June 2021 - Banking Frontiers

Vol. 20 No. 2 June 2021 `75

Pages 68

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Health insurance pg 6

Digital Transformation pg 8

India Infoline pg 19

Mandeshi Mahila Bank pg 24

Th

eRisk Sentinels

Call for Nomination

Rajeev YadavMD & CEO,

Fincare Small Finance Bank

Vishakha R MMD & CEO,

IndiaFirst Life Insurance

Rishi GuptaMD & CEO,

Fino Payments Bank

Mahesh ThakkarDirector General, Finance Industry

Development Council

Sumit RaiMD & CEO,

Edelweiss Tokio Life Insurance

Harnath BabuCIO,

KPMG

DNA 2021 - Jury Members

Please contact for more information:

Ashish Verma : 98332 36943 [email protected] Ravi Lalwani : 77382 97946 [email protected] Stalin Saldhana : 91677 94513 [email protected]

A N N O U N C I N G

Distinguished NBFC Awards 2021

Last date for nomination: July 16, 2021

DNA

Presents

NBFC’s

Banking Frontiers June 2021 3

June 2021 - Vol. 20 No. 2

Group Publisher : Babu Nair

Group Editor : Manoj Agrawal

Editor : N. Mohan

Editorial Mehul Dani, Ravi Lalwani, V. Raghuraman

Research Editors V. Babu, Ratnakar Deole, W.A. Wijewardena, Sanchit Gogia, K.C. Shashidhar, Dr L.S. Subramanian, Ajay Kumar

Advisor-Alliances Ateeq Siddique

Marketing Kailash Purohit, Dhara Thobani, Rohit Kahar, Aditya Arya

Events & Operations Shirish Joshi, Stalin Saldhana, Pramod Jadhav, Ashish Verma, Wilhelm Singh, Sneha Agrawal, Ramesh Vishwakarma, Sushant Tulapurkar

Design Somnath Roy Choudhury, Sudarshan Herle

Published By Glocal Strategies & Services D-312, Twin Arcade, Military Road, Marol, Andheri (E), Mumbai 400059, India. Tel: +91-22-29250166 / 29255569 Fax: +91-22-29207563

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Editor: Manoj Agrawal (Responsible for selection of news under PRB Act)

There is lot of buzz these days about neobanks. Banking industry analysts say they may if not one day replace traditional banks, become what Amazon is to the supermarkets. They have proved that

technology can indeed make big difference and bring in convenience factor, especially for the customer. One of their offerings is that customers will have complete control of their finances using apps. This is not just a sop for the customers but a means for the neobanks to lower their overheads and thereby allowing them to waive fees or service charges that traditional banks usually levy on their customers.

In markets where neobanks have firmly established themselves, like in the US, the customer service they offer is far superior to those given by traditional banks. And for them, digital is all-pervading. For example, their high- profile chat systems ensure that there is no way a resolution will not be found. In comparison, the apps offered by the highly technology driven banks are often stuck by poor functionality and security concerns.

Studies have indicated that even when neobanks own less than 5% of the retail market, they appeal up to 35% of new customers per year. Their market size was valued at $34.77 billion in 2020 and it is expected to expand at a CAGR of 47.7% from 2021 to 2028.

It is not a wishful thinking that neobanks will, if not render traditional banks redundant, come to stay and offer competition, thereby pushing the latter to evolve, modernize and become customer-centric. They will also be pushed into taking up technology for what it is and not just because others too are using it.

Neobanks have facilitated the creation of a new tech course that has completely changed the services, products and speed of delivery. And this makes them highly impactful, transparent, low cost and easy to access. They are assuming the role of digital challengers to the traditional financial services institutions, proving to be the real people-oriented institutions to the people who need them.

Editor’s BlogN. MohanMobile : 9322895820Email : [email protected]

Neobanks a boon for customers

N E W S Regulator

4 Banking Frontiers June 2021

Project Jura to experiment on wCBDC The Bank for International Settlements’ (BIS) Innovation Hub, Swiss National Bank and Bank of France will be working with a private sector consortium on an experiment using wholesale central bank digital currency (wCBDC) for cross-border settlement. BIS said the project, called Project Jura, will look into the potential benefits and challenges of

wCBDC in settling cross-border payments and digital financial instruments. It will involve 2 wCBDCs and a French digital financial instrument on a distributed ledger technology platform. The private sector consortium is led by Accenture and includes Credit Suisse, Natixis, R3, SIX Digital Exchange and UBS. The project is an expansion on central bank experimentation investigating the effectiveness of wCBDC for cross-border settlement. Several central banks are exploring the scope of launching CBDCs as a virtual form of a country’s fiat currency.

HKMA to set up fintech groupThe Hong Kong Monetary Authority (HKMA) is setting up a new Fintech Cross-Agency Coordination Group to formulate supportive policies for the local fintech ecosystem. This is part of the central bank’s Fintech 2025 strategy plan. The project involves local commercial banks, blockchain-based data sharing, talent supply and the central bank’s own work in exploring the outer boundaries of digital currency creation. The regulator is proposing to start study on a possible retail e-HK$ to understand its use cases, benefits, and related risks. It is also intending to roll-out a Tech Baseline Assessment to take stock of banks’ current and planned adoption of fintech in the coming years, to identify fintech business areas or specific technology types which may be underdeveloped, and would benefit from HKMA support.

Malaysia regulator sets up new funding facilityBank Negara Malaysia has established a 1-billion-ringgit financing facility, called the High-Tech Facility - National Investment Aspirations (HTF-NIA) to support local high-tech and innovation-driven small and medium-sized enterprises impacted by the pandemic. Eligible companies can receive up to 1 million ringgit as working capital and up to 5 million ringgit for capital expenditure. HTF-NIA is available until 31 December 2021, or until the funding has been fully utilized (whichever comes first). SMEs that are not eligible for the HTF-NIA can apply for other financing facilities from BNM, such as the SME Automation and Digitalization Facility (ADF). Under this scheme, businesses can receive up to 3 million ringgit for the purchase of equipment and software that accelerates the automation and digitalization of business operations.

BIS to open innovation hub in LondonThe Bank of International Settlements (BIS) has opened a London innovation hub in collaboration with the Bank of England. This is the fourth innovation center that the BIS has launched in the past 2 years, having already established innovation partnerships with the Hong Kong Monetary Authority, the Monetary Authority of Singapore and the Swiss National Bank. It now plans to open such hubs in Toronto with the Bank of Canada, with the European Central Bank and the Eurosystem in Frankfurt and Paris, and with 4 central banks in the Nordic region. It has also entered into a memorandum of understanding with the US Federal Reserve in this regard.

Saudi women can operate children’s bank accounts

Ravi Menon gets 2-year term at MAS

Singapore President Halimah Yacob has re-appointed Ravi Menon as the Managing Director of the Monetary Authority of Singapore for a further period of 2 years. He will now have his tenure until May 2023. Menon has also been reappointed to the MAS’s board for the same length of time. The central bank said in a statement it has appointed 2 new members and reappointed 5 existing members to its board. Menon has seen his global profile rise since he took the job in 2011. Under his leadership, MAS has adopted a multi-pronged strategy to build what is now regarded by many as one of the most vibrant fintech ecosystems in the world. The 2 new members of the board are Lawrence Wong, Minister for Finance, as deputy chairman, and Deborah Ong, a retired partner at PricewaterhouseCoopers. They will have a term of 3 years. Tharman Shanmugaratnam, Senior Minister and Coordinating Minister for Social Policies, has been re-appointed as Chairman until 31 May 2024.

The Saudi Central Bank (SAMA) said it will allow mothers to open bank accounts on behalf of their children, so long as they are minors. The regulator said it is keen to contribute to empowering maternal clients to manage their children’s affairs. Children’s account will be in the name of the minor but a subsidiary of the mother’s account. Saudi Arabia was the top reformer and improver among 190 economies in the World Bank’s Women, Business and the Law 2021 report, getting a score of 80 out of 100, compared with last year’s 70.6.


Sri Lanka

Covid Maneuver: Banks & Regulator RespondDr W.A. Wijewardena, former deputy governor of the Central Bank of Sri Lanka, shares interesting insights on measures taken by Sri Lankan banks to stay afloat in the aftermath of the pandemic:

Babu Nair: How has the Sri Lankan

banking sector been able to be resilient

in the pandemic scenario?

W.A. Wijewardena: The Sri Lankan banking sector had taken the technological path since some time. The pandemic came as a shock as face-to-face transactions took a hit. The banks could not render services in the usual way. Some leading banks moved to the digital platforms more easily than others. Some banks introduced banking via vehicles. This allowed the banks to give cash to their customers. This way the customers did not face liquidity problem and could buy essential goods.

When it came to other banking services like account opening, the systems were already in place. An automated clearing house has been introduced by the Sri Lanka National Payments Platform, called LankaPay. Through LankaPay, customers could log in to their respective bank accounts and make payments to government departments. This way, with just a click of a button anyone could pay their bills, income tax, etc.

The central bank introduced QR codes for use by retail shops. The customers could make payments just by scanning the QR codes. The Sri Lankan banking system will not have any problems even if the lockdown is to be extended.

Have the changes in banking methods

affected the business of banks? The government of Sri Lanka

is trying to stimulate the economy by giving lower interest rates. The lending rates have been brought down considerably. However, the government is supporting the banks fully. Several taxes like VAT, nation-building tax etc have been eliminated for the current financial year. The negative impact of the reduction in interest rates has been offset by the removal of expenses. Hence, the banks’ profits remain the same. The

banks will have to provide for upcoming businesses. They will also have to seed the capital for new startups and invest in newer technology to ease the banking system.

Have there been any changes in the

non-performing assets? NPAs have gone up as customers have

not been able to repay.

Has the government given a moratorium

on repayment of loans?

The Central Bank had announced a moratorium of 6 months which was further extended by 3 months.

The phygital system has worked so far.

What is the road ahead for the banks?

Sri Lankan banks are taking many steps. The important ones are:1. The use of APIs is coming up. Data

collected through APIs will be used to develop internal banking products.

The sharing of data between the banks is bringing transparency in the banking sector.

2. The Central Bank’s initiative to introduce blockchain technology for customer services is also being implemented.

3. Cryptocurrency is being promoted by the Central Bank. The aim is to reduce physical currency by replacing it with digital currency.

How is the banking industry going to

take business to next level?

The new normal is setting in. The banks will have to train their staff for the new technologies. Most of the banks are going for AI technology for processes. The law does not allow the banker to share the data unless they have the consent of the customer.

[email protected]

Revolutionising workplaces

Summary: When enterprises have adopted some solution or the other to optimize productivity during the pandemic times, how can they have better systems and processes?

Prajit NairDirector, Sales, VMware

W.A. Wijewardena highlights an initiative by Central Bank of Sri Lanka to introduce QR codes for use by retail shops

Health Insurance


Data drives Health & Treatment AnalyticsUdayan Joshi, President - Claims & Personal Lines Underwriting, Liberty General Insurance and Dr Sudha Reddy, Head - Health and Travel, Digit Insurance, speaks about issues relating to data for the health insurance sector:

Ravi Lalwani: What are the new types of

data that health insurers are seeking?

Udayan Joshi: A revolution has been sweeping the insurance industry for a few years now, to improve the management and utilization of data. Data is critical for designing new products, offering better service, improving customer experience and eliminating frauds. An established new trend is wearable technology that enables customers to track their routine, calorie intake and manage their lifestyle choices. This data can help insurers design better products that can reward customers maintaining healthy habits. Technologies like machine learning and artificial intelligence are now widely used - assessing fewer complex claims and deploying chatbots to manage customer relations better are some of the examples. Similarly, predictive models built based on richer data collated from various sources are helping in several business areas such as renewals management, cross-selling, fraud filtration, etc.

Dr Sudha Reddy: Health insurers look for both customer level data as well as overall trends in the health and well-being space across the world. For policy issuance, insurers are more and more looking at personal details, family history, lifestyle patterns etc, to gauge the overall health score of a person. Insurers also keep looking at overall health trends to understand what would be needed from a product level.

What are the sources of data for health

insurance companies? What is the quality

of the data?

Udayan Joshi: With this movement from the traditional structure to the unstructured data of today, there has been an evolution in the sources of data such as mobile applications, providers of wearable technologies and even web search providers. Many fintech companies specialize in providing data related to specific use cases and demographic/psychographic

analytics. The quality of this data has improved significantly over the last few years. Also, the use of technologies like OCR is helping insurers improve the quality of input data coming from various documents.

Dr Sudha Reddy: Health insurance companies either look at trends from customer data or use open-source data from IIB, GIC or other authentic research intermediaries. For instance, when we were curating India’s first covid insurance product, with no earlier references and evolving treatments, pricing was a real challenge. We improvised and used data from public domains globally - like the John Hopkins Report, Worldometer, research studies published by medical societies, hospital accounts, third-party databases and hospital expenses reports. This helped us understand the main levers of higher/ lower risks and develop our product accordingly. The quality of such data is generally high as they are curated by research bodies, health ministries or healthcare bodies.

What new functionality and analytics health

insurance companies are developing for

leveraging the data?

Udayan Joshi: The goal of any insurance company is to build a sustainable book. This can be done through precise risk selection, which in turn is enabled by data models determining accurate customer profiles and pricing – and right pricing helps in maximizing customer delight. While analytics can help in mitigating the risk of fraud and cancellation thus benefiting the company, it can also aid in designing better customer and partner journeys. Predictive tools can churn data to create personalized experiences and machine learning and artificial intelligence is used to improve turnaround time during

claims and endorsement. These together result in increased customer and partner retention.

Dr Sudha Reddy: H e a l t h i n s u r a n c e companies are developing predictive analysis for

claims, especially to gauge claim predictions that can help in scaling up claims processes, in looking at underwriting ratios and in being ready for any sudden increase in claims. These are relevant especially in such times with more and more covid claims coming in.

What kinds of queries are coming from

customers? How are health insurers

handling vernacular language data?

Udayan Joshi: While customers continue to interact with insurance companies with queries about their policy and to highlight challenges faced during their policy servicing, now, in addition to the traditional call center option, the mode of this interaction has expanded to include social and digital media. There has been a recent growth in technologies that can not only read, translate and organize data in any language from the written text but also analyze and respond through automated text and voice communication – and all this in the customer’s language.

Dr Sudha Reddy: Queries are usually on covid related claims. Customers usually want to know about expenses that are covered, whether consumables and preventive devices like thermometers and oximeters are covered and the kind of hospitals that are treating covid. Customers are also seen to be enquiring about digital claims processes and seeking guidance on the same.

More and more insurers are examining use of vernacular languages to help customers from across the country. We also have our documents in vernacular languages and our website is translated in multiple vernacular languages.

[email protected]

Dr. Sudha ReddyUdayan Joshi


Paradigm Shift

Key to Lending Growth - Speed & ScalabilityThe transformation that is happening in the lending space is enormous. Rajesh Krishnia, Head of Enterprise BFSI at Nutanix India, and D. Venkatesh, Director, Lentra AI, explain the nuances:

Babu Nair: What can banks do to reduce

the turnaround time for proposals? What

are the business opportunities in this?

D. Venkatesh: eKYC has been a game-changer. With the adoption of such initiatives, there has been a paradigm shift in running the lending business. Lending has moved from branch to online. Banks, due to lack of technology, are lagging behind in fulfilling business needs. We are empowering them with the right tools to cope with the demands.

Credit off-take has been hit during the

pandemic. How can technology help

banks?

Venkatesh: Our tools help to collate data and allow the banks to decide on further steps that will have to be taken. The product’s name is ‘GoNoGo’, and we believe that it helps banks to make faster decisions on loan approvals. The speed at which the data is collected from various sources and presented will change the way business will be run in the future.

The foundation must be compliance-

driven, secure and must perform in real-

time. What is the technical support that is

being given to lenders to reduce uptime? Rajesh Krishnia: The bank’s

application would work on a 3-tier architecture. Nutanix has brought in a new platform. We have tried to converge various storage and network aspects of banking. It is scalable and completely configurable. The availability of the data to the various tools makes it even more user-friendly. It is fully compliant with RBI regulations.

There are multiple applications running on

multiple clouds. How do you ensure the

governance of such platforms? Rajesh: Hybrid clouds will be adopted

in the future. We are helping clients with customer use cases. We are trying to move existing applications of clients to the cloud without disrupting their business.

Most of the demands are in the realm of WFH and how the employees’ work experience can be made smoother. Security and compliance are built at the first level so that it becomes easier to move to cloud computing from the mainframe.

What technology paradigms will create

further efficiency in lending?

Venkatesh: We enable the firms with tools that can aggregate the data and help run the business. The platform offers digital-first solutions.

RBI is proactive in reducing the NPAs. What

has been the role of technology in this?

Venkatesh: Early warning systems can be implemented in a 2-pronged approach. The first will be to review the portfolio. The best approach will be at the origination point. The data collected by our tools from various sources give a clear picture to the business rule engine. It can be further enriched by other ecosystems. We have found that under 1% of the cases had flaws and needed intervention.

Open APIs are making inroads in BFSIs.

What is the best way to integrate different

APIs?

Ve n k at e s h : T h e t ra d i t i o n a l lending system was very rigid. Now the government is opening the data portal for anyone to access the data; it is a game-changer. The new lending system allows banks to connect to outside systems. We are allowing the banks to choose the APIs which best suit their business. One of the revolutionary API-led frameworks initiated by the government is OCEN.

This is going to reach the gram panchayat level. This will allow the village-level entrepreneurs to get discounts a n d l o a n s without any physical intervention.

How can banks aggregate the lending

with the help of fintechs?

Venkatesh: Fintechs create niche products. We are dealing with both fintechs and techfin. We try to provide solutions to the banks using our collaborations. We have over 300 ready-to-use integrations. So, solutions are already there for the customers to choose from.

What are the challenges while working in

an open API environment?

Rajesh: Our products are API-driven. We want to remain invisible in the whole process. The customers are wanting to modernize the applications.

What are the technologies which are yet

to be seen in the lending space?

Venkatesh: Credit off-take is going to grow. SEHMATI is a framework that is coming up for lending. This will allow investigation of the accounts of the person and also credit bureau for any defaults. This means good customers will get loans at cheaper rates of interest, and bad customers will not be able to hide. All the banks are doing away with paperwork.

What will be the world of lending look like

post covid?

Venkatesh: There is going to be strong growth once the world reopens. The lenders are going to see increases in loans. There will be all types of lenders.

[email protected]

D. Venkatesh Rajesh Krishnia

Digital Banking


Tie-ups for digitization to drive business growthKarnataka Bank has set up ‘Digital Centre of Excellence’ in its quest for focus on improvement in technology, digitization and building values:

Karnataka Bank has deployed the most modern IT tools to deliver products and services for customers’ benefit

with an aim to develop effective long-term relationship with them. Mahabaleshwara M S, MD & CEO, lists the several digital initiatives in this regard:

Mehul Dani: What are the various tie-ups

Karnataka Bank has entered into and the

perspectives of such partnering? What

are the steps taken towards digitization

through such tie-ups?

Mahabaleshwara M S: We had embarked on a strategic transformation journey, namely ‘KBL Vikaas’ in 2017, complete with a vision, milestones, roadmap revolving around digitization and customer centricity. In the last 2 years, we have tied up with fintech companies for digital banking products, like Fin Wizard Technologies (FISDOM) for mutual funds platform, with IIFL Securities for demat and trading facilities for our bank customers and Corpository for sourcing corporate leads and business.

We have also tied up with companies like Karza Service, Perfios, Jocato, NSDL, Experian, Hunter, etc. to strengthen, automate and digitize the journeys, which include processes like onboarding of customers, recovery automation, data analytics and risk assessment, lending automation, etc.

In all tie-ups, customer is in the center as we all are moving towards ‘paperless, cashless, faceless’ Digital India economy. I am of the view that tie-ups with service platforms facilitates delivery, ease of access of the bank’s products to customers, whereas sales platforms are for customer onboarding, engagements, sales and retentions.

Our KBL Mobile Plus App is well loaded with features that varies from payment of

utility bills, credit card payments, UPI, scan & pay, mutual funds, insurance solutions and our aim is to bring complete banking at the fingertips of our customers.

We are witnessing digital adoption and customer delight through customer engagements. We will continue to focus end-to-end digital solutions for almost all banking activities so as to take customer engagement to a new high.

One more very strategic initiative and a milestone for us has been establishing non-financial, fully owned subsidiary of the bank, KBL Services, which is a big step for us in realigning business strategies with the objectives of improving efficiency, results and valuation in the long run for the bank.

What new initiatives the bank has

undertaken in the last 2 years to

augment business, like for example, lead

generation, business sourcing, cross-

selling and profitability? How do you view

cross-selling of third-party products?

Banks are increasingly becoming intermediary marketplaces in the digital era, and each prospective event in the customer journey presents a new opportunity. We already have our own infrastructure, resources and networking, para-banking tie-ups and activities, including bancassurance, depository service, insurance, MFs, credit cards, etc, that have helped increase the reach of the bank and bring a vast customer segment into the fold of varied financial services.

Our branches are supported by our lead management system (LMS) and analytical leads from the system facilitate identifying, engagement with prospective customers and help us offer additional banking services. This actually helps to build value to our relationships.

In retail asset segment, we have tied up with various builders for pre-approved housing projects that not only help customers in their decision making for house purchase, but reduces the loan processing turnaround time in the bank.

Similarly in motor insurance segment, we have entered into corporate arrangements with Tata Motors and Maruti Suzuki, wherein interested car buyers can avail finance from the bank through our ‘Xpress Digital Car Loan’ process. Our branches and loan processing units now have a strong retail marketing and sales force that facilitates end to end journey for customers.

Cross selling of products is undertaken as per RBI’s master directions on para banking or financial services as issued from time to time. It is in the nature of corporate agency, distribution, referral tie-ups etc. In the para banking segment, we have been offering various third-party

Mahabaleshwara M S claims that Karnataka Bank is ambitiously poised to become the Digital Bank of Future


Dhira - Digital Human Interactive Relationship Assistant

products, which provide one stop financial solutions to the needy customers.

In life insurance we function as a corporate agency of PNB MetLife India Insurance, LIC of India and Bharti Axa Life Insurance. For general insurance products we have tied up with Universal Sompo General Insurance and Bajaj Allianz General Insurance.

Our other arrangements with BFSIs include tie-ups with Way 2 Wealth Brokers and IIFL Securities for equity trading and co-branded credit card facility for our customers through SBI Card. We have partnered with FISDOM, an online platform for sale and management of mutual funds, which digitally enables our customers to invest and track mutual fund investments on KBL Mobile Plus App at their convenience.

The collaboration for third party products helps to improve revenue in the non-core income segment and there also exists a positive correlation to ROA in the longer run. In collaboration lies success.

How has the process of onboarding of

customers changed in the last 2 years in

terms of ease for customers?

We have set up an inhouse ‘Digital Centre of Excellence (DCOE)’, in our quest for reimagining customer journey and continuous focus on improvement in technology, digitization and building values. For example, digital loan underwriting products such as KBL Xpress Car Loan, Express Home Loans, Xpress Ghar Nivesh, Xpress Home Top Up, Xpress Easy Ride, Xpress Cash Loan, Xpress MSME etc, have been successfully launched and implemented by our bank in the last 1 year.

We have tied up with appropriate fintech players for these purposes. The application helps us to speed up account opening and approval of loan application by real-time data extraction and ID verification. These new age applications

automate many manual tasks to increase accuracy and hence, efficiency with automatic data entry. It is noteworthy that

we have already achieved the retail digital loan process adoption and 75% of the total/ number of retail loans have been sanctioned in such a way as on date.

Another tech product is ‘Tab Banking’, which is

flexible and reliable and empowers our field agents to initiate the on-boarding process on-the-fly. They can capture customer information on their tablet devices and initiate the e-KYC process to validate it and then upload this information to the core banking system in real-time. Using this solution, we can ensure the agile processing of savings bank applications and opening of accounts.

These customized banking applications have enabled us

to provide better customer experience by delivering flexibility and convenience of the essential banking operations right at the customer’s doorstep.

What steps have you taken in popularising

and marketing of digital products and

what is the visible impact?

Creating a robust digital platform and integrating all customer touch points across all channels is what we have ambitiously set into. We believe API integration is critical to business and so also our collaboration with newer and non-traditional players are to open up their APIs in order to remain competitive and witness growth. We are continuously engaged with the customers through social media marketing, mobile marketing, email marketing etc. to stay connected, build relationships, value and brand.

We also have contact center tie- up for providing tele marketing services and also popularising our digi-products and solutions. At the branch level, digital adoption campaigns are held to popularise and hand hold the customers for digital adoption.

As a part of indirect endorsement of the bank, you will find our bank’s products promoted in various blogging sites, bookmarking sites and classified sites such as Quora, Tumblr, etc. Customer experience, reviews and recommendations are found here, which affirms our customer centricity.

Also, the covid pandemic has accelerated digital adoptions and we have witnessed this, as our alternate delivery channel penetration crossed 90% this year. Such channel transactions have also increased 3.5-fold and today 90% of overall banking transactions are taking place through alternate delivery channels. We may say, that branch banking has shifted to mobile banking. This is enabling us, as there is a rationale to downsize 25-40% area in the branches, to reduce expenses on rentals, maintenance and other recurring costs.

We feel, we are on a right path to strengthen our technology and digital culture at all levels including business, managing of risk, compliance and governance, and is ambitiously poised to become the digital bank of future.

[email protected]

Collections


From bucket-based to risk-basedCollection systems are increasingly getting digitized and various approaches by financial services institutions make them more and more efficient:

When it comes to collection effic iency for MSMEs, a situational, 360-degree approach

is the most effective. For example, U GRO Capital, being a sector-specific lender, is focusing on leveraging knowledge and experience to understand the cash flows of the entire ecosystem in which a business operates and of the customer’s business as well at a granular level. In situations involving temporary cash flow issues, the company’s approach is to intensify the collection process. For varied situations, it utilizes other tailored solutions.

According to Anuj Pandey, Chief Operating Officer, in the collection process it is crucial to define clearly each milestone and ensure close monitoring of the required actions that need to be taken when such individual milestones are met or missed.

On its part, Fincare Small Finance Bank has built loan collection tools that not only enhance the customer experience but also lower the cost of operations, thus impacting the bottom line. The bank follows a hybrid analytics-driven collection approach, where extensive benchmarking is done and these are validated at the field level through pilots at select markets.

“Post evaluation of the pilot results, suitable collection models are launched across all markets,” says Soham Shukla, Chief Operating Officer - Rural Banking at the bank, adding: “In a nutshell, the combination of expertise and experience has helped us fine-tune our collection strategy - leading to best-in-class collection efficiency, despite the disruption caused by the pandemic.”

Clix Capital has adopted both efficiency and a top-down vs. bottom-up approach to work in tandem to improve collection efficiency. Vishal Jain, Head – Collections,

explains: “First is mind and later is the body and the 2 must work in a synchronized way to function effectively and efficiently.”

He adds: “A top-down approach defines the basic ground rules and direction to a bottom-up approach to ensure MIMO (Minimum Input and Maximum Output) and the bottom-up approach gives the feedback to a top-down approach to fine-tune the basic ground rules and direction to make it realistic and feasible to implement. Our adoption of both the approaches has helped us to segment the portfolio in a sharper and realistic manner to improve our collection efficiency as it was backed by field flavour.”

COLLABORATION WITH OTHER DEPARTMENTS Clix Capital’s collection team is in touch with borrowers throughout the loan tenor - in EWS, bounce and delinquency management activities. This structure feedbacks have been infused in all the key decision-making processes like defining the souring scorecard, loss prediction of the portfolio and in refining the organizational structure with right reward

and recognition program to manage the portfolio quality. Says Vishal: “Even in the current challenging environment where the regulator had declared various relief packages like restructuring, ECLGS, etc to the borrowers to come out from the difficult situation, collections learning has played a key role to identify the right customer segment to offer these packages to manage the portfolio in short and long terms.”

The appropriate collaborations between varied departments are critical to ensure high collection efficiency. Especially, teams from underwriting, collections and risk-analytics departments must work in tandem over the long term to ensure sustainable portfolio management. Anuj of U GRO Capital explains this feature: “At U GRO Capital, these departments work very closely. This collaboration is particularly instrumental in identifying portfolio and collection triggers at an early stage, post data analysis. The cooperation further extends to sales and product teams, which are key elements in the feedback loop, helping and refining the product proposition.”

Soham states that Fincare Small Finance

Anuj Pandey Vinod P


Bank is in the business of ‘collecting money, not giving loans.’ There is a strong alignment between business, support, and control functions for ensuring robust growth and portfolio quality, he says, adding the risk team helps highlight the operating and credit risks, the audit team ensures strong adherence to processes and support teams provide the required manpower, training, technology, back-office support to help the business teams fulfil their goals.

He also shares an example where the risk team put together concentration risk analysis and loss estimation modelling that helped the business teams navigate the way forward in a smarter way.

Speridian Intelligent Collection System provides a holistic view of the scenario about collections. It helps collate the results from various departments such as HR, risk, finance, etc. utilizing the capability of EWS, analytics, AI/ML, etc. Vinod mentions that with the impact of the pandemic, there has been a drastic change in the approach where digitization got a major thrust and the digital adoption has been swift to everybody’s surprise. “Here comes the real benefit of collaboration,” he says, adding: “Our Beacon collection solution synthesizes the data from various channels, analyses, and provides valuable insights to the collection team, dashboards to the managers such that they can approach their customers proactively as well as be more informed.”

He also maintains that this has provided good results to the company’s financial services customers. “The alerts, reminders, collection team dashboards, etc provide updated information so that these companies can take productive action. Also, the manager’s dashboards and escalations provide help to take proactive steps and improve the results.”

FINAL RATING/SCOREU GRO Capital has a distinctive scorecard-based underwriting model, for which the company has filed a patent as well. The model takes into consideration the historical loan delinquency patterns and cash flow within each focused business segment. In this approach, the application score, generated at the sourcing stage, and the behaviour score, reflecting the customer

repayment behaviour, are critical. Says Anuj: “Both scores are used as inputs in the collection strategy and process. These scores are dynamic and vary with time and circumstances. This process then dictates our collection strategy, to resonate with the posed situation, to achieve the best possible collection efficiency.”

Fincare Bank conducts Portfolio Quality Review (PQR) periodically by synthesizing internal and external data of each customer to understand the risk and evaluate future repayment behaviour. Basis this analysis, the bank creates customer segmentation and applies appropriate collection methodologies to reduce leakages.

Over a period, collection has also moved from the conventional way of bucket-based treatment to risk-based treatment, hence score plays an important role in defining the risk in the early MOB (Month on Book). As the MOB increases, the borrower’s internal and external behaviours gain higher influence in defining the risk score. Vishal explains this: “Even recent risk score helps to identify the improvement or deterioration in the portfolio, compared to souring score and to take corrective measure in new souring as well as the future loss prediction.”

According to Vinod, while NACH and e-NACH are extremely popular, other channels are getting more and more traction. Financial institutions are eager to utilize such ever-evolving facilities to reach out to customers, he says, pointing out that previously there were limited options for a customer to pay such as cash or cheque.

But, more than the underlying technology, it is the convenience and acceptability of the end customers which is driving the adoption of systems.

CUSTOMER BEHAVIOUR ANALYSIS Fincare Small Finance Bank recently launched a collection application that enables the loan office to update customer ratings at the time of collection. By gathering this data continually, the bank aims to create Early Warning Signals (EWS) for its field force and help them define bespoke collection strategy.

Customer behaviour score holds high importance in devising a collection strategy, believes Anuj of U GRO Capital. He says this is particularly essential to gauge the risk associated. Customer behaviour, being dynamic, impacts the score as well. “It is essential to appropriately analyze the behaviour to generate the most effective scores, to ensure efficient collection,” says he.

Collection has evolved in the past few years and the borrowers’ behaviour parameters are being used for the risk scorecard, which in turn helps to define the key input metrics like collection channel, collection intensity, engagement scripts and review mechanism for the institutions to improve collection. Vishal concludes the discussion: “Collection can be improved if we reach to the customer at the right time through the right channel with right communication script and all can be defined with the help of customer behaviour analysis.”

[email protected]

Soham Shukla Vishal Jain

Small Finance Bank


Roadmap to Achieve 50% GrowthShivalik Small Finance Bank will be adopting varied technologies and has engaged top-notch IT companies:

Shivalik Small Finance Bank is the first small finance bank to have transitioned from an urban

cooperative bank. It was first registered as a cooperative society in 1997 and was granted a banking license by the Reserve Bank of India to operate from Saharanpur district. The bank has Suveer Kumar Gupta as its MD & CEO, who is an engineer by qualification and has experience in computing and related activities with Tata Consultancy Services. He joined the bank in 1998 an he has been responsible for the all-round growth of the bank, which is the first and largest multi-state urban cooperative bank in Uttar Pradesh. With his deep focus on technology, he has brought in automation and technology drive services in the bank.

1000 TOUCHPOINTS With a strong technology infrastructure and a solid customer base, developed over 23 years, the bank today has 340 customer touch points, which includes 31 branches, 57 ATMs and 250 banking agents spread across western Uttar Pradesh, Lucknow and Madhya Pradesh.

Suveer has ambitious plans for the future: “We plan to add 40 customer touchpoints in FY 2021-22. In the next 5 years, we also aim to INCREASE the touch points to 1000. The aim is to expand through physical and digital channels and we are therefore looking at various skills including branch banking, digital sales, information technology, information security, compliance, risk management.”

DIGITAL ADOPTION DOUBLEDShivalik Small Finance Bank has made significant efforts in technology induction in the last 3 years to enable it to scale up rapidly. It completed a major technology transformation in 2017. And the pandemic accelerated digital adoption by the customers. Suveer says digital adoption more than doubled and the number of

digital transactions crossed 3.5 million. There was 20% rise in mobile banking adoption. There was a 150% yoy growth in mobile and internet banking transactions. More than 40% of the eligible customers already has debit cards and this segment is transacting using micro-ATMs or handheld devices. And 25% of the eligible customer base is on mobile and internet banking.”

LOAN ORIGINATION PLATFORMThe total business of the bank has grown by 10% in FY 2020-21 to `20 billion, with deposits at `12.45 billion and advances at `8.05 billion. This is despite extraordinary situation caused by the pandemic. The bank offers instant sanctioning of loans on digital channels.

It has a unique 2-wheeler insurance plan offered through BQR code, which is offered with the support of Bajaj Allianz General Insurance Co. The customer can just scan a QR code and enter the registration number of the vehicle. Details get populated and the premium amount

is displayed. Customers can just pay the amount at the press of button and the policy is also issued instantly.

DIGITAL ONBOARDING: E-KYCThe bank has introduced paperless account opening using e-KYC for savings bank accounts. Says Suveer: “95% of all savings accounts in our bank are opened digitally. We have plans to enable new account opening via website to drive customer acquisition digitally.”

The bank also offers business correspondent banking. In FY 2020/21, it introduced an app for employees, distributors, agents and BCs to onboard customers digitally and enable payment services. “We are currently working on video KYC and an integration sandbox for third parties to partner with us,” says Suveer

PAYMENTS & CLOUDTechnology has been a key focus area of the bank. Digital channels offered by the bank include mobile banking on both iOS and Android, internet banking, micro-ATMs for doorstep banking and Aadhaar-enabled payments. Says Suveer: “We are live on all retail payment platforms including UPI, IMPS, NEFT and RTGS and we are a direct member of the National Financial Switch. While 80% of all transactions in the bank are happening via digital channels, all our branches are equipped with cash recyclers, which perform the dual role of ATMs and cash deposit machines.”

Shivalik Small Finance Bank has been a pioneer in the adoption of cloud way back in 2013, even while it was a UCB. “We were the first bank in India to host the Infosys Finacle solutions on the cloud using a hybrid cloud architecture. The cloud-based architecture provides the bank with unmatched agility to cost effectively manage scale and power its growth,” says Suveer.

TECH VENDORSThe bank has a number of established

Suveer Kumar Gupta aims to offer online fixed deposits and digital loans in the current FY itself


technology vendors. The CBS is Finacle from Infosys and it has a digital banking suite including internet and mobile banking. The data is hosted at CtrlS data centers which are classified as tier-4 data centers. Other technology partners include FIS Global for Payments and Switching Services, FSS for UPI payments and Bharti Airtel for networking solutions. The bank is about to go live on Oracle’s Middleware and API Gateway solutions both of which also utilize Oracle Cloud Services.

CAPEX, OPEX, TEAM SIZEThe IT capital expenditure of the bank as a proportion of the total income has on an average been 5.1% over the last 5 years, which is higher than the industry standard of 2-3%. It touched a peak of about 16% in FY 19-20, when the bank completed a large digital transformation project. IT opex represented 8.5% of all operating expenses in FY 20-21. IT opex (excluding staff expenses) have increased by 42% yoy on average over the last 5 years especially because the bank’s IT infrastructure is hosted on a cloud-based model. The size of the bank’s IT team continues to grow and is about 10% of the total workforce, ie around 50 people.

CUSTOMER ENGAGEMENTShivalik Small Finance Bank has been using customer behavior analysis to offer products and solutions to existing customers and drive digital adoption. This is done via an assisted digital approach whereby contact center teams of the bank are in touch with customers. The bank has been able to increase mobile banking adoption through dedicated calling to customers where the teams guide the customers on how to onboard on the bank’s app.

The bank is also present on all major social media platforms including LinkedIn, Facebook, and Twitter. “We will continue investing in latest technology to keep pace with the changing nature of digital banking with a key focus on our extended target customer segment,” says Suveer.

DIGITAL FIRST VISIONWith over 450,000 customers, the bank has been leveraging technology to extend its

reach into the last mile and offer financial services for the masses and MSMEs. “If the year 2020 has taught us anything,” says Suveer, “it is that technology and digitization is the only way to progress. Our vision is to be a new age bank being digital first in its mindset and provide best in class banking services to the underserved and underbanked sections of the population, which they may be unable to get from other larger banks. The focus is on doing this through a combination of personalized, respectful customer service and superior technology offering for our target customers.”

SECURITY ENHANCEMENTShivalik Small Finance Bank has migrated to a new enterprise fraud risk management (EFRM) solution to monitor high risk transactions. “We have implemented Dynamic Key Exchange (DKE) as a security enhancement measure for payment systems. Any investments in technology have to be accompanied by investments into cyber and information security initiatives and fraud prevention tools,” says Suveer

HELP FROM FINTECHSuveer believes in having a clear vision to create a brick and click bank. The bank has API enabled architecture, which will allow partnerships with fintechs and other players. It currently has partnerships in place with India Gold, a fintech which offers doorstep delivery of gold loans; it has arrangements with Airtel Payments Bank and Atyati Technologies for retail and microfinance loans. It is actively engaged in discussions with multiple fintech partners to reach newer customer segments like entrepreneurial and underbanked women,

kirana stores, millennials in need of neo-banking services and individuals looking for gold loans.

In the next 12 months, the bank aims to offer online fixed deposits, customized savings accounts for millennials, digital loans against fixed deposits and insurance policies, loans against e-warehouse receipts, etc. Says Suveer: “With a razor-sharp focus on small businesses, we plan to grow our current loan book of `8.05 billion and deposits of `12.45 billion by 50% over next 12 months. Backed by significant investments made in building a robust digital interface to complement its physical touch points, our new entity aims to grow the business by `10 billion and significantly expand its current base of 450,000 customers in the next 12 months.”

TECHNOLOGY ROADMAP The pandemic has certainly accelerated digital adoption at a much faster pace than would have been organically possible. Suveer expects the trend of transacting through digital channels to continue and cross 90% from present 80% in the coming years. “Almost 65% of our customer base is using digital channels. We plan to push this up further by another 10-15 percentage points. We also plan to invest in building capabilities around digital sales, especially on customer on-boarding and insurance, integration capabilities to partner with the external eco-system including fintechs, data analytics to assist customer acquisition and business process automation to ensure that customer journeys can be simplified and time to service any requests are reduced. These are an integral part of our technology roadmap,” he says.

[email protected]

Shivalik Bank recently launched its Rupay Debit Card

Digitization Initiatives


Pillars of Transformation - AI & AutomationCity Union Bank is also building middleware platform that would help third party systems and fintechs to connect with core banking and internal legacy systems:

City Union Bank has been a pioneer in implementing IT enabled solutions for the benefit

of customers who could avail banking products and services at their convenience anytime, anywhere. One of the most innovative technology products of the bank is ‘CUB All in One Mobile App’.

Sankaran G., General Manager, Computer Systems Department, describes the solution: “This is a multilingual voice enabled interactive chat bot launched by Finance Minister Nirmala Sitharaman. The bot can converse in Tamil, English, Hindi and Telugu. We were the first bank to launch such a product in the Indian banking industry. Customers can converse with this bot for their general banking needs, including transactions like balance enquiry, mini statement, fund transfer over voice/text instructions, wealth management services, utility payments etc.”

‘CUB Lakshmi’ is the bank’s banking robot. It leverages AI techniques and is integrated with the core banking solution. It provides information on accounts, answer generic banking queries, last 5 transactions, 15G submission, cheque book request, etc.

AI BASED LOAN PROCESSING The bank is also planning some key digital initiatives during the current financial year. One of them is an AI-based loan processing solution, which will digitally accept KYC document, documents like IT returns, balance sheet, salary slips, GST returns etc and facilitate approval and sanction of the loans digitally. Says Sankaran: “The project is expected to go live by September 2021. It significantly enhances user experience by reducing TAT as application processing is done in 2 working days instead of the current 5-7 working days.”

OPEN BANKING PLATFORM The bank has set out on a digital

transformation journey to adopt open banking and partnerships. Sankaran says it is building an enterprise-wide middleware platform that would help third party systems and fintechs to connect with the core banking / internal legacy systems. This would enable them to distribute the banks products to potential customers and build products on top of it. “We expect to go live by July 2021 and will open up banking for fintechs to partner with us,” he adds.

SAVING FORMS, DOCUMENTSThe bank is also implementing a low-code content document management and workflow automation platform allowing the bank to create, share and save forms and inter-office documents quickly without building them from scratch and allow for digital execution. The project is expected to go live in 2 months by August 2021.

The platform is expected to help the bank in reducing manual processes and time delays. Also, it will help in going digital without paper. Says Sankaran: “In all the above cases, the vendors were selected basis due diligence on product capability, lower cost, company profile, feedback from peer banks and faster time to market as the metrics.”

AI BASED UNDERWRITINGThe bank has engaged a data analytics partner to make use of big data available with the bank on transactions, demographics and financials of the borrowers to deliver risk-based pricing on gold loans and SME loans. This is expected to help creditworthy borrowers to get credit at a lower rate / discount compared to ordinary borrowers. It will also identify potential NPAs and reduce the risk exposure of such accounts for the bank. This project is also expected to go live in 2 months.

AUTOMATING CHEQUE PASSINGUsually, cheque clearing at the 3 CTS grids is done after verifying the customer’s signature and payment details. Sankaran says the bank is proposing to automate the comparison process of verifying the signatures in the cheques and those in the bank’s records. “The passing of cheques is done during the night. The staff doing the comparison at night are bound to make mistakes due to fatigue. Hence, we have started procedure for procuring a solution for system-based comparison of signature, which will speed up the clearing process,” says Sankaran.

CONNECTING BANKING WITH ERP To provide better customer service to its corporate clients, the bank is developing an API service that will facilitate integration with the ERP system of the clients so that payables can be managed more efficiently. “With this

Sankaran G. reveals that 90% of City Union Bank’s accounts are now opened digitally via e-KYC or video KYC


service, customers can transact with their linked accounts on their ERP platform. Customers can also manage their cash management services with this API. The project will be live soon,” says Sankaran.

TAB BANKING, VIDEO KYCCity Union Bank has a number of new projects with their existing vendors. It has already implemented eKYC for opening of accounts with Aadhaar based identification of customers. It has also rolled out tab banking through which the bank’s staff meet customers at their places and using the eKYC process, open the accounts. The bank has also introduced video KYC process through which customer identification is done. Customers can open their accounts through the bank’s mobile banking application from their places. They can book a slot for video KYC and the staff will initiate a video call and verify KYC documents and signatures. Once this is done the account is opened and the customer can do all transactions. “Nearly 90% of our accounts are now opened digitally via eKYC or video KYC,” says Sankaran.

TRADE FINANCE AUTOMATIONAs of now, the bank’s trade finance

application is a static and transaction-oriented solution. The bank proposes to implement an AI based solution for trade finance. Sankaran says that the proposed solution will be capable of reading the documents submitted by customers online and automate the process of generating recommendations of LC/guarantee opening, bill payments, retiring of LCs etc.

CARD-LESS CASH WITHDRAWAL The bank has launched inter-operable card-less cash withdrawal enabling customers to withdraw cash in all its NCR ATMs by using the UPI QR code. Sankaran claims the bank is the first bank in India to launch this facility and once other banks launch this facility, customers of all banks can use this card-less withdrawal from any bank’s ATMs.

[email protected]

Fintrend Setters NEXT – New tech trends amidst the pandemic (Technoviti 2021)

Technology

leaders, CEOs

of payment

processing firms

fintechs

Summary: While it has been a disappointing year that had passed off, fintechs see a big future tapping into an impending era of mobile payments.

Customer Management


Who, When, What, How - CRM Embraces AllSpecialists discuss the changing role of CRM, personalized communication, power of social media channels, measures & special projects:

Finance companies are focusing on increasing customer engagement and enhancing customer experience.

Communication plays a critical role in terms of timing, relevance and what organizations want to communicate or to engage with their customers.

PERSONALIZED COMMUNICATION Canara HSBC Oriental Bank of Commerce Life Insurance Co has invested in a customer communication management system that ensures customized and interact ive communication with customers through varied delivery modes. This tool is further supported by a CRM solution that provides a 360-degree view of the customer and has analytical capabilities that the company is starting to unlock to deliver experiential and targeted customer experience.

Sachin Dutta, Chief Operating Officer at the insurance company, believes that there is immense opportunity to leverage on communication platforms already available via social media. This reduces the time that one normally takes to get familiar with new communication. “Therefore, our WhatsApp bot and chatbots provide platforms for customers to converse with us as per their convenience and device and time of choice. We made our IVR flexible and highly customized to cater to the needs of customers. We will be investing in more bots like voice bots and email bots to expand our servicing avenues and continue to pursue excellence in this area,” says Sachin.

Kotak Mahindra Life Insurance Co uses Send Time Optimization (STO) to reach out to the customers at their most preferred time. Everyone has a different pattern when it comes to checking emails. Over the few months, the insurer has identified a pattern for each customer and the best time to send out a communication to them which will ensure that they have enough time to read the email as well as

get the maximum benefit from it. This has helped the company to increase its delivery percentage and overall open rates.

According to Subhasis Ghosh, Senior Executive Vice President & Head – Marketing & Group Insurance at Kotak Life, every customer has his preference of consuming information - some prefer SMS (short content) and other email (more detailed). Sending communication to the customer on their preferred channel has helped the company to minimize wastage and create a higher engagement, he says.

SPECIALIZED SOLUTIONS To personalize the customer experience, Kotak Mahindra Bank has been issuing persona-based communications. For example, messaging on fixed deposits is a short-term goal-based communication for millennial customers, while for women customers, the same messaging is customized to saving money for emergencies and ease of investment.

Puneet Kapoor, President - Products, Alternate Channels & Customer Experience Delivery at the bank, says: “Our net banking home page experience can be hyper customized by each customer according to his interests. For example, if a customer uses bill payments, fund transfers and FDs the most, then he can customize the home page widgets for the most-used services to get easy and quick access.

Speridian CRM, which is built on Next Best Action (NBA) framework, uses AI for recommendations, business intelligence and to synthesize tactics, strategies, and business insights which considers all the possible actions during a customer interaction and recommends the optimal offer.

Mohammad Omer Kundi, Practice Manager - Global Banking SME at Speridian Beacon, says: “By continuously suggesting ‘what to do next to a customer, CRM NBA allows iterative and interactive forms of dialogue that customers identify as natural thereby delivering a first-class customer-centric experience. CRM NBA is a paradigm shift from being product-centric to becoming customer-centric. NBA is not necessarily about knowing the best product or message to serve up to a customer, but when to offer it and how to communicate it.”

SOCIAL INTERACTIONS The levels of adoption for social media have increased and customers are more familiar with the social media platforms compared to earlier times. BFSI companies are seeing this as a good opportunity to stay engaged with the customers.

Sachin says: “Social media has connected people digitally and has emerged as a platform where customers can do a lot of research, go through blogs and make themselves aware of new market trends, etc. It is also emerging as a tool to exchange views. We do provide WhatsApp as a mode of communication if the customer opts for such services.”

Sachin Dutta recommends IVR should be flexible & highly customized to cater to the needs of customers


Social media has been the place where irate customers would go when the traditional channels of approaching the company would fail. However, in recent months, Kotak Life has noticed an increase in the number of customers approaching the company via online to tell positive stories.

Says Subhasis: “We have noticed that as platforms have matured, customers have become more comfortable with interacting about private policy details in that environment. There are lesser requests for call-backs once the customers notice that such avenues are working. We use a third-party application to aggregate all these multi-channel tickets into one dashboard for easier and quicker handling. This single view approach has helped us reduce both first response and resolution times.”

Puneet maintains that at Kotak Mahindra Bank, interactions with customers on social media result in the staff getting a sense that inclusivity will matter more than ever. “To facilitate this, we are using stories as a content format,” says he.

Concurring, Mohammad Omer says: “CRM uses the objections info to improve ad campaigns on search engines and social

media platforms. A useful tactic is to create custom ads based on customer objections. Speridian CRM offers templates that meet all quality requirements, and which can be optimized for optimal results.”

INBOUND & OUTBOUND Call centres will have to elevate communication through digital channels to thrive in the post-covid world. Scalability being the key, organizations will need to adopt solutions powered by advanced automation which not only offers data security but also provides stability to human operators. The ongoing pandemic has opened newer channels for customer interaction. Kotak Life’s newly launched digital platforms account for a whopping 67% servicing, easing out the pressure on its traditional channels - namely call center and email desk.

Sachin expects the IVRs to become more responsive and intelligent with technologies like voice recognition-based verification becoming norm. Use cases for insurance are currently less but companies are experimenting. “Also, we believe that IVRs are perfect use cases for voice bots or virtual assistants provided by all technology leaders getting integrated and powering the IVRs in the future. We are also seeing increased adoption of video calls, video-based verifications including KYC which is helping businesses do well during covid times. Such reliance on voice and video-based technology shall emerge even stronger in the next 12 months,” says he.

With inbound calls forced to seek alternatives, consumers too have adopted a mobile-first approach and have turned to net banking. Kotak Mahindra Bank’s customer experience center is receiving a lesser number of calls. There has been a reduction in the number of calls to agents. Puneet provides details: “We have witnessed a huge change in customer behavior. The nature of calls is no longer only for seeking simple information. Customers now call for resolving multiple and complex queries. A total of 43% of calls and conversations are complemented with WhatsApp communication. This has led to a 9-11 points higher Net Promoter Score (NPS) for us.”

He maintains that in outbound calls digital processes/ products assisted by employees get sold on calls. If the effort is low, customers are quite comfortable engaging with virtual relationship managers. Besides, long conversations are not a deterrent if they add value, and video is still the future.

MEASURES Due to the pandemic, the Kotak Life team had decided to ensure that even though they were not able to meet customers face to face, they still are with them throughout. This led to focussing the attention of the customer on online mediums for any assistance they need. The company constantly communicated its digital tools through its campaign called ‘Ease hai ….hamesha’ across multiple channels - KAYA (chatbot), WhatsApp, OPM (policy manager app), and easy claim’s process online.

Subhasis shares the details: “The campaign was successful in reducing calls on our toll-free number and footfall to the branches. We went one step ahead and added this campaign as a part of our welcome and onboarding communication, which helped educate our customers from

Mohammad Omer Kundi advocates CRM NBA to deliver a first-class customer-centric experience

Subhasis Ghosh reveals that communicating in the right channel helped them create a higher customer engagement

Customer Management


the start about the various digital tools at their disposal to ensure that we stick by our promise of ‘Hum hai….hamesha’.”

Canara HSBC OBC Insurance Co used a video calling facility where in addition to normal inbound, customers can interact with its agent virtually over a video session. The company comes up with initiatives like video-based verifications to make the experience seamless for the customers who prefer to interact with them digitally. Sachin added: “We interact via social media platforms for business as well as in creating awareness. All such facilities have helped us, and our customers operate and engage with us digitally. We expect the trend to continue and gain further momentum and shape the way companies communicate and engage with our customers.”

FOR GEN X, GEN Y, GEN ZCanara HSBC OBC is focussing on working with the millennial age group to drive increased uptake of insurance. The company understands and foresees that future generations will consider technology and baseline services as given and would want the insurer to interact with them on how they interact with all other companies over the web.

According to Sachin, investments in technology are driven largely by keeping the future in mind and hence are being developed with the intent of making it fit for purpose for any generation. “We understand the needs of people who have opted for pension plans with us and understand the needs of millennials who may be interested in protection or savings proposition. That is the range we operate in and our solutions, therefore, need to be flexible and brutally simple to each of these generations,” he says.

Kotak Mahindra Bank has been using WhatsApp as a complement to voice conversations. “Last year, we were the first bank to integrate the video KYC process in the account opening journey. Additionally, we have also been using live chats with customers,” says Puneet.

CRM FUNCTIONSSperidian’s CRM system helps to generate

leads, segment them and qualify them so salespeople can customize their outreach. The optimum offer rejection is handled in CRM by Sales Objection Process; next, it provides sales reps with a historical overview of all customer interactions and valuable intelligence on how to approach every objection. The CRM system has its ways of handling sales objections before they have happened, while they are happening, and after they have happened.

Says Mohammad Omer: “Preventing sales objections is a function in our CRM system, it creates a database, including previous customer objections, regardless of whether the objections were successfully handled or not. This way, agents have enough saved information to deal with new objections, even if they deal with a client for the very first time. Another important thing CRM does is link leads to objections. This will help the agent customize his approach to a particular customer.”

He shares details of other functions like automating handling of sales objections. He says the CRM does not simply drive customers your way, but it examines their buying capacity (foremost

in terms of budget and influence), giving salespeople a more or less clear picture of the objection they might have. In relating leads to the common objections function, the CRM generates emails and messages for each of the tagged objections, allowing the salesperson to prepare just the right content for each target audience.

CRM & MARKETING Kotak Life has started promoter referral campaigns that piggyback on its Net Promoter System framework. These are directly integrated with its CRM.

Kotak Mahindra Bank offers segmented communications basis p r o p e n s i ty a n a l y s i s . C u s t o m e r propensity is analyzed to understand which offer will provide the most value to a particular customer and he receives communication basis that analysis. This is further augmented for cross-selling opportunities.

Explains Puneet: “Our CRM was effectively mobilized during the lockdown. It enables pre-qualified offers uniquely tailored for individual customers and MSMEs, thereby helping us boost new acquisitions as well as cross-selling of products and services. In addition, it provides a powerful lead management system on a customer’s transaction behaviour, thereby giving a 360-degree view of a customer’s profile to our banking relationship managers. This helps us offer the right product at the right time to the right customer.”

Speridian CRM omnichannel insights and reports provide comprehensive information on how overall support is performing across channels. The reports provide a rich visualization and ability to filter across channels, queues, agents and date ranges to better understand performance and troubleshoot problem areas.

Mohammad Omer says: “Some of the useful KPIs include conversation engaged based on channels, abandoned rate based on channels, transfer rate based on channels, average wait time based on channels, reports based on how the agent is performing on channels and sentiment zones by channels.”

[email protected]

Puneet Kapoor supports effective mobilization of CRM for individual customers & MSMEs


CX and Technology

Innovation & Tech that boost CXDharmender Narang, Chief Customer Experience Officer at India Infoline, speaks about CX innovations and technologies:

Babu Nair: What are the remarkable

innovations that you have brought about

in the last few months? What has the

customer response been?

Dharmender Narang: We always try to give superlative customer experience. Building trust and being proactive keep us ahead and progressing. Not constraining to the channels gives us an edge over others. We noticed the growing trend of ‘do-it-yourself ’. Customers want to be independent. AI and chat bots have helped us in achieving that. Many peers provide chat bot facility. We have gone one step further by adding AI to the chat bot. This gives clients a more realistic answer. We proactively provide solutions to the customers.

Irrespective of the channel the customer is using, he should get uniform customer experiences. We have implemented a common CRM platform across all channels of communication. This allows companies to address the queries of the customers.

This way (i) there is no disconnect between the channels (ii) AI is equipped with a large database of questions. However, if the customer is not satisfied, he has the option to chat with the agent live.

The customer can connect to us through multiple channels 24x7 and irrespective of the channel chosen, he gets the same experience in real-time.

It is observed that customers don’t

shy away from paying for better

customer services. Along with the

product differentiator, if an experience

differentiator were to be made, what

would be the criteria?

Undercutting will never result in the best customer experiences. The customer always looks for the value added to the product. There may be many companies selling products with the same technology, but the added value is what

entices the customer. For example, there may be many stock broking agents, but the well-researched agent, with whom wealth growth is possible, is the most sought after.

Many times, the customer may not know this upfront. The expertise of the person is valuable. This is what gives value to the product. We provide this expertise and allow the customer to create wealth for themselves.

What are the new and innovative tools

that you have planned for good customer

experience?

Voice bot is picking up. It will have to cross the language barrier. Chat bots are now giving language options. A lot of work is happening on voice analytics. During real-time chat the agent can identify an irate customer and provide solutions accordingly. Technology is moving very fast and new ideas are coming up equally

fast. This will help in reaching out to customers in small cities. This will in turn add to the customer base.

Is it possible to preempt customer

needs with technology? Will process

automation help the companies?

When the backend is completely automated it is easier to provide the analysis. If a customer query is not being resolved by AI, it indicates a process gap. Automating the processes and providing consistent output will help reduce the cost of service. Combined efforts of AI and service agents will take customer service to a higher level. We are always interested in exploring new products in the Fintech sector.

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Collections - It’s like Chess

Summary: Collections function in a BFSI organization involves making intelligent moves to maximize returns per customer, maximize number of customers, minimize the number of calls, focus on the high-risk cases.

Business Leaders from Fintech Companies

Dharmender Narang believes that technology is moving very fast and new ideas are coming up equally fast

Anil PinAPAlA

Abhijit RAy SReekumAR m

Alok ChAdhAAnAnt deShPAnde

kunAl VeRmA

Digital Journey


Becoming a Data First CompanyMyMoneyMantra is building robust technology infrastructure constituting AI, Data Analytics and Machine Learning to ensure a seamless customer experience:

MyMoneyMantra (MMM) is a finserve marketplace, helping customers compare products

across 100+ financial institutions and opt for the most suited one. Over the last 5 years, it has originated more than $5 billion worth of financial services products through its platform. It currently serves about 7 million customers across 60 cities with more than 100+ banking partners and 3000 employees. Raj Khosla, Founder & MD, traces the digital journey.

Mehul Dani: How has MyMoneyMantra

implemented its digital strategy in

2020-21?

Raj Khosla: Digital has opened up new avenues for creating competitive advantage and driving business growth for MyMoneyMantra. We have tied digital to our strong delivery and distribution platform to give us an edge over competitors. Recently, our website has been revamped with new design and functionalities keeping customer transactional convenience as the main objective. Our digital infrastructure has expanded our geographic and demographic distribution multi-fold.

We have always maintained that our digital strategy needs to be a means to an end, not the end itself. Engagement with our customers, needs to be met on their terms – entirely digital, on the phone or somewhere in between. By staying true to our north star, the business grew 2x yoy and we are tracking to originate $2.6 billion of credit this year.

We are in the business of connecting consumers with the best financial institution for their needs, at any given point (speed). We define best as the highest probability of the loan / credit card being sanctioned with the most favorable terms for the consumer. It also means ensuring we are not wasting our financial partners’ time. For example, if a certain financial partner will not underwrite a self-employed individual with

a credit score below 650, there is no point in wasting either the financial partner’s time or that of the customer.

Our marketplace aims to be malleable, ensuring we can successfully get transactions done and create long lasting relationships with both sides of the marketplace.

Please tell us how new tech initiatives

have contributed to increasing business

and customer base in 2020-21 post covid?

There is no question that this crisis has accelerated the pace of digitization in the credit origination space. We have been working tirelessly with our financial partners to digitize every part of the loan process. We were lucky to have started on our digital journey pre-covid. Fruits of our labor are now present in our numbers. The tech adoption has led to exponential versus linear growth.

i. APIs: Our API network is now one of the strongest in the country with 65 APIs with leading financial partners and credit bureaus – ensuring real time decision-making capabilities.

ii. Data Lake: It was commissioned pre-covid, and is hosted on AWS and with a 40 million+ consumer base.

iii. Recommendation Engine: Given the volume of credit origination done through the MyMoneyMantra platform, our recommendation engine gets smarter with every transaction with a real-time feedback loop. This ensures we can continue to provide the most favorable terms to our customers based on their specific needs.

iv. Our CRM, B2B and Analytics platform are all cloud hosted and empower our business across geographies. All the above tech initiatives ensured

that our sales and operations teams could work non-stop through the pandemic. We are one of the largest credit originators in India with $870 million of credit originated in FY 19. We have been profitable since our inception and it is clocking 25-30% CAGR.

What are the usage patterns of the digital

footprint – mobile app and WhatsApp for

marketing, customer serving?

We are seeing greater engagement from our customers on digital channels – digital logins and WhatsApp. Almost every credit product originated on our platform has some form of digital component, and our job is to ensure customers feel comfortable engaging with us and trusting us to get the best possible deal on their behalf.

Our website and CRM are integrated with all our partners and a customer application can seamlessly flow into a bank’s CRM in a secure manner. This functionality is also offered down the supply chain to our partner network for reaching out to our customers ever more efficiently and safely.

We employ all channels that we have

Raj Khosla outlines that early on in the journey, MyMoneyMantra decided to migrate its data into a standardized Data Lake


developed and integrated to make the customer journey more convenient and to make financial services more accessible. SMS, WhatsApp and emails are leveraged for delivering product information, document verification and transaction confirmations.

How have you brought agents, BCs, etc

into the fold of your digital strategy?

We serve as a platform for literally thousands of brokers. During the pandemic, we saw a 10x increase on our broker channel. We have proven to our partners that scale matters. The ability to have instant connectivity with over 100 financial partners across the credit spectrum increases their ability to serve the customer which they on their own find very challenging. This has also strengthened our conversion capabilities in tier 3 and 4 centers – creating a truly national credit origination marketplace.

Please describe the technologies that are

in use. Who are the key vendors and what

are their services?

We have used an agency to successfully transfer our data lake onto the cloud using AWS. Additionally, we strengthened our technology infrastructure across the board – data analytics, digital marketing, etc. We are leveraging new age technologies like headless CMS for content, React JS & Node JS for user experience, microservices based backend architecture/ MongoDB and Oracle for Database, AWS services for data engineering and PowerBI amongst others.

Our data analytics-backed business acquisition is growing at 20%. Our Data Lake initiative helped us overcome covid and build robust technology infrastructures like AI, ML and Data Analytics to ensure a seamless customer experience. To expand scope of operations, we acquired 2 financial marketplaces - Bengaluru-based Ascon and Hyderabad-based Shaster.

To ramp up our digital journey, we raised Rs1.04 billion ($15 million) funding from Netherlands-based IFSD BV and Vaalon Capital. Since our $15 million capital raising in May 2019, we have been investing in our digital value proposition.

How is technology put to use for CRM?

How strong is your company’s presence

on social media?

It is important to have a presence on social media but it is worth noting that people don’t go on Instagram looking for financial advice – they are looking to engage with their friends. Our job is to be top of mind when someone needs help with their financial goals. We think it is more important to create a brand around financial product expertise – we have built a brand around financial literacy. Over the last 2 years, we had media presence every other business day.

In terms of CRM, we have built a proprietary tool, which is hosted in the cloud and is extremely customer centric. We are focused on making sure the customer engagement is seamless throughout the loan process and more importantly post loan sanction. Customers come back to us because they are confident, they will get the best deal and we will do all the heavy lifting on their behalf – it’s really that simple.

What is the evolution of data science and

of products in the last 2-3 years?

While we have had access to a large amount of data, the same was challenged by the fact that it was being generated from different sources and hence was stuck in silos and in incongruous formats. Early on in our journey we decided to migrate our data into a standardized Data Lake. We have over time become a data first company, where every decision taken is now backed by rigorous data analytics.

Mortgage lending has its set of challenges; however, we have been working with a handful of financial partners to develop a digital mortgage product. The product is in beta phase, initial uptake has

been extremely positive. We have had to be creative with appraisals and wet signatures in the current covid environment.

In the post covid-scenario, what are your

targets and plans for IT, digital initiatives, for

tech-led business growth in the current FY? There is no secret sauce here. We want

to stay focused on our core competency – connecting borrowers with lenders at the highest success rate possible. The Indian retail credit market is expected to touch $1.3 trillion in the next 3 years – that’s roughly 2x growth. We think it will be larger than this projection, as the need for credit in a post pandemic digitized world will be even greater.

We have recently revamped our technology stack and the design of our online marketplace with the latest incorporations from the world of performance design. We are in the process of further modifying our rule engine to be able to offer the same to our associates and partners as well. Soon we are launching a savvier consumer app to provide personalized offers and ease of transaction for our customers.

Given our continued investment in digital origination and data analytics, coupled with the structural tailwinds supporting our business, we plan on a further 2.5x growth this year which would ride on need for credit in a post pandemic digitized world as well as greater adoption of technology by consumers and financial partners. We plan to achieve Rs5.3 billion in top-line by 2023.

Additionally, we want to be a household name when it comes to financial products and our goal is to de-clutter the noise in the market and help consumers make informed financial decisions.

[email protected]

MyMoneyMantra.com - Digital Team

Small Biz


A digital journey: From Data to PlatformNeoGrowth has adopted Analytics, Technology & Strategy as the engines of growth:

NeoGrowth Credit, a systemically important, non-deposit taking NBFC and a pioneer in SME lending based

on the underwriting of digital payments data, provides finance to small business owners to drive business growth that matches their ambitions. Headquartered in Mumbai, the company serves 70+ industries with a presence across 26 cities in the country. It has disbursed over `62 billion loans to 29,500+ customers till date to first-generation entrepreneurs, women entrepreneurs, and first-time borrowers. It also provides financing to retailers, restaurants, apparel shops, kirana stores, petrol pumps, groceries, pharmacies and other MSMEs.

DATA ANALYTICSUnderstanding and making use of data to derive meaningful outcomes for the business is what differentiates NeoGrowth from other traditional NBFCs and banks. Arun Nayyar, CEO of the Company, says the company has strong data management systems with structured organized warehouse, which enables it to have ready data available for advanced analytics on tap. “We have invested heavily in analytics, machine learning, digitization of customer journey and digitally verified alternate sources of data, which has helped us to reduce the turnaround time for loan sanctions and underwriting basis various types of alternate data,” he says.

AI & ML BASED MODELSNeoGrowth has a data science unit, powered by AI & ML based models, which enables it to provide real solutions in making objective decisions for the business. Says Arun: “AI & ML based models have enabled us in terms of customer value management by identifying eligible customers and offer them a loan with fast-track digital underwriting, enhancing customer experience and reducing TAT. Early warning models enable our risk management to help take proactive policy actions and streamline collections.

Understanding the customer needs and requirements through past data and behavior enables product development and enhancement. A 360-degree application of data science enables us to make decisions across functions like human resources, operations, customer service, sourcing, collections and risk.”

FASTER TECH ADOPTION The pandemic has led to various changes in the way IT is used by enterprises and despite several challenges NBFCs in the fintech lending space were quick to identify gaps in the existing formal lending space, points out Arun, stating further that such NBFCs thrive on the strength of faster technology adoption and government impetus. He says for example NeoGrowth has adopted an ATS (Analytics, Technology & Strategy) enabled-approach during the lockdown phase and the main advantage was that the company was able to reach the customer’s doorstep digitally by enabling

digital payments, communication and support. “As much as 99% of our collections are through digital modes of payments such as POS, UPI, NEFT, RTGS, Bill Desk, etc,” he points out.

COLLECTIONS APP Technology has connected internal stakeholders in the company (sales, collections, credit & risk) and an employee with field agent (both on-roll and off-roll) work remotely, ensuring seamless and real-time coordination with the customer and effective collections. Arun says further: “There has been pro-active portfolio management by deploying technology and analytics resources for supporting collections through calling, recovery and settlement scorecards. A field executive can easily use a collections mobile app on a smartphone from his home, to view the amount allocated to him for collections along with all details about the customer to enable real-time understanding of customers’ loan account and negotiate with him.”

The field executive could then immediately update the collections amount and issue a digital receipt via email / SMS on a real-time basis to the customer. “The integration of this mobile app (ENCollect) with internal systems and data warehouse has enabled us to make real-time repayment reconciliation with finance and operations stakeholders,” says Arun.

And most importantly, customers do not have to keep track of their due dates as NeoGrowth’s customer app notifies them about their payment cycles.

IN-HOUSE CAPABILITIES Strong in-house capabilities in technology have enabled NeoGrowth to quickly roll out strategic initiatives on giving options of tenor enhancement and moratorium. “This has acted like Sanjivni for our customers to survive and restart their business,” says Arun, explaining that the company’s micro-service-based architecture has been designed to ensure that all technology assets

Arun Nayyar points out that NeoGrowth has been educating its customers through blogs and e-mailers about digital frauds


are integrated and connected smoothly and can call upon data/functions from each other. “We moved developer roles in-house. And our branch level outsourced IT support staff has come down,” he adds.

One major challenge the company faced was multi-browser testing for mobile app, but a solution was evolved using Browserstack opensource tool.

HIGH PERFORMING TALENTNeoGrowth has continued to focus on hiring high performing talent and strengthen the organizational pyramid at front-line and middle level. “We do it to support our overall operational efficiency, execution capability and expand our geographical footprints, says Arun, adding: “We follow a hybrid operating model that involves hiring and leveraging contractors on C2H (Contract to Hire) model for core IT capabilities such as development and architecture. Outsourcing is limited to non-core IT services.”

IT PARTNERS RETAINEDNeoGrowth has mostly continued with the existing technology partners for their trustworthiness. Says Arun: “Our performance stands testimony to our long-standing relationship with channel partners and alliances with financial and strategic business partners, which has helped us deliver a superior and rewarding experience for our customers.”

VIDEO KYC OUTSOURCED NeoGrowth has allied with a video KYC vendor to enable digital onboarding given the limitations surrounding physical field visits. Arun says this feature enables a

remote way of verifying customer identify, thus eliminating the need for a physical visit to verify identity. The tool aims to eliminate identity fraud through AI-enabled fraud prevention and error checks.

DIGIBIZZ PLATFORMNeoGrowth has recently launched diGibizz, an end-to-end platform to help small businesses become digital-ready. The platform was conceptualized based on a research done during the pandemic to evaluate the need for small businesses to digitize their offerings to meet stiff competition from big brands and shopping apps and portals. “We aim to help over 200,000 SMEs double their turnover in 3 years by offering access to best-in-class digital solutions through business solution providers,” says Arun, adding: “With the diGibizz platform, we aim to provide consultation and technology solutions that help small businesses scale up and become profitable. After a quick analysis, we will provide a customized solution to business owners. This could be financial, non-financial, or combination of both depending on the gaps that small business owners have identified through diGibizz Digit-O-Meter smart analysis.”

NEOCASH INSTA LOANThe company has recently introduced ‘NeoCash Insta Loan’, an offering specially curated to meet immediate

fund requirements faced by retailers and small businesses across the country. It is collateral-free loan of `100,000, with just KYC documents. The approval is instant and online and repayment is `250 daily. The loan product was developed on an insight from the company’s flagship retailer outreach program ‘NeoGrowth Sanjivni’.

Says Arun in this regard: “We use exhaustive digital checks for underwriting and usage of digitally verified alternate sources of data to ensure risk mitigation and governance. Not only this reduces the hassle created by excessive documentation for customer but also ensures funds are disbursed within 24 hours, enabling retailers and sole proprietors to fulfil their urgent working capital and business needs.

NeoGrowth has always focused on creating a positive social impact by lending to first generation entrepreneurs and small businesses. Its business offerings are based on the dual axis of customer centricity and economic growth of all stakeholders. Giving the background of the product, Arun points out: “While speaking to retailers across the country, we learned that due to complex documentation and delays in loan approvals, they missed out on lucrative business opportunities. We created NeoCash Insta Loan with the specific goal of addressing all these problems faced by retailers across the country.”

IT SERVICES: PREDICTIONSNeoGrowth welcomes the restructuring framework recently announced by RBI. Arun feels that all the proactively announced steps and measures will benefit MSME clients, increase liquidity in the system and will alleviate the stress in the system.

He is of the view that leased infra (like laptops on rent) and VPN services will see a temporary increase to enable traditional desktop users to work remotely. Office IT costs such as internet and printers will not increase, says he.

[email protected]

Cyber Security Training & WorkshopsFor employees, NeoGrowth does regular communications on themes such as phishing, social engineering, etc, along with mandatory annual refresher training on information security policy. Arun Nayyar, CEO, explains: “This is done via online learning courses and tests to reiterate the various aspects of information security and potential threats. This helps the organisation in creating awareness and safeguard it from any unlawful attempt on its internal information.”

As businesses became more digital and started adopting technology in their operating rhythm, especially during the pandemic, the need for understanding of information security has increased and Arun says that through the company’s Sanjivni initiative, it has launched multiple initiatives to educate customers on the importance of awareness about this aspect. NeoGrowth did a series of blogs and e-mailers about cyber scams and digital frauds to educate customers about digital safety.

IT team of NeoGrowth Credit Pvt Ltd

Cooperative


Mann Deshi UCB benefits immensely by digital platform

The Mann Deshi Mahila Sahakari Bank was set up in 1997 after Kantabai, a welder who worked

and lived with her family on the footpath in Mhaswad in rural Maharashtra, approached the bank’s founder Chetna Sinha, narrating the harrowing tale of being rejected by several banks to open an account. Kantabai simply wanted a safe space to save some money so she could buy tarpaulin sheets to protect her home in the monsoons. Moved by the narrative, Chetna decided to set up a bank for women like Kantabai. Some 1335 women pooled their savings (`780,000) and set up the first bank for and by rural women in India. It remains a member-driven and member-owned bank.

Chetna Vijay Sinha, who is Chairperson of the bank, also started India’s first business school for rural women entrepreneurs. She was one of the 6 co-chairs of World Economic Forum at Davos in 2018. A MA in commerce & economics, a diploma in sheep and goat rearing, she is a Yale Fellow, Schwab Fellow and Ashoka Fellow.

ACCOUNTING, COMPUTER SKILLSThe bank today has 7 ATM centres and an equal number of branches – at Mhaswad, Gondavale, Vaduj, Dahiwadi, Satara, Lonand, Dhayri and Kamothe (Navi Mumbai) - in Maharashtra. At present, it has 68 employees.

Chetna says the bank has added 2 ATM centres in the last financial year and it hires those people who have skills in accounting, computing, credit and sales and are dedicated to work in rural areas.

AVERAGE ATM TRANSACTIONSDuring the pandemic, when ATMs of all other banks remained closed in the local areas, Mann Deshi Mahila Sahakari Bank ensured that all of its ATMs worked properly with possible minimum denomination notes. Says Chetna: “Our per week average ATM transactions, were 6000 and per

month average transactions were 27,000. Nearly 40% our customers are using the banks’ own ATMs and 60% of other banks’ customers are using our ATMs.”

During 2021-22, the bank does not plan to add new branches or ATMs.

DEPOSIT, LOAN THROUGH TECHIT services have played very crucial role in the growth of the bank, which is essentially a micro-enterprise development bank, drawing customers from low-income women groups with incomes averaging `40 per day. The bank currently has over 185,000 customers, and conducts 10,000 transactions on a daily basis. Installation of CBS, mobile banking and UPI with QR code have helped the bank in its business growth both in assets and liability. Says Chetna: “During the first and second covid waves, our customers used our digital platform to make and receive payments, including for loan repayments and utility bill payments. This

helped us in terms of higher customer acquisition and loan repayment rate. We are planning to commission a new CBS supporting our enhanced activities on the digital platform, to create a virtual branch for our customers and to enlarge our BC network to serve more in rural underserved areas. We have achieved 15% for deposits and 5% for credits through digital technology.”

APP USAGE PICKING UPThe bank is using digital payment system, which includes its own app, BHIM and IMPS. Rekha Sunil Kulkarni, CEO of the bank, says the bank started IMPS in June 2020 and 419 of its customers are using mobile-based app. The bank started UPI services in February 2021 and till date there are 744 customers using it, and the trend is increasing.

The bank has tied up with Google Pay and Phone Pe for digital payment services. Its agents/BCs are very active in the underserved areas. Rekha says she sees good prospects for the bank in the remaining part of the year and it intends to replace BCs with digital service, particularly in credit. “We average 5500 IMPS transactions and 15,000 UPI transactions per month. But we do not have internet banking facility till date,” she adds.

IT VENDORS, CAPEX, OPEXCoforge is the main vendor for IT services, including CBS, data center and disaster recovery site. The bank has a 3-member IT team and its technology capex is Rs1.5 million. Sinha reveals: “Our monthly expenses on IT service is `150,000. There has not been any significant growth in expenses over the years. In the current financial year, we are changing our IT vendor and we expect the capex to be `1 million and opex around 155,000 per month.”

The bank has yet started using data analytics or a CRM package. Sinha,

Chetna Sinha plans to have a new CBS supporting all activities on a digital platform to create a virtual branch for customers


Empower yourself with Multi Digital Channel Business Opportunity

Summary: Covid has led to the transformation of the age-old lending business of lending and there is need for increasing channel activity to enhance business opportunities.

Rajesh KrishniaHead of Enterprise BFSI, Nutanix India

D. VenkateshDirector, Lentra AI

Rekha Kulkarni sees good prospects in replacing the BC network with the offer of digital service, particularly in credit

however, says the bank is intending to get into these technology initiatives next year.

SOCIAL MEDIA PRESENCE The bank is live on UPI, mobile banking, ATM, PoS, e-com, etc. It is also present on Facebook, YouTube, and WhatsApp. “We can understand the value of changing technology. We will get the emerging technologies in banking sector on time to address the changing customer needs,” says Chetna.

IT TIE-UPSWhile the cooperative structure has its own limitations in forging financial or investment partnership, the bank does have tie-ups, especially with IT service providers. “We have tied up with Technospire, which has supported 15 BFSI entities. We have tied up with Sarvatra Technology, which has a customer base of 100 BFSI companies. These are apart from our relations with Coforge, which already supports more than 100 organizations,” says Rekha.

Since 2006, Chetna has been forging relationships with global organizations like HSBC, British Asia Trust, Accenture, Clinton Global Initiative, GIZ, Deutsche Bank, Bonita Trust, and Commonwealth of Learning and Global Giving to develop corporate community partnership programs. These relationships facilitate the corporate sector in the US and Europe

to get a unique view of the impact that microfinance initiatives have on the local rural population.

ONE UP ON OTHERSMann Deshi Mahila Bank claims to be one level up compared with other mahila cooperative banks in the country. It is also better managed and result-oriented compared to a number of good

cooperative banks, especially in terms of use of new age banking technology. Rekha stresses: “We not only adopt new age banking technology, but also help our customers adopt these technologies through our training initiatives such as financial/digital literacy programs and ‘digital didi’ program.”

She adds: “Our priority sector lending is 90%. We have very low loan ticket size, focused financial inclusion approach, customized products, micro loans and good savings, door step delivery, high profitability, less cost of funds and and proper compliance.”

TARGETS FOR ITPost-covid, the bank has set its targets for IT, digital initiatives and achieving planned tech-led business growth in the current financial year. Says Chetna: “We have laid down our initiatives for 2021-22. We have plans to migrate on to a new CBS system, implement digital loan origination system, WhatsApp banking, video KYC, agency banking and e-mandate system.”

Through the bank and the Mann Deshi Foundation, Chetna, no wonder, serves over 500,000 women and her goal is to take this number to 1 million women entrepreneurs by 2022.

[email protected]

Cover Story


The pandemic and lockdown have put the biggest strain ever on chief risk officers. This is the time that their systems were put to test as were they themselves. Largely, the financial community has proven itself to be capable and agile, as seen from the 16 respondents in this cover story. The CROs have also taken the opportunity to expand their knowledge frontiers to prepare for future risks. Kudos to The Sentinels.

Cover Story

Risk SentinelsTh

e


Cover Story - 16 Participants

RooPam aSthanaCEO & Whole Time Director,

Liberty General Insurance

DamoDaRan CVice President & Chief Risk Officer,

Federal Bank

Venkata JayaRaman m Chief Risk Officer,

Fincare Small Finance Bank

GoPal BalaChanDRanCFO and Chief Risk Officer,

ICICI Lombard General Insurance

SaDaF SayeeDCEO,

Muthoot Microfin

SunDeR nataRaJanChief Compliance & Risk Officer,

IndiaFirst Life Insurance

BikaSh ChouDhaRyAppointed Actuary & Chief

Risk Officer, Future Generali

India Life Insurance

ViJayalakShmi nataRaJan

Chief Compliance & Risk Officer, Aviva India

k R mohanaChanDRanChief Risk Officer,

ESAF Small Finance Bank

aBhilaSh BalanCISO,

Digit Insurance

BiRanChi miShRaHead - Credit, Risk & Product,

Netafim Agricultural

Financing Agency

aVneeSh tRiVeDiCRO,

Moneyboxx Finance

PRithVi ChanDRaSekhaR

President Risk & Analytics, InCred

RakeSh BanSalChief Risk Officer,

Hero Housing Finance

anil PinaPalaFounder & CEO,

Vivifi India Finance

SuJay DaSCRO,

MoneyTap

Cover Story


Over a year into the pandemic, covid has had a devastating economic, social and health impact across the globe. Hundreds of thousands of lives have already been

lost and the end of this pandemic is still not in sight. On the corporate side, there are 2 pictures: either a corporate has gone bust (or nearly so), or the corporate is in good shape. Judging from the responses, all the 16 organizations that participated in this cover story seem to be in good shape.

Our respondents have broadly classified WFH related risks into 5 categories: (i) business risks, (ii) cybersecurity risks, (iii) people risks, (iv) operations risks and (v) other risks. Here are their edited responses.

aBhilaSh Balan, CiSo at Digit insurance

Work from home often raises questions on the security of the organization and the increased risk of a breach. However, we were able to manage these risks using cybersecurity protocols and imparting right information to our teams. Digit Insurance took 6 key security initiatives: (i) Implemented secure VPN tunnels (ii) Strengthened the advanced

threat protection systems (iii) Audited system & application rights (iv) Used the best AV solution (v) Managed EDR solution for each system in our network, and (vi) Implemented a DLP agent on each laptop to take care of the company’s data on each system.

anil PinaPala, Ceo at Vivifi india Finance

During the pandemic, the thing that has really changed character is the concept of working from home. Where possible, this privilege was considered as a ‘breezy-few-days-a-month’ working from the comfort from your couch / bed. However, for organizations to think of it as a long-term option or a permanent option for all or most of its employees, requires them to think of the associated risks and get ahead of them immediately.

Having spent most of my career working remotely leading large teams, we have identified 4 risks associated with WFH: lethargy, focus, mental health and security & confidentiality.(i) Lethargy: The risk is that it is easy to procrastinate

within the comforts of working from home and add to it the unlimited social media activity that can keep us entertained. To counter the risk, we need to inculcate the discipline of working from home and ensure that we have

a schedule and plan for work days and fun days.(ii) Focus: It is quite easy to lose focus on what we are doing

considering the distractions of family, pets, friends, neighbours, household helps, kitchen sounds et al, but to effectively work from home, one needs to maintain focus on what needs to be done and train oneself to achieve this. Focus makes the work product better and also helps in getting it done faster so improve your ability to focus and not get distracted easily.

(iii) Mental Health: Pandemic news can be distressing and sometimes devastating, playing havoc with our mental health. A regular work environment also provides a social construct for addressing many of the concerns one would face day-to-day, but with everyone working from home that ability to socialize and find answers now doesn’t exist as much. Never ignore the stress or the impact on your mental health and seek the help of your family, friends and if required even a medical practitioner immediately.

(iv) Security and Confidentiality: Data security is a key risk in an environment where a lot of sensitive information and trade secrets are being accessed at home even when tunnelled through a VPN. These can be addressed with several sophisticated security tools to ensure data security, but the success is more dependent on a clear, transparent process and communication that emphasizes the importance of adhering to all the safeguards, no matter how cumbersome they might get.

aVneeSh tRiVeDi, Chief Risk officer at moneyboxx Finance

Creating right and feasible kind of IT support system was a big challenge. However, taking clues from last year’s learnings, it was relatively easy for the second phase of the lockdown, as WFH is being considered as a new normal. Teams were also aligned for WFH system this time, so it was relatively easy as compared to last year.

BikaSh ChouDhaRy, appointed actuary & Chief Risk

officer at Future Generali india life insurance

We anticipate 3 major risk areas with the WFH model - cybersecurity, physical security and new business volumes. While cyberattacks have become rampant during the pandemic, we have implemented several tools and technologies to protect ourselves from various kinds of cyberattacks and stay ahead of the curve. Disposable income and frequent lockdowns.

One risk overlooked was the impact of covid on the safety

Part 1

the WFh Risk PyramidQuestion: Risks associated with WFH – how has been the actual experience vis-à-vis the expectations?


and wellbeing of people during the second and third wave of the pandemic. At the start of the pandemic, we had taken a slew of proactive measures to enable our teams to work from home and also educate them about the virus. This approach reaped fruits as we had a <1% infection rate and 0 mortalities. However, the second wave of the pandemic

has had a significant impact on our employees and our infection rate is >5%.

We, as an organization, will continue to provide support throughout the crisis. We have 3 priorities throughout the crises. First is providing strong management and leadership support to ensure the health and sustainability of the workforce and our communities. Second is to represent and address the interest of employees in crisis with innovative solutions, quick actions and impactful measures. Third is to support business during this period with relevant information and services as well as opportunities for remote networking and engagement with peers.

BiRanChi miShRa, head – Credit, Risk & Product at netafim

agricultural Financing agency (naFa)

Working from home brings about many benefits. However, the organization also poses a different set of risks – both for itself and its employees. Below are the top 2 risks NAFA identified when it decided to allow employees to work from home.

Cybersecurity Risk: Working from home relies heavily on remote access to the

company’s network, cloud accounts, email systems, video-conferencing tools and others. In general, remote work increases cybersecurity risks such as home WiFi security breaches, phishing attacks, weak passwords and access controls, risks associated with accessing the company database through multiple systems and increased data sharing over the internet. We realized that people are often the weakest link in cybersecurity efforts. We started training employees on basic security practices such as setting proper access controls, identifying phishing emails using strong passwords and deleting suspicious emails. We also restricted access to websites not required for day-to-day job-related activities and select employees were allowed to share mail outside the domain.

Employee Health & Safety: Remote working exposes the divide in living setups, divides the ways people and organizations work and creates a divide in our individual needs for social interaction. WFH isn’t about just video conferencing - it’s about tools that streamline and enhance communication, collaboration and transparency. However, we think beyond these tools to ensure that teams are ready to tackle time management challenges and productivity while working with colleagues remotely. Even if teams work remotely, HR arranges

regular e-events and gatherings besides arranging sessions with yoga, meditation and health experts to educate and motivate employees to live a healthy lifestyle.

Our overall experience and productivity have been satisfactory except in areas wherein we need regular face-to-face interaction with our customers or other stakeholders outside the organization.

DamoDaRan C, Vice President & Chief Risk officer at

Federal Bank

WFH was an unimaginable idea for banking sector till the beginning of the pandemic. Now banks are effectively utilizing it to maintain productivity of workforce by leveraging technology enabled platforms. However, being a service industry, there are certain challenges in having a WFH model in its

entirety. Business continuity, or rather continuing business as

usual, was one of the major threats that we anticipated during prolonged lockdown and the associated restrictions. Increased risk of cybersecurity was also anticipated, as more customers embrace digital financial services.

Through the usage of collaborative work environment and virtual meeting applications, we are now able to offer uninterrupted banking services. Of course, there are a few domains where WFH model has limitations like catering to the credit needs of NTB customers.

Cybersecurity is the major threat associated with increasing penetration of digitization of financial services. In order to effectively mitigate the threats, we are constantly reviewing our incident tracking algorithms and have ramped up our real-time transaction monitoring capabilities working on a 24x7 basis. Customers are constantly educated on dos and don’ts of cyber security and all members of staff, including top management, are mandatorily required to undergo rigorous in-house programs on cybersecurity.

WFH has its own advantages and disadvantages as far as non-branch operations are concerned. The major challenge was to securely enable access to the applications for the employees working from home. The bank was quick in enhancing the IT infrastructure and upgrading the IT security to successfully meet the challenges. Members of staff were constantly educated on the dos and don’ts of WFH. Access of staff working from anywhere to applications were routed through the secured VPN, on a need to access basis with proper approval from the authorities. Such logins were monitored constantly to ensure that there is no unauthorized access to the bank’s systems.

GoPal BalaChanDRan, CFo & Chief Risk officer at iCiCi

lombard General insurance

If we have been able to survive the pandemic, it has been attributable to our robust Enterprise Risk Management (ERM) efforts. ICICI Lombard has been at the forefront when

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it comes to ERM. It was the first Indian company to achieve the ISO 31000:2018 certification in April 2018. The ISO standard has emphasized having an effective risk governance mechanism, a risk aware culture, a strong risk assessment process and robust and dynamic risk and control frameworks.

Here are the 5 main risks from an organizational and finance perspective.(i) Counterparty Risk: In a volatile environment like the present

one, it is crucial to keep a close watch on counterparty risk, by virtue of the fact that if the counterparty fails to settle his obligations to the company, it could in turn impact our cash inflows and thereby end up impacting our balance sheet in some way. Therefore, we continue to keep a close watch on the credit ratings of our counterparties and whether the counterparties would continue to operate as a going concern.

(ii) Mark to Market Value of Investments: We continue to keep a close watch on investments portfolio through assessing the market value of its investments and thereby providing for impairment, where necessary. Our focus is to look at qualitative investments in good companies and also ensure that the right percentage of investments is maintained in liquid assets at all times so that we can honour our obligations to customers on a timely basis. In the last 2 decades, ICICI Lombard has not witnessed any default on its fixed income portfolio, which is a testament of our robust investment practices.

(iii) Cybersecurity: Given that we are operating in WFH environment, protecting valuable company data becomes a key aspect, which places a key focus on cybersecurity. WFH best practices including Dos and Don’ts have been rolled out to users on a periodic basis using various communication channels, end point security measures, e-learning modules, etc. Security related educational videos are being published to guide employees and ensure security in a WFH environment.

(iv) Fraud Prevention & Management: These uncertain times also necessitate keeping a close watch on fraud risk since it is crucial to ensure that only genuine customers are paid claims, thereby protecting the bottom line. We have re-visited the triggers for fraud investigation/s and are carrying out claim related investigations. On account of physical inspections being difficult, virtual investigations are being undertaken through the digital route.

(v) Reputation Risk: We are proactively tracking any impact on the reputation through monitoring of various social media posts, articles on various social media handles, articles appearing in national and regional dailies and other communication modes to ensure that there would be no untoward incidents which would have a material impact on the brand reputation of the company.

k R mohanaChanDRan, Chief Risk officer at eSaF Small

Finance Bank

On adoption of WFH, systems of banks need to move from confined and contained environment to open environment. This could result in serious vulnerabilities if not patched or addressed properly, more particularly for financial institutions. Use of Virtual Private Networks (VPN), hotspot Wi-Fi devices, video conferencing facilities and personal devices used for official works/ meetings, etc, could expose banks to risks due

to possible dilution in security protocols and encryption standards. WFH scenario is more vulnerable to cyber-attacks, because of lesser security controls.

While WFH could largely help banks more in administrative functions, customer facing transactions cannot be executed through the employees working from home.

Digitization in banking is still not at appropriate levels to get all customer facing transactions approved by staff working from home.

We have started WFH arrangements since beginning of the pandemic in a structured manner, taking the limitations as detailed above into account. WFH is extended to staff of branches also in a limited manner. The expectations are largely met, by implementing various technical controls (like multi-factor authentication, endpoint posture check, etc) and no security breaches have been reported so far.

The WFH concept will not go away – staff expectations, pandemics, natural disturbances, regional conflicts, etc, will force organizations to think that remote work is an option for all times.

PRithVi ChanDRaSekhaR, President Risk & analytics at

inCred

The biggest risks associated with WFH are in the real economy. Entire sectors like travel, hospitality, commercial real estate, or even retail, will be adversely impacted for a long time. In the shorter term, there are also employment risks and income risks, especially to contractors or those earning incentives and commissions. There are collections risks

arising from borrower/employee migration. There are also internal risks. WFH requires a higher level

of technology security in a sensitive industry like financial services. It also makes it harder to assimilate new employees. So far, these risks have been successfully mitigated. The worst-case scenarios have been averted. But a lot of uncertainty remains, such as covid phase 2, lockdown, vaccination rates, possible covid phase 3, etc. Responsible risk professionals will continue to be cautious.

RakeSh BanSal, Chief Risk officer at hero housing Finance

Data safety is the main issue. All the laptops were hardened and


outside mails with attachments were not permitted. Also, it was difficult to assess new proposals of self-employed customers. We focussed on salaried segment. There were other restrictions like legal and technical agencies were not working properly. SROs were shut. There were no takers for fresh home loan purchases and hence volumes were less.

RooPam aSthana, Ceo & WtD, liberty

General insurance

As the pandemic became more severe, we proactively shut our physical outlets and moved to 100% WFH. The expectation here was that this will keep our employees safe from infection, but what we realized was that employees working from home were

exposed to more external sources of infection and that they were probably safer in our offices with monitoring of body temperature, usage of masks and hand sanitization.

The other risk associated with WFH is the disconnect with colleagues and lack of informal interactions that help employees, especially new joinees, imbibe the company culture. The good news is that with the entire ecosystem working from home using video communication and other digital assets, the exposure of ‘digital hesitants’ to the new way of working increased forcibly, and this has hopefully converted a lot many more to continue using digital assets.

However, here the expectation that all will move away from the traditional face-to-face interactions will not hold true. Apart from the general risks, we also encountered risks pertaining to processes and systems as everybody had to pretty much overnight devise processes and systems to manage the new work model.

Risk pertaining to processes mainly revolved around premium collection, policy issuance, investigation for fraud detection and claims, etc. Strategic risk included challenges in distribution of our products, change in mindset of customers as consumer confidence dipped, scaling digital channels with changing demands, etc. Risk pertaining to systems included cyber and data security threats and challenges relating to obsolete systems/hardware, etc.

SaDaF SayeeD, Ceo at muthoot microfin

The main risk associated with working remotely is connectivity and backups. Since the entire organization is working remotely, any connectivity issue which may affect work may create serious risk issues. We addressed these issues by providing CUG SIMs to all employees and ensured consistent coordination with the service provider for

seamless connectivity at all locations.

Productivity monitoring is another risk given that the nature of business is more into foot-on-street model. The sudden switch to a virtual scenario has created confusion and can lead to productivity risks. Muthoot Microfin has developed its BCP to ensure team leaders are always connected to the team and stay engaged throughout the day through virtual connect.

People are socializing less and there is lesser human contact, which is a big risk for mental health. Lifestyle-related illness risks have also risen over this period. To address this our wellness team is regularly calling the employees and offering them all types of support. The company has also introduced free on-line health consultations for employees and their families.

There is also the issue of keeping track of all assets in use, chances of damage, security risk if they do not adhere to access and privilege protocols etc. Our IT team has disabled some programs at the employee’s extremities so that risk factors may be reduced. The IT team can access the system at any time using any desk application.

SuJay DaS, Chief Risk officer at moneytap

On one side, WFH allows one to take care of their family and spend more time with them. On the other hand, it brings new challenges on the work front. Many a time, a face-to-face discussion is more fruitful and faster to get to a decision. Scribbling on the whiteboard sometimes help in making somebody understand a concept faster. At

times, a 5-minute corridor discussion can move things faster rather than waiting for people’s calendars to free up for a call.

It is said that humans are social animals by nature. Going to the office and meeting colleagues help usher in that social element to a lot of people’s lives. It also helps a lot in terms of decision making and teamwork. While working from home, it does get slightly challenging to have overly distinct boundaries between office and personal work environment and timings.

The new normal is now, everyone understands, more about say, background noises, children playing or even household noises to be a part of calls! A change in environment always refreshes you for the next task, be it personal or professional. Hence the pandemic, has made it more stressful for teams as they are in the same environment all the time with no reprieve, and it can get hard to keep track of time moving.

However, we have also evolved due to work from home and technology has allowed us to keep things going with minimal disruption. That is quite an achievement and has also proven that we can still deliver things at a respectable pace by working from home.

SunDeR nataRaJan, Chief Compliance & Risk officer at

indiaFirst life insurance

We experienced lesser risks than expected. The biggest risks we faced were business risks of an unplanned surge in claims and a sharp dip in new business and renewals. While the

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incidence of claims did go up across the year, the new business and renewals witnessed a consistent recovery quarter on quarter. A robust process built over the years helped shape the recovery.

Other big risks were around the market and interest rate volatility. Tight governance of our investment philosophy and tight

ALM management helped us derive best benefits the situation presented. Operational & IT risks were also kept under tight control through timely upgrades and astute management.

Venkata JayaRaman m., Chief Risk

officer at Fincare Small Finance Bank With the advent of the pandemic, traditional work models are getting transformed, with increased use of automation and digitalization tools. As the number of employees and home IP addresses have taken a step jump, the diversity of threats on devices exposed to local home network, pose a few challenges, including:(i) The need to put in place necessary infrastructure to provide

secure access to confidential information from home/remote.

(ii) Network latency at the employee’s location leading to issues in providing seamless connectivity through VPN.

(iii) Endpoint patching.(iv) Providing remote IT support.(v) Remote onboarding of new joiners.(vi) Given that home networks are inherently

insecure, need for continuous monitoring for new IoCs & IoAs.

At Fincare Small Finance Bank, our security priorities have always been aligned to the bank’s strategy pillar of safe and secured banking. Given the heightened threats, cutting-edge cybersecurity solutions were implemented to strengthen the

cybersecurity maturity level of the bank.

ViJayalakShmi nataRaJan, Chief Compliance & Risk

officer at aviva india The pandemic led to businesses around the globe transitioning workers to remote work, introducing new challenges to companies and employees alike. One of the biggest of these

were cybersecurity and keeping company intelligence safe with employees no longer protected by corporate firewalls. Four key risks associated with WFH are: (i) insecure asset (ii) access to unauthorized sites (iii) data leakage (iv) insecure internet connection exposing the company to information and cyber security threats.

Moreover, we need to ensure that the connectivity to company’s systems and applications is strictly through the company’s network enabled through secure VPN. For an insurance organization, it is important to restrict this concept to safeguard the company’s information. Our focus is to provide adequate training and awareness to promote safe usage of systems and applications and enhance the ability to differentiate between genuine emails and phishing attempts.

SummaRyExcept two, all our respondents spoke about cyber risks,

and that places it at the top of our risk pyramid associated with WFH. Six respondents spoke about human risks

– chiefly social issues as well as physical health and mental health issues – and that places it at

the 2nd position. Five respondents spoke about business risks, placing it at the 3rd position.

Three respondents spoke about operations risks, placing it at the 4th position. Other

risks mentioned include reputation risk, staff induction issues, etc. The same is

represented as an infographic. Our respondents also put forward a

very wide variety of solutions in response to the WFH risks.

[email protected]

PeoPle Risks

Business Risks

oPeRations Risks

otheR Risks

CyBeR Risks


Part 2

unique challenges need unique solutionsQuestion: What policies and practices have you adopted to mitigate risks associated with start-ups?

The explosion of the start-ups and their huge growth potential opens a variety of opportunities for the financial sector – to see them as customers as well as

partners. Four risk experts share their insights.

DamoDaRan C., Vice President & Chief Risk officer at

Federal Bank

Banks may face risks like business continuity, data privacy/ confidentiality, cybersecurity etc. The pandemic has exposed the inadequacy and ineffectiveness of business continuity strategies in some of the startups. Having said that, the services that startups, particularly in the fintech space, provide

to help partner banks in using innovative and cost-effective solutions for widening the scope and reach of banking services is commendable.

As the bank engages startups to deliver new experiences to our customers and to reach out to new customer segments, a robust framework is put in place covering selection, approval and ongoing monitoring of the partnerships for managing the risks involved. The experience that the bank has gained in credit assessment comes in handy while selecting an ideal partner too. We look into the managerial capability, the experience of the promoters, their systems and process, the importance they give to banking regulatory compliances and so on.

Almost all startups leverage technology for offering their services. We assess their business continuity mechanism, technological capabilities, measures adopted to ensure cybersecurity, easiness of their system to interact with our system etc. We share the least minimum data with our startup partners and we are keen to ensure that their systems and processes are as robust as ours in fulfilling our responsibilities towards customers.


Finance Bank

We deal with startups without hesitation or worries that startups are not experienced or that they do not have proven experiences or achievements to demonstrate. Our policies and practices are accordingly aligned. Obviously, startups whom we engage as our business partners undergo litmus tests on their professional, managerial, technical and

financial capabilities.

PRithVi ChanDRaSekhaR, President,

Risk & analytics at inCred

The startup ecosystem is distinctive and nuanced. Startups naturally have much more survival risk than mature companies. However, as a lender, we are more exposed to the survival risks as our upside is limited. Startups also generally have less mature processes in terms of tech-security, fraud control, etc.

We therefore provide startups with arrangements that protect our risk while providing them with the funding they need. This includes due diligence on the startup’s equity position and cash flow, FLDG (first loss default guarantee) arrangements, and extensive technology-based monitoring to ensure that the underlying credit and compliance risks are being appropriately managed.

SuJay DaS, CRo at moneytap

In a startup, things do tend to move very fast. There is minimal wait time before decisions get taken and the ability to huddle together as a team and come to a quick decision is another quality. This leads to quicker implementations.

The challenges that are usually seen with speed is that it brings in the risk of processes breakdowns. A keen eye on the process allows you to make sure that there are enough checks

and balances. It also helps to take a step away to make sure you are also seeing the higher-level vision of where the direction is headed. It helps you to monitor so that things don’t fail or that there are triggers which are like notifications for you as soon as there are any problems, so those can be rectified immediately.

With our company being in the fintech lending sector, the customer relations are long term. Hence, there are many touchpoints for a customer - starting from onboarding to repayments, to foreclosure, to re-opening of accounts, to customer service. As a result, whenever any product gets launched or any changes are done, there are many departments that get involved. While we plan to do it fast, we make sure all departments sync up about the product and each of their processes are built in.

We document the end-to-end process comprising all the departments and then start the build. When you put a document around any concept, it makes your head and vision clearer. It becomes easier to explain and then point out if anything is missing.

SummaRyData Points for Assessing Start-Ups:

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Question: Having mapped the risks associated with emerging technologies like API, RPA, AI, ML, etc, what patterns have you observed?

Part 3

Risk management supports technology spread

The wide variety of technologies and the interconnections between them are creating a system that is beginning to resemble the ecosystem of nature that we live in. Nature

has a way to keep the ecosystem in balance which enables living organisms to thrive. Risk management concepts and practices are evolving to sustain the technology ecosystem in a similar manner.


Although there is a direct benefit of using APIs for faster integration with partners, it is an immediate target for hackers as well. There are multiple security risks associated with API and process automation, such as leakage of customer data, fraud, etc. With respect to AI and ML, it requires more data

and is more complex to implement than others. Apart from that, there are vulnerabilities, misconfigurations, providing false information, etc. We have ensured security does not take a back seat during our adoption of newer technologies and have implemented robust framework around the same.

anil PinaPala, Ceo at Vivifi india

Finance AI, ML, API, etc, are the most common terms in the startup world, with or without adoption. Having been in the lending space for over 20+ years, it is important for us to ensure that a deserving customer is not turned down while at the same time,

the rogue players – synthetic fraud or wilful defaulters – are not let in. In this process, we need to analyze data provided or authorized by the customer, sought from public domain

databases, credit bureaus, etc, analyzed within seconds in real-time and offer a reasonable answer to a customer looking for emergency credit.

So, the reliance on RPA, AI, ML or similar technologies is heavy and has been one of our key differentiators in building a strong and profitable book of loans working with the under-served and unserved customers. While most exaggerate the use of these technologies, using these in the right way can accelerate business growth in this competitive space. We have strong audit and oversight processes to ensure that the various algorithms being utilized continue to work within the scope and guidelines laid out when implementing them.

aVneeSh tRiVeDi, CRo at moneyboxx

Finance

Emerging technologies have helped in assessing and forecasting repayment patterns during last and the current covid wave. It also gave a sense about the customer occupation segment impacted on high, medium and low parameters. Identification of new hotspots was also done with the help of technology tools.



Technology is constantly evolving almost daily, and with these changes, new risks are emerging. For us, it is important to keep ahead of the curve and remain innovators in the insurance space by not only adopting relevant emerging technologies but also managing the risks arising from holistic adoption of these.

Across organizations, stakeholders including the board, functional heads and internal auditors are exploring ways to improve efficiencies and provide cutting edge solutions and

i. Managerial capability.ii. Financial capability.iii. Experience of the promoters.iv. Robustness of Systems and process.v. Importance given to banking regulatory compliances.vi. Business continuity mechanism.vii. Technological capabilities.

viii. Measures adopted to ensure cyber security.ix. Ease of interaction with the bank’s systems.

Solutionsi. FLDG (first loss default guarantee) arrangements.ii. Have triggers which give notifications as soon as problem arise.

[email protected]


products to clients and stakeholders by leveraging emerging technologies. More often than not, however, organizations tend to either ignore or side-line security and risk considerations, while implementing new technological solutions.

With technologies characterized by little or very little intervention of human beings,

risk management plays a pivotal role in their implementation. Here are some key risks and controls that an organization should consider while implementing or planning to implement new technologies.(i) Non-standardization of processes – This often leads

to solutions being customized to an organization or a business unit, resulting in errors and increased cost of automation. Before implementation, organizations should first standardize most of their processes across business units.

(ii) A lack of ownership, roles and responsibilities – Functional heads tend to think that a particular technology solution is owned by IT, while IT think of themselves as just the enabler and the functional heads as solution owners. This leads to a situation where nobody owns the errors and problems of a technology driven solution. Organizations should clearly define the ownership, roles and responsibilities of each of the stakeholders for any technology solution they adopt.

(iii) Data privacy and cybersecurity – Technology implementation comes with several inherent risks such as internal privileged access rights that can be exploited by cybercriminals. This can lead to the confidentiality, integrity and reliability of data that the organization processes being compromised. Organizations should review and deploy adequate cybersecurity and data privacy controls, depending on the data exposure and extent of personal data available within the organization.

(iv) An effective change management process – As the level of automation within an organization develops, data mapping and configuration will also change. If the related configurations and data mapping are not updated within the technology solutions, it will deliver inaccurate results and incorrect output. Organizations should define and adopt a strong change management process to mitigate this risk.

(v) Process documentation – In many cases, process documentation is not updated, making it difficult to manage changes at a later date in the application. Organizations shall ensure that all documents, supplier/vendor information, inputs, logic processing, outputs and customer information are updated, which enables any changes to be easily implemented when required.

(vi) Selection of the technology solution and partner – Failure to invest in the right solutions and partners can directly impact the viability and outcome of an

organization’s digital journey. Inappropriate investment can lead to a waste of time and money. Organizations should perform adequate due diligence while selecting a technological partner and tools.


Federal Bank AI/ML systems and models have high dependability on the environment and input data to learn and train itself. Any changes in the variables, outside the possible bounds, renders judgement of the system/model ineffective. These models should have an effective governance mechanism and constant oversight to ensure that the system

is functioning as envisaged. The volatility induced by the pandemic has altered the variables to a great extent such that the present and future cannot be predicted only using historical observations.

Further, the possibility of corruption of input data by rogue elements manipulating loopholes also needs to be watched for. As more applications are migrating to fully digital mode with straight through processing and intelligent processing mechanisms, governance and oversight framework should be routinely updated and adhered to.

Federal Bank has adopted multiple controls for managing risks associated with emerging technologies. We rely on trial runs, random verifications, ongoing monitoring and periodical validations to ensure that the bank remains the master over technology.


Finance Bank

Technologies like AI, ML, RPA etc are all based on algorithmic models and knowledge base. The pattern observed is that there are high chances of accidents, unanticipated consequences and privacy violations. We ensure proper security tests before moving on to production and also when any major modification happens in the code.

A huge risk with AI and ML is that these technologies are highly prone to bias and prejudice. This fact is often ignored or underestimated. It will require consistent evaluation by the AI/ML implementation team to identify whether the AI/ML engines develop bias, prejudices or throw stereotype outcomes.

PRithVi ChanDRaSekhaR, President

Risk & analytics at inCred

We use technologies like APIs and AI/ ML models extensively. These tools are central to our business model and, in the balance, mitigate risk. The specific risk created by these technologies is complexity.

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For example, 20 years ago, my risk models were all generally regression equations that were not hard to interpret intuitively. Now, more powerful AI/ ML models use synthetic features that are harder to interpret. We mitigate this risk by ensuring that some human supervision of models is always maintained.

RakeSh BanSal, Chief Risk officer at

hero housing Finance

Many credit checks were done through APIs integrated through fintech companies. We were validating PAN, bank statements, etc, through APIs which made the process far more efficient.

RooPam aSthana, Ceo & WtD, liberty General insurance

Liberty General Insurance works with mainly API & RPA technologies and has recently introduced AI/ML in its processes. Besides the risk of the vendor going out of business and resultant inability to provide continuing support, expected risks include non-standardization, poor design, selection of wrong processes, faulty allocation of roles and responsibilities, lack of strategic approach, dependence on related system / process changes, which may not be managed synergistically and lack of inhouse experience in managing these technologies.

If done the right way, it has many benefits like improved efficiency, innovative approach to customer experience, saving time, removing manual dependency which had led to errors, ease to reuse and quicker response time. These benefits can be achieved with the right knowledge of the developers, clear requirement analysis, functional and non-functional design study, lifecycle planning and a thorough look from the governance and compliance angles as well.

SuJay DaS, CRo at moneytap

API integrations have helped the financial lending world to get different types of verifications of thousands of customers within seconds. Machine Learning models have given a boost to predictive power of different models, bringing out hidden patterns from data. RPA has allowed repetitive work to get automated and increase efficiency. Today,

using all of these, fintech companies are able to service different segments of customers with their financial needs quicker and with better accuracy.



Two key risks are (i) the problem of plenty and (ii) the risk of fast paced change. Embracing emerging technologies has become a necessity to keep pace with the market and make

rapid improvements in uplifting process productivity. Apart from the customer, the expectations of other key stakeholders like distributor, regulator and the shareholder have gone up. There is a deluge of service providers and identifying the right partner is critical. The risk of obsolescence is high as newer versions keep coming up quite often

and as a result, doing a cost-benefit analysis over a long period is tricky.

Venkata JayaRaman m., Chief Risk officer at Fincare

Small Finance Bank Some of the patterns observed are in the following areas: (i) Quality of data (ii) Handling of business-critical data (iii) Level of integration (iv) Interoperability (v) Upgradation of technology stack and (vi) Security review of platform, middleware, and technology stack.

ViJayalakShmi nataRaJan, Chief Compliance & Risk

officer at aviva india Technology is constantly evolving, and new opportunities are arising every day. But as is often the case with new opportunities, come new risks. Artificial intelligence, robotic process automation and the cloud are emerging technologies that particularly excite because of their capacity to do all these things and completely transform

organizations in the process.AI is only as good as its teacher – its outcomes can be affected

by poor training, bias and ‘bad data’. AI can deliver erroneous outcomes due to bias in data, algorithms, or development teams. Another prominent area of risk that has emerged is the third-party risk that arises when organizations are relying on external providers for these new technologies – a reliance that is set to increase and create an even more complex ecosystem. Risk now needs to be considered and designed at the inception of new products, services, channels or transformation. To create trust, all risks must be addressed together, at the same time – and critically, ahead of time.

[email protected]


Collective Wisdom in a Box – Related to technologyR i S k S o l u t i o n

1 (i) Quality of data (ii) Handling of business-critical data (iii) Level of integration (iv) Interoperability (v) Upgradation of technology stack (vi) High chances of accidents, unanticipated consequences and privacy violations.

Rely on trial runs, random verifications, ongoing monitoring and periodical validations, security review of platform, middleware, and technology stack. Ensure proper security tests before moving on to production and also when any major modification happens in the code.

2 Not updating configurations and data mapping which leads to inaccurate results and incorrect output. Process documentation is often not updated, making it difficult to manage changes at a later date in the application.

Define and adopt a strong change management process.

3 Multiple security risks associated with API and process automation, such as leakage of customer data, fraud, etc

No solution offered.

4 Vendor going out of business and resultant inability to provide continuing support.


5 Non-standardization, poor design, selection of wrong processes, faulty allocation of roles and responsibilities, lack of strategic approach, dependence on related system / process changes which may not be managed synergistically and lack of inhouse experience in managing these technologies. Risk of obsolescence as newer versions keep coming up quite often.


Collective Wisdom in a Box – Related to ai & mlR i S k S o l u t i o n

1 AI/ML systems are highly prone to bias and prejudice. This often ignored or underestimated.

Consistent evaluation by the AI/ML implementation team to detect bias, prejudices or stereotype outcomes.

2 AI/ML systems and models have high dependability on the environment and input data to learn and train itself. Any changes in the variables, outside the possible bounds, renders judgement of the system / model ineffective.

An effective governance mechanism and constant oversight to ensure that the system is functioning as envisaged.

3 Complexity. 20 years ago, risk models were all generally regression equations that were not hard to interpret intuitively. Now, more powerful AI/ML models use synthetic features that are harder to interpret.

Ensure that some human supervision of models is always maintained.

4 AI/ML vulnerable to misconfigurations, false information, bad data and poor training.

Risk now needs to be considered and designed at the inception of new products, services, channels or transformation. To create trust, all risks must be addressed together, at the same time – and critically, ahead of time.

5 The possibility of corruption of input data by rogue elements manipulating loopholes.


Source: 2 NBFCs, 3 Banks and 5 Insurance Companies

Question: What has been your experience with using technology to mitigate risks arising out of technology momentum?

Part 4

Slave power rising - what must the master do?

Technology is too powerful a tool to be taken for granted. It is totally unsafe to assume that technology will behave only as we want it to. Technology can

and does behave in unpredictable ways. 12 experts tell us how we can protect ourselves and keep control over technology.

Cover Story



We are a technology first company, and we are aware of risks such as misconfigured systems, access issues, data leakage, etc. We follow established governance and policy framework to ensure systems and data are protected. We have implemented multiple controls covering data protection, authentication and log review to monitor

and mitigate the risks. Also, we are continuously upgrading our systems and processes in line with the evolving threat landscape like phishing attacks, ransomware, etc.



Technology has truly become the backbone of every modern organization. From the use of computers, smartphones, tablets and the internet, organizations now have a global exposure to cyberattacks that are difficult to understand and predict. Basis learnings, following are 6 key lessons which, if followed, will help in mitigating the risks arising out of

the technology momentum.(i) Identify key risk, measure probability and impact – It is

very important to identify in time the key areas of concerns and measure the probability of occurrence and impact on business activity. This will help in developing an effective mitigation plan.

(ii) Measuring Risk – Once the risk is identified and analyzed, measure its impact.

(iii) Analyze security threats – The organization must identify all security vulnerabilities. This must include external threats such as cybercrime and cyberterrorism, as well as internal threats, such as the distribution of restricted information. Review of security requirement related to following areas is very important: (a) System access and controls (b) Authentication (c) Transaction authorization (d) Data Integrity (e) Audit trail (f ) Security event tracking (g) Exception handling and (h) System activity logging.

(iv) Analyze the risk of hardware and software failure - Organizations should consider what the risk of hardware and/or software failure entails for the organization and its overall operations. Questions that must be answered: How stable is the equipment and software the organization uses or plans to use? What are the potential consequences of failure?

(v) Outsourcing risk – It is very common for an organization to hire a third-party company to handle system development and maintenance, network administration, disaster recovery service, application hosting and cloud computing. A third-party vendor must be carefully selected and evaluated on the basis of their viability, capability, reliability, track record and financial position.

(vi) Rank potential risk and specify the desired outcome – Threat profiling should be carried out and analyzed post identification of a risk. The analysis should consider outlining the types of risks an organization can encounter as well as the likelihood of the risk occurring. Based on the analysis, the organization must choose the appropriate risk management strategy - risk avoidance or risk transfer or risk reduction or risk retention.


agricultural Financing agency Given that technology plays a vital role in the risk management and financial reporting process besides improving efficiency in each function, the integrity of the technology and the outputs are critical control elements of the internal control environment. The output of technology addresses several assertions inherent to effectiveness, efficiency,

confidentiality, integrity, availability, compliance and reliability. IT risks are the events that depict ‘what can go wrong’ in not meeting the above fundamental assertions. Secondly, unlike natural systems, organizations are managed by intelligent participants who may find ways to defeat the purpose unless there are adequate controls. Appropriate controls, constant upgradation and regular internal and external technology audits help mitigate the technology momentum risks.


Federal Bank

Digitization of risk management functions is necessary for mitigating the rapidly digitizing business domain. Use of AI & ML on the domain of risk management is increasing. This enables banks in early effective monitoring, early detection of risk events and ensuring timely remedial action. While banks rely on a host of technology enabled

models for decision making, we have put in place model risk management practices for periodic monitoring, back testing and reviewing such models. We have put in place tech-enabled models for transaction monitoring and fraud prevention. These models are constantly reviewed and upgraded to detect the emerging frauds in digital transactions.


Finance Bank

We use proper technology risk assessments to identify the critical risks and ways to mitigate them. We see the costs and take a call whether to go for risk mitigation using technical controls or administrative controls. In majority of the cases, only technology can help in mitigating the risks arising from


digital acceleration.We follow the concept of ensuring Confidentiality, Integrity

and Availability (CIA) in our information systems and applications. The information systems of the bank are subjected to Vulnerability Assessment and Penetration Testing (VAPT) periodically, as a preventive measure against cyberattacks that could threaten the CIA of data and the systems.

The bank has implemented a 24x7 Security Operations Centre (SOC) to detect and analyze all potential incidents and notify the application owners who have been affected, to contain, eradicate and recover from the incident. All cyber security incidents are recorded and reported to the InfoSec team. Also, we conduct planned and unplanned DR drills. The bank’s technology platforms have proved to be robust to face any potential cyber security and IT security risks.


inCred

I see complexity as the main risk emerging from the accelerated use of technology. In the balance, these emerging technologies are immensely powerful. They clearly make our customers and our industry better off. However, dealing with the complexity (and the unintended consequences) of these technologies, is something we are still

grappling with.


Technology momentum in any industry would affect 3 major pillars of any organization - Processes, Systems and People. While risk of obsolescence and lack of continued tech support can be an outcome of not keeping pace with technology, risk relating to introduction of new technology can likely lead to a major

failure. Hence, it is crucial to identify possible risks and create a plan to mitigate these risks. Post identification of these risks, we must have a strategic plan in place like business continuity plans and back-up plans. Constant identification of technology risk should be an ongoing process.


Various risks are arising out of the technology momentum. The most important is the data accuracy, availability of the data and security of the system and data. These IT/data security risks can be mitigated through various technological and logical tools. We are implementing the basic security tools effectively. Yes, with complexity of the

data, process and IT systems, we will be implementing more sophisticated security tools.


Technology enhancement has helped in mitigating risk in several ways for financial organizations. There are many things that can be done instantaneously using machine learning algorithms and through API integrations. In our case specifically, checking the validity of self-taken images that customers send us, validating of PAN

card details, verifying geo-location, eKYC and video KYC, income verification, etc, are a few examples where technology has helped the credit underwriting and verification processes become faster and more accurate. These go a long way in mitigating credit and fraud risk for financial organizations.

However, there should be proper checks and balances built in the processes to see that there are no failures in the technology. We should build in robust monitoring processes that get triggered if any technological failure happens, so that it can be immediately fixed so as to reduce operational losses.



Risks include adoption, teething and early redundancy. A head start in the use of technology across the sales process over the recent years has helped us ride the momentum which I have largely driven by the willingness of the end customer and our distributors to engage through digital or phygital means. We have seen a digital uptick across the

customer life cycle - right from engaging prospects through web workshops, paperless onboarding through an OTP-based customer consent, ongoing customer service through WhatsApp, IVR, and chatbots, collecting premium and remitting maturity and claim proceeds through digital means.

The first level risk arises from the above is adoption, especially if it involves a large set of users. The immediate next challenge is the ability to overcome teething troubles and course-correction alongside changes. The biggest risk, however, is maintaining the status quo in the age of rapid change.


Small Finance Bank

Technology has been a game-changer in addressing several challenges by optimizing the end-to-end risk management process. Our experience with using technology to mitigate risks arising out of technology momentum include: (i) Adopting a shift left strategy towards security testing (ii) Putting in place inbuilt security into the

product rather than retrofit (iii) Implementing DevSecOps (iv) Automating continuous vulnerability assessment and (v) Automating CI/CD pipeline.

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Question: Are you looking at risks associated with emotional issues like frustration, depression, isolation, alienation, resentment, etc? Please give an overview of the mitigation plan.

The fear created by the pandemic and the isolation created by the lockdown have had the biggest ever impact on mental health. Fortunately, companies have

found a variety of solutions that mitigate the problem. All 16 participants shared their insights and their company’s practices to tackle this issue.


With a remote work environment and loss of human connect, we do see these emotional phases in employees. But our HR team tries its best to foster motivation, productivity and mindfulness through various initiatives. From a tech point of view, we utilize all tech resources to ensure our employees are empowered to work from home without

a hassle. Team connects, training modules, appraisals and meetings are all there and we have a business continuity plan in place that helps employees to work smoothly even from home, thus helping to mitigate these risks.

anil PinaPala, Ceo at Vivifi india Finance We have strong HR and administrative policies and practices to

ensure that there are continuous community activities and independent feedback systems that help identify emotional issues arising out of work or non-work circumstances and provide assistance to our employees. In our organization, we have created a transparent process and safe space wherein our co-workers don’t feel any reservations in speaking about

emotional issues or issues related to their mental wellbeing. In fact, we make a conscious effort to choose plans with health insurance companies where there is adequate support provided to our employees with access to adequate care on mental-health issues.

aVneeSh tRiVeDi, CRo at moneyboxx Finance

Yes, focusing on emotional quotient of employees is very important in current scenario. Continuous engagement with employees and devising plans on their overall mental and physical wellbeing has been a very critical area. We focus on helping employees to keep mental calm through regular pranayama and yoga. Creating a positive

Part 5

mental health - u Shaped Recovery

ViJayalakShmi nataRaJan, Chief Compliance and Risk

officer at aviva india

With the increase in digital adoption in sales and servicing, the fact remains that the risk of information and cybersecurity threats do multiply. However, it is technology in itself that helps address the risks created by technology. The key to this is right investment in information and technology architecture and infrastructure at the right

time supported by an IT strategy roadmap.This should essentially address obsolete technology, timely

upgrade and patching, robust DLP tool, firewall protocols, underlying security protocols and annual real time BCP (Business Continuity Plan) drills. Add to that, information and security risk assessment both at pre-go live stage and at defined intervals for critical applications.

Information and cyber security of outsourced vendor must be reviewed at regular defined intervals. Other crucial issues include testing at onboarding stage, tight digital and physical access control management. Finally, there is a need to ensure ongoing training and awareness for employees and vendor resources associated with the company.

SummaRyLooking at all the responses, it is clear that technology poses a vast variety of risk thereby presenting a rich scope for dealing with them. One interesting perspective is that thanks to technology, there is now a dual intelligence within every organization – the human intelligence and the cyber intelligence. When they work with synergy, magical results happen. But when the synergy breaks down – accidentally or wilfully – the outcome is usually disastrous. Net net, the human intelligence must keep moving ahead to remain the master.

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environment with right messaging (Dos and Don’ts) has helped in boosting employee morale in these turbulent times.



Uncertainty breeds anxiety, and we are living in uncertain times. Between rising numbers of covid cases, questions about the ongoing challenges and the economic fallout of the pandemic, we don’t know what will come next. And that’s taking a toll on our mental health. This unprecedented situation is clearly demonstrating that individuals are

largely and emotionally unprepared for the detrimental effects of the large scale and prolonged effects of the pandemic.

In the current situation, anyone can experience crippling levels of stress and anxiety now and due to the remote working environment people managers need to be alert for signs that indicate employees are struggling to cope. We recognized these challenges early on and implemented the following to help employees manage their wellbeing, work-life balance and proactively work with emotional issues due to the pandemic:(i) Dedicated break-hours – Fixing break-hours helps an

employee take note of the time to relax and ease out the pressure of work during work hours. We have dedicated lunch and break times with instructions of not scheduling or attending any meeting during those fixed timings. We call it ‘Me Time’.

(ii) Digital Signoff – We all experienced long and odd working hours during the initial days of lockdown. Over time, things improved but I believe it still requires revisit and improvisation. All employees are encouraged to log off by 7 pm unless they are working on anything which is business-critical, which needs to be notified to the line manager.

(iii) Self Care – Encourage employees working remotely to take time for self-care and movement/exercise during the workday.

(iv) Quick check-in – We conduct a quick round of check-ins from participants at the beginning of every virtual meeting to see what’s on people’s minds, personally and professionally.

(v) Sharing information – We arrange sessions by leaders who are empathetic and who talk personally about challenges that they understand people are going through.

(vi) Tele-Wellness Services: We tied up with Truworth, a tele-wellness partner to provide our employees with on-demand medical consultations, online pharmacy and medical test booking services. These services were extended to their family members as well.


agricultural Financing agency

Both employees and the company are reeling from an unprecedented amount of change. Employees at all levels

continue to be worried about their health, the wellbeing and health of family members, in addition to performance pressure. Our company’s leadership makes sure employees feel heard, supported and led with empathy. Management, team leaders have regular informal interactions with employees individually and in groups, address concerns

in the most productive way possible. We prioritize the safety and wellbeing of employees and release guidance for working safely in general and during the pandemic. HR regularly arranges interaction with doctors and wellness experts to assist employees in dealing with their mental and physical health, which has never been more important.


Federal Bank

The certification ‘Great Place to Work’ is a testimony for Federal Bank’s employee-friendly work environment and HR practices. We consider human resource as the most important asset of the bank and take all steps to keep it vibrant. The pandemic has affected all human beings across the globe, psychologically, financially and physically.

Social isolation, fear of contagion, fear of impact on family members, etc., can all cause distress. With full awareness of the reality, the bank has come out with timely HR support measures. We have operationalized WFH, duly assigning priority for those staff who are considered more vulnerable to pandemic and wherever the risk of spread is assessed as high. The bank conducts webinars on health-related issues and arrangements are made for interactions with medical practitioners and counsellors. Round-the-clock counselling helpline is available for employees to seek assistance of trained persons to help them with their emotional issues.

The bank also takes care of expenses for treatment of employees and dependents. Emergency financial support is provided if any of the close relatives of the employee is hospitalized. The bank is taking exceptional steps in vaccinating all the employees and their dependents. The employee welfare measures, cordial relationships among employees and strong family bonding are the foundation stones on which Federal Bank is built and these factors have played crucial roles in keeping up the employee morale during these testing times. Various communications channels are open for to-and-fro communication between HR and employees and our MD & CEO reaches out to the employees at least once in a week through motivating messages.



The uncertain times related to the pandemic can be extremely

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unnerving. However, staying resilient and calm is the best opportunity and option we have, if we have to win this pandemic war.

Employee welfare and safety are key components for all organizations. The pandemic outbreak has taught us that anything is possible and accordingly we have accelerated the digital ways of working

to ensure that productivity is ensured in a WFH environment and employees can be safe and sound in their homes.

The company has also regularly engaged with employees by circulating educational material on safety and productivity and also urging employees to restrict travelling.

Again, mental health is a very important area which needs consideration. The company has organized digital wellness sessions for employees for which external experts are invited to address employees on the importance of good physical and mental health. They also provide valuable insights on staying fit and healthy through activities such as regular exercise, healthy diet plans, engaging in arts and craft, spending time with the family and similar other initiatives.

The company has organized hobby groups and employees are encouraged to be part of such hobby groups to ensure that they can pursue their hobbies and interests and engage with like-minded individuals on digital platforms provided by the company.

The company has also encouraged employees to spend more time with their families and whenever any employee achievement has to be celebrated, the company reaches out to the employee’s family to ensure that it is a memorable event for the employee and family.

The company also has an in-house program called Santulan, which is a 24x7 assistance program providing employees access to trained counsellors while ensuring confidentiality. Employees can share their personal and professional concerns with trained counsellors, who would play a pivotal role in boosting psychological strength.

Through our IL Take Care App which has crossed 500,000 downloads, we even offer the facility of tele consultation or a doctor on call facility, for employees as well as customers.


Finance Bank

The current situation of widespread infection has a psychological impact on the employees of any organization. The WFH arrangements, distancing from friends and colleagues, infection, loss of life of some of the colleagues’ relatives, social restrictions, etc, cause anxiety for employees. Some of them are able to manage the stress by

themselves, but we, as an institution, have taken many steps to address this issue and to support the employees, like employee connect programs, online training sessions, senior officials

addressing the staff in a structured manner, counselling arrangements, medical support, etc. Advisories are issued by the corporate office periodically. Personal contacts by senior officers with those employees who are tested positive for covid-19 provide relief to the employees.


inCred

Yes, we believe WFH can have an impact on the mental health of our employees. The most important mitigant is ongoing employee engagement. We are making sure that our employees are constructively involved in substantial work, and embedded with their teams, despite WFH. Further, we also support employees with flexibility and

resources if they ever need to deal with more severe mental health issues.


Our company hired a psychologist to deal with these issues and he was available on call. We kept the team engaged by giving them exciting projects on portfolio analysis and policies and process analysis of various companies. We also helped them develop new skills during the lockdown.


The current pandemic situation and its related complications have created the ground for emergence of mental health problems and emotional issues within employees and these are a risk to the long-term wellbeing of any organization. Our WE CARE health program for our employees has identified that one of the root causes for anxiety, fear

and related emotional challenges is also misinformation. To address this, we have organized Medical Expert Talks for our employees and families in regional languages so that they can better understand the 2nd wave of the pandemic. It helped put at rest many doubts and allay fears.

A robust Employee Assistance Program with expert counsellors available on call, in regional languages, is another effort to solve the issues. Additionally, we realised that many families were grappling with some challenges like how to talk to children about covid, how to quarantine without loneliness, and we have organized seminars on such topics.


We are effectively reaching out to our employees to provide awareness and ensure psycho-social support through our online HRMS and learning platforms. We promote and ensure that employees are engaged in relaxation activities.


Rediscovering healthy hobbies or activities are promoted through various employee engagement activities like cooking, painting, photography contests, etc. We stay connected 24x7 through our helpline numbers in case employees are in need of any support. Further, we have contacted each and every employee from HO to take feedback on

their safety and wellbeing. We have also facilitated free online consultations for employees to connect with a mental health professional by phone or videoconference through Practo mobile app and another doctor on call facilities.



Mental health is directly related to productivity and is underrated. While we may have rarely seen mental health issues surfacing pre-covid, the same is not true in the last one year. Even now, we are seeing just the tip of the iceberg. In an office environment, we may witness the effect it has on productivity and behavior while the cause

would have remained a mystery. In the times we are living in today, both cause and effect are a challenge to detect and assess.

The mitigation has to be both proactive and reactive. Simple yet effective measures to engage the team have made a difference to us. While some of these are done for knowledge enhancement, connecting over a coffee for 30 minutes and chatting up, and seeing each other’s faces have also made a big difference. Leaders are encouraged to reach out to the affected team and family to offer help. Small wins are applauded and celebrated instantly. We set up helplines a few years ago and they have started buzzing last year.


The pandemic has brought in many uncertainties in the lives of people. Many people have been working from home for the past one year with restricted movement as well. Lots of screen time and difficulty in separating office and home timings have made it important for the companies to start thinking of better ways to get work done.

Managers have been asked to be very proactive in speaking to their teams about shutting screens and doing off screen activities. It’s important for mental health reasons that people be reminded to nurture hobbies, read books, gardening, yoga, meditate, or anything else that can bring some relief from it getting too overwhelming. Even suggestions such as playing board games, cooking new dishes, music and other activities are encouraged.

The HR team has been very timely with their efforts to bring in external help wherever needed, and making sure

people feel more secure in the troubling times. We make sure that employees and individuals are getting help with medical tests, covid sick leave, leaves for caregivers and for vaccination purposes, vaccination drives, care packages, accommodation, transport, food, (for people staying alone, or far away), mental health counselling, wellness webinars every week, etc.


Small Finance Bank

Remote working seems to cause higher fatigue levels than being in office. There are instances of losing interest or motivation, start and end time pressure, natural distractions, lack of meaningful socializing, pressing issues, both at work and personal front. The bank has tried to navigate this challenging phase by providing flexibility of

work from home/remote location to ensure personal comfort, no strict start-end timings, regular leadership town-halls in order to alleviate fear and anxiety and regular team interactions about health and wellness, both physical and emotional.

The bank offers leave/financial benefits, offers support groups in case of infections for self/family members, engagement groups for social interaction, R&R as usual, special R&R and events, motivational posts in internal groups, social media buzz about bank’s progress and fight against covid. All these have helped us create positivity and buzz in the organization’s fight against the pandemic.

ViJayalakShmi nataRaJan, Chief Compliance and Risk

officer at aviva india

Emotional distress has increased phenomenally in covid situation and the extended lockdown, especially when self, close or extended family members and friends are affected. The mental stress increases manifold under the situation of work from home as well considering there is least face to face contact with fellow

employees.To address this most employers are directing this risk

on the ongoing business by creating support systems both on formal and informal platforms with ample employee outreach programs. Mandatory team connect with leaders, participation in seminars and conferences, extensive usage of safe communication platform for face-to-face engagements, connect with a doctor to address both physical and mental issues, maximizing safety protocols while at work in office, tie-ups with medical support platforms for medicines, consultations, hospital care, health care support are among initiatives that have been taken up by the company. Personal touch to show that ‘I Care’ is key to connect and embrace employees during these stressful times.

Living the value of ‘Care More’ to help our people and

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Question: What risk management frameworks do you expect to put in place as and when cryptocurrencies become legal and start gaining traction?

Part 6

looking, but not touching

support them in fighting the challenges of the availability of medicines, hospital beds, oxygen, ventilators, tests/vaccination etc, we have created Aviva War Room - a group of 50 volunteers who track the leads for medical supplies in real time, verify them and answer the distress calls. Some of our other initiatives include an in-house ‘Happiness Campaign’ to help our people combat stress, anxiety, anger, depression, cultivate happiness, resilience and mindfulness in these turbulent times using activities, micro steps, videos, stories etc. A similar campaign (WFH -Work Feeling Happy) had a positive impact last year during Lockdown 1.0 and we hope to create a positive impact with this exercise ensuring our people do not feel isolated or depressed. We have collaborated with Dr.Lal Path Labs & Apollo Pharmacy for discounts and home collection of blood samples and delivery of reports. We have also tied up with Practo to offer complimentary online consultation to all our employees, and their family members, with some of the best doctors across India.

These initiatives have strengthened the belief of our people that the organization stands with them in all ups and downs. We will continue our efforts to ensure safety – physical and psychological - for all our people until we sail through these challenging times.

SummaRyThe participants in this round shared a wide variety of responses. We summarized them and divided them into 6 broad categories.1. Time Related:i. Dedicated break hours to help employees take note of the time to relax and ease out the pressure of work during work hours.ii. Encourage employees to log off by a particular time, unless they are working on anything which is business-critical.iii. Ask managers to be very proactive in speaking to their teams about shutting screens and doing off screen activities.iv. Encourage employees working remotely to take time for self-care and movement/exercise during the workday.

2. Health Related:i. Vaccinating all the employees and their dependents.ii. Mobile app for tele consultation with doctors.iii. Psychologist on call.

iv. Encourage Pranayama and Yoga.v. Tele-wellness services covering medical consultations, online pharmacy and medical test booking services, for employees and family members.

3. Finance Related:i. Emergency financial support if any of the close relatives of the

employee is hospitalized.

4. Work Related:i. Strong HR and administrative policies and practices to ensure

that there are continuous community activities.ii. Independent feedback systems that help identify emotional

issues arising out of work or non-work circumstances.iii. Making sure that employees are constructively involved in

substantial work.iv. Help employees developed new skills during the lockdown.

5. Communications Related:i. Transparent process and safe space wherein co-workers

don’t feel any reservations in speaking about emotional issues or issues related to their mental well-being.

ii. A quick round of check-ins from participants at the beginning of every virtual meeting to see what’s on people’s minds - personally and professionally.

iii. Creating a positive environment with Do’s and Don’ts.iv. Session from leaders that are empathetic and talk

personally about challenges that they understand people are going through.

v. Wellness webinars to assist employees in dealing with mental and physical health.

vi. Seminars on how to talk to children about covid and how to quarantine without loneliness.

vii. Medical expert talks for employees and families in regional languages.

viii. Social media buzz about the company’s progress and fight against covid.

6. Hobbies Related:i. Organize hobby groups on cooking, gardening, painting,

photography, meditation, music, etc, and encouraging employees to be part of such groups.

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Large parts of the world at showing a lot of interest in crypto currencies. Bitcoin and others have been rising despite some drops. The financial sector however has

only a little to say on the subject. Here are responses from 13 of our participants.


Currently the same is not legal in India and have much less data to comment on the risks associated with it.

anil PinaPala, Ceo at Vivifi india Finance We have a strong regulator in India - Reserve Bank of India - and I am

sure that the regulatory framework for cryptocurrencies set up by them will be the driving force for all processes of transacting with them. We are strongly guided by the central bank’s guidance in managing the risks associated here.


Finance

We need to wait for RBI guidelines on this. Fintech in blockchain space is going to be fiercely competitive. The big push will be for startups who want to raise funds through Initial Coin Offerings.



Cryptocurrencies are in a very nascent stage and regulators are yet to decipher their adoption. While not illegal, they are not regulated. In India, we do not have a regulatory framework to govern its functioning till date, but the Indian government is exploring crypto regulation in consultation with industry experts and regulators. As cryptocurrency is still an exploratory phase in India defining a risk management framework around cryptocurrencies will not be appropriate at this stage.


Federal Bank Cryptocurrencies carry high risk, as evidenced by the huge volatility in value. RBI and the Central Government have often alerted the public about the high risk involved. The debate as to whether these are currencies or assets is still on. Against this background, it is too early to have an opinion on the cryptocurrency-related risk

management framework. The evolution of legal, regulatory and risk management frameworks for dealing in cryptocurrencies in the country is expected to be accelerated, with the verdict of the Supreme Court and the subsequent clarification from RBI enabling customers to avail banking services in connection with their dealing in virtual currencies. RBI has recently advised regulated entities to carry out customer due diligence in line with the existing regulations like KYC, AML, CFT and obligations under PMLA, in addition to ensuring compliance with FEMA for overseas remittances.

Cryptocurrencies may not easily gain acceptance as a medium of exchange and may remain a speculative asset in the near to medium term in future. A few central banks are designing their own digital currencies, which are naturally expected to gain traction and acceptance as a medium of payment. As Central Bank Digital Currencies gain traction, central banks are expected to come out with regulations for cross border transactions as well as domestic holdings in digital currencies providing the platform for banks to build their risk management systems.

Given the high-risk nature of cryptocurrency as an asset class, banks may tread very cautiously in assuming exposures. Cryptocurrencies are susceptible to technology and cybersecurity related risks, given that blockchain technology is their operating platform. We have already identified blockchain as a fast-emerging technology with wider scope for application in the domain of banking and finance and put in place security standards for its use in line with the prevailing best practices.

Bank will tread with caution as far as assuming exposure to cryptocurrencies are concerned and tighten the risk management framework on use of blockchain technology to address technological and other associated risks. Vulnerabilities of blockchain to technological and operational failures will be addressed by building robust governance framework and business continuity measures, inter alia, including appropriate incident response and recovery time.

Though the distributed database and the cryptographically sealed ledger reasonably mitigate corruption of data, the value stored in customer wallet is susceptible to theft. Confidentiality of data stored is also exposed to risk, as transactions appended to the ledger can be accessed by all the participants. Even in a permissioned network where data could be stored in a hashed format, metadata available to the participants can be monitored to get information on the type of activity and the volume associated with the activity.

A robust technological framework needs to be evolved to mitigate the risks involved. Creating technological as well as cybersecurity awareness associated with the underlying technology among the staff and customers would be one of the challenges that needs to be addressed from a risk management perspective. Appropriate monitoring mechanisms and exposure limits will have to be put in place to manage the risks. Legal and regulatory risks around smart contracts involving blockchain technology also will have to be carefully evaluated

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and mitigated. More clarity needs to emerge on regulatory and legal

framework around enforceability and governance of smart contracts within a network, inter alia, covering interactions between such contracts as well as with the external legal and regulatory framework. The developments in the domain of cryptocurrencies and blockchain technology will be keenly watched going forward and appropriate stand will be taken at the right time, duly upholding business prudence.


Finance Bank

The BCBS’ March 2019 statement on crypto-assets articulates its minimum expectations for banks’ exposures to crypto-assets and related services. These expectations apply to jurisdictions that do not prohibit such exposures and services, and may be further augmented by additional country-specific requirements. In December 2019, the

committee said in a statement that the immature nature of the asset class meant there were still significant challenges for regulators to deal with.

Due to the volatility of cryptocurrencies, banks will have to impose restrictions and stringent margins where the bank accepts cryptocurrency as value rather than as a medium of exchange. A secondary concern would be increased scrutiny of transactions in cryptocurrencies from AML/CFT perspective given the fact that cryptocurrencies are the preferred medium of payments on the dark web.


inCred

We don’t deal with cryptocurrencies right now. We look forward to the technology and regulatory environment for crypto becoming more stable, so we can weave these emerging technologies into our business model.

RakeSh BanSal, Chief Risk officer at

hero housing Finance

I will avoid cryptocurrency players as lot of money laundering and terrorist funding exists through digital currencies. We have defined this as negative segment in our credit policy.

RooPam aSthana,

Ceo & WtD, liberty General insurance

Cryptos are still unregulated and there is no framework to govern. It will not become a legitimate investment horizon, till it is approved by the regulator (RBI). Further, insurance regulator (IRDAI) and Insurance

Council will have to take further cognisance. At present, it is only speculative and highly volatile.


There will be huge risk arising from the use of cryptocurrencies. These may be in the form of wallet vulnerability, double spending, risk of rogue miners, volatility and liquidity risk and reputational risk for the organization. There will be requirement of the multi-fold risk management strategy. This will be in the form of automated monitoring as well as

tracking of incidence as well as alerts.


It is diff icult to comment about cryptocurrencies at this point. It has to be seen how the central bank rules and regulations come in for cryptocurrencies and their acceptance. Then risk management strategies and frameworks can be built around that.



Avoid is the mantra for now. This is a domain where we have limited expertise and we would not want to venture into it unless it stabilizes and we have stronger legislation and controls.


officer at Fincare Small Finance Bank

On the radar are NIST 800-53, ISO 27001, RBI cybersecurity frameworks and any other relevant advisories received from regulatory bodies, industry associations or best practices.

SummaRyNo one wants to touch the crypto currency business until the regulator or the government lays a roadmap. The risk officers prefer to apply their mind only when they get this clarity. What this also implies is that none of the financial organizations (or perhaps a very small number) are really interested in making an early move to grab the opportunity.

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Question: What has been your experience with cyber insurance as a risk mitigation tool?

One doesn’t have to ask an expert to know what are the biggest threats to any financial organization – the two biggest threats are pandemic and cyber-attacks. 14

experts share their perspectives on the effectiveness of cyber insurance is against cyber risk, and how to adopt it.


Cyber insurance does offer protection in terms of mitigating monetary loss, providing support for forensics, reputation costs, regulatory fines, etc, in case an organization suffers a security breach. It also brings to the table access to international level experts and vendors to help in covering these risks. It allows us to transfer some risk to the

insurance service provider, but one has to be aware that it’s just one of the components of risk management framework.

aVneeSh tRiVeDi, CRo at moneyboxx Finance

Cyber insurance is gaining traction now. With the increased pace of digital journey in consumer lending space, cyber insurance is needed to safeguard against any eventuality. In the current scenario as most of us are working from home and are a fully remote workforce, organizations are facing email threats, end point security gaps, etc. Cyber insurance is designed to cover the fees, expenses and legal costs associated with cyber breaches. It is imperative to use this insurance as a proper risk management tool.



Due to the rapid adoption of remote working, cybersecurity has ballooned into major concern for all organizations, governments and individuals across the world. Since the onset of the pandemic the frequency and the complexity of cyberattacks have increased exponentially. Thus, management of cyber risks has become increasingly onerous and

inevitable.Organizations are often left perplexed in the event of a

cyberattack as they are either faced with the proposition of large payout (ransoms) to the cybercriminals or face potential reputational damage and / or regulatory penalties. In such situations cyber insurance can prove to be a very effective risk

management tool. At Future Generali Life Insurance, we are proactively working

on thwarting cyberattacks. We have done so by implementing several initiatives such as SOC, endpoint encryption, endpoint detection and response, digital risk management, etc. However, we also have recognized that the dynamic nature of cybersecurity needs us to consider that we can have certain blind spots and have opted for a cyber insurance cover as well. This enables us to mitigate the cyber fallout through post facto financial loss indemnification and at the same time become a proactive ex-ante prevention mechanism.


Federal Bank Cyber insurance provides an effective risk transfer mechanism against the low frequency high impact cybersecurity incidents. This needs to be aligned with the regular operational risk indemnity covers for deriving the maximum benefit and cost optimizations. Assessment of the financial value to be covered and the policy clauses required are a challenge as this is a relatively new area and new cyber risks are constantly emerging.



Cyber insurance is a very vital tool for risk mitigation and the times we live in make it imperative for every business, irrespective of its scale to aim at availing the right set of insurance covers to protect businesses and individuals against cyber risks.

The 14th edition of Data Breach Investigations Report (2021 DBIR) by US-based Verizon Business, analyzed 29,207 security incidents from data collected from 83 contributors, with victims spanning 88 countries, 12 industries, and 3 world regions. The report showed that with an unprecedented number of people working remotely, phishing and ransomware attacks increased by 11% and 6% respectively, with instances of misrepresentation increasing 15x compared to last year.

With most people working from home, due to the pandemic, there has been a significant growth in cybercrime. The year 2021 saw 5258 data breaches across the globe.

Additionally, breached data showed that 61% of breaches involved credential data. About 95% of organizations suffering

Part 7

interest is high, but adoption is low

Cover Story


credential stuffing attacks had between 637 and 3.3 billion malicious login attempts through the year.

Among financial and insurance industries, 83% of data compromised in breaches was personal data, while in professional, scientific and technical services industries, 49% data was personal. Further, the report also revealed many breaches that took place in the Asia-Pacific region were caused by financially motivated attackers - phishing employees for credentials and then using those stolen credentials to gain access to mail accounts and web application servers. The above statistics speak volumes.

Therefore, in today’s day and age, whilst cybersecurity is an essential tool, it is equally important for all organizations, including SMEs, to assess their nature of business from a risk profiling perspective and accordingly make an informed decision on obtaining the right set of cyber insurance covers. They must evaluate the terms and conditions of the insurance policy.


Finance Bank

Cyber insurance policies offer insurance cover for risks such as data liability, administrative obligations, reputation and response costs, multimedia liability, cyber and privacy extortion, network interruption, PCI DSS assessment, reward expenses, fraudulent communication loss, cyber terrorism, fraudulent fund transfer loss, psychological

support expenses, social engineering frauds, etc. Any financial institution is susceptible to cyber frauds. We have opted for cyber insurance as a mitigation tool.


inCred

We don’t specify cyber insurance right now (apart from our broader business insurance framework). We look forward to the technology and regulatory environment for cyber insurance becoming more stable, so we can weave these emerging technologies into our business model.


We have to evaluate this option.


The e-space ecosystem in India has undergone a very large transformation during the recent past and is vulnerable to both natural accidents as well as intentional interventions. Cyber ecosystem, if overlooked, can lead to credibility crises having financial and social consequences. Recent breach of data bases and systems of an airline and a large

oil pipeline are perfect examples of increasing cyberattacks.

Adequate cyber cover will help to mitigate the risk of losses arising from such attacks, of course along with proper IT security practices – as prevention is better than cure always. Unfortunately, the cyber risk insurance product has still not caught the fancy of consumers.


We have not availed cyber insurance till now.


As we move more towards better and more seamless digital processes, cyber risk is becoming more important to consider. With increasing number of cyberattacks across the globe, cyber insurance is a good tool to cover those losses. At this particular time across any industry across the globe, the awareness of how important cyber insurance is frequently

known to the companies using technology usually. An increasing awareness within individuals is also necessary as we see increase in losses due to identity thefts, phishing etc. However, it is also important that fintech companies and other financial institutions constantly monitor and keep updating their systems and technologies so that cyberattacks can be minimized.



Reviewed renewal. No claim. We have not raised a claim yet. However, we did a comprehensive review of requirements whilst renewing our cover during the year.


officer at Fincare Small Finance Bank

The bank is on a journey to undertake risk assessment on continuous basis and mitigate risks to keep it within the acceptable risk appetite. However, cybersecurity is always fighting against the unknown. Any organization needs to protect a multitude of areas against any weakness, whereas a hacker needs a single gap or weakness to penetrate the organization. Hence continuous and rigorous monitoring framework is the key to staying on top of the game.

ViJayalakShmi nataRaJan, Chief

Compliance and Risk officer at aviva india

The probability of cyber risks, which include phishing, smishing, vishing, malware and ransomware attacks have increased 3-fold with the entire world moving on to work digitally from home. This has increased awareness about cybersecurity protocols


across industries without any distinction. Data and information protection has assumed paramount importance with the industry having resorted to extensive use of internet and all available modes of digital platforms for communication, both formal and informal, to elicit information and speed up servicing. This is where cyber insurance comes into play - to protect against damages, losses, penalties, etc associated with data loss or recovery cost in case of a cyberattack/hacking that results in disruption. But,

the extent of liability covered by cyber insurance would be an area of debate for most as well as affordability to cover all damages and all instances. With the impending Personal Data Protection (PDP) Bill in India, organizations are willing to invest in cyber insurance and the significance is growing day by day.

SummaRyNot a single participant has spoken against cyber insurance….all have commented on its importance and effectiveness. From the

14 organizations that responded to this question, 3 have actually purchased cyber insurance, 3 haven’t purchased and the other 8 haven’t indicated either way. Of the 3 that have purchased cyber insurance, 2 are life insurance companies and one is a small finance bank. The 3 that haven’t purchased cyber insurance are all NBFCs. The low penetration of cyber insurance indicates that the product has to mature to fit a greater variety of needs and the awareness too has to grow.

[email protected]

Question: What new skills have you acquired based on your experience with the pandemic and lockdown?

The pandemic would be a wasted opportunity if people didn’t take advantage of the adversity to learn something new. From the responses, it is clear that none of our 16 participants

wasted this opportunity. Here is what each of them has learnt – some focused on personal learning, some focused on professional learning, and others focused on organizational learning.


The pandemic and the lockdown which followed forced us to stay confined in our home, but it also helped us get more time to adapt and learn new skills. During the lockdown, I picked up skills like cloud security aspects and global trends in risk management that would help me stay afloat while working in this domain.

anil PinaPala, Ceo at Vivifi india Finance Having played sports all my life, the pandemic induced lockdown made me pick up yoga along with my wife. Reading & playing sports and yoga has greatly helped me in keeping fit during this time and helped me overcome mental and physical stress.


Finance

The pandemic and lockdown have reflected 2 important facets of human behavior - resilience and upskilling. Adoption of online learning tools has really been a very enriching experience. In these times, I have upgraded myself on 2 fronts

- functional knowledge and behavioral knowledge. Considering it as a black swan event, insights about changed consumer behavior can be observed in these times.

BikaSh ChouDhaRy, appointed actuary & Chief Risk officer

at Future Generali india life insurance

The pandemic has amped up risk management, forcing executives and employees to adapt to remote work, learn new technologies and find different ways to serve clients and customers. Covid has helped more people than before understand that a single root cause issue can totally trigger risk at an enterprise level that affects everything.

Here are the key methodologies and skills that I adopt when it comes to risk management: (i) Put our employees first (ii) Understand technology, digital adoption and risks associated with it. (iii) Challenge the basics (iv) Identify emerging risks & (v) Develop strategies to respond, monitor and communicate risks.


agricultural Financing agency

If the pandemic has taught us anything, it is that events in far-off corners of the globe can have massive repercussions on our traditional risk management plan. Irrespective of the size or geography, it is critical to evaluate the risks seemingly outside our scope that could impact our business and to what extent.

One of the skills that we are trying to acquire focuses on categorizing and quantifying risk in terms of its interconnection

Part 8

Variety is the spice of learning

Cover Story


and the sequential impact. It helps us to develop a comprehensive risk management plan for all associated risks. The key is being flexible, looking at emerging risks from multiple angles, and have proactive mitigation plans in place.


Federal Bank Adaption to the WFH environment was the most important learning across the organization, induced by the prolonged lockdowns and associated restrictions. With more than one year through the pandemic, managing teamwork through virtual meeting platforms and fully digital means of communication has become the order of the day. Remote working and

virtual meetings without affecting productivity and compromising on security are the key institutional skills acquired during the pandemic. WFH also led to more disciplined organization and systematic handling of functions.

Pandemic exposed Business Continuity Management to an unchartered territory, with no parallel in recent history. It necessitated quick realignment of BCP strategies and out of the box responses across the organization. Experience gained in conducting meetings involving employees from different locations through virtual mode in the normal times proved handy for the organization to smoothly migrate fully to digital communication platforms. Our digital capabilities increased manifold during the pandemic. The bank has put to use its digital capabilities in all spheres of business – be it customer interaction, digital banking services and online products, induction and training of staff, upskilling of staff by providing digitized learning experience and internal / external certifications, marketing, risk management, monitoring and control functions, business analytics etc. Now the organization is more agile and can respond and adapt to changes with more confidence.



This is a situation which has not been experienced ever before and with new situations and there comes the need to build new skills and new work-related abilities.

Being the Chief Financial Officer and Chief Risk Officer of the company, I would like to focus on a few key skills/areas from a finance perspective and the endeavour would be to focus on leveraging and suitably applying the skills to enhance the contribution of the finance and accounts functions of the organization.(i) Honing skills in Technology: The workforce has to be more

technology savvy in terms of being able to navigate through tough situations and get the work done utilizing the various systems and other tools available on technology driven platforms. Utilizing paper is a thing of the past and must be forgotten!!

(ii) Cross Functional Interdependencies and System Flow: As the finance function has significant inter-dependencies on other functions across an organization, every function would have to look at being more technology savvy. Data has to flow seamlessly into the financial accounting systems from various revenue and expense booking systems and to ensure the same, the data flow management needs to be looked into along with appropriate integration of various technology-based platforms. If the various legs of revenue and expenditure booking have manual elements involved in them, the same would have to be transformed to being managed through the technology systems, to ensure that the finance function gets accurate and timely data required for finalization of accounts and other activities.

(iii) Information Security: In a remote working environment, information security is very important. Therefore, the work forces of the finance function, which are in the possession of Unpublished Price Sensitive Information (UPSI) would have to be knowledgeable on information security aspects.

(iv) Use of Analytics as Levers to Detect Outliers: The finance functions deal with large quantum of data. Therefore, they would be more knowledgeable in the use of analytics which can help them detect outliers and verify the accuracy of the outliers in terms of assessing false positives or false negatives. The same would go a long way in ensuring that the accounts give a true and fair view.

(v) Blockchain Technology: Where transactions are being undertaken with parties outside the organization, there is a need for ensuring smooth flow of information as well as the transfer of authentic information, including assessing whether the right counterparty is receiving the accurate information with the required levels of confidentiality. Blockchain technology could go on to play a big role to enable this. I would like to particularly lay emphasis on a critical soft skills aspect, which has gained prominence in the WFH operating model. Building relationships on the fundamental of empathy and navigating between cross functional teams with stakeholders at all levels, is extremely crucial for achieving long term success. Amongst other aspects, the WFH model has laid focus on being sensitive to needs of fellow colleagues, helping them during these tough times in all possible ways and above all, lending an ear patiently to their concerns and endeavouring to resolve them at all points in time.

As time passes, situations and functions are expected to evolve, and all-in-all I am fairly positive that the finance function will stand the test of time and continue being a business partner to

their organizations.

k R mohanaChanDRan, Chief Risk officer

at eSaF Small Finance Bank

Pandemic risk management has been a topic of academic interest so far. But it has now become a reality. Concepts and plans in pandemic risk were not tested earlier. Like any other risk, pandemic


risk has also become a reality and that itself is a big learning. The pandemic environment has offered many more real time experiences upfront with fewer hours for mitigating and managing the same. All processes of life have undergone testing and changing. A new lifestyle pattern and uncertainties in the front made risk management yet more dynamic, essential and meaningful. The most important skill that one might have acquired during the pandemic is to dispassionately deal with uncertainty.

PRithVi ChanDRaSekhaR, President Risk

& analytics at inCred

Personally, the most important new skill I’ve acquired is compartmentalization. Previously, I could get into a certain persona or mind-set at work and switch back into a different more relaxed persona on my commute home. With WFH, that no longer happens. I’ve had to learn

to switch between different mindsets, or modes of functioning, even while I’m in the same space. Mindfulness or yoga practice has helped me manage this critical switch.


Some of the industries were badly impacted during covid period, and we were overly cautious during lockdown in those segments. I started interaction through video discussions with the customers. I became more tech savvy and started team meetings through Zoom calls and Google Meets and saved travelling and telecom costs.


Some of the skills that have become highlighted in the current situation are agility and ability to thrive in an increasingly uncertain world, living in and being effective in a phygital world, digitally connecting with people at large (includes employees & customers), being open to change and increased focus on governance and risk management.


As an organization, in the new hybrid mode of operations, we are looking for candidates who are self-driven and possess remote management skills. The preferred skillset would include coaching and counselling, interpersonal and problem solving, communication skills, coordination/collaboration and related computer skills. Consistent with the current scenario, we believe that ‘resilience’ is the new competency we have seen among our employees. They gave their 100% and were quick to learn and proved their flexibility to adhere to changing business scenarios.


Since I have had an interest in cooking, this additional time on my hands has given me the opportunity to brush up on my skills, and also learn how to make many new dishes. I have also been fascinated to learn the history of how many different Indian cuisine dishes have been prepared with details of procuring the original

ingredients for authenticity, which I try and recreate as best as I can. So, I make sure I am doing the research that is necessary for this.

Photography has also been a good hobby and since I like the science behind the photo-editing, it has given me another reason to enjoy research this subject all the mechanisms behind the scenes

of taking a photo and editing it.

SunDeR nataRaJan, Chief Compliance &

Risk officer at indiaFirst life insurance

Getting camera savvy, shedding ego to seek help from Gen Z and tight calendar management.

Venkata JayaRaman m., Chief Risk officer

at Fincare Small Finance Bank

My approach here was 2 pronged – first to strengthen emotional resilience. In today’s context, more than ever, when one must deal with multi-level challenges, emotional quotient is imperative to managing self, family, teams and extended family of team members. The second is keeping abreast of the developments in cybersecurity domain not just in banking but across, through webinars and e-learning has been a productive use of time as well.

ViJayalakShmi nataRaJan, Chief Compliance and Risk officer

at aviva india

At a personal level, enhanced mental strength and emotional strength are the value adds in the current situation of prolonged lockdown. From the organization’s point of view, we have learnt to value each other. We work remotely but even more efficiently with optimum utilization of available resources. Time management with balancing between work and home with reduced support system is key. We have to become more empathetic with our fellow colleagues, peers and teams. Also, it is important to appreciate what we have on hand rather than what we do not have. Nature has taught us unforgettable lessons for life.

SummaRyClearly, none of them let the opportunity go waste. What the variety shows is that there is an amazing number of ways to look at a situation and respond accordingly. That in itself is a powerful risk management capability that mankind is blessed with.

[email protected]

Cover Story


the tree of new learnings

CLOUD SECURITY

INFORMATION SECURITY

GLOBAL TRENDS IN RISK MANAGEMENT

YOGA

FUNCTIONAL KNOWLEDGE

BEHAVIORAL KNOWLEDGE

NEW TECHNOLOGIES

HANDLE UNCERTAINTY DISPASSIONATELY

NEW WAYS TO SERVE CUSTOMERS

CATEGORIZE & QUANTIFY RISKS

CROSS FUNCTIONAL INTERDEPENDENCIES

MENTAL & EMOTIONAL STRENGTH

DIGITAL CONNECTION WITH PEOPLE

ANALYTICS TO DETECT OUTLIERSSHED EGO TO SEEK HELP

FROM GENZ

TIGHT CALENDAR MANAGEMENT

LIVING IN A PHYGITAL WORLD

ZOOM CALLS & GOOGLE MEETS

APPRECIATE WHAT IS IN HAND

COMPARTMENTALIZATION

BLOCKCHAIN TECHNOLOGY

BEING OPEN TO CHANGE

BE MORE EMPATHETIC

PHOTOGRAPHY

VALUE EACH OTHER

TIME MANAGEMENT

GOVERNANCE

COOKING

AGILITY

Credit Risk


ACHIEVE COMPLIANCE IN 90 DAYS & SAVE $100-500 MN EVERY YEARBCT Digital is a global Fintech company

specializing in regulatory technologies

announces the launch of its specialized Cloud-

Ready rt360 Credit Risk Suite. The company has

been recently recognized as “Category Leaders”

under the Chartis RiskTech Quadrant for Model

Risk Management solutions, 2021, presented

by Chartis Research – a leading provider of

research and analysis on the global market for

risk technology. The full-stack credit risk suite

is a powerhouse that comprises origination &

on-boarding, credit monitoring, fraud monitoring,

credit analytics, and other value- added services

– all on the cloud.

The company’s award-winning rt360 EWS

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This can now empower banks, NBFCs, and HFCs

to rapidly implement the product and gain control

over their asset book very swiftly. It has sheer

power to handle millions of data points through

sophisticated AI/ML-based predictive models in

order to detect patterns and quantify risks.

While Indian banks reported a decline in bad

loans in the last quarter of 2020, the impact of

the extended pandemic situation may have major

ramifications on the asset quality over the next

two to three years. To tackle the vulnerability,

financial institutions need to invest in disruptive

technologies that proactively and accurately

detect risk and improve regulatory compliance.

“Financial institutions must step-up

monitoring and take timely corrective measures

to mitigate the impact of credit risks arising from

the pandemic led disruption. Though public

sector banks have preferred an on-premise

solution, it has been our persistent endeavour to

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solution helps these banks be compliant with

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as well as retail customers. The cloud-enabled

credit risk suite will build a future-ready and

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frauds through real-time data,” said Jaya

Vaidhyanathan, CEO, BCT Digital.

Risk practitioners involved in lending/

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have deep concerns, which the rt360 Credit Risk

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detect fraud patterns, minimize false positives

and quantify risks through effective scoring

algorithms that compute critical default statistics.

The pre-built and extensible library of early

warning indicators include regulator- prescribed

indicators such as RBI’s RFA and the Department

of Financial Services scenarios for India. Alerts

including those of fund diversion, negative news,

and financials are delivered to a configurable

mobile responsive inbox. Bankers can leverage

rt360 EWS’s powerful case management tool to

manage alerts as per the escalation hierarchy

and undertake timely corrective action. The

cloud-ready rt360 Credit Risk Suite empowers

financial institutions to focus on profitable credit

growth while mitigating risk.

USPs of the cloud-ready suiteu AI/ML-driven Rule Engine comprising

170+ pre-built early warning indicators; expandable to include custom requirements

u Real-time alerts to prevent fraudulent transactions

u Cloud-ready architecture tuned for on-premise / cloud / hybrid models

u Horizontal and vertical scalability to meet increasing volumes and user-base.

u The product handles massive volumes - 100s of branches, 1000s of customers, and millions of transactions

AI/ML-driven solutions

take center stage in

the post-pandemic

economy today as

they can effectively

measure and monitor

your credit portfolios,

detect credit stress

and recover loans

before they become

NPAs.

trRisk ManagementSuite

BCTDigitalA Bahwan CyberTek Company

Web Panel Discussion


Architecting the Workplace RevolutionBanking Frontiers organized a panel discussion of technology and cyber security experts to discuss how the cyber workplace is evolving and how to make it more secure. Participants were Deepak Sarda, GM-IT at Indian Bank, Ratan Kumar, GM at Central Bank of India, KM Reddy, CISO at Union Bank of India, Babitha BP, CISO at CSB Bank and Prajit Nair, Director Sales - End User Computing at VMware. Manoj Agrawal, Group Editor at Banking Frontiers, moderated the discussion.

Manoj: What major issues faced by the

employees have been eliminated or

automated?

Babitha: Due to the pandemic, the focus shifted to automation of the processes. Initially only few tech savvy employees worked from home. After one year, more employees have been upskilled.

Ratan Kumar: The branches were working with 50% capacity. But the backend was fully equipped to work from home. Employees faced many glitches and disruptions initially. We are in the process of redesigning our websites, call center workings and digital products.

Deepak: The biggest change was the use of technology for major decision making. We have ramped up our IT support. Some applications which were allowed only to be used on intranet are allowed on home PCs now. It is difficult to replicate the physical branch banking for public sector banks.

Manoj: What kind of support did you

take from outside service providers to

mitigate the issues?

Reddy: During the first lockdown the challenges ranged from scarcity of hardware to disruption in business continuity to security of the devices. This time the challenge is coming from employees getting infected and managing to keep the business running. To handle the unpredictable situations, we are

collaborating with vendors to provide IT solutions. With only 15% physical presence, we are able to manage 100% business.

Manoj: What kind of requests and

queries have you been receiving from

BFSI companies? Prajit: Each bank has its own demand.

But access management is common to all. Banks would like to have visibility of their end points. With hardware now not restricting to premises this is the biggest

challenge. Many banks have solved this using the VDI solutions. Now they have increased the security layer by introducing facial recognition for user. This allows the firms to measure employee productivity also. To get new devices connected to the bank applications, without having to call the IT department is also being requested. All the companies have been going through various phases:

React: What do we do? As the lockdown

Babita BP finds that networks and end points sometimes get overloaded while running tools and applications

Ratan Kumar observes that during the lockdown, the branches were working with 50% capacity, but the backend was fully equipped to work from home


KM Reddy has identified a shift in problem from first phase (scarcity of hardware) to second phase (employees getting infected)

Deepak Sarda points out that technology has reached all over, but the challenge is that in rural areas people are not tech savvy

Prajit Nair describes 3 phases in response to the lockdown: 1. React - figuring out what to do 2. Responding - building tools that enable WFH 3. Rethink - think about the big picture

was announced everyone was scared.Respond: Each firm started building

tools to make work from home easy. Rethink: Now the firms have started

thinking about bigger picture. No more point solutions are working. To find balance between security and ease of working for the employee has become the priority for the firms.

Manoj: Do you see the business enabler

tools also increasing at the same pace

as business applications?

Deepak: RBIs regulation requires to install tools as part of cyber regulations. Along with that some tools are implemented by banks themselves. The general idea is to have maximum security on the end user site. Each bank’s requirements are different hence the applications will vary.

Babitha: Implementation and management of various tools in the right way needs resources. Sometimes due to network issues the applications are underutilized. Integration of these tools with SOC for alerts is another operational

challenge being faced. Moving from older tools to the new ones takes time. Threats have increased and multilevel security is needed. The networks and the end points are sometimes getting overloaded while running these applications.

Manoj: What is being done to make the

adoption and usage of technology easy?

Prajit: A lot of work has been happening at the data center level. Client-side consolidation has started to happen. To bring all the different types of devices and networks under one roof is a challenge. Sometimes the devices are also connected through VPN. This increases the vulnerability of the data center. VMware has brought unified end-point management, ‘VMware workspace 1’, which unifies multiple tools. It increases the visibility of the devices. We have also integrated next generation anti-virus solutions with it. With our latest solutions the devices can be patched automatically. If the user or device is not registered it will not be allowed to connect to the bank’s network.

We are helping the organizations to consolidate the tools, reduce them, bring in more automation, reduce cost and bring in more efficiency.

Manoj: Which will be the bigger

challenge: What to do or how to do?

Reddy: With integrated technology both these questions can be answered together. This is the era of hyper automation.

Ratan Kumar: There are lot of vendors giving lot of solutions. This takes care of the how to do part. What to do will depend on each organization’s needs.

Deepak: The reach of technology has allowed us to implement many services. But in rural area where people are not technology savvy, it is challenge.

Babitha: How is not a challenge any more. The question remains – how are we going to deliver the payment gateway to customers in a secured way. Banks cannot pass on the bug in case of issues. That will have to kept in mind before accepting any proposal.

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Managing Data


Evolving Data & AIWith all products, services and other industries adopting digital platform, a wave is coming. How do we manage this huge chunk of data and put it to our use? Analytics, data virtualization and playing with data are some of the tools which firms are using for business advantage. Sushil Ostwal – Head of Data Science at Motilal Oswal Financial Services, shares his insights:

This year’s global crisis has caught everyone off guard. Firms are trying to reduce their payback

time. AI and data models are being scaled up across firms. New lockdowns have made it difficult for people to visit their offices. With retail physical businesses closed, more people are looking for digital solutions. This has brought in newer demographics online. Kids from 16 years to older people until 70 years are looking for trading through online.

Financial insecurity has brought in more people into trading, so that they can have additional income. This has accelerated the digitization of firms. Both the products offered and the firm’s processes are now on digital platform.

For better performance, we will have to put data and people together. Maintaining data quality is a big challenge for firms. The challenges are two-fold: (i)

How to bring data in one big pool? (ii) How to access it by different individuals?

According to Sushil Ostwal, another important change would be in the mindset of people. The working methods used till now will undergo a drastic change, which people will have to accept. AI can be scaled to any measure, but it has to be woven with the organization, only then it will give better performance.

Addressing the customer at each touch point is necessary. With more customers joining the online trading this has to be resolved immediately. To serve them better and at right time, we will have to prepare processes and workflows ready for next step.

A great number of fintechs are coming

with new products. This is speeding up digitization. This is also bringing in competition along with it.

How to bring together all the aspects of digital transformation? The IT department, business stakeholders and the data science team need to work together in harmony. Though data was available, it was spread across various formats, databases and systems.

What will be the road ahead from here? Organizations must create a roadmap so that future needs can be foreseen. AI needs to be scaled up. This will help in data driven decision making. In the future, technology should be used to interpret the data. Looking into use cases for creating the model, training the users will be the plan to tackle future demands.

[email protected]

Evolving Data & AI the Transformational Journey

S u m m a r y : A I & Cloud are evolving and creating new technology benchmarks in the BFSI sector.

Sushil OstwalHead-Data Science and AI, Motilal Oswal Financial Services

Sushil Ostwal believes that AI can be scaled to any measure, but it has to be woven with the organization

PrAShAnT LELE – Director Denodo

How to get clarity among the chaos? Data is available everywhere…. how to put it to use is the challenge. A digital service provider can help the firms in reducing the time taken for making decisions. The next step in digital evolution will be self-service. Data virtualization can help in connecting to new data sources. Whether the data is structured or un-structured, it can create a view about customers. The business team can take quicker decisions on how to proceed with the customer. This will reduce the dependency on IT team. This will also fasten the AI or ML by providing proper data.


Cooperative

SVC Bank’s medical loans up by 7% to `8.56 Bn The prominent cooperative bank has special loan products - SVC MediEquip, SVC Chemist and SVC Hello Doctor - for the medical and health care fraternity:

The Ministry of Finance has expanded the Emergency Credit Line Guarantee Scheme (ECLGS).

It has offered, amongst many other things, ECLGS 4.0 for onsite oxygen generation, wider coverage of ECLGS 3.0 and increase in tenor for ECLGS 1.0. Under ECLGS 4.0, 100% guarantee cover is provided to loans up to `20 million to hospitals/nursing homes/clinics/medical colleges for setting up on-site oxygen generation plants with interest rate capped at 7.5%. The validity of ECLGS has been extended to 30 September 2021 or till guarantees for an amount of `3 trillion are issued.

FOCUS ON MSMERBI has advised cooperative banks to do higher proportion of lending in the priority segment of the economy. Ravinder Singh, Chief General Manager & Head - Corporate Banking at SVC Cooperative Bank, says the bank has accordingly increased focus on small ticket micro, small and retail segment not only to spread the advances portfolio but also to mitigate risk. It has maintained a healthy mix of MSME mid-corporate and large corporate segment business and retail business over the years, he adds.

QUALITY OF ADVANCESThe bank has realigned its credit policy to tackle the highly competitive market. Says Ravinder: “We have worked out region-wise strategies with a focus on loans and advances offtake and increase in yield. We have also

been focusing more on quality of advances and an optimum mix of banking resources.”

LOANS THROUGH EMAILSSVC Bank has also made efforts to expand its outreach through electronic and digital means. Ravinder says a large number of customers are applying for loans through emails. The bank is also using emails for faster communication and TAT. It is under process to finalize a digital partner for expanding its

reach among micro & small customers. “We already have a robust net banking and mobile banking facilities for our customers. Core banking software is also being upgraded to suit emerging requirements,” he adds.

MEDICAL, HEALTH CARE CLIENTSOne of the bank’s focus areas has been the health care sector, which contributes to social infrastructure. Ravinder points out: “We have specially designed loan product schemes like SVC MediEquip, SVC Chemist and SVC Hello Doctor to target the clients from medical and health care segment by offering financial assistance to doctors, chemists, dispensaries, health care workers etc. In addition to that, we also provide customized loan assistance to nursing homes, hospitals and pharmaceutical companies to suit their requirements.”

SIGNIFICANT YOY GROWTHThe year-on-year growth in loans and advances given by SVC Bank to doctors, hospitals, pharmaceutical companies and chemists is significant.

Ravinder updates: “Our bank had 223 accounts, amounting to `7.53 billion in 2018-19 in all such loans. Our bank registered 24.66% growth in accounts, amounting to ̀ 8.02 billion in 2019-20 and 23.74% growth in accounts, amounting to `8.56 billion in 2020-21. Approximately 80% of these sanctions have been disbursed by the bank, which is an indication of our ‘connect’ with the customers.”

Appropriate healthcare financing is a means to ensure that adequate funds are allotted for health care, to provide equitable access to all population groups and to reduce financial barriers to utilize health services. Ravinder maintains that the bank is committed to help the health care sector in the current FY also to overcome the challenges from the continuous lockdown during testing times of pandemic by offering timely financial assistance at competitive rates.

[email protected]

Ravinder Singh asserts that SVC Bank is committed to help the health care sector to overcome the challenges from continuous lockdowns

SBI aims for `100 bn covid bookDinesh Kumar Khara, Chairman, State Bank of India, said during the bank’s Q4 FY21 Earning Conference Call that a health infrastructure related covid book is expected to be created and internally the bank thought of having book size of somewhere around ̀ 100 billion. “We already have exposure to the pharma sector. But we will be very aggressively supporting the hospitals and nursing homes or augmenting their oxygen needs and oxygen facilities,” he had said.

SBI is quite open to be consider the NBFCs also for the onward lending in this particular area because RBI schemes permit banks to do that. Khara added: “So, we will be quite keen to support any such initiative. We will be happy to avail the reverse repo facility and also, the most important factor for us is the priority sector component. The priority sector is something, which we are very happy to look at.”

Development Funding


ADB commits $3.92 bn loans to India in 2020Expects to help expand the country’s infrastructure development

The Asian Development Bank (ADB) committed $3.92 billion in sovereign loans to India for 13 projects, ADB’s

highest-ever annual lending commitment to India since the start of its lending operations in 1986.

“ADB is expanding assistance to quality infrastructure development to support India’s fast economic recovery. ADB’s lending assistance will be further supported with knowledge work to help develop transformative projects”, says ADB Country Director for India Takeo Konishi.

Throughout 2020, ADB continued its regular assistance to energy, transport, urban development and public sector management in India. Among the new projects committed in 2020 included $500 million to build a modern, high-speed 82-kilometer Delhi–Meerut Regional Rapid Transit System corridor; energy sector loans to strengthen distribution network in Maharashtra, Karnataka, Uttar Pradesh and Meghalaya; and support to build a 120-megawatt hydroelectric power plant in Assam. In the urban sector, ADB approved loans for sustainable urban development in secondary and smaller towns in Rajasthan and Madhya Pradesh. ADB also committed funds to support the Government of West Bengal’s fiscal consolidation program.

The Project Readiness Financing (PRF) for ‘Sikkim major district roads upgradation’ will fund consulting services for (i) initial screening of the tentative list of candidate roads and bridges; (ii) feasibility studies of the shortlisted roads for final selection; (iii) detailed design for selected road and bridge subprojects, including the environmental and social safeguard assessments and preparation of environmental and social safeguard planning documents, cost estimate, economic analysis, due diligence and capacity building on financial management, assistance and capacity building on procurement, preparation of bid documents and supporting the bidding process until contract award; and (iv) providing assistance for developing the institutional strengthening and capacity development component of the ensuing project.

The benefits of the proposed loan for Gujarat Paguthan wind energy project include (i) addition of 132.8 MW (50.4 MW for Samana – Phase II, and 82.4 MW for Saundatti) of power generating capacity to help reduce the growing supply deficit in India; (ii) development of new renewable energy sources, which will decrease fossil fuel consumption and reduce the emission of greenhouse gases and other pollutants; (iii) and demonstration of the successful implementation of large-scale wind power projects by the private sector.

HELPING COVID RESPONSEThe funding of $3.92 billion includes $1.8 billion in projects to support the Government of India’s response to the covid pandemic. ADB also committed $356.1 million through its non-sovereign operations to India, including 3 covid related projects.

“Going forward, ADB stands ready to provide additional resources to address India’s many covid related challenges, including funds to expedite the country’s ongoing vaccination program and build

the health system’s resilience against future shocks, with supplementary support to protect small businesses and underpin education and social protection,” says Takeo Konishi.

STRONGER ASIA At a recent 54th annual meeting of the Board of Governors of ADB, its President Masatsugu Asakawa said the Asia-Pacific region can emerge from the pandemic even stronger than before by focusing on 5 areas to help achieve a prosperous, inclusive, resilient, and sustainable future. “I believe the path we have laid out will help lead our region out of these uncertain times,” he had said and added: “We will continue to deliver ADB’s unique synergy of finance, knowledge, and partnerships. And we will prioritize the quality of our assistance over quantity, meeting near-term needs with a clear vision for the future. If we stay on this course, I am confident the region will emerge from the current crisis even stronger than before.”

Asakawa explained the 5 focus areas: 1. Place ambitious climate actions at the

centre of development, with increased focus on adaptation and resilience and with full commitment to the goals of the Paris Agreement.

2. Address inequality including the gender gap – which has worsened during the pandemic – by investing in health, education, and social protection.

3. Promote high-quality green and digital infrastructure, enabling economies to rebuild smartly while closing the digital gap and attracting substantial private investment.

4. Deepen regional cooperation and integration, so that ADB developing member countries can seize the opportunities of renewed globalization and strengthen regional health security.

5. S trengthen domest ic resource mobilization, to ensure that governments have the resources they need to finance sustainable growth and respond effectively to future crises.

[email protected]

Masatsugu Asakawa predicts that the Asia-Pacific region can emerge from the covid pandemic even stronger than before


Investment Options

Gold bonds rise and shineSovereign Gold Bonds are attracting wide range of investors and acceptance across spectrum, be it retail, HNIs or ultra HNIs:

Santosh Shetti, Product Head, Investment, Insurance & Research at Motilal Oswal Financial Services

and Anil Gupta, Vice President, Financial Sector Ratings at ICRA, analyzes the progress of Sovereign Gold Bonds scheme since 2015.

Mehul Dani: What is the total volume

and value of investments in gold bonds

through banks, brokerage houses and

wealth management companies in all

the earlier Series since inception in

November 2015?

Santosh Shetti: Since the launch of the first Sovereign Gold Bond Scheme by RBI, there have been 50 issues till May 2021. Over the years, the scheme has started attracting wide range of investors and acceptance across spectrum, be it retail, HNI or ultra HNI. Last financial year was a historic year for SGB, as investments were higher every month and the year. In August 2020, Series V mobilized over `33 billion and in FY21, overall mobilization was `160 billion. This was higher than all previous years’ combined mobilization of `96 billion.

The current FY has started on a great note. In May 2021 Series-1 has mobilized `25 billion, which is the 2nd highest monthly mobilization ever in the history of SGB Series since launch.

Anil Gupta: As much as 68.6 tons of gold or units of gold bonds have been issued since November 2015. The total value at issuance cost comes to `282.36 billion.

Do you think the authorities have been

successful in attracting customers to

invest in gold SGB?

Santosh Shetti: Yes, last year was a defining year for SGB. There are customers, who have bought it as an alternative to physical gold or just as a pure investment to be held till maturity. There are some, who have bought them from a hedging perspective during the pandemic times to take benefit of gold

prices rising in uncertain times. SGB has helped the government in its objective of financialization of savings from physical assets to financial assets. Online buying, available with `50 per gram discount, has resulted in maximum buying.

Anil Gupta: Given annual imports of almost 700 tons, the issuance of 68 tons since inception is not very significant, but still a good amount. Also, in relation to the overall debt of the Government of India at `109 trillion, the amount of borrowings through gold bonds is less than 0.5% of total debt.

How has gold as an asset class performed

over the years, say in the last 3 or 5 years,

compared with other asset classes and

investment options?

Santosh Shetti: Gold has performed very well in the last 3-5 year perspective, in view of regular market uncertainties over these periods. In the calendar year 2018, 2019 and 2020, gold had generated highest return compared to other asset classes.

However, one should not invest in SGB or gold purely based on past years’ returns. It has to be more from the perspective of asset allocation. It would be prudent to ensure the allocation to gold (preferably through SGB, etc) should not be more than 5-10% of the total asset allocation (ie equity, debt, cash, gold).

Anil Gupta: Recently, RBI has announced a buyback price of 4837 per gram for the first tranche of gold bond issued in November 2015 at `2864 per gram. This along with 2.75% interest on these bonds works out to be a 5.5-year CAGR of 14%. Nifty was 7900 in November 2015 and has given returns at CAGR of 13% apart from dividend yield of 1-2%. 1-year bank deposit rates during this period ranged between 7.5-8.0% at beginning of 2016 to 5.0-5.5% now.

Hence, if we compare with fixed deposits, gold bonds have given better returns. Moreover, the gain on gold bonds also attracts lower tax than fixed deposits @ 20% with indexation, as compared to a fixed deposit, which is at marginal tax rate.

Tax adjusted returns for Nifty will be better than gold bonds, as long-term capital gain on equity is lower at 10%. However, equity investments do come with higher risks also.

Although, the performance of one of the series of gold bond may not be a reflection of future returns, as the domestic gold bond prices typically outperform during periods of depreciating Indian rupee apart from international gold prices.

Recent gold bond issuances have also been at lower rates than in the past because of decline in domestic gold prices.

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Anil Gupta Santosh Shetti

N E W S Capex


NPCI lines up `180 bn capexN u c l e a r P o w e r Corporation of India plans to spend about `180 billion as capital expenditure in 2021-22. Elaborating the plan, an official of the company said the first pour of concrete for the construction of two more 1,000 MW units (Units 5 and 6) at Kudankulam is expected to happen this year and the 700 MW

unit at Kakrapar Atomic Power Station (KAPS) will begin commercial generation in September 2021. He said the funding will be through a mix of internal accruals, central government budgetary support and long-term borrowings. The first two will be about 30% and the borrowings will be about 70% of the project cost. The major on-going projects of the company are the construction of two 1,000 MW units (Units 3 and 4) at Kudankulam, four 700 MW units - two each at Rajasthan Atomic Power Station and KAPS.

Tata Motors plans `30-35 bn capexTata Motors proposes to have a capital expenditure of `30 billion to `35 billion in FY22 for its India business. The company saw a sustained multi-quarter rise in sales especially for its SUVs and cars. The company had provided a guidance in the previous quarters for FY21 which was around `15 billion. It had an actual capital spent of `18 billion for FY21. A company official said there has been increase in demand and the company did calibration of production capacity particularly of petrol engine. The company is therefore looking for a capex plan of `30 billion to `35 billion plan for the current year. Tata Motors was one among handful of outliers in India’s passenger vehicle industry recording a growth in sales during FY21.

Wheels India to have capex of 1 bnWheels manufacturer Wheels India has proposed a capital expenditure of `1 billion in 2021-22 for its wind energy unit and is planning to set up a new plant in Chennai. The company is also investing a ‘good portion’ for the second phase of the cast aluminium plant. A top official of the company said the proposed capex will go into the wind segment by setting up a new plant near Chennai. The company has a built-up capacity of 350,000 wheels, which it proposes to take to 750,000. The company did well in the domestic segment in 2020-21 where wheels for wheels for agri-tractors were much in demand.

Roca India to invest `500 mnSpanish sanitaryware make Roca intends to invest `500 million in expansion as it proposes to have greenfield project functional in 2024-25 in India. The Indian subsidiary Roca Bathroom Products is exporting to markets like Australia and others previously served by Roca’s plants in China. A senior company official said the amount will be used in the expansion of its faucets and plastic products production capacities. The company did not stop production during the covid times and continued to build inventory to take advantage of the demand that would come when the lockdown is eased. Roca is present in all the segments in the Indian sanitaryware market - luxury (Armani Roca), premium (Roca, Johnson Suisse), mass premium (Parryware) and budget (Johnson Pedder).

Bosch to cut capex

JSW Steel plans to hike capacity to 5 mn tonnes

JSW Steel has earmarked plans to spend `474.57 billion in capital expenditure in the next 3 years. Through expansion of its plants, it proposes to increase its steelmaking capacity by 5 million tonnes per annum at its Vijayanagar, Karnataka, and build mining infrastructure in Odisha. The new projects will cost the company `251.15 billion, while the ongoing investments, including doubling of capacity at Dolvi in Maharashtra to 10 MTPA, will require `223.42 billion. The company plans to expand its capacity to 38 MTPA by 2024 from the present 23 MTPA (including the recently acquired Monnet Ispat and Bhushan Power and Steel).

Bosch India is expected to have a capex of `1.6 billion to `2 billion in 2021-22. The group comprising 16 companies used to spend `4 billion to `6 billion and for FY22 its mobility division will spend ̀ 1.6 billion to `2 billion for plant expansion and localisation. The company derives 80% of its revenue through mobility business, said the second wave of covid will adversely affect its future plans.


Research Notes - Textiles & Apparels

25% decline in credit availed by textiles industryA sector study brought out by SIDBI and credit bureau CRIF Highmark states the pandemic has indeed impacted the textiles and apparels industry:

The Indian Textiles and Apparels Industry has availed a total credit of `1620 billion as of December 2020,

which is a yoy decline of nearly 20%, says the third edition of Industry Spotlight that analyzes this industry brought out by SIDBI and credit bureau CRIF Highmark. The decline is due to the suspension of manufacturing activities in the immediate aftermath of the lockdown in the wake of the pandemic in March 2020.

The report mentions that the number of active loans (volume) in the sector stood at 426,000 as of December 2020. Also, the industry observed a quarterly decline in NPAs (proportion of credit value delinquent by 90+ days) over the last 2 years, from

29.59% in September 2018 to 15.98% in September 2020. NPAs in December 2020 increased by 0.94% which is nearly 8% lower than NPAs in December 2019.

Observing that over the years, apparels have contributed to a majority share of exports, followed by home textiles and fabric, the report states that export credit as of December 2020 stands 25% lower yoy, largely attributable to a decline in exports due to the pandemic. With 95% of the overall credit by volume of the sector concentrated in MSME borrowers, the industry has a presence of close to 500,000 borrowers as of December 2020.

The report states that at the state level, Maharashtra has the largest share of the

credit portfolio at 25% of the credit book to the sector. The 13 regions rich in textiles and apparels manufacturing accounted for 80% of the credit portfolio of the sector as of December 2020. Nearly all states have districts manufacturing textiles and apparels, having several credit active units. Some districts such as Mumbai and Surat have more than `100 billion credit portfolios as of December 2020.

The report also mentions that the sector contributes 7% of the country’s manufacturing production, 2% of the country’s GDP, 1.2% of the country’s export earnings and there are over 45 million workers in the sector with another 6 million in the allied industries. Public sector banks are the dominant lenders for the sector with a share of 62.61% in volume as of December 2020. The share of private banks, NBFCs and foreign banks were 23.49%, 8.66% and 1.41%, respectively. By value, private banks have the largest share at 40.54% followed by public sector banks with 36.59%, foreign banks comprising of 9.14% and NBFCs with 8.47% as of December 2020.

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Financing Pattern - Market Share

Textile & Apparels Regions in India

Research Notes - Post the Pandemic


Technology inseparable from an enterpriseEnterprises of the future will be highly technology-oriented with leaders more tech-savvy than ever:

The world is hungry for a new kind of leadership and this becomes evident with more companies than ever

embracing the axiom that every business is a technology business, and they have ignited a new era of exponential transformation as technology continuously reshapes industries and the human experience. This is the broad finding in a research paper on Technology Vision 2021 titled ‘Leaders Wanted - Masters of Change at the Moment of Truth’ by global consultancy firm Accenture. And Accenture says “Now, as we begin shaping our post-pandemic reality, companies must learn to master change.”

Stating that enterprises across industries have accelerated their digital transformations all at once, it is technology that has come to change the world, the report asserts that the era of the fast follower is effectively over and perpetual change is here to stay. “And leaders must not only embrace it, but catalyze it,” the study adds.

CLOUD IS SUPREMEThe report found that 82% of IT executives reported ramping up their use of cloud technologies in direct response to the crisis, and 66% of the respondents reported that they will continue to grow their use of cloud for the foreseeable future.

On the other hand, 95% of companies said they are seeking new ways of engaging customers as a result of covid. “From food delivery platforms that kept restaurants connected to customers to the rise of telehealth services and e-commerce, the pandemic opened enterprises’ eyes to a new reality. Cloud is now at the core of the company, not just the periphery, and technology is no longer just one vehicle for success - it’s the vehicle all possible success depends on,” it adds.

NO WAIT AND WATCHThe study also points out that rapid digital acceleration during the pandemic has cemented technology as the cornerstone of

global leadership. It says: “The gap between digital leaders and laggards grows by the day and committing to a wait-and-see approach will land companies on the wrong side of that gap. Leadership demands that enterprises prioritize technology innovation in response to a radically changing world. Small pilots and incremental scaling are an obsolete luxury, and the friction between research, development and large-scale deployment must diminish or disappear.”

The report recalls the maxim that the best way to predict the future is to invent it and states: “Prioritizing technology is essential to ensuring the enterprise doesn’t fall behind. However, true leadership will come from companies embracing radically different mindsets and models. The world has been beset by sweeping change and demands leadership that thinks boldly in response.”

It adds: “Thriving in this moment will require ambitious leaders not content to rehabilitate the business to what it was, but willing to upend convention and wield their vision for the future.”

LEADERS WHO STAND OUTWhile from the workforce to supply chains to technology to operation, and business models, leaders have spent decades building systems for static purposes, where change happened slowly and expectedly,

today success is coming to those with the audacity to reimagine it all, states the report pointing out further: “In the last year enterprises were forced to confront deep-seated assumptions about how fast the organization can pivot, where or how work gets done, even what they sell and to whom. While some froze, watching their old convictions crumble, others shattered the bureaucracies and assumptions holding them back - becoming the leaders that everyone will follow.

The report cites instances of an organizations rising to the occasion and getting things done: “Before the pandemic, if you asked an executive how long it would take to deploy a new communications platform across the company, doing it in less than a year would feel like a stretch. But in March 2020 the United Kingdom’s National Health Service dispelled perceptions of just how fast technology transformation needs to take. In a matter of weeks, they rolled out Microsoft Teams to 1.2 million employees.

“If you had asked a manufacturer what it would take to pivot from producing power and propulsion systems to medical equipment, they likely would have argued it was nearly impossible. But when the UK faced a critical shortage of ventilators, Rolls-Royce demonstrated the true capacity enterprises have for change. The luxury car

From insights to action, the path to extraordinary value starts here.

#techvision2021

Leaders Wanted

Technology Vision 2021

Masters of Change at a Moment of Truth


manufacturer redesigned its entire supply chain to begin producing this desperately needed medical device. Within five weeks, the company had secured the new parts needed from across 100 different suppliers, orchestrated operations across 3 sites, and production was underway.”

REINVENTING, REIMAGININGAccenture says there is a temporary vacuum as people, employees, customers and partners all continue to establish a new set of preferences for the next normal. “Boundless opportunity lies ahead for the enterprises willing to break from the mentality of “that’s how we’ve always done it” and become part of crafting what comes next. This could be reinventing the customer experience in your industry, reimagining how data flows across the enterprise and its partners, or fostering the advantages of a virtualized workforce - even when social distancing is no longer a necessity. But the wide-open opportunity also means competition has never been fiercer. Every company, from startups to traditional competitors, is facing those same disruptions, and introducing their own vision of the future all at once. It’s not enough to keep pace anymore - to lead, enterprises must become pioneers,” it says.

The study found that 83% of executives

agree that their organization’s business and technology strategies are becoming inseparable - even indistinguishable.

The study says there is a unique moment to rebuild the world better than it was before the pandemic, and realizing that goal will mean expanding our definition of value to include how well people thrive, the impact left on the environment, growing inclusivity, and more.

BUILDING VISION OF FUTUREThe study observes that companies are no longer strictly competing for market share; they are competing to build their vision of the future faster than the competition. Success will depend on their ability to accelerate and master change in all parts of their business, which in turn will be a direct function of the technology decisions they make today, it emphasizes.

“But make no mistake, transforming the enterprise into a technology leader cannot be contained to the oversight of the CIO or CTO alone. To be successful, a digital-first approach must be fostered by the entire C-suite and manifested across all areas of the organization, it cautions.

It forecasts that a new future is on the horizon - one that’s different from what the world expected. “As this future takes shape,

there will be no room for enterprises that cling to the past. Will you watch the world change around you? Or be the one leading it? People are ready for something new and it’s time for enterprises to join them. Let there be change,” advocates the report.

The study predicts 5 technology trends for 2021:u Stack strategically, meaning a scenario

where companies compete on their architecture

u Mirrored world, which is the creation of a new generation of business and intelligence with the investments in data, AI and digital twin technologies

u I, Technologist, resulting from the use of natural language processing, low-code platforms, robotic process automation etc, which is democratizing technology, putting powerful capabilities into the hands of people all across the business

u Anywhere , Ever ywhere , where enterprises have to transform remote work from an accommodation to an advantage

u From Me to We as the pandemic has ignited a scramble for enterprises to reimagine their partnerships - and multiparty systems gained newfound attention.

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Completing the picture

2021 Trends

Accenture’s Technology Vision report comprises a three-year set of technology trends, currently including trends from 2020 and 2019.

It’s important to recognize that each year’s trends are part of a bigger picture. Tracking how they evolve over time offers a glimpse into how they may continue to grow in the future.

2020 Trends

2019 Trends

Stack Strategically

Mirrored World I, TechnologistAnywhere,

EverywhereFrom Me

to We

The I in Experience

AI and MeThe Dilemma of

Smart ThingsRobots in the

WildInnovation DNA

DARQ Power

Get to Know Me

Human+ Worker

Secure US to

Secure MEMyMarkets

#techvision2021

20Technology Vision 2021 | Leaders Wanted

3 4 521Introduction

Neobanks


Chime’s secret is unique productsChime is a huge success as a neobank because of its sheer imagination about the needs of the customers:

Chime is a fintech and the No 1 neobank in the US, but it says it is not a bank. Responding to

complaints by the California Department of Financial Protection and Innovation it agreed to stop using the term ‘bank’ in marketing. The regulator acted against the neobank because it does not have a state banking license. In terms of the ruling of the regulator, Chime describes itself on its website as a fintech and that it is partnering with its parent The Bancorp Bank and Stride Bank to offer banking services.

UNIQUENESS IN OFFERINGSChime has more than 8 million users, accounting for a 2.4% share of the US banking market. It offers various fee-free banking products, which comes with features like get paid early, online banking, fee-free overdraft, no hidden fees, mobile banking, automatic savings, mobile payments and security and control. It also has accounts such as a spending account, credit builder and savings account.

Its SpotMe is a fee-free overdraft service where customers can overdraw their accounts up to $100 without incurring an overdraft fee; once the overdraft limit is reached, purchases will be declined but no traditional negative balance fees charged. Its Credit Builder is a credit card designed to help consumers build their credit history. All account holders are given Visa debit cards and have access to an online banking system accessible through chime.com or via the mobile app for Android or iOS.

Chime’s revenue is primarily from the collection of interchange. It has no physical branches and does not charge monthly or overdraft fees. Bank accounts are insured up to the standard maximum deposit insurance amount of $250,000.

Founded by Chris Britt and Ryan King in 2013 in San Francisco as an alternative to traditional banking, Chime has raised

as of 2020, $1.5 billion in private funding. It has also received funding from investment firms like Dragoneer, Menlo Ventures and Cathay Innovation.

Last valued at $5.8 billion, its valuation may have touched anything between $12 billion and $15 billion as of now. It has a 35% share of all digital bank checking accounts in the US. Its immediate competitors are Ally Bank with 9% of the digital banking market, and Varo Money with a 6% share.

EARLY DISBURSALSIn April 2020, in response to the financial strain resulting from the pandemic, Chime announced a pilot program to provide users who e-filed tax returns with the IRS a $1200 advance on the Economic Stimulus Payment via SpotMe. Subsequently, it said it had successfully processed over $375,000,000 in stimulus payments 1 week ahead of the scheduled government disbursement date.

FEATURIZATION STRATEGYHow Chime got into the hearts of Americans is by evolving a strategy experts describe as ‘featurization’. Customers no doubt can be attracted by providing a good user experience or by providing no-fee services. However, Chime appears to have used non-traditional methods like early access to customers’ money - 2-day early access to their direct-deposited pay cheques; early access to government stimulus and tax refund checks; its Spot Me product allowing customers to make debt card purchases that overdraw on their accounts with no overdraft fees; and the credit-builder credit card, which is held by all the primary banking customers of the bank.

Two-thirds of Chime’s customers are under the age of 40.

While it is predicted that neobanks in the US will have 20.2 million accountholders by end of 2021, more than double the number just two years ago,

Chime for all purposes is well ahead of its competitors. Many industry watchers say it will hold steady as the industry leader. It will have 13.1 million US account holders this year, up 30.7% over last year. By 2025, it is expected to reach 22.7 million account holders, increasing its lead over competitors through the end of the forecast period.

Chime’s Co-founder and CEO Christ Britt had said once: “You can either have product structures that are aligned with the consumer’s best interests, which is what we strive to do, or you can have products that are adversarial and profit from people’s misfortune. That’s what big banks do and that’s being exposed.”

OUTAGES HAPPENChime obviously derives its strength from its technology backbone. But sometimes, this can falter. In October 2019, it faced an outage that left its 5 million customers without access to funds or the ability to make purchases. Customers did not have the option to physically go into a branch and talk to a banker. This had been some sort of a reputational damage and loss of trust for the bank, but it quickly recovered and regained the lost space.

Chime is confident it will continue to deliver banking as simple and low-cost as possible, along with new complementary services. To retain its position as the leader, it will look to lead the way with game-changing products that cater to multiple customer segments at different stages of life, from students to retirees.

[email protected]


Country Report - Open Banking

Indonesia readying for open banking forayIndonesia is taking initiatives to usher in open banking as the country’s central bank has recognized the definite advantages of the system in creating a digital economy:

It was in 2016 that Indonesia made its first move towards modernizing/digitizing its payments systems

when the country’s central bank, Bank Indonesia, announced the setting up of the Indonesia Payment Gateway System or Sistem Pembayaran Indonesia (SPI) and a regulatory sandbox for fintechs. Subsequently it came out with a blueprint for SPI 2025, containing 5 initiatives. One of this was the implementation of open banking in the country through open API standardization, which would include the technical, security and the governance sides of the initiative.

Another financial services regulator in the country, Otoritas Jasa Keuangan, meanwhile, has granted licenses to some 150 Indonesian P2P or fintech lending platforms until December 2020. Now alongside SPI 2025, OJK has launched its Financial Sector Master Plan 2021-2025 and one of the 5 main priorities of the plan is to support innovation and digital financial transformation, including open banking.

DATA PROTECTIONIndonesia has in fact put in place data protection measures way back in 2016 when the country’s Ministry of Communications and Informatics had come out with what is termed as Perlindungan Data Pribadi (PDP) to regulate and ensure protection of data in the context of data retrieval, collection, analysis, broadcasting etc for entities that provide gateway systems or open banking enablers.

As in other countries, where open banking has matured, in Indonesia too market-driven initiatives from banks, fintechs and other non-regulator parties play a key role in the implementation of open banking. It is a fact that from 2015, top banks like BCA, BRI, BNI, Mandiri, Permata, CIMB Niaga, Bukopin, BTN, BTPN and Panin Bank had started to offer open access to their APIs for fintech companies to explore with. Most banking institutions have segmented their API

products in certain categories for different use cases, such as account verification, payment initiation, real-time balances, historical transaction, and others.

FOCUS ON PAYMENTSOne clear use cases of open banking in the country has been in the payments domain. Payment has been a major focus within the open banking strategies and there is no dearth of tech companies like Midtrans, Xendit and Brankas, which enable the open banking payment system to be adopted by merchants that use their services. There are also firms that focus on financial data APIs for data verifications and account aggregation. These fintechs are catalysts in the implementation of open banking by providing other companies with services, like integrating key APIs.

As the financial ecosystem is getting digitized, there are bound to be customer demands in terms of payment initiation, online loans and e-commerce utilization. Banks can meet these demands only with innovations and open banking is key in the scheme of things to maximize business growth and financial inclusion in Indonesia. And the country is moving in the right direction as it is expected to fully implement a standardized open API system in 2025.

SECURITY A CONCERNMeanwhile, Bank Indonesia has called on the financial services industry to develop an open banking system to boost financial inclusion. However, what is of concern for the regulator, the banks and the customers is the lack of security standards and data protection regulation. Experts feel this can indeed hold up a full implementation of the initiative as also the efforts in creating a digital economy.

But the central bank is in the process of creating regulations on open banking standards, which will oblige banks to share their data with fintech companies by creating their own APIs from their own systems. It is expected that open banking platform will see traditional banks help

digital players reduce technical costs by sharing KYC metrics or loan affordability metrics in an API. The initiative may reduce borrowing costs for MSMEs as banks could access MSMEs’ data provided by digital firms.

Experts, however, feel that the central bank should be extra vigilant about cybersecurity risks while framing regulations on open banking and the system will need to be tightly regulated to ensure security.

A STRATEGIC PARTNERSHIPIn a recent development Brankas, an open banking technology provider in Southeast Asia, has concluded a strategic partnership with Southeast Asia-based payments company, 2C2P to introduce its latest open banking solution to Indonesia. Through Brankas’ API integration, customers of 2C2P’s merchants will be directly connected to major Indonesian banks including Bank Central Asia (BCA), Bank Mandiri, Bank Negara Indonesia and Bank Rakyat Indonesia. The partnership enables Indonesian businesses to offer customers a direct debit option during the checkout process to make payments from their personal banking accounts with the banks immediately. Since the payment is authenticated directly between the consumer and the bank, merchants can avoid higher transaction costs, and chargebacks generated due to fraud or an inability to capture funds.

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Bank Indonesia plays a catalyst role in bringing open banking to Indonesia

Country Report - Blockchain


Russia makes major advances in blockchain, DLTRussia is now employing blockchain technology and DLT in major segments of activities:

While the Russian Government is positive about any new technology, it is particularly

responsive towards blockchain, especially DLT, which has seen substantial use in the financial services industry in the country. Several DLT-based projects are being implemented by financial institutions and banks, unlike in the US or Europe, where such technologies are largely prerogative of new age banks or fintechs or digital only enterprises.

The Central Bank of Russia has been specifically recognizing DLT based initiatives like electronic mortgages, digital letters of credit and digital bank guarantees. Similarly, there is a blockchain based platform for e-proxy shareholder voting mooted by the National Settlement Depository, the central securities depository of the country. The platform takes care of blockchain-backed commercial bonds.

USE IN ELECTIONSOne unique use of blockchain other than in financial services in the country has been in elections. Very recently the government created a blockchain based voting platform during the city parliament and municipal governments elections. Besides, there is ‘Active Citizen’, the government’s platform for public polls, which is created using blockchain. There are also similar tools used in the registration of transactions in the real estate sector.

The Russian Federal Tax Service has created a blockchain-based platform for banks to provide interest-free loans for payment of salaries to staff of companies affected by covid pandemic, including MSMEs.

REGULATEORY SANDBOXThe central bank has launched a regulatory sandbox for testing innovative financial technologies, including DLT and services on the financial market in 2018. It functions under the Digital

Economy National Program adopted by the government in 2017 and also the central bank’s Main Directions for Development of Financial Technologies for 2018-2020. The sandbox is targeting projects in the spheres of bid data and machine learning, artificial intelligence, biometric technologies and DLT.

DIGITAL CURRENCYIn October 2020 the central bank has come out with a consultation paper on the potential introduction of the Central Bank Digital Currency (CDBC), or digital ruble. According to the consultation paper, the digital ruble will be a digital form of the national currency and have all features to serve as money and will be issued by the central bank to become yet another form of money in addition to cash and cashless money. The central bank is planning to ensure seamless integration between the CDBC and other payment forms and is planning to issue CDBC as tokens on a distributed ledger. It is expected that a prototype will be ready by end-2021 and will be built on a hybrid platform combined with DLT. The central bank said it is moving forward with its CBDC to “help reduce costs for households and businesses, increase the speed of payments, and develop innovative products and services in the financial industry and the economy in general,

BANK GUARANTEEOne notable development in the realm blockchain is the recent issue of digital bank guarantee by VTB, a leading Russian bank. The bank guarantee was issued on the Masterchain blockchain, which is in production. Masterchain is an Ethereum blockchain variant that uses Russian cryptography. It is co-developed by the Bank of Russia and commercial banks, and is operated by the Fintech Association. The other organizations on the platform that can issue guarantees are Gazprom Neft, Alfa-

Bank, PSB, Raiffeisenbank and Ak Bars. Each participant has its own node on the network.

Sberbank, a state-owned Russian banking and financial services company, and telecom firm MTS, the leading Russian telecommunications operator and digital service provider, had earlier successfully completed the country’s first commercial bond transaction using blockchain. The transaction was placed through a proprietary blockchain network system operated by the National Settlement Depository (NSD).

Alfa-Bank, which is one of the largest private banks in Russia, is exploring applications based on Blockchain technology to automate services for freelancers and self-employed workers. It involves the whole process of registration and payment for self-employed people, along with income registration and other add-on services.

Some of the top blockchain technology companies in Russia include MixBytes, which takes up blockchain and DApp development, Maxilect, which connects talented IT professionals throughout Russia, to take up complex projects, Edone, an IT outsourcing company that helps to bring ideas to life, HWdTech, a software development company specializing in blockchain and Evrone, an engineering company successfully delivering high-quality digital products.

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Russia made use of blockchain in the country’s elections


People Track

Mahesh Kumar Jain reappointed Dy Governor, RBI New role in Citi for BALAJI NUTHALAPADI

Citibank has appointed Balaji Nuthalapadi as Head of Operations & Technology, Citi South Asia. In this role, he will have responsibility for India, Bangladesh and Sri Lanka. Balaji has over 24 years of experience with Citi. He joined India’s retail lending business in Chennai in 1997 and went on to lead several roles in the retail wealth management business across Asia, India, and the UK for over 13 years. In 2018, in addition to his responsibilities for consumer banking operations, he was appointed as the Head of India Citi Solutions Centers (CSC).

DR BHANWALA is now Advisor, Omnivore

Agritech venture capital firm Omnivore has appointed former Chairman of NABARD Dr Harsh Kumar Bhanwala as senior adviser. He will guide the company in managing its portfolio companies, advise on new investments and help develop the fund’s rural fintech investment strategy. Dr Bhanwala was Chairman of NABARD between 2013 and 2020. Prior to that, he was the Chairman and Managing Director of India Infrastructure Finance Company (IIFCL). He had begun his career at NABARD and worked there for almost 3 decades. At present he is holding the position of Executive Chairman of Capital India Finance. Omnivore funds entrepreneurs building the future of agriculture and food systems and has backed over 25 agritech startups since 2011.

RAHUL BHUSKUTE is CIO at Bharti Axa Life InsuranceBharti AXA Life Insurance Co has appointed Rahul Bhuskute as Chief Investment Officer. Prior to joining Bharti AXA Life, he had a long stint with the ICICI Group in London and Mumbai leading significant verticals in asset management and corporate and investment banking. His work experience spans investments in bonds, loans, convertibles, equity-linked instruments and credit derivatives in investment-grade, growth capital, special situations and distressed debt. An MBA from Jamnalal Bajaj Institute of Management Studies, he has successfully completed all three levels of the CFA course by the CFA Institute, USA.

Hitendra Dave to be CEO of HSBC IndiaThe Hongkong and Shanghai Banking Corporation (HSBC) has appointed Hitendra Dave as Chief Executive Officer of HSBC India. He had been appointed interim CEO effective 7 June pending receipt of regulatory approval. He succeeds Surendra Rosha who is moving to Hong Kong as the Co-Chief Executive of HSBC, Asia-Pacific. Dave was Head, Global Banking & Markets at HSBC India. He has almost 30 years work experience in the Indian Financial Markets, including 20 years with HSBC. India is the third largest contributor to HSBC’s group profits with Hong Kong and Mainland China being the top 2 contributors.

Rajesh Bansal is CEO, RBIH

Brij Mohan Sharma is new ED at Canara BankCanara Bank has named Brij Mohan Sharma as its new Executive Director. Sharma, who began his banking career at the Oriental Bank of Commerce in 1983, became Chief General Manager, Punjab National Bank, after the merger of the 2 banks. During his 37 years of service, he has worked in various capacities - Regional Head of Pune and Bhopal, Cluster Monitoring Head, Branch Business, Western India, and Vertical Head of Inspection and Control. He also has varied experience, including in branch banking, corporate credit, retail credit and inspection and audit.

Rajesh Bansal is the new Chief Executive Officer of the Reserve Bank Innovation Hub. Bansal was a member of the founding team of Aadhaar and previously served at the RBI in various capacities in the areas of technology, financial inclusion and payments systems. At the UIDAI, he was Assistant Director General and had played a crucial role in designing India’s Direct Benefits Transfer (DBT) system, especially for cooking gas and the electronic KYC (eKYC). He also led the implementation of the world’s first interoperable bank agent system which has become the industry norm now and has come in handy as India navigates the Covid-19 pandemic. He has also been a member of various committees of the RBI and the Government of India. The Reserve Bank Innovation Hub is key headed by Infosys co-founder S (Kris) Gopalakrishnan.

The Central Government has reappointed Mahesh Kumar Jain as the Deputy Governor of the Reserve Bank of India for a period of two years with effect from 22 June. Jain, before joining the central bank, was Managing Director of IDBI Bank. He also served as MD and CEO of Indian Bank from November 2015 to March 2017. The other three serving Deputy Governors of the Reserve Bank are Michael Patra, M. Rajeshwar Rao and T. Rabi Sankar.


Please reach out to following Managers to have an elaborate discussion on the program.

TOPICS

u Transforming the Lending Landscape

u Transitioning to digital Transformation

u Expanding into Newer ecosystems with Fintechs, Big Techs and BFSI relationships.

u Exploring Newer Trust Sentinels.

u Frictionless and Personalized- The New realms of an Experiential World

u Ring-fencing interest with strong stress Mitigation strategies: The Way forward

u CEO Panel – NBFC Tomorrow – Re-thinking strategies for the new world

RNI REG. NO. MAHENG/2002/9930 POSTAL REG. NO. MCN/70/2019-2021 POSTED AT MUMBAI PATRIKA CHANNEL SORTING OFFICE, GPO, MUMBAI ON 16-17 OF EVERY MONTHPUBLISHING DATE 16th OF EVERY MONTH

Presents

NBFC AWARdS & CONFERENCE 2021

NBFC’s

VENUE VIRTUAL PLATFORM

dATE AUGUST 5TH, 2021

TIME 9:30AM – 06:00PM

Please contact for more information:

Ashish Verma : 98332 36943 [email protected] Ravi Lalwani : 77382 97946 [email protected] Stalin Saldhana : 91677 94513 [email protected]

Documents

June 2021 - Banking Frontiers