As part of Elets’ endeavour to recognise and highlight the exemplary contribution of several leading facing across the BFSI sector, the felicitation ceremony was organised during the summit.

Opening the felicitation ceremony, Vijayalakshmi R Iyer, Former Member (Finance & Investment) of IRDAI & Chairperson & MD, Bank of India addressed a valedictory session.

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CONFERENCE report Financial Inclusion through Innovation in Physical & Digital Services: Reaching Citizen at the Last-Mile through Phygital

Rajagopal Devara

Arijit Basu

Principal Secretary, Department of Finance (Reforms), Government of Maharashtra

Managing Director-Commercial Clients Group & IT, State Bank of India

"Digital payments across India are setting new milestones but it is still very low as compared to the transactions performed by the people in foreign countries. Centre’s initiatives in terms of digitisation are commendable and we all are trying our level best to make Digital India a reality. The department supported Elets 3rd BFSI Leadership summit to assemble stakeholders from across financial institutions in India for analysing various hurdles pertaining to banking the underbanked and take the recommendations suggested by the experts to the Government of Maharashtra. This will help us in rolling out the policies better and serving the common people efficiently."

"Today, 87 percent of the banking performed under SBI is outside the branch. Of this, 30 percent of the transactions happen at the ATMs, the remaining 57 percent are undertaken online. For our regular online platform, we now have over five crore customers. There have been a lot of innovations that are undertaken over the years. The scenario was completely different two to three years ago and the figure merely stood at 40 percent."

K Ramachandran

Satish Pillai

Senior Advisor-Banking Technology Indian Banks’ Association

Managing Director & Chief Executive Officer Transunion CIBIL

"One of the most important tools required to boost the momentum of financial inclusion is to increase the level of awareness amongst the public about the products that are available. It is observed that the lack of knowledge pertaining to digitisation is not just confined to the users/public it is equally present among the staffs of banking institutions. For example, there are a lot of mobile phone users in India but most of them are feature phone users, not the smartphone ones. This shows the need to build strategies in terms of digital banking."

"If you look at the journey of last ten years from 2008-2018, we all acknowledge a lot of changes as far as the banking system across India is concerned. In 2008, retailed lending in India was a credit card-driven unsecured market. Back then, customers were happy to get a credit card in 15 days time but today things have flipped completely. Today, credit industry receives about one million credit applications per day and average approval time on consumption loans is one working day."

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CONFERENCE report

Ashish Chauhan

Dr Sanjay Chahande

"The fundamental question that should come to the mind is – why do we need Financial Inclusion in India? Financial Inclusion is not just important but it is the base of banking services. In the recent past, we have made significant accomplishments pertaining to this and Aadhaar is a major source contributing to this cause."

"Aadhaar is not just an identification number; it is also an important way to extend welfare benefits to the populace and enabling financial inclusion. Aadhaar ensures a unique alignment between physical and digital banking by reaching out to the last mile. We have several successful case studies where people across India are using Aadhaar-based services in conveniently receiving their deserving welfare benefits."

Managing Director & Chief Executive Officer Bombay Stock Exchange

Deputy Director General, UIDAI, Government of India

Technology Presentation Reimagining Your Business for the Digital Age Sabyasachi Goswami

Senior Vice President - Head Sales & Strategy Perfios

"It is important for every financial institution to adopt transparency at the first place prior to embracing digitisation.

Secondly, there has to be a culture and mindset within the organisation that has to be driven by Chief Information Officers and Chief Technology Officers."

Protecting Your Mobile Workforce and Securing Your Data in Today’s Connected World Amit Mehta

Managing Director SEA & India, BlackBerry

"For some reason every ten years, there is a massive shift in the way technology helps the communities and countries to evolve further. This major transition is pushing the enterprises is adopting new technologies. But the concern is technology providers and developers hadn’t really realised that how this could be used. In this era, we at Blackberry pledge to make a safer world by ensuring cybersecurity or cyber highway from the most secure devices."

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CONFERENCE report

Technology Presentation Destination for Next Gen IT Companies Aneesha Chowdary

General Manager - Branding & Promotions, APEITA Government of Andhra Pradesh

"The vision at Fintech Valley Vizag is to create a sustainable system for fintech innovations and become a global fintech destination. We offer new-generation talent pool for global fintech industry and we are a gateway for market access in India. We organised three conferences last year that witnessed the participation of start-ups from all over the world who took part in the million dollar challenge."

Panel Discussion Leaders’ Conclave: What Comes First for NextGen Banking & Insurance-Innovation or Legacy?

Dhananjay Redkar

T V Ramanmurthy

"A couple of years ago, it was widely believed that India is on the cusp of fintech revolution. Today, we are no longer on the cusp but we are very much within it. Fintech ecosystem in India is the third largest. We also have the third largest number of Unicorns in the world. In the next few years, India would be the second most preferred destination after China for the Unicorns."

"Everything can be done in a better way than it’s being done today. This is the real driver for innovation. The practices that are currently in implementation can be questioned tomorrow exhibiting superior innovation. Legacy is not a negative term, it carries its own experience. It is paramount in understanding or analysing what level of innovation is required in future."

Head-Strategy & Planning Barclays Bank India

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General Manager-IT Bank of Maharashtra

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CONFERENCE report

Shashi Kumar Ravulapaty

Head of Banking Innovation Vertical - Mission Parivartan, Punjab National Bank

"Nextgen banking is a broad term and it could be anything that is not present today. The biggest question is what is the need to implement nextgen banking across the BFSI sector?

It the necessity to adopt to the innovations apart than the already existing techniques, for streamlining the services and ensuring efficiency."

"Innovation and legacy have to co-exit. They cannot be in either or situation. Public sector banks like Punjab National Bank carry its own legacy which is rich and beneficial for functioning of the lender. Legacy in terms of PSBs are categorised into two types. One category believes in innovating ahead however, the other carries a closed mindset and does not believe in new techniques. My role is to act like a bridge between legacy and innovation in PNB."

R Vijay

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Indrajeet Arora

Advisor-Technology and Analytical Consulting Services, AxionConnect

Sanjay Karnatak

Chief Information Security Officer Mahindra Finance

Executive Vice President - Chief Technology & Digital Officer, Star Union Dai-ichi Life Insurance Co. Ltd

"In the era of digital innovation, every product or service delivery is associated with time. Everyone looks forward to swift resolution of demand. On the other hand, whenever legacy is followed or traditional methods are applied, human intervention is required which inflates the time consumption, for example physically collection of documents, other paper work, several other verifications and more."

"Insurance sector in India primarily prefers to be with the legacy rather than implementing every new technology available in the market keeping the safety quotient in mind.

However, to be in the game of innovation, it is significant to implement the new techniques. Insurance companies in India must look for an alternative route where they can stay in the traditional framework and also choose and implement new technologies."

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CONFERENCE report Technology Presentation Protect your Business and Safeguard your Critical Financial Data Against Insiders and Future Threats Veneet Sharma

Regional Sales Head - India & South Asia, Thales eSecurity

"We are the world leaders in data protection and hold 40 years experience in this particular domain. Thales eSecurity built this expertise over the time and has a lot of patents to its credit on the customer-base side. Our cliental base comprises fortune 500 companies, banks and energy giants. We are successfully protecting data in association with 130-plus partners."

Reaping Benefits of Next Generation Banking Technologies Hareish Gur Director Servosys Solutions

"The banking and financial services players are facing the challenges of inefficiencies in managing “activities” rather than “data” as the Core Systems like CBS, mandated by the regulators across the world, are already taking care of managing the data through their accounting-based core systems. For eliminating process inefficiencies, Servosys Solutions has developed multi-tech solutions that are based on disciplines like Robotic Process Automation, Business Process Management, Document Management and Image Processing on mobile devices."

Panel Discussion Innovation-led BFSI Transformation: Importance of Cyber Security and Risk Management Framework with Zero Trust Kersi Tavadia Chief Information Officer, Bombay Stock Exchange

"People are now taking risks to implement innovations, which was not the situation few years ago. Earlier, people used to prefer products that were stable, tried and tested. This thinking is changing across the corporate world and brands are now investing for innovations and start-ups. But despite this eagerness, people are hesitant to be the first ones to experiment and new product."

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CONFERENCE report

Nabankur Sen

Chief Risk Officer SBI General Insurance

"Challenges in terms of cybersecurity are more or less the same for every financial institution, irrespective of the operation size. And it is evident that banks face the wrath of frauds the most, obviously because banks handle money and related matters. Whatever amount of awareness you spread, it is always significant to keep an eye on all the operations."

"As insurers, we are definitely coming out of the conventional norm and trying our level best to leverage the digital platform and embrace innovations. But the biggest challenge that we come across is the concern regarding the far-sightedness of the innovation that is implemented."

Shashank Bajpai

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Avez Sayed

Advisor (Infosec) Bandhan Bank

Ashutosh Jain

Chief Information Security Officer ACKO General Insurance Limited

Chief Information Security Officer Axis Bank

"Technology enables us to meet the challenges and get close to innovation. With time, every financial institution must change and embrace new techniques. Sticking to the legacy is not always safe and we must plan and make changes in the security framework with changing times."

"I see innovations in two parts. The first part deals with innovating on the user experience. The aim is to offer smart technology through web or a phone and in return get benefit in terms of revenue as a result of offering seamless service to its customers. The second category of innovation is with respect to the infrastructure through various emerging techdriven means."

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CONFERENCE report Panel Discussion: Transactions in Phygital World: Essential Pre- Requisites for Administrating Online and Offline Transactions

Gautam Anand

Pinak Chakraborty

SVP & Head Mobility, NetBanking, BillPay & Direct Pay, HDFC Bank Ltd.

"In today’s era, the biggest question is will the digital survive without physical services? It is evident that in a country like India, digital services would always need a push from physical techniques. For the next few years, both the modes have to co-exist because the aim is to reach the last mile and several people across rural India still needs physical assistance to complete banking formalities."

Senior Vice President of Technology - Digibank DBS Bank

"Be it digitisation or phygitisation, all the financial institutions are functioning at a different-level of service disbursement.

When we talk about offering digital services, we will have to analyse the services imparted uniformly across all the cities, towns or villages. The level of its implementation entirely depends on the intensity available for customers across the country."

Salahuddin Choudhary

Pitchai Mahalingam

Vice President & Head- Electronic Payments- Information Technology, IndusInd Bank Ltd

Head - Operations & Transaction Banking Federal Bank

"When we look at phygital banking, we should look at how the banking system has evolved from physical to digital banking.

Earlier, in a bid to complete every banking formality, every consumer had to visit the bank physically which is not the case in digital age. But despite the digital interventions the penetration of technologies among the rural populace is still a challenge."

"The physical transaction is removing friction from the customer journey. When we are removing friction we would still need some amount of physical intervention. That need could arise from regulation and legislation of a country."

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CONFERENCE report Panel Discussion: Reaching Out to Citizens Through Secure Technology Interventions in NBFCs, MFIs and Housing Finance Companies

Nikhil Bandi

Chief Technology Officer, Dewan Housing Finance Corporation Ltd

"JAM has brought-in several major changes across the banking and financial sector. These changes or developments were ensured by Centre’s commendable initiatives towards promoting a digital India. The intention of government and social bodies behind this was to include a large chunk of underbanked segments of the society into the formal banking system."

"If we look at the technology penetration, financial inclusion in India, we are way behind as far as the industry expectations are concerned. In this digital age, financial institutions believe that launching a mobile app will ensure digitisation but reality across the rural areas is different.

They are still lagging behind in terms of digital literacy."

Mehjabeen Taj Aalam

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Jyothirlatha B

Senior Vice President & Chief Information Officer Vistaar Financial Services

Vitthal Naik

Head-Information Technology Muthoot Homefin Ltd

Chief Technology Officer, Profectus Capital

"From digital reach point of view, people can be reached in two ways. It can either be from customer perspective when we want them to get in touch with using the digital mode, or the lender gets in touch with the customers via digital mode.

This mode not necessarily means that the customer has to be digitally sound but here the lender uses its techniques to reach the consumers and also contributes to financial inclusion."

"There has to be a well-defined focused approach for reaching any particular sector. Technology plays a vital role in defining this approach. It helps you to zero-down to the suitable segment of consumers and sector. Data crunching with the help of technology helps financial organisations in deciding the areas of investments. Following the analysis, it can easily be decided where to open a new branch or which new technology should be implemented."

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Dominic Vijay Kumar

Prakash Bhatia

Deputy Vice President & Head-Information Technology, ART Housing Finance

Head-Information Technology, Muthoot Housing Finance

"From the affordable housing point of view, if you look at the penetration there are two points that are vital namely customer acceptance and infrastructure requirement. In general, our bond with the customer is long term where we get to meet them once yearly after sanctioning of the loan.

To avoid any-level of detachment in this time-frame, we, at Art Affordable Housing Finance, are designing a lot of programmes to maintain continual engagement with our customers."

"At Muthoot, our aim is to reach out to the customers whose needs are generally not catered by the traditionally banking system. We ensure that the unberbanked segments of the society are empowered enough to pursue their credit demands. Reaching this particular segment is a major challenge for us. But once they get enrolled the opportunity or scope is significantly high."

Anand Sharma

Goutham KS

Chief Technology Officer Asirwad Microfinance

Head-Information Technology Auxilo Finserv Pvt Ltd

"As far as the microfinance sector is concerned, every organisation reaches out to the relevant segment of the customer following the census data. This helps MFIs in gaining a lot of insight pertaining to the customer segment and step-into the market with greater confidence. Analysing the data helps us in understanding a lot of points namely political scenario, geographical nuances and many more."

"Lending demands pertaining to educational necessities emerge from as early as schools and continue till higher education. The sector, in particular, is very dynamic and loan demands differ from applicant to applicant. The biggest challenge of this sector is meeting the demands of the students who are brighter enough to handle. The lenders have to be quick and flexible to match the requirements."

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CONFERENCE report Technology Presentation: Kratikal Pavan Kushwaha

Founder and Chief Executive Officer Kratikal

"90 percent of the attacks that are occurring across the industry are due to the people. Because they still fail to understand the difference between a normal link and phishing link. There are instances where a single email received and clicked by a computer has encrypted 40 other personal computers in the organisation. We, at Kratikal, have identified attack vectors. Attack vectors are the medium that allows attackers to get into your system. We offer complete suite of manual and automated security testing services."

Panel Discussion: The Next Big Things in BFSI Sector: AI, Machine Learning, Chatbots, IoT and Blockchain Abhijit Shah

Chief Technology Officer DCB Bank

"Digital landscape is evolving at a very fast pace. If we observe the trend of technology implementation a decade ago, AI, Machine Learning, Chatbots, IoT and Blockchain were still a matter of curiosity. Back then, it was predominantly adopted by the stakeholders across the retail sector. These technologies are predicted to have a great future across the BFSI sector and AI, in particular, is expected to result in 30 percent cost saving and 20 percent increase in the revenues."

Sunil Soni

Bhavesh Lakhani

"E-KYC as a used case has evolved over a period of time. It is one of the readily available examples of AI implementation in India. This particular mode has a lot of challenges associated with it but despite that it is one of the best digital ways to connect a customer with the bank without even visiting the branch physically."

"SBI Mutual Fund was the first one in the segment to introduce Google Assistant as well as Alexa. So you can now choose any of the platforms and talk to SBI Mutual Fund which in return will take you through common queries. But this alternative is yet to gain confidence across customers as they still rely on humans and willing to speak to sales person prior to opting for a plan or make an investment."

General Manager-IT Punjab National Bank

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Chief Technology Officer SBI Mutual Fund

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Samson Samuel

K R C Murty

Technology Strategist Positka

"AI is significant for ensuring cybersecurity across the sector. However, its implementation for ensuring security is still at a pilot stage. We are still at the stage of Machine Learning where the data is studied, correct algorithm is figured out and final analysis is made. The times ahead are interesting across the security scenario. It has given a lot of convenience to the customer and his onboarding."

Head of RTB Function (Information Technology) Kotak Mahindra Bank

"From Kotak Mahindra Bank perspective, technology has been at the forefront always. At the bank everything revolves around customer’s expectations and customer service. UI UX (UX Design refers to the term User Experience Design, while UI Design stands for User Interface Design) is important in today’s era. Gone are bricks and mortar days of banking. Millennials need everything at one touch and to cater to this need, we were the first bank in India to unveil 811, a digital application that enables swift and convenient digital banking."

Lalit Popli

Srikanth Ramasubramanian

Head-Information Technology & Chief Information Officer, ICICI Prudential Asset Management

Senior Vice President-Business Systems and Technology HDFC Life

"Great opportunities are associated with technologies namely AI and ML. But India is a different and diverse. Here every state has a different dynamics. In India the biggest challenge is from the regulation point of view. You have to inform the customers that you are using his data and reason behind it.

But again, if you provide lucrative offers, people in India willing allow all usage and agree to all the conditions."

"Life insurance sector is a bit different from other insurance categories. The moment we ask a customer to get his medical test done prior to insurance, there are chances of him opting out. This is the scenario across 60 percent of the customers. So, to avoid this we make use of technologies like AI and ML to analyse the status of the customers without any medical examination."

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CONFERENCE report

Valedictory Speech Vijayalakshmi R Iyer

Former Member (Finance & Investment) of IRDAI & Chairperson & Managing Director, Bank of India

"Digital innovation across the banking sector should consider gender diversity in the team. Women should equally be part of the transforming banking era and it’s my earnest request to the CXOs to bring more and more women onboard. Despite the digitisation, the basics of banking have not changed. It is just that technology-driven techniques have driven the banking to an entirely different ball game altogether."

Felicitation Ceremony

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CONFERENCE report Felicitation Ceremony

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CONFERENCE report EXPO

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Thank You

for making 3rd Elets BFSI Leadership Summit a grand success

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Industry Perspective

Social Entrepreneur and Innovator strives to improve and provide access to finance in Rural India Inspired to do much more for the low-income households in rural India, A Ramesh Kumar began an arduous journey of championing new approaches for addressing their issues, through his innovative approaches in finance. He was awarded the Wall Street Journal & Metlife Foundation Award for “The Most Innovative Model in Asia Pacific Region” in 2016, The Government of India’s Award as “Top Social Innovator of the Year in 2017 and The Social Innovator of the Year by Responsible Business Award.

Below are the excerpts of his conversation with Elets News Network (ENN). of access has been provided through microfinance loans, these have been used more as loans to meet the crisis, rather than as loans for planned improvement of livelihoods and economic welfare of the families.

The problems associated with traditional money lenders as well as informal hand loans at exorbitant interest still persist in most parts of the rural India. The unmet demands for quality school education for children, vocational training programmes for youth, finance for micro enterprises, which are not tapped by the institutional lenders, etc. persist and need to be addressed.

A Ramesh Kumar Founder Chairman, Swarna Pragati Housing Microfinance and President - Laraksha Social Impact Trust

What is your view on access to finance for the rural populace in India? Do you see any progressive change in the segment over the years?

Access to finance has always been a big challenge for rural families in India.

This problem has been compounded by damage to their credit history from failed agriculture loans. While some amount 62

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While the expansion of microfinancing and lending for two wheelers etc. has improved to some extent in recent years, the unmet demand is still huge in the areas that I have mentioned.

How are microfinance institutions catering to the demands of rural areas in terms of home and other financial needs?

Microfinance institutions have significantly helped in bridging the periodical cash flow deficits of rural families. They have been able to largely

address only demands relating to consumption, family functions, and emergency medical treatment needs apart from adding in a small way to livelihoods enhancement.

However, the need of the hour is to channel funds in a segmented manner to address important needs such as improved education for children, obtaining job oriented training for youth, boosting micro enterprises at a scale where, they create additional employment beyond the self-employment of the entrepreneur.

While microfinance has frequently addressed the urgent needs of rural families to a certain extent, the imperative need is to address the important needs rather than only the urgent ones.

It is this differentiation in meeting the unserved important needs of rural families from a long term quality of life enhancement point of view, rather than only meeting urgent crises and consumption needs, is what Laraksha Social Impact Trust is focussing on.

Which segment do you offer your services to? What are your offerings?

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Laraksha Social Impact Trust addresses the acute gap in access to finance for Education and Vocational Training of children of rural families, for protection of Rural Livelihoods through Microenterprise and household infrastructure oriented solutions, for providing access to clean water through financing rural Water Purification and Dispensing Plants and improving Habitat through financial access to dedicated Roofing solutions.

residency rights, creation of Para-legal documents using the Village Panchayat and using these to create a workable collateral for housing and a recognition of the mortgage of the property to the Company.

Group Lending: Leveraging time-tested and well established group lending mechanisms of Microfinance into housing finance, which was traditionally considered an individual loan product.

These Best Practices of Microfinance have been co-opted into Housing Finance viz., Peer pressure, social collateral, selfselection, and joint liability

Laraksha Trust is working to design and deliver Innovative Financial Solutions to address the above unmet needs, particularly for weaker sections of the society in rural areas.

Partnership with Grass roots Institutions Using Community connect of Grassroots institutions like NGOs and MFIs to source clients and collect repayments creating new Institutional Partnerships

Laraksha currently operates in three states viz; Tamil Nadu, Bengal and Manipur and hoping to expand its operations to Karnataka, Odisha, Telangana, Maharashtra, Tripura and Mizoram by 2020.

Laraksha Product Bouquet includes the following financial services in the rural areas: • Education Loan • MSME Loan • Roofing Loan • Water ATMs and Dispensing Units Loans What new techniques and innovations have you implemented for streamlining your service in your ventures? Did you deploy any technology to digitise your services? introduced in Housing Microfinance through the Swarna Pragati Housing Microfinance Model Incremental Housing: Rural borrowers are psychologically averse to avail a one-time loan with long tenor due to unpredictability of their income over a longer time horizon. They also prefer house construction in incremental stages due to the financial burden, hence, an appropriate Short Tenor, low EMI financing product was designed for them.

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Current Innovations in Protecting Livelihoods and futures through Financing by Laraksha Social Impact Trust Pioneering access to Education finance for unserved rural families:Identifying the need and aspirations of rural families for providing quality education to children at private schools and in vocational institutes and providing the needed finance 1. Institution centric model of finance: Active engagement with private schools and vocational training institutes in rural and semi-urban areas to identify among their students, those needing finance for continuance of education thus preventing drop outs.

2. Pioneering Finance to the ‘MISSING MIDDLE’ of Rural Entrepreneurs:Providing access to Finance to Rural Micro-entrepreneurs in the segment of Rs.50,000 to Rs.500,000 not covered by MFIs or formal Financial Institutions like Banks and NBFCs 3. Innovative Financial Solution to provide access to Clean Drinking Water:Bringing Technology and

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Finance to villages to provide access to clean drinking water by facilitating establishment of Water ATMs by Self Help Groups (SHGs) and Rural Microentrepreneurs 4. Innovative Roofing Finance Solution to provide opportunity to enhance quality of Shelter in Rural areas: Studying the need for dedicated Roofing solutions, including the use of alternative materials, for vulnerable rural families, particularly in coastal areas and high rainfall/wind speed zones and pioneering a specialised Financial Product for them.

Innovative Partnership Model with Grassroots institution and Micro entrepreneurs for effective Rural Outreach What are the major challenges and opportunities for the rural finance segment? What do you see in store for 2019?

The major challenges for the rural finance segment is to focus on more important needs such as education, employment, growth of localised enterprises, improving access to quality drinking water, etc, which have not been focussed upon so far. And, at the same time create innovative business model to overcome the hurdle of high transaction costs in serving scattered rural households.

The opportunities lie in identifying these important needs of rural families and providing targeted and segmented financial solutions, leveraging grassroots institutions which fulfil these important needs and not on amorphous financing which encourages wasteful and nonproductive expenditure.

I expect to address these major challenges through our innovative and perceptive financial products and create new innovative products and greater social impact which translates into tangible long term enhancement in the quality of lives of the rural families. In 2019, we are creating suitable vehicles for executing these plans, thus ensuring the motto of Laraksha of Protecting Livelihoods and Futures.  March - April 2019

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Industry Perspective

Bahwan CyberTek Empowering Banks with Predictive Analytics Solutions Bahwan CyberTek has an array of solutions for digital transformation across the Banking, Financial Services and Insurance (BFSI) segment. Being a specialist in governance, risk and compliance technologies, we were the first in India to build and implement a predictive analytics solution for Early Warning System for large banks in India, says Jaya Vaidhyanathan, President, Bahwan CyberTek, in an interview with Elets News Network (ENN).

Jaya Vaidhyanathan President, Bahwan CyberTek

Give us an overview of your products and services.

The Banking, Financial Services and Insurance (BFSI) arm of Bahwan Cybertek specialises in the Risk Management area, commonly known as Regulatory Technology (Reg-Tech), done through the Asymmetrix product suite. Asymmetrix risk management for banking domain offers solutions across credit risk, liquidity risk, model risk and operational risk.

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The modular solution suite allows for implementation of each module separately, and empowers banks to be fully compliant with latest regulatory standards. The Asymmetrix umbrella consists of the following: • Early Warning System (EWS) is a solution that alerts bankers pertaining to the incipient stress in accounts much before they reach the default stage, so that corrective action can be taken and credit recovered.

• Enterprise Risk Management (ERM) is a platform for operational risk management system covering Risk Assessment, Monitoring, Measurement and Reporting. The solution is scalable for AMA modeling and facilitates capital charge calculation.

• Model Risk Management (MRM) helps institutions in the model life cycle including DIY performance monitoring and validation of their models for a variety of applications across corporate and retail businesses.

• Asset Liability Management (ALM) helps financial institutions balance their assets and liabilities, through data aggregation as per BCBS239, optimisation and

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modeling for scenario analysis and stress testing.

RAROC Calculator is a handy tool that computes the RAROC (Risk Adjusted Return on Capital) so that the bank’s relationship manager has the expected profitability from the account on his/her fingertips before giving a quote.

Capital Engine facilitates capital computation for Credit Risk, Market Risk and Operational risk.

Your brand offers solutions in 20 countries across North America, Middle East, Far East, Africa and Asia. What challenges and opportunities do you witness is India in terms of digital transformation?

• Digital Revenues is a critical reason why India SME INC, India INC, and Governments will eventually move to digital, especially the B2B sector.

• Reducing transaction costs, in turn facilitating small value payments, is welcoming massive numbers of first time customers into the banking ecosystem.

Customers, who have never used cheque books/demand drafts, have leapfrogged into mobile

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wallets, thereby resulting in an explosion of e-payment volumes as well as data on consumption habits.

Artificial Intelligence, Chatbots, Virtual Reality (VR) will pervade the B2C space over the next two years. In B2B, technology will improve ease of doing business and bring transparency.

While Micro, Small & Medium Enterprises may find cost factors prohibitive, yet it would be inevitable.

This will drive the need to be operationally efficient, which will happen automatically as these technologies extend throughout the customer journey lifecycle.

There is going to be huge pressure on IT companies to respond to the increased demand at moderated costs.

Tell us about I@Bank. How significant is its role in today’s Indian banking industry?

‘I@Bank’ – Intelligence at banks, enables us to have hassle-free banking experience without visiting a brick-

visit, and can visualise what happens with their savings, investments or borrowings. While Chatbots are already helping customers find answers to their queries without having call or email, Artificial Intelligence will work with Machine Learning to dramatically improve processes and bring customer empathy. AI along with Predictive Analytics can continually provide insights on how these services are performing and how customers are handling them. AI can help both the bank and the customer make intelligent decisions about the choices they have. We also believe that when banks do that, regulators will keep a close watch.

How do you look at risk and regulation technology across India? What should be done to ensure predictive analysis amongst financial organisations?

The Reserve Bank of India (RBI) has been paying special attention on detecting frauds or payment default, early. However, to understand the readiness of the banks, we did a quick survey, the results of which are

India has been at the forefront of change, constantly investing in technologies to be where their customers are, and we believe this will bring dramatic change in the way customers are going to experience banking services. and-mortar outlet through disruptive technologies. India has been at the forefront of change, constantly investing in technologies to be where their customers are, and we believe this will bring dramatic change in the way customers are going to experience banking services.

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summarised below: • Banks unanimously voted that they wanted a New Solution for “Early Warning System” • Automation was selected as a critical factor for compliance, and only a handful of banks claimed their systems were fully ready • Banks said they want a scientific method of selecting Benchmarks through a combination of statistical and intuitive approaches • Banks wanted an Integrated The Banking and Finance Post

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Organisation structure for Risk Management DATA & RISK EXPERTISE ranked amongst the top two priorities in Credit Monitoring for Banks Data-Driven Decision Making through predictive models ranked first amongst the top five priorities

BFSI has been a key focus for Bahwan CyberTek since inception, and has an array of solutions for Digital Transformation in this vertical. Being a specialist in Governance, Risk and Compliance Technologies, we were the first in India to build and implement a predictive analytics solution for Early Warning System for large banks in India, for which we see demand growing. The uniqueness of the product is that it is a pre-built framework based on RBI regulations that needs minimum customisation and is at the same time, expandable to meet futuristic needs of credit monitoring. In addition, we have predictive analytics solutions for the whole gamut of risks banks face, aimed at empowering banks with their strategic intent of profitable growth.

We have built products for: • Asset Liability Management to help banks tackle Balance Sheet Risks • Enterprise Risk Management for enhanced operational efficiency resulting in profitable operations • Model Risk Management to evaluate the wide range of statistical models used by a bank for analysis and decision making and manage risks arising thereof.

• Capital Engine for capital computation based on credit risk (based on standardised and Internal Rating Based (IRB) approaches), Market Risk (SDA) and Operational risk (BIA).

• Risk Based Pricing of advances, enabling banks to grow their asset book and trade finance operations profitability 

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Industry Perspective

‘Banks in India Ready for Tech-Revolution’

Deployment of new-age technologies like Mobile Banking, Anytime Anywhere Banking, cardless transactions, biometric based transactions, Robotics, Chatbots etc. are absolutely necessary to meet varied customer preferences in the country. However, several challenges including the financial viability of the product and services offered emerge as one of the biggest roadblocks to this implementation, says Sunil Soni, General Manager-IT, Punjab National Bank, in conversation with Elets News Network (ENN).

While there may be initial delay in adopting digital technologies due to the procurement processes involved in Public Sector Banks, we have caught up with the private sector counterparts in offering digital products and services as we have a sizable client base.

Sunil Soni General Manager-IT, Punjab National Bank

In the era of digitisation, how progressive are Public Sector Banks (PSBs) as compared to their private contenders?

Public Sector Banks have made immense efforts to create the products and solutions catering to the needs of ever increasing customer base.

Demonetisation, reduction in cost of bandwidth, opportunities to serve the millennial customers and the need to overcome the competition from Fintech and Payment Banks has been the driving factors for the Public Sector Banks.

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How important is the deployment of new-age technologies? Is India ready to implement all innovations practiced by banks across the world?

Deployment of new-age technologies like Mobile Banking, Anytime Anywhere Banking, cardless transactions, biometric based transactions, Robotics, Chatbots etc. are absolutely necessary to meet varied customer preferences.

While India is ready to implement the innovations practised by the banks across the world, several challenges such as the size of the banks, the adaptability of desired change by the customers and the financial viability of the product and services (as the large segment of the customers are not ready to bear the cost of such transactions), hinder the immediate implementation.

The other challenges include lack of uniform adoption of technologies across the countries. A case in point, while the Indian Regulators and the

Payment Service providers (for avoiding cloning risk) have drawn a roadmap for implementation of Chip based EMV (Europay Mastercard and Visa) cards with the creation of the requisite infrastructure for the card acceptance, still many countries in the west are lagging behind.

In the absence of uniform adoption, maintenance of the cards with both Magstripe and Chip and the card reader infrastructure to accept both types of cards is a challenge, which leads to increased operational costs. Any service or product that is offered through one channel needs to be replicated across channels to cater to customer’s preference and convenience.

Financial Inclusion and Digitisation both are trying to reach their goal in the country. What role is Phygital Banking playing in this aspect?

In India, while the millennial population prefers digital mode, the old and middle-aged prefer physical Brick and Mortar model for fulfilling their banking needs. In fact, bank branch is one of the outing for the superannuated customers who prefer to visit banks and interacting with the staff and their friends.

Conservative Indian middle-class feels assured with physical presence of their

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own known representative for their banking transactions. That is the reason for the huge success of the financial inclusion concept in the remote villages which has given the poor people, an opportunity to be financially independent and get connected to the mainstream banking services.

The Enhanced Access and Service Excellence Agenda (EASE) promoted by the Government of India focuses on deepening the financial inclusion by expanding the products and services that are being offered through the Banking Correspondents. Thus Phygital (Physical with Digital) Banking has a major role to play in making India an Economic Super power besides having a financially literate population. The Direct Benefit Transfer (DBT) with immediate credit to the beneficiary’s bank account, linking of Aadhaar with bank account, Life Insurance and General Insurance Facility to the account holders are some of the significant steps to enable common man for financial independence.

How does PNB strike a balance between physical and digital banking.

With 7000+ offices and 9000+ ATMS, Cash Acceptors, and a strong Banking Correspondent Network spread across the country and more than 11 crore Customers, PNB has a solid foundation and is building on its strengths. This combined with unified Core Banking System with Digital offerings through a host of Services like Retail and Corporate Internet Banking, Tab, Mobile Banking, financial inclusion kiosks, various card offerings and a variety of deposit and credit products to suit the varied aspirations of the customers helps PNB in striking a balance between physical and digital banking.

What are the prime challenges and the opportunities for the Indian Banking Sector in 2019?

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Public Sector Banks have made immense efforts to create the products and solutions catering to the needs of ever increasing customer base. Demonetisation, reduction in cost of bandwidth, opportunities to serve the millennial customers and the need to overcome the competition from Fintech and Payment Banks has been the driving factors for the Public sector banks. shoring up per employee productivity, attracting the customers and prospects with suitable products and services and retaining them, expanding quality credit portfolio besides securing the critical assets like customer and financial data, and surviving the technology adoption challenges. The dependence on the Government of India for capital infusion remains.

The opportunities exist for tapping the unbanked areas through a combination of physical banking, digital banking and reach of the Banking Correspondents,

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collaboration with Fintech companies and start-ups for evolving suitable physical and digital products and service, which are new and attractive, consolidate through mergers and acquisitions to increase the Asset Size and scale of operations will lead to reduction of operational cost per customer and increased productivity.

Opportunities exist for closing the unviable branches, relocating branches to emerging economic and residential centres to cater to the banking needs in these centres. ď‚— March - April 2019

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Industry Perspective

RBL Bank Evolving with Technologies for Mitigating Risk Banks have been using analytics or some form of it for years to predict and manage risk. We at RBL Bank have also evolved from Risk Analytics to Risk Modelling where historical data is used to play out the likely future scenarios which then become the baseline for strategic decisions, says Topendra Bhattacharjee, Head-Digital Banking, RBL Bank, in conversation with Elets News Network (ENN).

Tech-savvy Indians are turning to the internet more and more to address their money-related queries. Also, the number of Indians having access to high-speed internet, at cheap rates, is also increasing.

The Reserve Bank of India (RBI) is exploring setting up a regulatory sandbox or innovation hub for the fintechs.

More and more banks are opening up towards ‘Open Banking’ platform and collaborating with fintech partners. So it’s clear that there are a large number of favourable factors indicating a shift in that direction. Both ends of the value chain, the consumers and financial institutions, are looking for new technologies for value creation Topendra Bhattacharjee Head-Digital Banking, RBL Bank

Banking in India is reinventing itself with tech-innovations. Is India ready to embrace emerging technologies?

2019 is the first year ever where ‘fintech’ as a term was mentioned in the Union Budget. This is an indicator of just how much the financial sector, and banks being a major player in that, has moved towards adopting cutting edge technology in all facets of business, whether its customer service using bots or its paperless onboarding leveraging Aadhaar or its AI/ NLP (Natural language Processing in Artificial Intelligence) engines to deliver personalised offerings for customers.

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How significant is banking analytics in today’s era? What are the areas of concern that it is primarily catering to?

Analytics is playing a significant role in banks today across business functions.

Product and portfolio management and optimisation are heavily driven by data analytics and descriptive analytical modelling. This helps in increasing the profitability of each customer while effectively managing the costs. Advanced risk modelling helps to manage the risings costs of compliance and more importantly risks of non-compliance.

Predictive analytics models using Machine Learning, Big data, Data mining helps us to effectively monitor and prevent any potential fraud or money laundering activities.

Historically, banks generated huge amounts of data which was scattered across platforms and systems. The volume and velocity of data generation have only increased over the last few years. Banks have now started deploying analytics solution to leverage this data usefully.

This data is now used for customer segmentation, at-risk prediction, customer lifecycle and lifetime value management, next best and bundled product offerings etc on the business side.

Pattern recognition and predictive models help in fraud prediction, detection and prevention. Analytics models also stress testing on the assets side to predict default and repayment risk on the book. We recently implemented a model to optimise the cash flow and refilling of ATMs which helped us reduce cash-outs in our ATMs. What is RBL Bank’s take on banking analytics? What helps it in risk management?

Banks have been using ‘analytics’ or some form of it for years to predict and manage risk. The complexity, however, has increased manifolds in the recent years. Analytics in risk management has moved from just data gathering and reporting to predictive modelling, scenario analysis and event simulations. We also have evolved from Risk Analytics to Risk Modelling where historical data is used to play out the likely future scenarios which then become the baseline for strategic

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decisions. While enterprise risks are not exactly quantifiable, analytics models help to establish and examine possible scenarios and then plan for managing those risks. Predictive models generate actionable insights for the management to plan for and effectively manage enterprisewise risks.

Advanced credit risk analytics helps us to improve underwriting decisions and increase revenues while reducing risk costs. Stress-testing of initiates helps us create likely scenarios, translating them into business parameters and quantify the risks associated and then the impact on the PnL (Profit and Loss) as well as the brand.

All of this enables us to mitigate risks and swiftly capture opportunities.

Tell us about the new technology deployments at the bank.

Digital channels have become the pulse of banking customers’ interactions. With almost half of banking consumers using only digital channels for their transactions, expectations are outpacing experiences.

Earlier the consumer touch-points were offline (brick and mortar) and online.

Now online has diverged into various interfaces such as browser through desktop, mobile, tablet and then there are apps, chat-bots. Furthermore, a consumer being time-poor tends to access the touch points across different points of the day or on different days to complete transactions (read ‘journeys’). Future interfaces could be WhatsApp and may be other chat-based apps which may gain prominence.

In order to provide consumers with this freedom, we are building micro-services in a common layer which can now be accessed across various client interfaces and also will be able to extend the same experience when newer interfaces get added.

What are your plans for 2019 in terms of innovations?

Artificial Intelligence (AI) is fast evolving as the go-to technology. Robust and rapid processing needs, the advent of mobile technology, data availability and proliferation of open-source software offer AI a huge scope in the banking sector.

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With enabling technologies becoming a lot more accessible and inexpensive, AI is now becoming mainstream, with large enterprises and start-ups looking at different opportunities. AI adoption is still in its nascent stages, and a lot more needs to be done to realise its full potential. Application of AI and ML (machine learning) to different functions

from a bank to make the most appropriate recommendation to the user based on their preferences.

There are many such use cases such as automation in back-office operations and processes, Fraud and Risk control, software performance monitoring.

Automation of such back-end workflows

The Reserve Bank of India (RBI) is exploring setting up a regulatory sandbox or innovation hub for the fintechs. More and more banks are opening up towards ‘Open Banking’ platform and collaborating with fintech partners. within the bank will enable personalised, contextual, efficient and predictive services to customers through Bots.

Another key contribution of artificial intelligence is the recommendation engine.

Recommendation engines have been very successful and have accomplished to become a revenue driver through cross-sell and upsell in the bank’s retail portfolio.

It is based on using the data from the past about customers across various offerings

The Banking and Finance Post

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will increase accuracy and efficiency in serving customers.

However one of the biggest challenges is the availability of the right data. Data is the key input for an AI, and any vulnerability arising from the source or quality of information is a serious concern in the functioning of an AI model and challenges its efficacy. Structured mechanisms for collection, validation and standardisation is crucial as a starting point.  March - April 2019

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