The Indian financial services sector has been looking for a makeover, for a long time now. This year, though, it is on a cusp of a major transformation with several new technologies set to gain momentum in the industry.
2017 will be a critical year for the financial services industry. As digital technologies gain immense prominence, companies in the financial services have a growing opportunity to increase their market share and profitability. The financial sector is laying razor sharp focus on improved services to its clients and customers by upgrading its technology infrastructure in order to get a competitive edge.
By 2019, it is projected that national savings in India will reach a little above USD 1 billion. The insurance sector is expected to touch USD 350-400 billion by 2020, according to a joint report prepared by KPMG-Confederation of Indian Industry (CII).These numbers further drive home the fact that positive business sentiments, improved consumer confidence are likely to propel the industry. Enhanced spending on IT infrastructure, robust implementation of projects are likely to give an impetus to its growth.
To further elaborate on the trends, business challenges, and opportunities that will shape the industry this year, IDG media spoke to three CIOs of top companies in the industry: Ekhlaque Bari, EVP and head IT, Max Life Insurance; Nafees Ahmed, Group CIO, Indiabulls Housing Finance; Kersi Tavadia, CIO, Bombay Stock Exchange. The three IT leaders also describe how they are using IT to leverage challenges and their expectations from the government to give a boost to the industry.
What business challenges are you facing? How do you plan to leverage IT to overcome these challenges?
Ekhlaque Bari: Our business challenge is to increase revenue and not the cost. We have to make our sellers–banks and agents–productive, and convert leads into customers in an efficient manner. We plan to leverage IT to improve seller and customer experience. As we have a service oriented architecture, we can leverage internal APIs, external APIs and plug into National Insurance Securities Depositories Limited (NSDL), Know your Customer (CKYC), and medical bureau to bring information. At the same time, we have embraced agile and devops so that we can deliver results faster.
Nafees Ahmed: The biggest challenge is to reduce our operational costs. Last year, we launched an e-home loan business, a complete, end-to-end digital platform home loan business. This year, we are working on its version 2.0, which will help us in collecting process payments on time from our customers. Also, we are creating a virtual branch on Facebook. Customers can apply for loans through social media and all the functionalities available on a mobile app will be available on Facebook too.
Kersi Tavadia: As cybersecurity has become a big challenge for everyone, we are getting into artificial intelligence and machine learning to tackle it. In a couple of months we’ll go live with it. With this, we can predict a cybersecurity issue beforehand and prevent it.
How do you think technology can play a key role in accelerating innovation in financial services industry?
Bari: Technology can play a key role in accelerating innovation in the insurance sector. Over the past year, several technologies like AI, bots, blockchain, virtual reality, augmented reality, and IoT will transform insurance.
Ahmed: Technology plays a crucial role in accelerating innovation in our home loan business. In our e-home loan business, customer need not come to our office to file documents, and fill up forms in order to apply for a home loan. Everything can be done online. As a result, it is reducing our operations cost, increasing efficiency of sales force and customer satisfaction.
Tavadia: Many innovations are happening in the fintech and payment bank arena. Mutual funds have become paperless. Earlier, mutual funds were not traded in stock exchange, but now it is happening. With the current technology available, our markets can compete with the best in the world.
Which technologies are going to be disruptive in your industry in 2017?
Bari: AI will help insurance companies look into the right set of demographics to focus on campaigns and help reduce the routine tasks done by people. In case of bots, there will be customer servicing bots and auditing bots. Blockchain will help in executing reinsurance. If someone wants to insure their property, AR and VR will help in figuring out the risk before underwriting.,”
Ahmed: Globally, AI and machine learning are going to be the most disruptive. The initiatives taken by the government of India like Aadhaar, United Payments Interface (UPI), KYC, are the accelerators to digitize everything. These are the platforms everyone needs to use to be completely digital.
Tavadia: Mobile technology, cloud, big data, analytics, open source are going to be disruptive. Open source gives you the freedom to pick and choose what you want, but one has to have the right to customize. Also, with big data and analytics, it is easier to read structured and unstructured data.
As a CIO, what are your priorities for 2017?
Bari: My first priority is to enable digital transformation, attract customers and give them a good experience. Second, to digitally enable my sellers with all the tools, so that they can convert a lead into a customer. Third, to make our organization digitally intranet by having a bunch of employee applications. Finally, I would bring in skill sets of agile and dev ops, and become cloud enabled.
Ahmed: I want to make India bulls a digital company. For that to happen, we have a dedicated team working only on innovation. And whatever is required, we will outsource the work and do the remaining work in house.
Tavadia: My priorities are to innovate more in the trading system. At the same time, we are trying to innovate more business processes and employee sales service portals. We are scaling BSE Star MF, a mutual funds platform by providing it on mobile.
What initiatives are you expecting from the government to give the industry a boost?
Bari: We are expecting the government to reduce the number of paper requirements for the regulator mandates. That said, the government should enable digital processing of applications and claims. As India has an under penetrated market for insurance, the government should give incentives to people, so that they come ahead and insure themselves.
Ahmed: We are expecting the National Payments Corporation of India, which is developing the UPI, to provide a unified platform. When UPI is implemented, we have to go through partners like HDFC bank, ICICI bank etc. It should be a unique platform where all the banks are covered under one platform, where there is a need for us to only integrate instead of going to individual banks. At the same time, new initiatives like Bharat Bills payments will be useful for us and hope NPCI will deliver them on time.
Tavadia: The government needs to encourage more startups in the digital space and fintech companies.