bfsi.eletsonline.com ASIA AND THE MIDDLE EAST’S LEADING PORTAL ON BANKING AND FINANCE SECTOR A Bimonthly Magazine on BFSI Sector SPECIAL STORY Has BFSI Reached Cloud Nine? ALSO FEATURES A Report JANUARY-FEBRUARY 2019 | VOLUME 05 | ISSUE 01 | US $20 | `200 Cover Story Factors DRIVING TechRevolution in India’s BFSI Sector Articles Benjamin Henshall Country Manager India & Director of Sales, Financial Services APAC, Red Hat Sabyasachi Goswami SVP – Head Sales & Strategy Perfios Dr Saibal Paul Associate Director Sa-Dhan Pinak Chakraborty Senior Vice President of Technology Digibank, DBS Interviews Pavan K Gupta Chief Executive Officer Muthoot Housing Finance Company Ltd Abhijit Ray Co-founder and Managing Director Unitus Capital Mehjabeen Taj Aalam Head of Information Technology at Muthoot Homefin (India) Limited Protect your business and mitigate security risks CONTENTS JANUARY - FEBRUARY 2019 ARTICLE COVER STORY 08 12 Andhra Pradesh -The Sunrise State INDUSTRY SPEAKS 16 Perfios Software Solutions Real-time Analysis & Decisioning Sabyasachi Goswami SVP-Head Sales & Strategy, Perfios 20 Open Banking: A Strategic Approach to Factors Driving Tech-Revolution in India’s BFSI Sector 28 Inclusive Growth in North-East India: The Way Forward Through Alternative Channels of Microfinance Dr Saibal Paul Associate Director, Sa-Dhan Win Digital Consumer Benjamin Henshall Country Manager, India & Director of Sales, Financial Services APAC, Red Hat INDUSTRY PERSPECTIVE 18 Affordable Housing: Growth Driver for Banks and Housing Finance Companies Pavan K Gupta Chief Executive Officer, Muthoot Housing Finance Company Ltd 30 How Much Security is Enough? Mehjabeen Taj Aalam Head of Information Technology at Muthoot Homefin (India) Limited 23 Tejora—Architecting Solutions to Meet Highest 54 Digital Transformation in Banking Sector: A Journey in the Making Pinak Chakraborty Senior Vice Presidents, Technology, Digibank, DBS Standards in BFSI Surabhi Shenoy Managing Director, Tejora Private Limited 56 Unitus Capital Helping Businesses in Financial Inclusion Space Abhijit Ray Co-founder and Managing Director, Unitus Capital CONFERENCE REPORT 32 MUMBAI 20 NOVEMBER 2018 JANUARY - FEBRUARY 2019 [ bfsi.eletsonline.com ] Asia and the Middle East’s Leading Portal on Banking and Finance Sector EVENT CALENDAR 2019 EVENT NAME PLACE MONTH EGOV / INNOVATION / ENERGY / WASTE National Energy Summit Delhi 27 February 2019 Innovation Summit Jaipur 28 February 2019 Elets Waste Summit Delhi February 2019 ELETS SPECIAL INITIATIVE Mumbai Port Trust Special Souvenir Mumbai February 2019 eGov Annual Special Magazine Delhi April 2019 MANUFACTURING / RETAIL Elets Manufacturing Summit Delhi April 2019 Elets Retail Summit Bengaluru May 2019 TECHNOLOGY / BFSI NBFC100 Tech Summit Delhi 15 March 2019 BFSI GameChanger Summit Goa May 2019 7th NBFC100 Tech Summit Chennai June 2019 th HEALTH 2nd Healthcare Innovation Summit Hyderabad 22 February 2019 Urban Healthcare Summit Mumbai 27 March 2019 3rd Healthcare Innovation Summit Bengaluru April 2019 Healthcare Innovation Summit Mumbai June 2019 Healthcare Innovation Summit Chennai August 2019 Healthcare Innovation Summit Delhi October 2019 th th th EDUCATION New Delhi 15 March 2019 10th School Leadership Summit New Delhi 12 April 2019 11th School Leadership Summit Chandigarh 27 April 2019 14th School Leadership Summit New Delhi 9-10 August 2019 15th School Leadership Summit Mumbai 6-7 December 2019 OUR PUBLICATIONS 10th Higher Education & Human Resource Conclave SUBSCRIBE NOW JANUARY - FEBRUARY 2019 EDITOR-IN-CHIEF Dr Ravi Gupta EDITORIAL TEAM - DELHI/NCR Senior Assistant Editors: Souvik Goswami, Sandeep Datta Published by Elets Technomedia Pvt Ltd Assistant Editors: Priyanka Sharma, Gopi Krishna Arora, Mukul Kumar Mishra Senior Correspondents: Akash Tomer, Rashi Aditi Ghosh Correspondent: Ritika Srivastava MUMBAI BUREAU Senior Assistant Editor: Kartik Sharma Senior Correspondents: Harshal Yashwant Desai, Rakesh Kumar Roy JAIPUR BUREAU Senior Assistant Editor: Kartik Sharma CHANDIGARH BUREAU Assistant Editor: Priya Yadav HYDERABAD BUREAU Assistant Editor: Sudheer Goutham B LUCKNOW BUREAU Assistant Editor: Arpit Gupta AHMEDABAD BUREAU Our Publications and Initiatives Assistant Editor: Hemangini S Rajput SALES & MARKETING TEAM Manu Raj Singhal, Shivam Pathania, Hina Shukla, Shashank Jaiswal SUBSCRIPTION & CIRCULATION TEAM Manager, Subscriptions: +91-8860635832; subscription@elets.in DESIGN TEAM Art Director: Om Prakash Thakur EDITORIAL & MARKETING CORRESPONDENCE Deputy Art Directors: Gopal Thakur, Shyam Kishore, The Banking & Finance Post – Elets Technomedia Pvt Ltd: Stellar IT Park Office No: 7A/7B, 5th Floor, Tower-B, C-25, Sector-62, Noida, Uttar Pradesh - 201301, Phone: +91-120-4812600, Fax: +91-120-4812660, Email: info@elets.in Raja Das, Shiva Vats Graphic Designer: Shivangi Shukla ADMINISTRATION Director: Archana Jaiswal Owner, Publisher, Printer - Dr Ravi Gupta, Printed at First Impression Corporate Services Pvt Ltd, E-114, Sector-63, Noida, Uttar Pradesh and published from 710, Vasto Mahagun Manor, F-30 Sector-50, Noida, Uttar Pradesh © All rights reserved No part of this publication may be reproduced or transmitted in any form or by any means, electronic and mechanical, including photocopy, or any information storage or retrieval system, without publisher’s permission Send your feedback about our interviews, features, articles, and news You can either comment on the webpage of the story, or mail at editorial@elets.in JANUARY - FEBRUARY 2019 [ bfsi.eletsonline.com ] Asia and the Middle East’s Leading Portal on Banking and Finance Sector EDITORIAL JANUARY - FEBRUARY 2019 Technology Paving Way for Pro-Consumer BFSI Sector To remain aligned with the rising significance of technology, the Banking and Finance sector in India is making a lot of investment in the IT and digital advertising The Indian Banking, Financial Services and Insurance (BFSI) sector spent $9.1 billion in IT in 2018, which is an 11.7 percent increase (Year-on Year), a leading research firm stated in a report According to a report by Internet and Mobile Association of India (a non-profit body), the BFSI sector spent Rs 2,022 crore on digital advertising (46 percent of its total advertisement budget) The statistics show how there is a symbiotic relationship between IT and BFSI in India While these numbers would match up to the Gross Domestic Product of a few African nations, what they prove is that the growth of the Indian IT market is still predominantly driven by the BFSI agenda Similarly, for large banks, insurance companies or other fintech and financial services players, IT is perhaps the most critical catalyst to grow, both on their corporate enterprise and consumer front This camaraderie between BFSI and IT has been prevalent from the early days of tech adoption in India: Banks have always shown the way We can trace the evolution as BFSITech 1.0 (Internet adoption); BFSI-Tech 2.0 (migration to data centers); BFSI—Tech 3.0 (the SMAC- Social, Mobile, Analytics and Cloud, amalgamation with security, mobility, analytics and cloud defining banking agenda We are presently in BFSI-Tech 4.0 phase — technologies like blockchain, contact-less payments using NFC mechanisms, AI and gameplay are driving this phase of digital transformation Dr Ravi Gupta Editor-in-Chief The Banking & Finance Post Magazine and Founder Publisher and CEO, Elets Technomedia Pvt Ltd The magazine’s latest cover story “Factors Driving Tech-Revolution in India’s BFSI Sector” tries to outline and examine precisely these technologies and how they are helping BFSI adopt a more customer-friendly look This digital transformation is not by choice but borne out of necessity to stay more relevant in a pro-consumer society and world The issue also carries a special feature “Has BFSI Reached Cloud Nine?” that captures the nuances and dynamics of cloud deployment in banks and insurance companies More importantly, there is an attempt to explore whether migration to cloud really enhances the transformation especially from the secure, agile and scalable perspective Our magazine’s latest issue also features interviews with Pavan K Gupta, CEO, Muthoot Housing Finance Company and Abhijit Ray, Co-founder and Managing Director, Unitus Capital and interesting industry insights by Mehjabeen Taj Aalam, Head—IT, Muthoot Homefin, Pinak Chakraborty, SVP Technology, Digibank, DBS and Benjamin Henshall, Country Manager, India & Director of Sales, Financial Services APAC, Red Hat We have also brought out a report of the 5th NBFC100 Tech Summit Mumbai, highlighting the future of Non-Banking Financial Companies (NBFCs) in today’s challenging times The Summit touched upon challenges and future roadmaps of NBFCs, Payments Banks, Small Finance Banks, Microfinance Institutions (MFIs), Housing Finance Institutions and many more Continuing our legacy of creating knowledge-sharing platforms for the BFSI sector, we are organising the 3rd Elets BFSI Leadership Summit in Mumbai The summit aims to congregate CXOs and technology experts from across BFSI domain We hope our collection of articles, interviews, reports and special stories will prove thought provoking and evoke invaluable feedback of our esteemed readers Connect with us on BFSIPost @BFSIPost The Banking and Finance Post elets_bfsi eletsvideos JANUARY - FEBRUARY 2019 COVER STORY FACTORS DRIVING Tech-Revolution in India’s BFSI Sector Technology is reinventing everything around us The world is now entering an era of ‘Digital Darwinism’, a stage where various technologies are emerging faster than the adaptability speed of organisations Amidst this transformation, the banking and financial sector is also aligning itself with the emergence of digital forces, leading to creation of new ways interpreting data and the means to so costeffectively, writes Rashi Aditi Ghosh of Elets News Network (ENN) JANUARY - FEBRUARY 2019 [ bfsi.eletsonline.com ] Asia and the Middle East’s Leading Portal on Banking and Finance Sector COVER STORY EVOLUTION OF TECHNOLOGY IN THE BFSI SECTOR In the late 1990s, implementation of information technology helped some private sector lenders across the country in unveiling non-branch banking services Initially, internet banking was presumed to be an insecure option for a transaction by the users However, the particular mode of banking witnessed a whopping growth in the 2000s due to the initiatives taken by the government The Reserve Bank of India (RBI) in a bid to popularise it The cost of online transactions was also dropped significantly The mode that earlier received negative reviews from the users, enhanced level of customer satisfaction gradually, by ensuring the benefits of banking anytime anywhere It helped the users in performing all the important banking formalities without even visiting the bank branch Ankur Gupta, Principal Secretary, Department of Electronics & Information Technology and Elections, Government of Haryana says, “Technology has indeed transformed banking but I still feel that there are a lot of areas requiring intervention when it comes to offering convenient options for consumers Today, if you want to lodge a theft complaint or want to put up a service request, you will be made to call the customer care service The customer care service rather than helping you out with your problem will keep you waiting for a long time, transferring your call from one department to other It is important to offer better and hassle-free customer service options to the consumers much prior to implementing world-class technologies.” In the last few decades, the banking sector in India realised the rising significance of digital technologies and the urgent need to embrace the same for streamlining their services The sector is making considerable investments in a bid to Connect with us on BFSIPost @BFSIPost create digital infrastructure so that it can offer better solutions pertaining to mobile banking, e-wallets and virtual cards, etc To name a few, Digital-only/ Virtual Banking, Biometric Technology, Artificial Intelligence, Blockchain Technology, Bitcoin and Robotics are key innovations in the digital banking segment LR Ramchandran, CGM, Financial Inclusion & Banking Technology, NABARD says, “Banking is not an easy operation; it is a very complex activity Digital transactions might look an easy activity but it involves a lot of touch points as far as cyber security measures are concerned The sector has undergone a massive change Banking activities that earlier needed human intervention, are now handled by machines When technology was introduced in banking and operations started witnessing paradigm shift, the Reserve Bank of India (RBI) took several transformative measures to reinvent the entire banking industry and took it to the digital platform, at the same time ensuring safety and security.” Padma Jaiswal, Secretary, Department of Information Technology, Government of Puducherry said, “The complete Banking, Financial Services and Insurance (BFSI) sector has undergone massive changes due to technology The The Banking and Finance Post elets_bfsi eletsvideos sector is now extended to a lot of new segments apart from the financial genre as information technology is opening up new vistas for the industry From urban to rural, banked to underbanked, BFSI industry is offering a bouquet of services that suit the requirements of all the consumers.” WHAT IS FINTECH? FinTech, an abbreviated term used to describe technology that proposes improvement in the delivery and usage of financial services It is utilised to help companies in a better management of financial operations, processes and lives by utilising specialised software and algorithms that are used on computers and, increasingly, smartphones In the 21st century, FinTech was initially applied to resolve the back-end systems of established financial institutions Since then fintech has been expanded to ensure financial literacy as well as streamlining the wealth management, lending and borrowing, retail banking, fundraising, money transfers/payments, investment management and more The role and the significance of FinTech have now escalated to a greater extent in India and its landscape in the country can now be clasified into three broad categories: payments, financial products and services, and other general-purpose JANUARY - FEBRUARY 2019 COVER STORY The Indian Fintech market is forecasted to touch $2.4 billion by 2020 from a current $ 1.2 billion, as per NASSCOM technologies According to B Raj Kumar, Deputy Chief Executive, Indian Banks’ Association says, “Earlier we used to define eras into BC and AD but in recent times we now perceive it as BT (Before Technology) and AD (After Technology) I represent the BT era and I am privileged to witness this entire transformation in banking in alignment with technology in India Today, we cannot imagine a human being without a smart phone This change is huge and I am thankful that I could witness both the eras Technology has now given you the power of convenience It also helps you in controlling the number of frauds associated with your cards and bank accounts You can choose to maintain low balance in your particular card and then transfer the required amount to it through mobile banking whenever you need it KEY TECHNOLOGIES TAKING INNOVATION AHEAD In the last few decades, the banking sector in India realised the rising significance of digital technologies and the urgent need to embrace the same for streamlining their services In the digital era, there are several technologies that helped ensuring innovation across the sector But in India’s context, three developments proved to the milestones These innovations were the gamut of significant developments that we witness around us today They are namely Core Banking Solutions, Immediate Payment Service, and Aadhaar CORE BANKING SOLUTIONS Core Banking Solution (CBS) is one of the most important and nodal systematic change that completely transformed the way we see banking transactions today Core banking was recommended in the 1984 Rangarajan Committee report on bank computerisation An expression of interest pertaining to CBS was invited in July 2000, and the actual implementation started in August 2003 when the first branch of the State Bank of India (SBI) was put on TCS’ BαNCS core banking solution The number of public sector bank branches in India with CBS implementation increased from 79.4 percent in March 2009 to 90 percent in March 2010 It is a process where all information regarding the transactions and accounts, and the business of the bank are hosted via single centralised data base IMMEDIATE PAYMENT SERVICE (IMPS) Launched in 2010, the Immediate Payment Service or the IMPS was developed by National Payments Corporation of India (NPCI) The system facilitates immediate fund transfer from one account to another Prior to the launch of IMPS, fund transfers were scheduled as per the bank operation hours, settlement hours, national holidays, etc This innovation, after its implementation, is helping customers to transfer funds anytime immediately IMPS is the fastest growing immediate payment system in the world The daily transaction volume of IMPS grew from about two million per day in 2017 to approximately 2.8 million per day in 2018 10 JANUARY - FEBRUARY 2019 [ bfsi.eletsonline.com ] Asia and the Middle East’s Leading Portal on Banking and Finance Sector CONFERENCE REPORT 5TH NBFC100 TECH SUMMIT 2018 SRIVATHS VARADHARAJAN Chief Information Officer, Niyogin Fintech Ltd The first thing that came to our mind when we planned to implement NexGen Banking in our organisation is how can we put our architecture our place where your entities can seamlessly access your text stack across all verticals For example, how you place your employees, partner and customer in such a manner that they have a seamless view your ecosystem that is driven through your technology orientation VITTHAL NAIK Chief Technology Officer, Profectus Capital If you want to implement any innovation in your organisation, it is important to look at the agility of the architecture In the absence of agility, it is next to impossible to achieve the benefits of technology completely Agility and labour architecture is a key thing even for traditional NonBanking Financial Companies (NBFCs) Building an API layer helps you to integrate with the partners 46 JANUARY - FEBRUARY 2019 SURESH A SHAN Head-Innovation & Future Technology, Mahindra Finance Technology market dynamism changes the level and a type of innovation BFSI market itself is changing from corporate digital to customer digital Now, individual customer is treated as a corporate and the technology should revolve around the fact that the customer’s demand remains as the prime focus DOMINIC VIJAY KUMAR Deputy Vice President and Head-IT, Art Housing Finance India Ltd Two years ago we decided to implement innovations in terms of technology Our organisation wanted to innovate something totally different from the standard procedure We brought in a process called virtual branch At Art Housing Finance India Ltd is running 15-20 virtual branches but we face several channels while running the operations in those branches [ bfsi.eletsonline.com ] Asia and the Middle East’s Leading Portal on Banking and Finance Sector CONFERENCE REPORT 5TH NBFC100 TECH SUMMIT 2018 RAMAN M K Senior Business Evangelist, Exotel Chatbots, particularly in the banking sector, has witnessed a lot of developments In this segment, voicebased authentication or voice bio-metrics is the new innovation wherein you try to store customer voice prints based on his voice and speech analysis But there are several security challenges associated with this Connect with us on BFSIPost @BFSIPost The Banking and Finance Post elets_bfsi eletsvideos JANUARY - FEBRUARY 2019 47 Glimpses of Awards 48 JANUARY - FEBRUARY 2019 [ bfsi.eletsonline.com ] Asia and the Middle East’s Leading Portal on Banking and Finance Sector Glimpses of Expo Connect with us on BFSIPost @BFSIPost The Banking and Finance Post elets_bfsi eletsvideos JANUARY - FEBRUARY 2019 49 MUMBAI 20 NOVEMBER 2018 Thank You Elets Technomedia and The Banking & Finance Post thank the esteemed speakers, delegates and partners for attending the 5th NBFC100 Tech Summit, Mumbai on 20th November 2018 We believe that you found the conference informative and worthwhile We believe that our diverse and dynamic group of speakers and panelists provided in-depth insight Host Partner Supporting Partner Security Partner Cloud Lending Partner Lanyard Partner Sales Execution Partner Lending Technology Partner Associate Partners Branding Partner Exhibitors Good people to work with bfsi.eletsonline.com/nbfc100 | #eletsNBFC | Watch all the videos of the summit at: Elets_BFSI Elets_BFSI BFSIPost bit.ly/elets5thNBFC The Banking and Finance Post @BFSIPost SUBSCRIBE NOW Your Best Source for Insights into Latest Technology & Innovation in BFSI Sector Asia & the Middle East’s Premier Bimonthly Magazine on Banking and Finance Sector We would like to subscribe for The Banking & Finance Post Magazine Duration (Year) Issues Newsstand Price INR Subscription Price INR New * Renew Savings INR 1200 1100 100 12 2400 2100 300 18 30 3600 6000 3000 4800 600 1200 Please fill this form in CAPITAL LETTERS First Name Last Name Designation/Profession Organisation Mailing address City Postal code State Country Telephone Fax Email Website I/We would like to subscribe for Years Years I am enclosing a cheque/DD No.* Drawn on (Specify Bank) Dated in favour of Elets Technomedia Pvt Ltd., payable at New Delhi For `/US $ only Scan Paytm Code * Please make cheque/dd in favour of Elets Technomedia Pvt Ltd, payable at New Delhi * No charges applicable for ordinary post Charges will be applicable for speed/registered post or courier Subscription Terms & Conditions: Payments for mailed subscriptions are only accepted via cheque or demand draft | Cash payments may be made in person YOU CAN SUBSCRIBE ONLINE elets.in/subscriptions Elets Technomedia (P) Ltd Stellar IT Park, Office No : 7A/7B, 5th Floor, Annexe Building, C-25, Sector 62, Noida, Uttar Pradesh, India - 201309, India, Ph: +91-120-4812600 | Fax : +91 - 120 - 4812660 Email: subscription@elets.in, Contact Number : +91-88606-35832 SPECIAL STORY HAS BFSI REACHED CLOUD NINE? Why Cloud Technology is Beneficial for Banking Sector? The banking sector is home to a huge volume of consumer data and in a bid to offer best of the services pertaining to data protection, the sector has to deploy tech-driven innovations In such a scenario, the cloud computing serves as one of the significant and transformative solutions that is ensuring security, agility and scalability, writes Rashi Aditi Ghosh of Elets News Network (ENN) Experts across the banking and financial sector believe that strategically implemented cloud computing services assist the banks in optimum utilisation of its resources in a highly flexible and efficient manner with the help of data storage, batch processing and data analytics Further, the cloud technology facilitates the banking industry in improving revenues, operational efficiency, and the client servicing department computing in terms of the Banking, Financial Services and Insurance (BFSI) sector, T V Ramanmurthy, General Manager - IT, Bank of Maharashtra, says, “Before implementation of cloud computing in the BFSI sector, it is important to accept the relevance of the technology first In 2017, when BHIM and Unified Payments Interface were implemented National Payments Corporation of India (NPCI) took six months to realise the vitality of cloud technology in the implementation of the above mentioned interfaces.” Talking about the relevance of cloud Explaining about the implementation 52 JANUARY - FEBRUARY 2019 of cloud services further, Zulkernain Kanjariwala Head - IT, Doha Bank says, “Each and every financial institution in India has its own perception pertaining to leveraging cloud technology in their institution completely In reference to the current level of digitisation in the country, it is evident to make use of tech-driven initiatives and cloud is definitely going to play a major role in the transformation.” Benefits of Cloud Technology: Flexibility The cloud helps the banking sector in swiftly adapting to frequently modifying [ bfsi.eletsonline.com ] Asia and the Middle East’s Leading Portal on Banking and Finance Sector SPECIAL STORY consumer demands and market requirements It offers an additional room for financial institutions in meeting the consumer needs and this flexibility helps banks to streamline the services Explaining the vitality of cloud implementation across the banking and financial institutions, Prasanna Lohar, Head-Innovation and Architecture, DCB Bank, said, “Today’s consumers and their needs are hyperactive It is therefore important for the brands to evolve and shift to cloud in alignment with the consumer’s dynamic requirements Cloud comes with lots of opportunities that help the brand in offering hyper- personalised services to the customers Agility Cloud-based offerings/ services have a great power to boost the efficiency, agility and productivity of the banking industry It assists the banks in reallocating resources and allowing their IT staff to take a leap from the administration of IT infrastructure, enabling them to bring their focus to more innovative tasks “Cloud Computing is a buzzword in the recent times Organisations and experts are now relating it to the virtualisation of the application, storage, infrastructure and several other domains People now perceive that this piece of technology will give rise to a lot of benefits and opportunities,” says Manoj Nayak, Chief Information Security Officer, SBI Life Insurance Co Ltd Auto Scalability Cloud-based services help the banking and financial institutions in automatically scaling down their resources on the basis of the customer requirements This helps in lowering down the capacity, redundancy, and resiliency risks that are likely to be associated with traditional technologies Operational Efficiency Cloud technology assists the financial institutions in integrating futuristic technologies and applications in future that Connect with us on BFSIPost @BFSIPost Cloud-based offerings/ services have a great power to boost the efficiency, agility and productivity of the banking industry helps in levelling-up the productivity of their operations Leveraging a data managed centrally by cloud can also help the banks in eliminating complexities pertaining to the changes and increase of data “The days of saving the data within the premises have phased out In today’s world there are several software available as services Thinking about cost effectiveness and ease of operations, organisations are now going for cloud services,” says, Gautam KS, Head, IT, Auxilo Finserve Cloud has its own benefits Apart from being a significantly growing technology it is also a cost efficient option Mehjabeen Taj Aalam, Head-IT, Muthoot Home Finance, says, “Cloud is going to be one of the fastest growing The Banking and Finance Post elets_bfsi eletsvideos technologies in terms of banking Its growth is entirely connected with the benefits it offers The major advantage that cloud has is its cost efficiency.” Better Client Servicing Cloud technology helps the banks in streamlining their products and services It not only assists the banks in boosting their computing power but also allows them in offering better insights which helps banks for creating customised services for their clients “Implementation of cloud technology in financial institution is significant However, the companies must make sure that the storage of the data is done within the geographical premises of the country Companies should make sure that all the security parameters are met before putting any new technology in place,” says Vijayakumar Radhakrishnan, Chief Information Security Officer, Mahindra Finance While most of the experts opine that the cloud computing technology has the power to ensure transformation across the banking and financial sector, however, it is extremely vital to implement this technology only if helps in streamlining the services for the consumer Experts across the sector also believe that the cloud-based services should be implemented taking all the safety related matters in mind and only leading and trusted cloud services providers should be chosen  JANUARY - FEBRUARY 2019 53 INDUSTRY SPEAKS PINAK CHAKRABORTY Senior Vice President of Technology Digibank at DBS Rationalisation of multiple technologies - “Brevity is also the soul of wit” - as well as of clarity This is somewhat obvious but needs to be reiterated to challenge the status quo of existing technology Banks began computerisation many decades ago to primarily adopt core banking systems, which have served their purpose quite well in traditional model of bank branches and ATMs However, banks may now find themselves entangled to many applications which may no longer be fit-toserve scalability and “always” availability demands of digital channels Moreover, many times, banks adapted different applications and technology stacks to serve a common business goal because of an absence of a consistent technology strategy It is not uncommon to find that many different software functions to return a simple query like customer balance Therefore, the first step towards digital adoption is to look into the set of applications that were not developed with a consistent digital technology strategy in mind, but were rather built to fulfil some past requirements drawn in isolation 54 JANUARY - FEBRUARY 2019 Digital Transformation in Banking Sector : A Journey in the Making Digital transformation of large organisations like banks is bound to be arduous, protracted and varied Although there may not be a panacea for this varied and complex problem, but there are a few common threads that can be discerned This article attempts to sketch a brief outline of these common threads that banks can consider as they embark on their digital transformation journey A consolidation of these applications will not only reduce time to market for new features, but also the cost to run the applications necessary of day to day operations From monolith to loosely coupled architecture – “the elephant in the room” – let’s talk about that A loosely coupled architecture of software application enables rapid software development, increases resiliency and fault tolerance, and makes software systems easily scalable with the increase in user base in digital channels These are also tailor-made to be deployed to cloud and utilise benefits of distributed system However, the software applications that sit at the back of mobile applications or website may not have been developed with these principles and are mostly monolithic, which are difficult to change and maintain Any digital transformation can consider evolving to a loosely coupled architecture of these bank-end applications to take [ bfsi.eletsonline.com ] Asia and the Middle East’s Leading Portal on Banking and Finance Sector INDUSTRY SPEAKS advantages of distributed systems Increased adoption of test automation – “to err is human”- so automate Automation in tests during build to ensure quality up-fronting the development process will lead to early identification of potential bugs in the software and ensure quality up-front in the delivery process Advancement of technology and adoption of test engineering practices like Behaviour Driven Development means that user requirement, in the form of user stories, can be written in a manner that it can be automatically converted to test cases, which will reduce manual testing efforts and will enable traceability of requirements to test cases and actual testing performed These automatic and repeatable test cases for the entire applications in a regression test suite can enable rapid and frequent deployment of software in production without impacting quality adversely Continuous integration and continuous deployment – “the more the merrier” let’s deploy often then Automation of build pipeline of software deployment including automated code scans not only for coding standards, but also for any potential security issues, performance bottlenecks integrated with automated test cases can create software which is always release-ready This automated and accelerated product release processes will lead to on-time and frequent product releases reducing or eliminating system down-time completely Moreover, production release should eventually become a non-event with little or no manual effort needed from engineering teams Conversion data points generated from customers footprint to digital channels into actionable insights–“You see, but you not observe” – let’s both Right from gaining an insight into user pain-points while using an App that might lead to app abandonment, potential areas Connect with us on BFSIPost @BFSIPost of opportunities for optimising customer journeys, to determining an offer and a deal most appropriate to the customers, advances in machine learning algorithms can offer a lot features to be developed for the benefit of customers Data and resultant insight into app usage pattern of customers can also make it possible to provide contextual help to the customers as they are using the app, find out patterns in their transactions leading to better detection and prevention of fraudulent usage It can open up possibilities of almost a separately channel of interaction for the customer, where they can interact with the app using audio-visual inputs instead of current touch or keypad-based textual inputs Real-time visual monitoring, logging and altering systems– “nothing can dim the light that shines from within” – let system logs shine a light upon themselves Logging and monitoring systems can now deliver actionable insights in real time from centralising infrastructure logs and metrics to keep a pulse on customers concurrently using the app or websites The response time to server requests from digital channels during a certain time-frame can be monitored for The Banking and Finance Post elets_bfsi eletsvideos an average, or a maximum or minimum response time If a request is detected to be taking too long to process beyond normal limits, an alert can be generated automatically for further investigation Similarly, system load over a set timeframe can be monitored which is useful for traffic tracking If there is an unusual spike in user activity, e.g in non-business hours or on weekends, this can be altered and investigated It could be caused, for instance, by web crawlers who index the web-site content or evil bots scanning system for vulnerability Many of the monitoring tools have a built-in alerting engine (e.g email or Slack notifications) for some conditional rules This makes it possible to move away from a reactive system monitoring to a proactive and aggressive approach to resolve system issues This also helps in reducing manual efforts to operate a production system and time in debugging the underlying cause for an issue while providing a superior customer experience by increasing resiliency and fault-tolerance and availability of the system  (Views expressed in this article are a personal opinion of Pinak Chakraborty, Senior Vice President of Technology, Digibank at DBS He is developing a mobile first and paperless banking experience for customers.) JANUARY - FEBRUARY 2019 55 INDUSTRY PERSPECTIVE UNITUS CAPITAL Helping Businesses in Financial Inclusion Space Unitus Capital has in-depth expertise in handling investor relationships and insights, maximising engagement of impactaligned investors, and streamlining execution of raising capital As an advisor to the clients, it has provided insightful and actionable advice on mergers and acquisitions, financial restructurings, and other strategic and financial matters, says Abhijit Ray, Co-founder and Managing Director of Unitus Capital, in conversation with Elets News Network (ENN) Unitus Capital has completed 11 years of its operation in India How has been the journey so far? Challenging, exhilarating, overwhelming, and greatly satisfying! In 2008, when Eric (my fellow Co-founder and Chief Executive Officer) and I joined hands to launch Unitus Capital (UC), our aim was to help businesses in the financial inclusion space to raise institutional equity and debt by putting professional team in place, organised structures and reporting, improve corporate governance practices, help understand the investment thesis and approach of institutional investors, and how to work with them Later, this transformed into arranging capital for all types of businesses that work with the mass markets to provide affordable products or services or help in preserving and conserving the nature The name Unitus signifies our intention to “unite” the haves and the have-nots This was also the time when renowned investment banks across the world imploded, which had a cascading effect on the financial services sector everywhere In the beginning, UC started raising capital for the Micro Finance (MF) Industry Within a short time of commencing 56 JANUARY - FEBRUARY 2019 work with Microfinance Institutions (MFIs), the Andhra Pradesh MFI crisis struck However, UC manoeuvred the difficult phase and now, in the 11th year of operations, I am happy to state that Unitus Capital has become a name to reckon as the Investment Banker of choice for investors and businesses which are not only scaling very fast but also creating great social, environmental and financial impact through their work During the last decade we have been able to arrange capital for multiple sectors including microfinance, affordable housing finance, Micro, Small and Medium Enterprises (MSME) lending, agrifinance, education finance, affordable healthcare, affordable education, agriculture, renewable energy, and women empowerment etc Looking back, I am proud that we have been able to accomplish so much within such short time span by helping more than 100 impactful businesses in raising over US$ Two billion of equity as well as led the investment banking deals table in India in terms of largest number of deals makers, for the past five years in a row Your vision is to deliver capital and change lives What services you offer in a bid to accomplish this aim? ABHIJIT RAY Co-founder and Managing Director Unitus Capital Unitus Capital (UC) is a boutique investment bank that facilitates access to capital for businesses to innovate and scale, as well as deliver deep social and environmental impact Our services can be broadly classified into three major categories: Equity Debt,Structured Products, and Advisory On the equity side, Unitus Capital offers end-to-end services to businesses at various stages of their life cycle, right from early to growth stages, as well as mature businesses UC works closely with clients in preparing collaterals to reach out to potential investors, identifying such investors, negotiating term sheets and transaction documents, and compliance of conditions precedent, and finally facilitate closing of the investments On the debt side, UC is involved in raising term loans (secured and unsecured), as well as subordinated debt and working capital [ bfsi.eletsonline.com ] Asia and the Middle East’s Leading Portal on Banking and Finance Sector INDUSTRY PERSPECTIVE facilities from domestic and international debt investors This includes commercial banks, Non-Banking Financial Companies (NBFCs), Small Finance Banks (SFBs), Development Finance Institutions (DFIs), Micro Investment Vehicles (MIVs), Socially Responsible Investors (SRIs) and Family Offices UC has helped clients to raise funds through Non- Convertible Debentures (NCDs) (listed and unlisted), External Commercial Borrowings (ECBs), securitisation of portfolio, assignment transactions, rated loan pool sale, loan portfolio sale, etc In many instances, UC was the sole arranger of multiple issuances of non-convertible debentures and external commercial borrowings for various businesses Non-Banking Financial Companies (NBFCs) are going through challenging times What is your view pertaining to their future in India? The liquidity issues in the NBFC sector occurred during a year that was best in terms of performance as far as the sector was concerned The said liquidity situation is a wake-up call for the sector to conserve capital, possess a strong equity base, be adequately leveraged (and avoid stretching leverage ratios), and curb unnecessary expenditure The Reserve Bank of India has stepped in at the right time to address the difficult situation by reducing the minimum holding period requirement for NBFCs raising funds via securitisation of loans of original maturity above five years This also came at a time when many of Public Sector Undertaking banks are under PCA and many others plagued by their own Non-Performing Assets (NPA) levels resulting in most of the Banks reducing their lending to the retail, Housing and SME sector However, many of the wellrun NBFCs were still able to raise debt, albeit with slightly higher interest rates and shorter maturity period.In my opinion, the worst for the NBFCs is over and I foresee continued funding and strong growth for the sector in years to come Wealso need to appreciate that most NBFCs— especially MFIs, MSME lending entities, affordable Connect with us on BFSIPost @BFSIPost housing finance companies, etc — fill a vital gap in making funds available to segments that otherwise lack easy access to institutional credit and majority of them have been able to service their debt on time despite the tight liquidity situation in the market Apart from non-banking, your operations are spread across education and dairy sector as well What new innovations have your initiated or planning to implement in the above sector? UC has worked with numerous businesses engaged in education, agriculture, healthcare and dairy sectors Apart from advising entities that provide financial services to families to help meet feerelated expenses of their children, UC has worked with innovative organisations that structure educational programmes for the disadvantaged and provide training/employment opportunities to the differently abled people UC has also worked with businesses that made learning easier for students in the affordable private schools as also in the Government schools In agriculture sector, UC has worked with entities that are providing value-added services to farmer producer organisations in agri supply chain management UC has also worked with dairies, especially in eastern States of India, to help raise equity and identify strategic partners to expand their dairy processing capacity, deliver value-added milk products, improve distribution outreach, and set up chillers in remote rural areas to bring in more dairy farmers within their ambit UC has done great work in the healthcare sector, by raising capital for companies which manufacturer low costs stents/ catheters and low cost ophthalmology devices for five tests of the eyes UC has also worked with maternity hospitals that offer pre-and post-natal healthcare facilities and traditional medicinal therapies, as well as expanded outreach of diagnostic services through technologically enabled point-ofcare devices The Banking and Finance Post elets_bfsi eletsvideos The founders of Unitus Capital have also facilitated setting up UC Inclusive Credit (UCIC) Private Limited, a NonBanking Finance Company (NBFC) for providing innovative debt products to impactful businesses in the areas of agriculture, education, financial inclusion, healthcare, renewable energy, and women empowerment UCIC has commenced operations after receiving necessary statutory approvals from RBI and has already began disbursing loans to those type of businesses Tell us about the latest tech-driven implementations planned for 2019 Fintech is a fast-emerging sector in India The expansion of telecommunications and internet network across the country, availability of smartphones even in remote corners of the country, the government’s Jan Dhan Yojana for bringing in the unbanked sections of population in formal banking channels, and uptick in technology-enabled payment channels have resulted in a range of services available to customers through technology driven processes and systems.This has enabled an entire ecosystem of interesting business ideas to provide various services including credit scores, funds for meeting short-and long-term financial needs, savings and investment options, healthcare and fitness services, travel and tourism, etc Rapid advances in artificial intelligence, machine learnings and blockchain technologies will see more sophisticated services being offered to customers in the days to come UC is also seeing an increasing trend of established tech players looking at becoming aggregators of products and services as also building their lending books Many international investors, including large VC and PE funds from China focused on fintech companies, are actively looking at India as the next frontier in fintech At Unitus Capital, we’re working closely with such investors and fintech companies to make innovative capital available for fintech companies  JANUARY - FEBRUARY 2019 57 Organiser Knowledge Partner 15 MARCH 2019 Meet the Unconventional Non-Banking Players & Explore Best Business Prospects Get connected with the emerging players of the non-banking finance industry and explore the best possible business prospects by networking with them Elets Invites you join the 6th presentation of the NBFC100 Tech series, commencing on March 15, 2019 in New Delhi Why Join 6th NBFC100 Tech Summit? • • Power Packed Conference Networking • • Insightful Technology Presentations Awards & Expo Key Focus Areas • • • • • NBFCs and its Diversifying Role Financial Inclusion Challenges & Opportunities in NBFCs Modifying Framework of NBFCs Role of Regulatory Bodies • • • • • Role of Technology in NBFCs Digital Banking Cloud Computing Cyber Security NextGen Banking For Queries Contact: Manu Raj Singhal | +91 9871543890 | banking@eletsonline.com Elets_BFSI Elets_BFSI BFSIPost The Banking and Finance Post @BFSIPost ... It is therefore, important to analyse the fitment of the technology implemented and put the security measures in place prior to its usage  JANUARY - FEBRUARY 2019 11 ARTICLE ANDHRA PRADESH THE. .. You can either comment on the webpage of the story, or mail at editorial@elets.in JANUARY - FEBRUARY 2019 [ bfsi.eletsonline.com ] Asia and the Middle East’s Leading Portal on Banking and Finance. .. opportunities for the industry, employment generation and enhancing productivity and competitiveness FISCAL INCENTIVES 14 JANUARY - FEBRUARY 2019 IT INCENTIVES The Sunrise State of Andhra Pradesh, with