CHALLENGE DRIVES FAMILY FOCUS - Kotak Mahindra Bank - Bitly
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Vol. 20 No. 5 September 2021 `75
Pages 56
Kotak Mahindra Bank pg 4
Village Financial Services pg 38
AP State Coop Bank pg 46
Investonline pg 47
MP Gramin Bank pg 48
www.bankingfrontiers.com
www.bankingfrontiers.live
WFH
CHALLENGE DRIVES FAMILY FOCUS
An Open Letter to Honourable Prime Minister of India
Shri Narendra Modi !
Subject: Provision of Child Care Leave and Better Guidelines on Transfer of Women Employees in Public Sector Banks.
Honourable PM Sir,
Your tenure as Prime Minister of our country has seen some of the most remarkable Women Empowerment plan and programs
becoming reality. Be it “Beti Bachao, Beti Padhao”, "Ujjwala Yojana, or "Sukanya Samridhi Yojna and or even Swachh Bharat
(Clean India) program, all of them have led to the improvement in the lives of millions of Indian mothers and sisters.
Today, we realize that Women Empowerment is not just a fancy topic, but a reality we see in life all around us, in the increasingly
empowered women around us while diligently serving their family roles and responsibilities.
Honourable PM Sir, today we are proud nation with 11 women ministers in your cabinet and this the highest number of
women in the union council of ministers in the last 17 years.
It is here I would like to bring to your kind notice to the countless hardworking professional women of India who are day in day
out devoted in serving the Public Sector Banks and today, these women employees need your attention& support.
Honourable Sir, the women employees, of Public Sector Banks, work tirelessly along with their responsibilities towards their
children and families.
Honourable PM Sir, the number of customers walking in, in the Public Sector banks is almost fifteen times than that in any
private sector bank simply because the trust and good will the Public Sector Banks enjoy with the masses.
Respected PM Sir, the women employees of Public Sector Banks of this great country, deserve better. So, that they
can go back home grow better children that are also an important section of our Indian population. And these women
are working just as hard as the women in Central Government entities those are availing the benefits of “Child Care
Leave.”
Honourable PM Sir, it is hard for these working women to take care and look after families especially after birth of a child, since
many of them live in nuclear family with no support from parents/ in laws because of their current place of postings.
Sir, the time has come when we need to support and respect our lady employees of Public Sector Banks and award them their
true right in terms of the Child Care Leave and effective guideline on Transfer policy for female bank employees as the
Government is giving to the Central Government Women Employees.
Respected PM Sir We trust your leadership is best able to bring about such forward looking changes and make our
society and country the best country to live in.
Yours Sincerely,
Amit Goon
Corporate Director | Connoisseur - Government Business
Technocrat | Online RTI Activist | Nationalist | Tree Hugger
@Amit Goon @AmitGoon
Editor’s Blog
Manoj Agrawal
Mobile : 98673 66111
Email : manoj@bankingfrontiers.com
September 2021 - Vol. 20 No. 5
Group Publisher
Group Editor
: Babu Nair
: Manoj Agrawal
Fortune at the Bottom of
Editor : N. Mohan the Data Pyramid
N
Editorial o doubt data is the new oil and the new gold.
Mehul Dani, Ravi Lalwani, V. Raghuraman, Numerous companies have grown big and
Aditya Arya rich by leveraging and exploiting data.
Research Editors Data has been added to a variety of inputs such
V. Babu, Ratnakar Deole, as minerals, forest products, machines and
W.A. Wijewardena, Sanchit Gogia, even technologies as enablers of wealth. But
K.C. Shashidhar, Dr L.S. Subramanian, what about customers? Those customers
Ajay Kumar who have published/revealed a lot of
data about themselves have helped
Advisor-Alliances
thousands of such companies
Ateeq Siddique
reach out to them with offers.
Marketing Many of these are attractive
Kailash Purohit, Wilhelm Singh, offers for gadgets, education,
Dhara Thobani, Rohit Kahar travel, fitness, etc. The smart
customers have taken advantage of
Events & Operations
these offers and the competition among
Shirish Joshi, Stalin Saldhana,
the data savvy companies. The not-so-smart ones
Pramod Jadhav, Ashish Verma,
have had some unpleasant experiences.
Sneha Agrawal, Ramesh Vishwakarma,
Sushant Tulapurkar That leaves the question as to what about those people who have not enriched
cyberspace with their data – people about whom companies do not have much
Design data. This paucity has made it is very difficult for companies to make meaningful
Somnath Roy Choudhury, Sudarshan Herle offers to these customers. No doubt these customers are prospects for a wide
Published By variety of products and services. But the lack of data implies that it would cost
Glocal Strategies & Services companies much more to reach out to such customers. I would like to call these
D-312, Twin Arcade, Military Road, Marol, as the invisible customers.
Andheri (E), Mumbai 400059, India. There are of course a huge number of such invisible customers in India. They
Tel: +91-22-29250166 / 29255569 are comfortable with physical over digital – such as reading newspapers, buying in
Fax: +91-22-29207563 stores, speaking with companies over phone rather than digital communications,
preferring feature phones over smart phones, hailing a taxi on the street rather
than using an app, sending servants for shopping, and so on. Their consumption
Printed & Published by Babu Nair on of digital offerings such as fitness trackers, online diets, search engines, etc, is
behalf of Glocal Strategies & Services and very low.
Printed at Indigo Presss (India) Pvt Ltd., However, just as corporates ignored and later realized the fortune at the bottom
Plot No. 1C/716, Off Dadoji Konddeo Cross of the pyramid, likewise there is an untapped fortune at the bottom of the data
Road, Between Sussex and Retiwala Indl. pyramid. Companies that engage such customers in different ways – perhaps using
Estate, Byculla (E), Mumbai 400027. visual communications, perhaps speaking in local languages, perhaps engaging
them culturally – stand to gain a fortune. By virtue of its nature, the financial
Editor: Manoj Agrawal (Responsible for sector has the opportunity to quickly engage with these invisible customers. Many
selection of news under PRB Act) companies are doing this and I see many more jump onto the bandwagon and grab
the fortune at the bottom of the data pyramid.
Banking Frontiers September 2021 3
Digital Excellence
One-page Banking Experience
Kotak Mahindra Bank acquires about half a million customers digitally
every month, powered by extensive use of AI and internet:
K
otak Mahindra Bank’s mobile Mobile Banking
banking app continues to be one of Transaction volumes through mobile
the highly-rated banking apps in banking have doubled. Deepak updates:
India. Deepak Sharma, President & Chief “We have witnessed a year-on-year
Digital Officer, explains: “With over 200 growth of almost 114% and approximately
features, we continuously update the app 75% y/y increase in mobile banking
to introduce new and innovative features. transaction value as on May 31, 2021, as
We recently launched the ‘Pay Your compared to the same period last year.”
Contact’ feature, which allows customers As of Q1 of the current financial
to send money or make payments through year, there has been 63% increase in
UPI to any of their contacts across all apps QoQ active users for Keya Chatbot and
just by entering the beneficiary’s mobile 101% increase in QoQ active users for
number. Further, it enhances security Whatsapp banking. With regard to
since fund transfers and payments to any KayMall, there has been 3.8 times growth
UPI ID can be done from the safety of in transaction volume, with shopping
the app itself. Customers need not bother and grocery categories topping the list
about downloading multiple payment at 4.95 times. Personal loan digital share
apps on their phone.” has grown from 34% to 45% in the
In addition to this, KayMall is Kotak’s Deepak Sharma shares that previous quarter. Personal loan on cards
marketplace for value added services has shown 230% q/q growth through
Kotak Mahindra Bank has
(VAS). It offers an array of services from mobile and net banking. About 94% of all
ticket booking and medicine shopping to enabled rich push notifications investment accounts have been sourced
shopping on e-commerce platforms like through images through these channels.
Flipkart, Amazon etc.” Chennai-based Market Simplified
certificates. We have enabled rich push India and Mumbai-based SnapWork
Card Transaction Control notifications through images. Recently, Technologies are the bank’s technology
Kotak Mahindra Bank has enhanced we launched international remittances partners, engaged in developing its
the security of the app by introducing a on mobile that allow our customers mobile banking app.
new registration flow. Deepak informs: to conveniently transfer money
“Customers can manage their credit internationally to their beneficiaries Digital Strategy
card/debit card transaction controls on straight from their phones. Kotak Mahindra Bank’s digital strategy of
a real-time basis. They can switch on/ is centred around customers with key focus
off domestic/international transaction Virtual Assistant Keya on customer acquisition, engagement,
types i.e., e-commerce, ATM, PoS, Kotak has also introduced a video KYC and experience. While speaking at the
contactless and also manage the limits for option for savings account onboarding of latest earnings conference call, Shanti
these transaction types. The credit card customers. For faster query resolutions, Ekambaram, Group President, Consumer
overview feature allows customers to view the bank has enabled a help centre in Banking, KMB, elaborated: “We have a
their virtual credit card and outstanding its app that provides multiple options range of options in the digital acquisition
balance and make payments.” to customers. Deepak adds: “Customers process: Do-It-Yourself, Do-It-With-
can browse information related to You, and Do-It-For-You. This caters to
Rich Push Notifications banking products and go through all kinds of customers. We have powered
The bank has launched many new frequently asked queries and chat with multiple engines of acquisition to acquire
features. Deepak enlists: “Customers virtual assistant Keya on text and via customers digitally across our platforms
can apply for sovereign gold bonds. They voice. We have facilitated live chat for of savings, lending, payment, investment
can download consolidated statements certain segments of customers that and protection. We acquire about half a
of savings accounts, credit cards, demat enables them to raise a query and view million customers digitally every month,
accounts, loans, mutual funds and TDS reported issues.” which has been made possible through
4 Banking Frontiers September 2021
extensive use of AI and internet. the infrastructure side, our focus has
Kotak Mahindra Bank has embarked been to build resiliency and go-to-cloud
on building a new age mobile experience, for agility, flexibility and skills, for which
Mobile 2.0. It is designed to be a super we made significant investments last
app that will provide the customers a year. In the core applications, we have
personalized banking, payment, shopping upgraded our platforms to be able to
and ecosystem connect experience. offer new features, functionalities, and
Shanti explained: “It will enhance customized solutions to our customers.
customized offerings, ease of transacting This includes risk and fraud protection
and thus the whole experience. We have for our customers.”
successfully migrated to our new net In digital channels, Kotak Mahindra
banking platform with over 90% of the Bank has revised its DIV, DIY, STP and
retail customers adopting this. This is automation, again enabling the customer
designed in the cloud and offers a one- to consume its products in a seamless,
page banking experience. We will be frictionless, and convenient manner.
launching an investment ecosystem Shanti said: “Investment in our core tech
and a new state-of-the-art stock trading stack will be a continuous journey and will
platform this year.” be the backbone of our digital strategy.
A significant part of our transactions
AI, ML In Data Stack Shanti Ekambaram reveals has moved to digital across payments,
For all customers, whether acquired that Kotak Mahindra Bank deposit, loans and investment, largely
through physical or digital, existing will launch an investment through mobile and we will continue
or new, Kotak Mahindra Bank runs ecosystem and stock trading with our mobile-first strategy.”
extensive AI and ML in its data stack. platform this year
Shanti said: “This has been done to 811: Work In Progress
make them personalized offers on loan automation across 23 business verticals 811 app is a part of the Kotak’s mobile
products, payments, investment, and and over 40 service options in WhatsApp. banking app, and the bank has made
protection. This is available omni- Investing, Enhancing Tech several changes in the DIY journey for
channel, be it mobile, net, contact center, Kotak Mahindra Bank remains customer acquisition. Shanti added:
branch, ATM, etc.” committed to the journey of enhancing “We have optimized the process journeys
customer experience constantly. All of the significantly, we have shachetized some
STP At Branch, In App above has been possible only because of of the products for 811 and we have
In addition to the above, Kotak Mahindra investments in enhancing the technology optimized the cross-sell journeys for
Bank has enabled DIY services across its stack, which is the backbone of the bank’s some of those.
voice and chatbot Keya and WhatsApp. digital strategy. Shanti points out: “On mehul@bankingfrontiers.com
Shanti claimed: “We have seen significant
adoption by customers of these channels
for service. We have used APIs to integrate
the providers in thee-com, OTT, travel
and transportation segments to offer
our customers a one-stop experience,
all in one app. And we will enhance this
significantly in the next few quarters.
Service is a very important metric for the
customer, and digitization of services and
automation of all processes has been at
the core of our delivery to customers. We
have enabled straight through processing
(STP) for many of our service requests
at the branch and in the mobile app,
and this better customer experience has
actually enabled in Net Promoter Score
(NPS) per service at the branches of 80
plus. We have enabled robotic process
Banking Frontiers September 2021 5
Insurance
Actuaries reduce TAT using AI, ML & Big Data
Andy Rallis, global chief actuary of MetLife and the immediate past
president of the Society of Actuaries, shares insights on the evolution
of actuaries during the pandemic
Ashish Verma: How has the actuary space will be of utmost importance.
evolved in the pandemic phase? Tools that have been of importance
Andy Rallis: Actuaries are the leading include the ability to manage and
professionals in finding ways to manage appropriately utilize large quantities of
risk. The pandemic represents a type of risk data – much larger and more complex
that has not been encountered for several than have ever been available before –
generations. It has had an impact across all and build models that properly assess key
parts of a company’s financial statements components of the data and recognize
and daily operations, making it crucially interdependencies.
important for the profession to use their
risk management techniques. It has also How much can AI and analytics help in
led to public health issues, which makes making underwriting and risk analysis
it even more imperative for companies to stronger?
evaluate risks, especially those associated Underwriting and risk analysis (in
with finance, insurance and related fields addition to marketing) have been some
as the frequency and size of claims can of the earliest and strongest users and
spike dramatically. So actuaries have been beneficiaries of artificial intelligence (AI)
assessing and responding with new ways to and analytics in the insurance industry. In
mitigate the health, mortality and financial Andy Rallis has observed a post-covid world, investments in building
risks posed by this new form of risk, the foundation of data are becoming
that insurance companies are
particularly with respect to the financial increasingly critical. Insurance companies
security systems and programs. increasing their focus on data have been increasing their focus on data
transformation initiatives transformation initiatives. This evolving
How has the actuary space affected the data ecosystem has created an opportunity
job of insurance and risk analysis? have the luxury of longer periods of time for to drive innovation in AI and ML across
Insurance and risk analysis has become risk analysis and planning. Actuaries have many operational processes of insurance
both easier and more difficult. The risks and always been required to have strong technical companies. As AI is further integrated in
their interdependencies have become more skills and knowledge (IQ), and those who the insurance industry, the wait times for
complex. However, the tools and models would rise to leadership roles also needed clients to have their policies approved and
that actuaries use have also become more strong emotional intelligence quotient issued have often decreased dramatically,
sophisticated. We now have the advantage (EQ) skills. But the rapidly transforming and the claims outcomes for the insurers
of big data and artificial intelligence that environment of the past two years also have often improved significantly. These
were not readily available just a decade requires adaptability quotient (AQ) skills. techniques have also been instrumental in
ago. The opposing forces of risks and risk With accelerated automation, applying a detecting fraud in the underwriting and
management are both developing rapidly. level of emotional intelligence a machine is claims adjudication processes.
Insurance business leaders are aware of incapable of and providing insights from it, ashishverma@glocalinfomart.com
these rapid developments and are open
Finpowering
to using new models, although most are Summary: There is a
also cognizant of the need for appropriate global organization
Women
governance practices related to model that is helping women
development. expand their economic
assets and provide
What kind of skills and tools have emerged financial power to low-
for the actuary space? Across 28 Countries income women
Actuaries already use advanced software
to develop new methods of calculating and Sneha Agrawal
Project Manager
analysing data. Today, due to an increasing Banking Frontiers
need to respond rapidly, actuaries no longer
6 Banking Frontiers September 2021
Start Ups
SAMRIDH to mentor & fund 300 startups
An investment of up to `4 million to the start-up, based on current valuation
and growth stage, will be provided through selected accelerators:
S
tart-up Accelerators of MeitY for technology-led startups whereas, 1300
pRoduct Innovation, Development new tech startups were born in 2019 alone,
and Growth (SAMRIDH)” program implying there are 2-3 tech startups born
aims to create a conducive platform for every day. In 2020, India achieved a rare
Indian software product start-ups to feat by joining the league of the top 50
enhance their products and securing innovative economies.
investments for scaling their business. The
program is being implemented by MeitY INDIA SHOWCASE PLATFORM
Start-up Hub (MSH). As per Ministry of Commerce &
Ashwini Vaishnaw, Union Minister of Industry, Start-up India Showcase is
Electronics and Information Technology, an online discovery platform for the
says that the initiative will not only provide most promising start-ups of the country.
the funding support to the startups but These innovations span across various
will also help in bringing skill sets together cutting-edge sectors such as Fintech,
which will help them to become successful. entreprisetech, social impact, healthtech,
The technology and energy of youngsters edtech, among others. Ecosystem
is a great potential source of energy for stakeholders have evaluated, nurtured,
inclusive development. The technology can and supported these start-ups. These
play a role in accelerating and in taking the Ashwini Vaishnaw explains start-ups are solving critical problems
quantum jump in reaching out to people that SAMRIDH initiative will and have shown exceptional innovation
which would have taken many years. Using in their respective sectors.
the energy of startups, these areas can be
help in bringing skill sets 104 start-ups from different sectors
reached within months. together which will help start- have currently on boarded on the Start-up
Ajay Prakash Sawhney, Secretary, ups to become successful India Showcase Platform. Each startup has
MeitY, explains that SAMRIDH scheme a profile page with detailed pitch about
will pick up startups that are ready for have benefited from the Department their product, innovation, and USP in
acceleration stage and will provide them for Promotion of Industry and Internal forms of Videos and PDF links.
with funding support, mentorship and Trade (DPIIT)’s Start-Up recognition Startup India Showcase is also an online
a lot of other support that is required by initiative, according to Som Parkash, networking portal which offers various
startups at this stage. The scheme heralds Union Minister of State for Commerce social and digital connect opportunities on
a very important milestone in our journey and Industry. More than 50,000 startups the platform. Each startup profile is linked
towards building confidence in our startup have reported 5.7 lakh jobs. Start-up India with social media pages, LinkedIn URLs
community. is a flagship initiative of the government of founders and a direct connect button
The SAMRIDH program will focus on of India, intended to build a strong eco- which facilitate networking opportunities
accelerating the 300 start-ups by providing system for nurturing innovation and between users.
customer connect, investor connect, and Start-ups in the country that will drive The platform is powered with various
international immersion in next 3 years. sustainable economic growth and generate tools from a powerful search to an intuitive
Also, an investment of up to `4 million large scale employment opportunities. The filter which will enable seamless discovery
to the start-up based on current valuation main objective of the startup ecosystem of startups for stakeholders.
and growth stage will be provided through establishment is to stimulate equitable Startup India Showcase is an all-star
selected accelerators. It will also facilitate redistribution of income. Startup repository as the platform contains startups
equal matching investment by the ecosystems are dedicatedly promoting who have already proved their capabilities
accelerator / investor. small-scale industries in rural and urban via different means (winning competitions,
areas. Start-ups have raised $63 billion selling on GeM etc), they will also be a
52,391 STARTUPS RECOGNIZED between 2016–20 in funding. potential priority choice for government
Five years since the launch of the Start-Up The third-largest ecosystem in the and corporate buyers, facilitating their
India initiative by Prime Minister world, India had about 50,000 startups business growth.
Narendra Modi, a total of 52,391 entities in 2018; around 8900 - 9300 of these are mehul@bankingfrontiers.com
Banking Frontiers September 2021 7
Industry Vision
LMS rising to the next level
Industry experts discuss the approaches & actions required to modernise
LMS software:
L
oan Management Systems (LMS) is based on a modular micro-services
supports multiple facets of loan framework. Each application is like a Lego
portfolio starting from prospecting to block, which snaps into other Lego blocks
closure and monitoring. A comprehensive through an API. The company’s architecture
loan management solution facilitates banks is intrinsically scalable and easy to modify.
and financial institutions to automate the Prithvi says: “InCred is a digital-native and
procedures for achieving cost savings and cloud-native company. Organizations with
better customer experience. older legacy systems will have a harder
time migrating their applications to more
ACTIONS TAKEN IN LMS modern architectures.”
The LMS software is not directly impacted by Interfacing between external agencies
the changes in customer experience as most platforms has matured a lot in these
consumer loans are either term loans repaid times. Data entry work has been reduced.
in EMIs (like a personal loan or auto loan) or Getting the information that you need can
lines of credit (like a credit card or overdraft). be fetched from other portals because it is
Prithvi Chandrasekhar, President, Risk and available on various other repositories.
Analytics at InCred Finance says: “The basic Vinod believes the industry is evolving
LMS level requirements for these products in such a way that interfacing is getting
have not changed for a long time. Where seamless facilitating communications.
Rachit Chawla stresses making
there will be changes is in enabling features For example, if GST number provided
(eg. rewards on a line of credit product, or LMS more real-time & customer that required data can be pulled out from
more flexible repayments on a term-loan). friendly the GST portal, financial statements can
These were less common a few years ago. be made available from the registrar of
LMS systems across the industry will be has been transformed digitally. Vinod companies, income tax statements can be
upgraded to address these needs.” Puliyakote, Vice President - Banking made available from their portal, etc. He
Rachit Chawla, CEO, Finway, using an Solutions at Speridian Technologies shares explains: “This helps not only just reduce
LMS, hands-on features should be provided details: “Customer onboarding with video data entry efforts, but it also improves
to customers on a real-time basis. They KYC, video-enabled loan application speed and accuracy, reduces the chance of
should be able to download their SOAs processing and scrutiny, credit bureau manual errors and helps reduce fraud due
and real-time receipts. It is highly crucial check, automated financial statement to intentional manipulations.”
to keep their data safe so that they can analysis, online disbursement, smart Beacon LMS is helping FIs become more
access it. For certain NBFCs, TDS is a big collection and follow-ups, mobile-based efficient digitally. With all these, the TAT and
issue wherein the credit in the customer’s customer communication and updates, etc, overall operational efficiency has improved
account happens with a delay, which ideally are a few of them. Regulator reporting is while at the same time, accuracy has
should be in real-time. Businesses need to another area which has evolved.” increased with reduced man efforts. Beacon
think from a customer’s perspective. helps to improve the efficiency of FIs in loan
He maintains: “Covid-19 has caused MODERNIZE BACKEND APPLICATIONS management process by 50%, says Vinod.
significant restructuring when it comes to Instead of making the backend applications
the LMS. The reporting doesn’t provide heavy, Finway FSC focused on a dynamic TECHNOLOGY PARTNERS
the details. There is uncertainty regarding platform. Rachit explains: “APIs can Nowadays, partners are well-positioned to
the rationale behind it and how the said function as it has been doing. So, even if lead the industry in areas like compliance,
amount has changed. The increase has not there is a need for modification in time cyber-security, etc. These issues impact
been specified, but the LMS should be able coming time, the main hardcore software the entire industry. Vendors who work
to cater for that. Rather than keeping it does not need to be tweaked, they can with many players are well-positioned to
limited only to internal accounts. It should only change the API as per the customer understand the needs of client organizations
be customer friendly and give them all details needs and get it sorted. That is how you across the ecosystem, and proactively
automatically and on a real-time basis.” can modernize your backend applications approach them with packaged solutions.
Most of the activities and workflow as technologies are changing very rapidly.” Finway FSC has a proprietary in-house
under Beacon loan management processes Incred’s technology architecture software. Rachit says: “Outsourcing
8 Banking Frontiers September 2021
with any of the leading solutions in the industry
and can work in the sink with all such systems.
This gives customers flexibility in adopting
Beacon because any of these modules can be
seamlessly fitted into your IT ecosystem and
start realizing the benefit out of it.”
He maintains that this approach is
required to ensure the adaptability and
flexibility of our customers and it helps
reduce the stickiness to one vendor, thereby
reducing risk.
NEW APPLICATIONS
Finway FSC is adding a new feature in
their application in which PDs will take
place virtually using mobile phones. The
company is also adding a feature to assign a
Prithvi Chandrasekhar dedicated relationship manager attached to Vinod Puliyakote indicates
promotes flexibility & additional all the customer’s files and all the customer’s that Beacon LMS is helping
queries. With a click of a button, customers
features in their loan products FIs to become more digitally
can access the relationship manager not
technology is a very costly affair. Now, there just by WhatsApp call but even by face-to- efficient
are no companies that can dynamically face meetings. The application also helps to Vinod shares examples: “Due to DHFL
keep on upgrading the systems depending access all the data on a real-time basis so and ILFS incidents, the regulator has become
upon the users of financial institutions. that customers get a very dynamic response more cautious and introduced few more
Most financial institutions are stick to their from the company’s end. stringent practices for the segments to follow.
integrated proprietary platforms.” Rachit shares additional details: “With These practices when followed helps FIs to
He adds: “Certain players work with all the apps at their disposal, users choose become more robust and Beacon helps them
top-of-line IT software services like Infosys, easy and intuitive ways to fulfil their needs. to cater to these requirements seamlessly
TCS, etc, but that’s a different ball game.” By integrating ML, we fetch predictions without affecting their day-to-day operations.”
Vinod says that technology keeps on more simply. Subsequently, AI will allow the The regulator is keen to introduce
evolving. All of them help institutions one users to get the info within the blink of an controls as well as provide new avenues to
way or the other. But to adopt evolving eye. Long story short – AI and ML are also boost the industry. It is a fact that during
technologies organizations cannot always in the works to meet modern requirements.” 2018-19, because of the failure of these
go back and start over again. There lies the Prithvi says: “Our customers are looking biggies, everybody was hesitant had a risk
importance of component-based architecture. for more flexibility in their repayment aversion. The pandemic too added to these
That is why many organizations are adopting terms. This is true for term loans as well as concerns. RBI came up with options such as
it. Easy implementation, flexibility in post- a line of credit product formats. So, we will co-origination model, securitization option,
implementation maintenance, and support enable more features that allow customers partial credit guarantee, and various other
are all other benefits adding value. Beacon to manage their cash flows actively, to get schemes ECLGS scheme to help covid-19
LMS is also component-based. more value from their loan products.” hit MSME sector.
Beacon has an umbrella branding for a All such requirements are built in the
bunch of financial solutions encompassing COMPLIANCE & CONTROLS Beacon solution. It has a sound architecture
delinquency management, collection Beacon LMS is built on robust and secured and framework and so is quite adaptable to
applications, early warning system, and architecture. It consistently follows the accommodate these requirements. Also,
mobile banking applications, apart from the regulatory guidelines defined and revised a strong and dynamic team updates the
enterprise solutions such as core banking, by regulators regularly. Beacon solution solution according to market needs to help
loan management system, loan origination undergoes security audit and gets certified FIs scale up and grow without any delay.
system, etc. Beacon LMS provides AI/ by any of the globally leading audit firms Vinod added: “We are very aware of the
ML-based predictive analytics for various at least once a year. That way we ensure basic fact that our customers are eager to
use cases such as loan default, next best the solution gets continuously improved to expand, and the Beacon team’s role is to be
action for loan collection, etc. suit the evolving security requirements and a growth catalyst so that our customers can
Vinod dives deeper: “All these solutions are enhanced to itself helping mitigate newly achieve their business targets.”
fully component-based and can be interfaced evolving security risks. ravi@glocalinfomart.com
Banking Frontiers September 2021 9
Conference Highlights
Dawn of New Strategies
M
ulti-pronged asset strategy, The under penetration of India credit significantly, impacting the bottom-line of
diversified liability approach, and market is vast and the possibilities for NBFCs.
a fresh technology design and newer financial institutions are endless. The Sanjay Sharma holds another opinion
blueprint in place, NBFCs have redefined concerns and roadblocks these institutions on constraints, not having seen funding as
their strategy to take on the competitions could face will also be challenging because a problem, per se. He says: “Funding is not
concluded the panel discussion held as of the very dynamic nature of technology. really a big concern for mid-sized NBFCs,
part of the NBFC’s TOMORROW series by Shachindra Nath says: “Technology is not because there’s a reasonable amount of money
Banking Frontiers. Moderated by Manoj really the constraint, but our ability to keep available.” But for him, the major challenge is
Agrawal, Group Editor, Banking Frontiers, enhancing it is one. And for the financial maintaining an agile team, to keep pace with
eminent personalities like Shachindra Nath, services industry, especially for lending, it is the markets moving quickly. He believes that
Executive Chairman & MD of U GRO Capital, a constraint of mindset.” NBFCs have done well by responding quickly
Sabyasachi Rath, CEO, Karvy Financial According to him, the entire liability to emerging opportunities and being agile.
Services, Sanjay Sharma, MD & CEO, AYE spectrum rating agency is over weighted “A good team that can look at opportunities
Finance, Nehal Mehta, Head of Business towards the big names and high-rated and leverage those opportunities and go in
Development, Financial Services Industry companies. They are rated highly not due to areas where others have never bothered to
at Amazon Web Services and Arun Nayyar, a solid underlying business model, but due to go, that’s the difference in the DNA of NBFCs
CEO, NEO Growth Credit, deep-dived into their name-weightage in the industry. This as compared to large established banks.”
the set theme of discussion ‘Re-thinking tends to hamper the newer NBFCs’ ability to The other thing that Sanjay Sharma
strategies for the new world.’ innovate, grow and serve the market. Despite thinks that poses a challenge, is the ability
NBFCs, long considered a second cousin excellent business models and innovation, of these institutions to continue to improve
to banks, are slowly fighting their way up they have to compete with a name, and that their credit or underwriting skill in the
the recognition pyramid. They are putting is a big constraint. But in the last 2 decades marginalized customers. “NBFCs typically
themselves on the map, like in the case of in India, multiple financial institutions have cater to customers, that in banks, are marginal.
UGRO Capital which recently tied up with overcome this problem. They have always done well in capturing this
Bank of Baroda. What has led to this turn marginalized customer. And I think the ability
around? to underwrite it well, is a constraint. It’s not
One of the ways that NBFCs have a very struc-tured market. But NBFCs have
assuaged this is through a change in the normally overcome these constraints well, and
leadership mindset. The Executive Chairman dif-ferent institutions have different models.
and & MD of UGRO Capital, Shachindra According to Sabyasachi Rath, NBFCs And if you don’t have that, it can be a huge
Nath believes: “What this segment needs are also face the constraint of funding as earlier constraint in this market.”
the innovators and problem-solvers because sources like banks and mutual funds have But have traditional NBFCs been able
if you’re not solving a problem of a segment changed their approach to funding NBFCs. to overcome these challenges? All the
of the market, there is no value proposition COVID has been one more factor which major successful companies have deployed
available to you.” has led to collection efficiencies dipping tools and technologies and modeled their
Sanjay Sharma Sabyasachi Rath Shachindra Nath
10 Banking Frontiers September 2021Nehal Mehta Arun Nayyar Manoj Agrawal
businesses on fully understanding the the need of the financial industry. The that they become your extended family. And
customer. Customer insights have become technology has to be aligned with the covid has brought people closer. And as a
the holy grail in the business world. business goals of a company. “Essentially, leader, you have to be empathetic towards
Nehal Mehta says: “Many traditional the underpinning theme of being technology their needs, apart from the need of the work.
NBFCs have not been able to really move with driven is to be a data-driven enterprise, So, it is an empathetic culture, which needs to
the customers’ demands and I feel it’s important where you are actually leveraging all level up in an organization.”
to know what your customers want. I think possible data. What you have, what you On organization culture Nehal Mehta,
understanding the customer and moving with don’t have, what you’re trying to get, what is of the opinion that the business and the
the customers’ expectations is something that your partners have and making actionable technology teams within an organization
NBFCs need to adopt in a big way.” decisions based on that, which is an enabler need to be aligned together. “They should
Moving on to another issue: that of for business. The core element of enabling work together as a team, because if both sets
integrating technology and business in is the data. I think it’s really important understand each other and work with each
such a way that technology is embedded in other towards a common vision, it can take a
long-term strategy as opposed to a trend in business to greater heights.” Sanjay Sharma
business where technology is just a small part is of a similar view: “Culture is extremely
of the business, not affecting the whole. crucial if you want to create an institution
“From the NBFC standpoint, it is essential and it is the sharing of a vision together. If
to use technology across the value chain, to institutionalize knowledge that you people share that vision and have a common
starting from customer acquisition. A modular have today, so that your employees and value system, that builds the culture. It’s a
system of digitizing each and every element customers also get something out of that synergy that works and helps the business.
of the value chain can be created. My view is institutionalization,” says Nehal Mehta It includes many things like ownership,
that you need to have a bigger picture of the of AWS. transparency, excitement, emotions.”
entire value chain, but approach it in a modular Warren Buffett once said: ‘Culture eats According to Shachindra Nath: “Culture
fashion. And that really helps you respond to strategy for lunch’. In simpler words, culture is important and I’m only driving one cul-
the market needs,” says Arun Nayyar. is much more powerful than strategy as an ture, which is culture of unlearning. In the
Instead of using technology to solve only organizational tool. Cultural objectives bind financial services industry, we need the most
certain problems, it should be integrated into the organization and strengthen it. experienced people, which actually turns out
the system, but to get there, businesses can As cultural objectives go, Arun Nayyar to be the bottleneck. Because the learning
take the piecemeal approach. believes the sense of ownership in the of past is not relevant for today. So first
Sanjay Sharma believes: “Technology or-ganization creates a culture of pride and unlearn what you have learned, so that you
firms are becoming lenders, and the lenders responsibility and leads to everyone thinking can innovate here. And that’s very, very hard.”
are moving towards technology. This like an owner. While Sabyasachi Rath wants As learning begins at home, the culture
differentiation is fast merging into the main- to lead with emotion and empathy. “I think an of unlearning is sorely needed at this hour.
stream. So that’s why it’s not that technology emotional leader is the call of the day. Specially All the knowledge that we have acquired
is used as a flavor to add to the fi-nancial covid has taught us this. At my company, we is insufficient for dealing with the new
offerings, technology itself has become the keep track of all who have got vaccines, who world that we are in. Similarly, re-thinking
point of competition.” haven’t. Which people and their families have strategies for the future of the financial
Models that bridge business and been affected by covid. Because we spend so industry requires us to unlearn and re-learn
technology strategies together are now much of our time in the office with colleagues, as we progress in to the 21st century.
Banking Frontiers September 2021 11Conference Highlights
Cloud tech fuels NBFC growth
A
s part of the NBFC’s TOMORROW
conference, Banking Frontiers
hosted a high powered panel
discussion titled ‘Extracting the real
Value from Cloud to Drive Digital
Transformation and Business Growth’.
Moderated by Manoj Agrawal, Group
Editor, Banking Frontiers, the eminent
panel comprised Rishikant Dubey, CRO,
Muthoot Microfin, Kunal Kathpal, Chief
Risk Officer (CRO), Hinduja Leyland
Finance, Prabhakar Tiwari, Chief Growth
Officer, Angel One, Rajesh Krishnia, Head
of Enterprise, BFSI, Nutanix India
Cloud technology is one of the most
powerful emerging technology and solution.
As an approach for many businesses in the
Rishikant Dubey Prabhakar Tiwari
financial sector, NBFCs have been trying
to make meaningful use of the cloud and
derive maximum value for the business. Gone are the days when companies played a pioneering role by adopting new
Earlier the BFSI sector was a bit used to operate in functional silos. business models, technologies, policies and
reluctant to adopt cloud systems due Today, it is possible to generate data at opportunities.
to concerns of data breach and security all customer touch-points both internal Any new common infrastructure is
system lapses. There wasn’t much clarity operational data, customer data and hugely beneficial for the economy, but there
on how they function and how to integrate then keep on tweaking the products and are risks attached. There are undisputed
them into different legacy systems. But services. That has become a clear-cut way benefits, but we also know that cyber
the cloud system is now a reality, as cloud is redefining business today. threats are increasing every day. There are
there have been many security-side and Cloud computing for Hinduja Leyland many different aspects of risk which can
analytic-side modifications and have been Finance, which is diversified into various pose a challenge. Security is only one of
whole-heartedly integrated into many them. Scalability and cost can be an issue,
legacy systems. manpower can be an issue as switching over
Banks and financial institutions to cloud requires expertise to be able to do
have adopted cloud services because of it efficiently. Governance and compliance
seamless computing and fast services. are other challenges. The risk exposure
Digital transformation through cloud is parts of India, has played a pivotal journey. remains, according to Rishikant Dubey.
happening by way of payment systems, During the pandemic, on the back of real- Kunal Kathpal added: “With cloud
internet banking, etc, which has led to high time data availability, it was possible for the computing, you’re moving your data which
customer satisfaction. business to continue to function smoothly. is something that a customer has trusted
Prabhakar Tiwari says: “I agree, Many companies in the BFSI sector are also on your brand name and he’s given you
that’s a big revolutionary change. And it using cloud infrastructure for data backups. his personally identifiable information
has impacted both start-ups and large In the past, backups were done in batches and certain times SPI (sensitive personal
organizations.” Today the idea is to use cloud once in a day or once in week. Kunal Kathpal in-formation) also. How do we secure
for business transformation; the agenda says: “Now with cloud, data integrity and such sensitive data? As an organization,
has changed from pure IT to investment data availability has touched a new high, we take different steps for different type
and profitability. “Data architecture and where these data backups happen on a real- of data, like for the SPI we will not mostly
data analytics have become the backbone time basis, and this information is floating move to cloud, because at the end of the
of any organization. All this data helps us so that in case there is a BCP event, the data day we have to be very sensitive as well as
to personalize customer journeys and take can be recalled.” very risk aware.”
advantage of that. I’m very enthused by the NBFCs are no longer seen as second One way of mitigating these kinds
algorithm compute ability of cloud and we to banks. They’re moving ahead faster. of risks is to be in control of your own
leverage big data a lot at Angel One.” One of the major factors being, they have data. When you are riding on another
12 Banking Frontiers September 2021Kunal Kathpal Rajesh Krishnia Manoj Agrawal
company’s infrastructure like Microsoft They’ve had many takeaways from them in learn from these experiments. There cannot
or Amazon cloud service, you have to terms of customer engagement and their be traditional risk management at a startup
develop the capability of protecting your applications in business to the relevant or a high-risk management or analytics
data. The businesses need the expertise segments as a business proposition. AI, ML-based risk man-agement in a
and permissions to be able to audit them. Like with Angel One, that went through traditional company. The model that some
So how does cloud help NBFCs a transformational experience from NBFCs have adopted is by tying up with
synchronize data between customers having a brokerage model to becoming fintechs and trying to work the business
products and infrastructure? How does a true FinTech company. The business through their analytics. The juncture
this convert to business value? invested heavily in tech by way of people these businesses have arrived at now is
In the past, there were data warehouses and technology. “I think we really not only doing business by themselves, but
to store the data, on which data analytics understand where NBFCs stand today, combining with others to do the business.
would be done. This data would be their struggles and their opportunities. While there are positives to using
somewhat predictive but not prescriptive. It’s about understanding consumer facing public cloud, there are certain risks
Rajesh Krishnia explains this in detail. technologies and psychographics. And as well.
“Today, the data points are not just from when you look through those lenses, then So, the way forward for most
the organization’s legacy system or branch organizations is going the way of hybrid
offices, but you’re also following the same cloud. NBFCs expect customers will run
customer on social media and on his journey their applications both out of public as well
in real-time as he’s making payments to as private cloud. Within public cloud itself,
you. The hybrid world of cloud allows us they may use multiple vendors for different
to marry the old data marks that had with you’re not competing with any bank, fintech services there. Another risk is getting tied
the new data that is available, so that we or any other NBFC, you’re competing with to a single vendor. An NBFC should have
can make decisions in real time. Today, an Netflix, Uber, Swiggy, Zomato and such the freedom to move between services. “I
NBFC can your loan in 60 minutes or even companies. Customers’ want the services should be able to move my applications or
sooner. With AI and ML capabilities and at the push of a button. Today’s generation move my data together. And that really is
analytical and storage capabilities the cloud doesn’t have the patience, they are spoilt for very critical. And that’s where hybrid cloud
offers, we’re now going to be storing tons choices. So not only in the same asset class, really plays a very pivotal role,” according
and tons of information about a customer. I have multiple companies competing, but I to Rajesh Krishnia. Hybrid cloud also acts
Cloud has done a good job by marrying have different asset classes competing with as bridge between different systems and
the old systems of analytics with the new each other. The relationship has changed. new partners, “where the choice at the
system and start offering prescriptive points It’s not a sellers’ market anymore. It’s a end of the day will be with the customer.
to the customer, rather than just try to be buyer market,” says Prabhakar Tiwari of If he is going to use a particular service on
predictive of what this person is going to do Angel One. premise in his data centre, he should be
next. I think that’s one area where cloud has Risk management itself is a series of able to do it. But if he wants to leverage a
played a very pivotal role.” experiments, so there are bound to be fail- particular service on one particular cloud,
In recent times, fast growing fintech ures. The need of the hour is dynamic risk- he should be able to do that as well. That
companies have paved the way for NBFCs. management in all aspects and to be able to really is the way forward.”
Banking Frontiers September 2021 13Panel Discussion
Digital Foundation & Tech Strategy
for New Normal
What best technology strategy can NBFCs adopt in the world of new normal.
Is there a need for new platforms to be developed? How much to adopt
and how much to invest in technology? Experts discussed such questions
in a panel discussion at NBFC’s TOMORROW conference. Edited excerpts:
Sumit: What will be the digital foundation The key question to be answered is: How
PARTICIPANTS
pillar for starting an NBFC? much technology-driven underwriting is
Rachit Chawla: Founder & CEO
Rachit: The first and foremost being performed? This aspect is still in a Finway, Financial Services Channel
requirement is good technology. Because very native stage. There are 3 aspects of a Ashok Mittal: CEO & Founder
that is the only tool that can be used to loan: (i) A customer’s ability to pay has been PrestLoans
leverage data capturing. AI and ML can help digitized to large extent. (ii) The intention Vijay Kumar: Head Collections,
you with the processing of the data and let to pay by the customer cannot be accessed Centrium Financial Services
you take correct decisions. The technology by technology. A lot of work has to be done Anish Choudhary: Head Products,
has to be proprietary. Your secret sauce if in this field. (iii) The collection part of the Digital & Marketing, Edelweiss
it may be put in lighter terms. The second loan should also be digitized. There is very Finance Services
important factor would be collaboration little being done on this front. Mohit Arora: Senior Director,
with the right players. Collaboration with Commercial & Govt Sales, VMware
the right company should bring value to the Sumit: Those NBFCs who are starting their Sumit Kumar: Director Digital
lives of the customer. The third important journey into digital space, where should & technology, Ernest & Young
ingredient would be to have fully secure the journey start? (Moderator)
channels. It should be ensured that the Vijay: NBFCs should prioritize on their
customer documents and other sensitive need for technology. Various options would whether the NBFC has the right processes
data are secured. Once everything is done be (i) If they want the entire life cycle to for the chosen strategy. The customer
it should be made sure that the Ease of Use be digitized (ii) Start in between the cycle requirements have to be placed neatly for
is maintained. The customer would want to (iii) At least the collection front should be easy adoption of technology. Going by
get everything done in just one click. pushed to become digital due to the current the traditional platform or project-based
situation. It can happen at various levels; approach would help. So that as and when
Sumit: Which services do you believe it depends on where the NBFC stands and the requirements arise or go down the APIs
can be focused on for improving the how much are they willing to invest? or modules can be added or deleted. The
technology strategy of NBFC? low code approach helps in manoeuvring
Ashok: SMEs in smaller towns are Sumit: With a small budget how can NBFCs the newer software faster. Agile brings the
still not very tech-savvy. The technology maximize their ROIs? business and technology closer. This helps
currently focuses on customer acquisition. Anish: More than checking for the in value-added features to the product.
It is further used to do a lot of promotion ROI, the NBFC should know which
through SMS and other channels. In a issues are they trying to solve while going Sumit: Adoption of agile is increasing. Due
true sense, NBFC is much more than this. digital. Another important decision will be to the current scenario, Work-from-Home
and Work-from-Anywhere are becoming
a new standard. What are the challenges
due to this and what recommendations for
smooth working?
Mohit: The new technology has enabled
the workings of many offices without being
physically present. This is not easy to
achieve. Pre-pandemic the technology was
designed for data centres and branches. The
user would be physically present. Now the
challenge is that the employees are away
from sight. Challenges come in terms of
Sumit Kumar Rachit Chawla Ashok Mittal visibility, availability and security. Giving
14 Banking Frontiers September 2021access to the unreliable network to them to
work on enterprise data is a big issue. The
future of work is going to be hybrid. To make
consumers simple and enterprise secure has
been our endeavour. With the launch of
‘Anywhere Workspace,’ we have a complete
integration platform. From data centre
to delivering securely and combination of
various products of VMware.
Vijay Kumar Anish Chowdhary Mohit Arora
Sumit: What would be your recommendation
for modernizing the legacy landscapes? to build better physical infrastructure. look at security from 4 angles: (i) The
Mohit: It’s all about applications. How Today the focus has shifted towards end-user side. EDR: End User Threat
well modern applications are going to help technology. The bottom line everywhere Detection is one of our new additions. This
the customers as well the employers. Our is how can technology (i) improve the helps in preventing threats by capturing
focus for the digital platform has been on efficiency (ii) help in decision making and user behaviour. (ii) Network side. NSX:
3 pillars: (i) Application (ii) Where this (iii) scale up to the organizations’ demands. defines how the network should behave.
application is being done (iii) How this Anish: What do you want to modernize? How the traffic is managed in a data
application is going to be accessed? Things that will undergo rapid changes. centre. So that security is not compromised.
The origination systems, collection, (iii) Clouds. Cloud Health: this manages
Sumit: Technology can be a game-changer. customer acquisition are highly configurable. security in a multi-cloud environment. (iv)
What is your view? Accounting standards do not change that Device. Workspace1: this helps in having
Rachit: It takes a lot of effort and rapidly. This need not change very fast secured devices that access the enterprise
brainstorming with all players to develop unless there is a change in the environment. applications.
the technology. Technology can be used For example, blockchain technology is a long
to leverage growth, but that is not the only way from becoming new normal. Sumit: what will be your recommendation
criteria. It’s true that technology indeed India is going to be a phydigital market. for the viewer?
helps acquire the customer. But at the end A large chunk of our population does not Rachit: I would recommend
of the day technology should be able to solve even own a smartphone. But the current spending more time on the development
the problems faced by a firm. Right business crisis has worked as a catalyst for many of the platform. This is the backbone of
model backed with good technology is a transformations. The business models will technology. But should be open for plug-n-
great asset for the company. also have to be adapted to a new dynamic play options. Keeping the system dynamic
Ashok: Our customers are not very tech- environment. is the key in the fast-changing environment.
savvy, so we had to think and innovate to use There is a solution through technology Ashok: Build something for the large
the technology to our advantage. The long for most of the problems. But is it scalable, 80% of MSMEs. These people are not
application form was designed in such a economical and is it relevant to your even accessing e-mails. Build something
way that it could capture the data from PAN business and customers? These questions to support the bottom half of the pyramid.
card, Aadhar card and Check and fill the must be answered before jumping in to get Anish: Focus on digitalization and
information in data. With a couple of clicks, new technology. not digitization. And being clear in being
the whole process of filling of forms could be the part of the value chain the firm would
done. Because of the language barrier, the Sumit: Cybercrime levels are rising. How like to be part of. Think platforms rather
customer is at a loss of what to fill. are you fortifying the organizations and than software. Think and adopt AGILE.
The technology should also be used the applications? Technology is not to be treated as a separate
to increase efficiency. The customer Mohit: In the race of being the first department. Everyone should get involved.
expects us to process the loan application to adopt the technology, sometimes the Vijay: Any technology has to be fluid
in a lesser duration. This can be achieved security aspect of workload is compromised. which gives room as things develop.
by adopting a good platform. With There is a race between the bad guys and the Mohit: I would like to emphasize that
competition getting tougher day by day, good guys. And many a time the bad guys focus should be given to the foundation
time can be deciding factor. win the race. There can be two situations: of the technology on which the newer
(i) either you are already hacked (ii) or you applications will be built. The customer
Sumit: Continuous transformation is the don’t know you are hacked. There has been experience is going to depend on the
need of the hour. New challenges are an alarming 93% increase in ransomware foundation. Keep innovating and always
coming every day. What’s your view on this? attacks. We try to make security an intrinsic remain customer-obsessed. These are the 2
Vijay: In pre-covid times we were trying part of the application or platform. We mantras we would like to follow.
Banking Frontiers September 2021 15You can also read
