Leadership during covid pg 8 Software Development pg 21

THINK SIMPLE THINK DIFFERENT

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Leadership during covid pg 8

Software Development pg 21

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Vol. 19 No. 3 July 2020 `75

Pages 48

Banking Frontiers July 2020 3

Editor’s BlogManoj AgrawalMobile : 98673 66111Email : [email protected]

July 2020 - Vol. 19 No. 3

Group Publisher : Babu Nair

Group Editor : Manoj Agrawal

Editor : N. Mohan

Editorial Mehul Dani, Ravi Lalwani, V. Raghuraman

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Speed is the New Normal

The covid crisis has hit many businesses hard, and many of them are stumped as to how to respond. For the financial sector, there is pain, but the show has not stopped. I had assumed that the lockdown

would cause some amount of pausing to look at the emerging scenario in light of the business uncertainties. However, the industry appears to have taken a very upbeat stance. Every financial organization I talk to is gearing up for a new kind of ‘achche din’ coming soon. Their preparations include accelerated digital transformation, core technology upgradation, product innovation, robust business continuity plans, and much more.

There are several amazing things I see happening in the BFSI sector. First, it did not trip, it did not lose its balance with the lockdown. So many BFSI organizations quickly changed the working mode to work from home within days. Some anticipated it coming and started the shift even before the lockdown was announced. Many have expressed their gratitude to their IT partners for providing amazing support to keep business running non-stop.

Secondly, with diminishing revenues, most businesses want to upgrade to the next digital and technological level and are asking their IT and IT Security teams to deliver results in double quick time. CIOs, CTOs and CISOs tell me that their workload has increased from 50% to 200%. Putting in a 10-12 hour work day has become the norm. These people have shown amazing agility to achieve the impossible. Technical requirements that took weeks to document were done in days. Same for legal processes. Vendor negotiations too crashed from months to days. In general, anything that was done in months, was being done in weeks, and sometimes in days.

The pace at which the organization is transforming, a year’s worth of work is being done in a quarter. One can safely say that in today’s scenario, ‘quarter is the new year’.

N E W S Regulator

4 Banking Frontiers July 2020

PBOC gives up its stake in HDFCPeople’s Bank of China has cut down its stake in HDFC of India following a furore after it was brought to light that the Chinese central bank has increased its holding in India’s largest mortgage company, taking advantage of the market meltdown. The Chinese central bank is now not a shareholder in HDFC, the Mumbai-based company said in its disclosure for the June 2020quarter. During the quarter ended March 2020,

People’s Bank of China held 17.5 million shares, or 1.01% stake in HDFC, valued at Rs 33 billion at current market rate. It is not known whether the People’s Bank of China and sold off its entire stake or brought it below 1% as stock exchange shareholding disclosures capture names of public shareholders who own more than 1% stake. There were allegations that Chinese investment firms were taking advantage of the fall in the domestic markets, triggered by the covid pandemic, to lap up shares of Indian companies with a possible aim of buying them out at an opportune time. Life Insurance Corporation is the biggest shareholder in HDFC.

Saudi Payments, Discover in strategic pactSaudi Payments, a wholly-owned subsidiary of the Saudi Arabian Monetary Authority, and Discover have concluded a strategic agreement that will increase the global acceptance footprint for both organizations. The agreement will give Discover, Diners Club International, PULSE and network alliance cardholders the ability to use their cards on the network. This includes at Point-of-Sales, on e-commerce platforms and at ATMs across the Kingdom. It also allows Saudi banks to issue cards that will be accepted on the Discover Global Network for international purchases and cash access outside of the Kingdom. The strategic alliance enhances Saudi Payments’ strategy to grow the number of options available in the Kingdom’s digital payment environment providing more choices to consumers. It will benefit customers by increasing the number of payment options available and provide them access to more than 48 million outlets in 200 countries. Discover Global Network cardholders will have access to more than 470,000 POS terminals at local merchants and more than 18,000 ATM access locations in Saudi Arabia.

14 qualify: digital banks in SingaporeThe Monetary Authority of Singapore (MAS) said 14 of the 21 it had received to set up digital banks in the country, meet the eligibility criteria required for the applications to be considered. These eligible applicants, comprising 5 digital full bank applications and 9 digital wholesale bank applications, will progress to the next stage of assessment. MAS had received 21 applications in January 2020 - 7 for digital full banks and 14 for digital wholesale banks. In the next stage of assessment, MAS will invite the 14 eligible applicants to present their proposals via virtual meetings. Applicants will then be shortlisted based on their (i) value proposition and business model, incorporating the innovative use of technology, (ii) ability to manage a prudent and sustainable digital banking business, as well as (iii) growth prospects and other contributions to Singapore’s financial centre. The new digital bank licences, which will be extended to non-bank players, aim to ensure that Singapore’s banking sector continues to be resilient and competitive. Digital full banks will be allowed to take deposits from and provide a wide range of financial services to retail and non-retail customer segments, while digital wholesale banks will be permitted to serve SMEs and other non-retail segments.

BIS, Bank of Canada to set up innovation hub

Brazil suspends Whats-App Pay

The Central Bank of Brazil suspended a newly-launched system allowing users of WhatsApp messaging service to send money via chats. It has ordered Visa and Mastercard to halt payments and transfers via the system. The central bank said in a statement that rolling out the service without previous analysis by the monetary authority could damage the Brazilian payments system in the areas of competition, efficiency and data privacy. Facebook launched its payment services recently in a nationwide rollout, allowing users to transfer funds to individuals or local businesses within a chat, attaching payments as they would a photo or video. WhatsApp has over 120 million users in Brazil, its second-largest market after India, where it has also struggled to roll out a payments system. The central bank has also introduced a regulation saying it could require market participants to receive previous approval to operate in payments.

Bank of Canada and the Bank for International Settlements (BIS) are launching a BIS Innovation Hub to advance fintech innovation within the central banking community. The center will open in Toronto within 2 years and is one of four locations scheduled to open in North America and Europe. The partnership will advance BIS’s understanding of the digital economy and the technological transformation of financial services and will build on its existing research and collaboration with partners in the central bank and technology communities on digital currencies and fintech.


Digital Initiatives

Deepak Sharma reveals that the bank plans to launch several new enhancements in its FD platform

52% FDs booked through mobile appKotak Mahindra Bank enhances its FD booking & servicing journey:

As on 31 March 2020, the Kotak Mahindra Bank had a national network of 1600 branches and

2519 ATMs, besides branches in GIFT City and DIFC (Dubai), affording it the means to serve its customers through its wide presence. Deepak Sharma, President & Chief Digital Officer, says in FY2020, 4.4 million 811 accounts were opened digitally. Accounts continue to be opened in April and May 2020, during the lockdown and the rate in May 2020 was 14,000 accounts per day, he adds.

SOURCED DIGITALLYCASA ratio of the bank as on 31 March stood at 56.2% compared to 52.5% as on 31 March 2019. Average savings deposits grew by 21% to `856.56 billion for FY2020 compared to `709.90 bn for FY2019. The average current account deposits grew by 17% to `336.99 billion for the year and term deposits were 6.6% of the total deposits.

Digital remains a focus area for the bank, says Sharma adding: “During Q4FY2020, the share of recurring deposits sourced digitally was 93% and that of term deposits 80%. With the implementation of open banking, 91 API relationships have been enabled till 31 March 2020.”

Over 65% of the bank’s FDs placed in rural areas were done online while in urban areas, this is over 80%. “We expect these numbers will increase further going forward,” says Sharma.

IMPACT OF APP IN GROWTHDigital initiatives, primarily mobile

banking app, have significant impact on the growth of FDs in the last couple of years and Sharma gives the details: “During FY 2019-20, we have booked 52% of the FDs using our mobile app only and 75% from all our digital platforms overall.”

HOME BANKINGPre-covid, there were times when a customer could avail services of her relationship manager who would at the request of the customer visit the premises and carry out banking activities like FDs, but now, says Sharma, with the high digital adoption and online presence, a customer can open an FD account from the comforts of here home using net banking, mobile banking or phone banking.

The bank has seen certain changes in the tenures of FDs. “We have seen the money flowing into shorter tenor FDs,” says Sharma, “primarily from businesses and the self-employed. Money that would have normally remained in circulation is now being booked as short-term FDs. We have also seen increased flow in mutual funds and direct equity. Customers continue to invest in long term saving instruments like term deposits and NPS.”

VIDEO BASED KYCOn the digital front, the bank keeps enhancing the FD booking and servicing journey. It was amongst the first banks to offer TD sweep where any surplus amount lying in one’s savings or current accounts can get swept into a term deposit thereby earning the customer a higher rate of interest. Sharma elaborates: “We have added nomination addition and premature withdrawal options on our mobile app to offer a better FD servicing experience. Recently, we launched India’s first video-based KYC platform which offers convenient and zero-touch full KYC account opening experience. Prospective customers can use this platform to open a savings account and subsequently for placing an FD. We plan to launch several new enhancements in our FD platform.”

[email protected]

Tech Transformation


The bank has several digital initiatives that are unique:

South Indian Bank foresees in the long term the predominance of digital channels to the extent that

most of the transactions will be through these channels with minimum requirement for customers to visit branches. In line with this conviction, the bank has set up a dedicated Digital Banking Department.

Elaborating the bank’s efforts in digitization, Raphael T.J., CIO of the bank, says the bank has been constantly focusing to onboard all customers on to digital platforms with an objective of improved customer convenience for entire banking activities. In addition, the bank has moved all frequently sought requirements from customers on to digital platforms ensuring seamless as well as hassle-free banking experience to the customers. Raphael lists some of the recent initiatives in this regard: u SIB Mirror Plus app, which facilitates

online FD/RD opening, debit card management, cheque book facility, FASTag recharge, payments of school fees, etc

u SIBNet, an internet banking facility which ensures bulk processing of salary/NEFT transactions for corporates, GST payment and e-filling of returns and online onboarding for customers for FASTag.

FOR CUSTOMER CONVENIENCEThe bank has also been leveraging digital technologies to reduce the need for physical presence of customers at branches or use of other resources. For example, customers can block ATM cards or debit cards using their mobiles without the involvement of the bank staff, use FeeBook, which is an online self-customizable payment portal, where multiple payment portals can be created in quick time and integrate the bank’s payment gateway with them or make use of the Digital e-Lock facility to safeguard their accounts.

Raphael emphasizes that the IT strategy of the bank is in total alignment with its business strategy and the bank has evolved short-term and long-term

plans in this regard. Among the short-term plans are enhancements of CBS, internet banking, mobile banking, CRM, Business Process Management (BPM), branch infrastructure, scaling of the SOC operations, extension of FRM solution to internet and mobile banking and extending AI capabilities into process automation. As part of the long term plans, the bank intends to implement blockchain based applications, new technologies to improve storage, computing and memory, BYOD/WFH and cloud compliance.

IT DEPARTMENTThe bank’s IT division comprises digital banking and IT operations departments. There is also an independent CISO Office. The digital banking department focuses on innovation, improvement and implementation of major projects on the digital front making use of emerging technologies such as blockchain, AI/ML etc.

Raphael says the bank has recently set up an exclusive department for BI and Analytics. “We have developed dashboards for diverse business uses such as business development and monitoring, digital channel penetration, customer analysis, ATM analysis, ATM idle time analysis, ATM cash forecasting, daily transaction analysis,

NPA movement, early warning system, delinquency analysis, accounts opened/closed, fund movement to other mutual funds/insurance etc. In this work, we are using ML algorithms and probabilistic models and the results are conveyed to targeted business teams,” says he.

TECH PARTNERSThe bank has engaged with global technology partners like Oracle and VMWare and there have been unique instances where these institutions have helped in simplifying the banking experience for customers.

He says most often the offerings of these partners are deployed to enhance front-end customer experience such as AI, chatbots, RPA, advanced analytics and ESB/API, engaging Big Data and analytics for better customer profiling, which helped the bank offer its customers a more appropriate array of digital channels and curate highly customized products for them and loan origination system to facilitate centralized loan processing resulting in improved TAT in account opening, loan sanction and customer servicing.

Says he: “Technology partners like Oracle enable us with next generation cloud services and futuristic offerings, which we can then tap to deliver superior banking experiences to our customers, while simultaneously improving our operational efficiencies and continuing to lower costs.” The bank is proposing to implement Oracle’s Autonomous Database and use its Gen 2 Cloud region, which just came to India.

RPA IN VARIOUS DEPARTMENTSRaphael also says the bank has implemented RPA in various departments and processes, which he says has definitely helped it to minimize mundane human efforts, improve TAT and increase accuracy in processes. He also reveals that by giving increased fillip to digital modes of banking and educating customers regarding the same, the bank was able to increase its share of digital pie from 60% to 72% in the last financial year.

[email protected]

South Indian Bank aims to maximize its digital pie

Raphael TJ


Insurance

PNB MetLife Insurance focuses on 3Ds – Data, Digitize and Disrupt:

In the insurance industry, customer data is a precious resource that is both avidly protected and used to improve business.

In response to increasing consumer demand to access information and services anytime, anywhere, PNB MetLife Insurance Co has taken several steps. Samrat Das, Chief Operating Officer, says: “Our focus has been on 3Ds – Data, Digitize and Disrupt. We use data analytics and artificial intelligence (AI) to assess the profiles of the customers and their financial behaviours, which helps us to improve our persistency ratios, reduce policy surrenders and manage underwriting for mortality experience. We have taken steps to digitize our end-to-end sales process so customers can seamlessly explore their needs, get advice, and apply and purchase coverage online and 24x7 through mobile channels.”

HIKE IN APP DOWNLOADSPNB MetLife has an AI based customer service application, khUshi, which is a virtual assistant that can chat with an existing or prospective customer and help respond to product and policy related queries in real-time. Das says the 24x7 chatbot is a proactive and predictive application that aims to quickly address customers’ requirements in order to provide customized responses to their queries. The company, he says, has been encouraging its customers to raise service requests through khUshi. “Between February and March this year, we witnessed a 14% hike in app downloads. Now that the nation-wide lockdown has been lifted, we are still seeing strong demand, with a 33% increase in the daily transaction average. We used push notifications to create awareness of the app amongst customers, which resulted in high response rate,” says he.

REDUCING TAT Technology has always been a focal point at the company while offering a better customer experience. A robust technology infrastructure has enabled continued customer engagement during the covid

pandemic and Das explains that along with enhancing efficiencies and reducing turn-around-times, technology is now playing a vital role in supporting customers and connecting associates during this time of crisis. “We’ve also leveraged social media and other online channels to build awareness around our digital servicing capabilities like online premium payments and simplified claims processes,” he adds.

The company has also regularly engaged with its customers via SMS and emails informing them about its toll-free number and dedicated email address so that they have access to seamless customer service. “The technology support extended to our call center teams enabled us to ensure continuity of customer services during the lockdown period. As a result, our call abandon rates reduced from 2.5% to 1.8% during these tough times,” says Das.

ONLINE CLAIMS PROCESSPNB MetLife has ensured continued customer engagement during the pandemic, using multiple assets to create awareness around ease of servicing through digital modes, premium payments and simplified claims processes. The company saw a robust online buying journey for its term product and for April till date it has

seen a surge of 54% logins for the online business. It has implemented tele-medical limits for investment and savings plan with select criteria and set up a dedicated claims helpline and email address for customers to send their documents via email and claims will be processed basis these documents. Post email, the customers will need to courier their original document after the lockdown is lifted. All claims are being paid by direct bank transfer.

EPATHSHALA FOR EMPLOYEESThe company’s employees were advised to work from home and it allocated dedicated IT team members for various departments so that employees could quickly resolve any issues. Says Das: “We offered seamless access to our internal systems via VPN connection meaning employees could stay connected using mobile hotspots or their home Wi-Fi. We have transitioned all our training programs online to ‘ePathshala’ – our mobile learning platform. We have conducted 1674 virtual training programs with over 24,000 employees attending multiple training sessions on various topics ranging from product training, process trainings, induction, etc.”

SOLUTIONS IN PIPELINE PNB MetLife will continue use multiple online assets to create awareness about its simplified digital servicing capabilities like online premium payments and claims settlement. Das says the company is enhancing its digital sales platform with added features like digital endorsements for customers and intermediaries to offer a complete online journey. As another value-added feature to augment remote engagements, it exploring co-browsing facility, which will enable the customers and the agents to be on same virtual page during a policy purchase journey. “While bringing in these innovative offerings, we have also ensured PII (Personally Identifiable Information) data protection for our customers,” adds Das.

[email protected]

Logins up 54%, Transactions up 33%

Samrat Das

Leadership


Covid19 has come as the blackest of all swans, unleashing a human and economic tragedy beyond all expectations. In such turbulent times, what sort of captain is leading the crew of the ship IDBI Federal Life Insurance....Banking Frontiers finds out.:

Crisis times calls for leaders with multiple skills. One such critical skill is communications, which

itself is a multi-faceted subject. While everyone recognizes the importance of more communications in this pandemic situation, Vighnesh Shahane, MD & CEO at IDBI Federal Life Insurance, has a slightly different take. He believes in informality as more important than just the quantum of communications. And this is just one facet of his leadership strategy.

In a free-wheeling interaction, Shahane discusses various aspects of leadership that can significantly make a difference in an organization as it passes through such critical times and lists things that he considers relevant and unavoidable in a leader’s journey in taking his organization to the safe shores.

I n f o r m a l i t y , h e emphasizes, helps break down communication barriers; it also helps to breed knowledge and improve speed of communication. “When the ecosystem is formal and bureaucratic, you can have whatever communication you want, but you won’t get the required information or trust,” he explains.

Shahane also believes that informality is a necessary condition to think and talk beyond work related issues and encourages it at IDBI Federal Life Insurance. It does not mean, he says, putting your legs up on the boardroom table and having a cup of coffee. It is breaking the barriers of politics and bureaucracy and ensuring speed in decision making.

“But I do not believe in taking informality to the level where all kinds of personal problems are discussed between office colleagues – informality should not go beyond a particular point.

A lot of leaders recommend increasing communication skills and I cringe, as communication happens in various forms,” says he.

WATCHING BODY LANGUAGEWatching body language is another facet of his leadership. He explains that in an office, it is easier to listen as you can also watch body language. “Leaders listen to what is not said or what should be said. Some people are very open and frank with me. But there are always some people who are not. So, I am a perceptive guy. When you walk into my room, I can tell whether you are in a good mood or bad mood. This is an instinct I am born with. More than that, I lay a lot of stress on body language. Sometimes body language speaks louder than what the person is saying. Secondly, I always create a network of people. Not all my colleagues are going to come up to me openly. Everybody has their own network in the office with whom they confide in. So, I have encouraged the senior leaders to form a network which keeps them informed about their team members who are feeling down or discouraged, and who need to be spoken to,” says Shahane outlining his strategy of how to be informal without a virtual show of it.

He adds that at IDBI Federal Life Insurance, there is no new

people strategy post-covid. “Our pre-covid strategy,

built upon informality, non-bureaucracy,

non-political and o p e n , h o n e s t communication is holding good for us. Anyway, a sudden

change in strategy would not have been

possible. This has to be

A Covid-proof Leadership Strategy



done gradually as it takes a lot of effort,” says he.

FORMATIVE YEARSShahane has been a Ranji Trophy player for the Bombay side for 3 years and his days on the field has helped him learn more that in a classroom or in a boardroom. “Although I have worked in some great organizations and done my MBA from a premier institute, my most valuable knowledge comes from the cricket field playing as part of a team, learning invaluable lessons like teamwork, making quick decisions, informality, never taking success to your head and never taking failure to your heart. I am of the confirmed belief that only sports can teach you these things,” he emphasizes.

STORY TELLINGDoes he share his experiences or the wisdom he gained by his vast reading with his staff? In fact, good leaders are good story tellers as well.

“Oh, I think story telling is a part of communication. More important than story telling it is the effort to remind people that in the past too, the world has come out of suffering and we can do it this time as well. I believe they have to dig into the past and find their strengths, individually and also as a group. People don’t relate to the stories of celebrities and others as they relate to their own stories and those of their neighbors and friends. Those stories are much more credible. Challenges keep changing, and you have to face them,” he shares his views.

CONTINUING TRANSFORMATIONIDBI Federal Life Insurance has been in the midst of a transformation while the covid happened. But the pandemic has not halted the transformation process or its pace in the organization.

And it is business as usual, says Shahane, stating: “We just pick up the phone and speak with the person concerned or WhatsApp him/her. We don’t have a culture of excessive use of sending emails and waiting for a response. Decision making has not slowed down,

but what has probably slowed down is execution, because people are not there together which is often helpful.”

He outlines the process of giving his feedback to the staff: “I connect with my direct reports once every day, and the next level, once every 3 days. So just a phone call or email or text or WhatsApp message from me enquiring about the person goes a long way. Technology makes it possible for me to connect in different ways, without being too intrusive. I keep enquiring about how they are doing and how their family is doing. I wouldn’t usually do this in normal times, but I’m overcompensating now during these unusual times.” This is yet another facet of his leadership.

WFH A NEW NORMHe says covid has brought in at least one new practice - work from home, or WFH, and he is sure this is going to be a reality from now on, for at least 3 months, and most probably after that as well. “So, we need to figure out how to make work from home more effective and to support our employees emotionally as well. WFH has its own distractions as you have

family, some people live in small houses, you have kids and parents and we have to ensure we overcome all such challenges,” says he.

The employees too have given meaningful suggestions. Like the use of laptops. Some staff members were using their personal laptops since their official desktops were still in the office premises. “So, the idea came up that rather than procure new laptops, we could give them VPN access and allow them to use their personal laptops. Such small suggestions have come in. But we cannot have a one size fits all approach,” says he.

REDUCING STRESSIDBI Federal Life Insurance has been doing whatever is needed during the lockdown days to ease the life of the stressed employees. Shahane says when the lockdown was announced, the company disbursed salaries within 4-5 days as the people would need money for urgent requirements. Earlier, salaries used to be disbursed on the 28th of the month. Now the disbursals take place on the 22nd of the month. The company has also doubled the term life cover as part of the employee’s compensation package and increased the medical coverage limits.

Says Shahane: “In a time when companies are laying off people and holding back salaries, we went ahead with appraisals as per the existing timelines and finished the process digitally this time. We also gave increments, promotions and bonuses to our employees as per their performance. Nobody was laid off and there were no job cuts. It is about walking the talk and then you talk the walk.” This is another facet of uncommon leadership.

Shahane is also happy that stress among the employees is not a concern for him because most of the stress today arises from concerns about job safety and salary and the company has acted upon these issues. “The employees whom I speak with on a regular basis, they tell me or I can make out from the tone of their voice that there is hardly any stress. While we are figuring out a mechanism to identify

The formative years when Vighnesh started developing his leadership skills on the playground

Leadership


and help stressed employees, we have our ongoing open and positive communication.

This is for everybody and not just those who are stressed out,” he adds.

MISSING HANDSHAKESCan he name one constraint that he regrets the pandemic has brought in in the routine?

“Yes, in the past, it has been a practice for me to have a handshake with a staff member if he or she has done a great job or deserves a pat on the shoulder. I also used to prod him or her to do better. I regret this is not possible now. Physical contact is a very important part of communication. I feel absolutely handicapped in this regard. But there are different ways to convey empathy, even in these times of social distancing,” says he.

In conclusion, IDBI Federal Life Insurance does seem to be in capable hands, which is fortunate for all its stake holders. Our heartfelt thanks to Vighnesh Shahane for sharing his leadership insights and how he is practicing them in these tough times. We also hope that after reading so many autobiographies, he too will write one for the benefit of future generations.

[email protected]

Seeking Inspiration

Where does Vighnesh Shahane get inspiration and energy to counter the ill-

effects of the pandemic and human suffering?

Not from management gurus, spiritual gurus or just reading - it is from his 2500

employees. “Yes, they are the biggest source of inspiration for me,” he avers.

Shahane is also a voracious reader and one genre of books he likes is

autobiographies. It could be that of a musician, or a politician, anyone, especially

sports persons. He elaborates: “An autobiography depicts the challenges that the

author faces and the manner in which he manages to overcome these challenges.

For me, it’s not about the person earning so much money or glamour, but rather the

hard work and adversity that went into his success. The reason that he is successful

and is where he is the result of his having overcome the challenges. Take Sachin

Tendulkar. Outwardly, he achieved great success and, on that account, he can be

said to be having a great life. But I have had long conversations with him, right from

our cricketing days until now, as he is the brand ambassador of our organization.

People don’t know about his injuries, him being out of form, pressures of public

expectations, pressures of the country’s expectations, etc. Some of his injuries

were very scary. He could actually not let down a billion people down. I only have

to worry about not letting down 2500 people.”

Shahane is also captivated by cricketer Nasser Hussain’s autobiography titled

‘Playing with Fire’. Nasser speaks about his adversities in his cricketing journey,

his being an Indian and with this background how he could become the captain

of the England team.

Jack Welch, Chairman of GE, too has inspired

Shahane as the leader at General Electric through

2 decades of extraordinary corporate prosperity

and who rose to be the most influential business

manager of his generation.

“I read 2 books a week, and at any point

of time, I am usually reading 2-3 books

simultaneously. I can’t read one novel start to

finish. I will read 50 pages of one and 70 pages

of another,” Shahane reveals his uncommon

reading strategy.

IDBI Federal has Sachin Tendulkar as its ambassador

Enriching Experience

Summary: Experience should be a critical factor in determining the product preferences rather than just a price point which is unfortunately today the most differentiating or dominating factor.

Karthi MarshanPresident and Chief Marketing OfficerKotak Mahindra Group


Insurance

Canara HSBC OBC Life Insurance intends to have a higher degree of personalization and friction-free processes in its digital journey:

The digital strategy at Canara HSBC Oriental Bank of Commerce Life Insurance has been focused on

ensuring that its sales through its website and digital partners continue to grow in the post-covid scenario. Rishi Mathur, Chief Digital & Strategy Officer, says the company has enabled its sales team and bank partners with the right tools and remote working capabilities in record time so that it is able to reach and meet the insurance requirements of its customers. “While there have been few initial challenges, we have been able to enable remote engagement processes and also using the ‘Insurance Self-Network’ platform, we have been effectively able to reach out to our customers. Almost all of our applications are submitted through digital means,” says he.

The company claims a rapid increase in volume of leads and quotes being generated on its website and through targeted digital campaigns and customers have been reaching out online to ensure they are protected during the period of the pandemic. RISING DIGITAL INVESTMENTDigital business is an important and growing component of overall business plan of the company. The technology and digital strategy are closely aligned to enable its distribution partners (mainly Canara Bank, Punjab National Bank, HSBC and PolicyBazaar) to create a seamless process for customers, and empowering its employees with right tech tools to serve partners and customers effectively. Mathur points out that the company has seen aggressive growth (over 100%) in policies sourced through digital business in the first few months of 2020-21. The company invested in digital technology to enable its teams to be able to support sales at bank locations an for seamless integration of systems with the bank partners. “We have strong plans to invest in and grow digital over the next few years. Our aspiration is to grow the business at >50% p.a. over the next few years and reach optimal scale,” says he.

BUILDING FUTUREThe company is actively investing in digital

and technology enablement initiatives across the organization and the covid situation has created an opportunity for it to accelerate the deployment of critical technologies to further enable its workforce. “Our capex and opex on technology have been growing in line with our business growth,” says Mathur, adding: “We have invested in some critical enabling technology applications such as a revamped workflow, CRM, digital builds for our website and buy journey which are long term investments in building capability for the future and be ready for an increasingly digital world.”

BRAND SEARCH UPThe company uses social platforms extensively to reach out to its customers and showcase its brand values. In 2019-20, it extended its main campaign onto digital in the form of ‘Promise Batao’, which encouraged people to share their promises of life protection with their loved ones.

Mathur maintains that in 2020, the company has so far strengthened presence on social media with topical and relevant campaigns to keep its audience engaged and the brand alive during these challenging times. “In line with our brand platform of ‘enabling people to fulfill promises’, we ran the Family Promise challenge that gave us tremendous user generated content and the

recent Father’s Day campaign coupled with a quiz tool to test what kind of protector father you are. Our overall brand search volumes have been increasing due to consistent presence in digital media and targeted placements. We intend to continue and further strengthen our online marketing and promotional efforts in 2020-21 with fresh campaigns and topical and relevant messaging for our customers,” says he.

The company has over 920,000 followers on Facebook, over 16,000 on LinkedIn and 1500 subscribers on YouTube.

ANALYTICS FOR CRMThe company has been using analytics as a key cornerstone across multiple business processes. Analytics is used to identify high propensity customers for cross-sell and up-sell campaigns, as well as using data enrichment to improve its conversion through targeted campaigns. Mathur says by using existing information and leveraging the power of analytics, the company is now able to create pre-approved and pre-qualified offers which are customized for specific segments and can reduce the requirements to be collected from prospects before it can issue them a policy. “Analytics and modelling are a powerful capability which we have leveraged effectively in managing our persistency (through modelling and predicting lapsation behavior) and in addressing fraud risk and effective assessment of customer profiles with limited information,” says he. PLANS FOR IT INITIATIVES Mathur also mentions that the company is committed to building a strong technology backbone and digital enablers in the current financial year, which will help it in business transformation and increasing digitization of the business processes. In addition, in line with the constantly changing and dynamic nature of the needs of digital customers, it intends to have much higher degree of personalization and friction-free processes in the digital journey.

[email protected]

Digitally sourced policies jump 100% during lockdown

Rishi Mathur


Sankarson Banerjee CIO, RBL Bank

Sanjay GuptaPresident & Business Head-IT,

Kotak Mahindra Bank

Gaurish LawandeDirector-Systems

Engineering, Nutanix

C O N C E P T P A R T N E R

Application MobilityCloud strategy should facilitate

BFSI organizations are now conscious of the developments in the domain of cloud and are examining the best-suited architecture:

A sizeable majority of banks have started exploring the potential of the cloud as a business strategy but only

a few seem to be actually using its abilities and capabilities to support these institutions in disrupting the marketplace. It is a well-established fact that cloud can be the foundation for a comprehensive transition that BFSI institutions need to achieve in order to be a serious player in the new age financial services business. Institutions undertaking piecemeal cloud projects may find it difficult to realize the desired results.

When banks and financial services institutions begin to rely increasingly on the cloud, there are questions that come up. Are they still using the traditional 3-tier architecture for new applications? What percentage of the new applications are developed on cloud architecture? Are they adopting hybrid cloud architecture, or there are plans to do so in the near future?

IT’LL BE COEXISTENCEPresident & Business Head – IT, Kotak Mahindra Bank, believes the traditional

architecture will co-exist for a good amount of time along with new ways of designing and tools for development. “However, the techniques for innovating front-end experience are changing at a faster pace than for the back-end systems. With the evolved landscape, the front-end has to be cloud and microservices have to be ready for a smooth and seamless experience. Serverless computing, dynamic scaling up and scaling down of computer power, multi-cloud, and hybrid cloud integration are capabilities that new age architecture has to leverage to add value to enhanced customer experience,” says he.

HYBRID CLOUDSankarson Banerjee, CIO, RBL Bank, says his bank has been moving away from traditional 3-tier architecture for a long time, even for on-premise applications. He explains: “The 3-tier was appropriate for client server applications, but modern web applications do not fall neatly into the 3-tier paradigm; many are 1-tier, 2-tier or n-tier or even not tired at all. Mesh architectures,

grid architectures, graph architectures, serverless architectures - all these have been evolving for some time for different use cases and we’ve started to adopt all these different models for different applications.”

He emphasizes that hybrid cloud is about application deployment, not really about application architecture. “It can be applied to 3-tier architecture or (say) mesh architecture equally. It means that the application can sit partly on-premise (private cloud) and partly on public cloud. This is increasingly the go-to architecture of enterprises, since pure public cloud can be very expensive while pure on-premise is very limiting. An optimal mix gives us benefits of scale and flex while managing costs,” he explains.

Gaurish Lawande, Director – Systems Engineering at Nutanix, adds another perspective. Says he: “Modern enterprises use a large data plane; data can now be stored on the public cloud, private cloud, and at the edge. Customers can now choose the platform (SaaS, PaaS or IaaS) depending on the type of workload and what best suits their needs.”


Sankarson Banerjee CIO, RBL Bank

Sanjay GuptaPresident & Business Head-IT,

Kotak Mahindra Bank

Gaurish LawandeDirector-Systems

Engineering, Nutanix

C O N C E P T P A R T N E R

Application MobilityCloud strategy should facilitate As the amount of data generated by

the enterprise continues to increase in volume, it will be important for businesses to integrate and utilize the latest technologies and innovations to extract even greater, real-time value from that data. Interoperability and enterprise-wide access to the data will be key factors for decision-makers to consider, as they look for an IT architecture that can help them remain relevant and capable of acting, reacting and anticipating any operating conditions or market condition, he adds.

COMPETENT INFRAGaurish emphasizes that applications that run the modern enterprise certainly need an infrastructure to match. “They need an infra that that is web-scale, offers various consumption models (appliance, SW or in the cloud), offers a choice between opex and capex, is scalable, and most importantly, is platform agnostic. HCI and software-defined solutions will be seen as fundamental to their continued growth and survival,” he explains.

Given the preference for cloud-based solutions among startups and fintechs and given the cautious approach banks have towards the cloud, hybrid cloud architecture can be a potential solution. What are the new and emerging applications for which the hybrid cloud is an apt model?

Sankarson Banerjee of RBL Bank says the caution of established businesses like banks towards the cloud has mostly to do with the management of change. “Banks already had heavy investments in on-premise hardware that they wanted to maximize the use of, and unlike startups had legacy applications that were not cloud-ready. As banks start transforming into cloud-native applications for their digital transformations, adoption becomes more widespread,” he points out.

He hastens to add that hybrid cloud is not a risk management strategy for going towards full cloud; but can only be a permanent strategy for cost management and data control. He then elaborates: “Cloud is about renting, so it is more expensive and has an additional profit and loss impact. Banks will always mix buy with rent, even as they move to all cloud-native applications.

The only difference will be that even the on-premise will look like the cloud and have similar features so that applications can move in and out. The most cost-effective mix is to have steady workloads on premise and peaks and surges on cloud.”

LONG-TERM DATA CONTROLHe also points out that there is the issue of data control - long term (7-10-year storage or longer) - which is sometimes best done on premise because this period may exceed the lifetime of any cloud contract. “However, this is changing as cloud providers move from being startups to long-running, stable, large businesses able to sign long-running contracts,” says he.

Sanjay Gupta of Kotak Mahindra Bank says cloud adoption for banks entails learning, which is still ongoing and has not matured to the desired levels. Security is going to be the key and hence, security of information (infosec) has to be considered and evaluated as we work towards this and as the usage increases, he adds.

He confirms hybrid cloud is one such way of ensuring data security that enables banks to play an intelligent role between service providers and customers. “Hybrid cloud can play an enabling role to intensify opportunities for new use cases and ensure trust from a data security point of view,” he adds.

Gaurish says BFSI organizations have been some of the early adopters of new technology. Nutanix, he says, is associated with some of India’s largest banks, broking firms, lending institutions and payment companies as customers, which are engaged in modernizing their infrastructure and leverage the company’s Enterprise Cloud Platform to run their mission-critical applications and workloads. “These organizations have been enthusiastic about the potential of technology to improve customer experience,” says he.

DIGITAL INNOVATION CRUCIALGaurish argues that financial companies understand the importance of digital innovation to strengthen their operations and remain competitive, with a shorter time-to-market. “For example, having the ability to launch new mobile services in a

matter of days or weeks instead of months, is a huge benefit especially in times of change. They realize that simplifying their IT helps free up resources for other critical business functions such as attending to customer requirements. Ultimately, more FSIs in India will gravitate to the simplicity, flexibility and scalability of software and cloud as new business models,” says he.

About Nutanix’s role in helping these organizations, he says be it with End-User-Computing, Application or Database Automation, Nutanix solutions have enhanced IT teams’ experience at every stage of execution. “This in turn leads to faster time-to-market and a great customer experience for the customer’s customer,” says he.

Gaurish also says as a service provider, Nutanix has witnessed rapid cloud adoption in the BFSI sector. Both public and private clouds provide benefits for BFSI organizations, he says, but to truly gain a competitive edge, they are increasingly looking to a hybrid cloud infrastructure.

“Hybrid cloud delivers the benefits and convenience of the public cloud, together with the security of a private cloud, without compromising on efficiency and cost. This allows financial companies to be more empowered to move applications across clouds with ease and gain greater control of their IT spend, while remaining confident in the security of their data,” he elaborates.

TRADITIONAL APPS MAINSTAYGaurish is of the view that traditional apps will continue to be the mainstay of BFSI organizations for some time. While the cloud is a de facto platform, BFSIs have core systems and applications that are not architected for the cloud and realistically it


will take time for this to happen,” says he, arguing: “Instead, financial companies will adopt a hybrid approach, by moving their data across a mix of public cloud, private cloud / on-premise. As that transition takes place, the BFSI industry can ensure it is ready with the infrastructure and skills to support traditional as well as cloud-native apps.”

IMPORTANCE OF SAASHe says SaaS has accelerated this trend. “SaaS often speaks directly to business, with the CIO as an enabler, and as they become richer and more common, business starts to gain a direct understanding. This helps greatly with convergence. The main SaaS movers here are GSuite/O365, Human Capital solutions, CRM solutions etc, he adds.

Another development according to him is that convergence will increase. “Everyone is becoming much more digital native,” says he.

Gaurish responds to a specific query on the challenges BFSI companies faced in scaling VPN access and related services to employees working at home during the pandemic: “It was more of a logistical challenge to most organizations, than an ‘IT challenge’. At the beginning of the lockdown, as organizations were forced to adopt remote working almost overnight, the priority was ensuring that employees had access to the resources that enabled them to do their jobs. It was also important to ensure that this access to company and customer data was secure.”

He says for many organizations the task at hand was moving not just a few, but hundreds of employees to the remote working model, and scaling their existing services to accommodate this shift meant they had to invest in even more hardware. “Luckily, organizations realized they had another, better option - moving towards cloud-based services and solutions like Nutanix, which allowed them to quickly scale up or down as per their requirement, and on demand,” he adds.

Such a situation also necessitated the need for a secure control plane. Organizations, Gaurish says, realized they required a comprehensive control plane for holistic administration across systems, storage, databases, clouds, applications and networks. “And the pandemic has forced customers to consider solutions that would make managing workloads super easy irrespective of their data plane,” he adds.

IMPROVING CXWhen it comes to customers, today’s customers are digitally savvy, well-informed. So, when a bank or a financial services institution looks at upgrading the customer journey it would need upgrade of back-end and front-end technologies to Sanjay Gupta says.

CX is the key for making customers adopt products and this is something which has to be a continuously evolving phenomenon based on how customer behavior changes from time to time, he says. Customer behavior has to be understood in terms of segmentation, usage patterns,

personalization, transaction cycle time, device friendly UX, incentivisation etc and only analysis of these parameters will result in improving the overall CX.

He adds: “The separation of user interface, APIs and microservices, and light weight front-end pages are technologies that can be deployed to create a good CX. Finally, CX is about engaging through autonomous methods, using AI to get insights and personalise transactions and transition customer journeys into life journeys to simplify day-to-day needs.”

Sankarson Banerjee says there are 2 parts to the issue. He explains: “Part 1: The key CX parameters we look at are usage and adoption. Are people using the features we are launching, and is it a permanent adoption sustained over time? Many digital features seem great on paper but turn out to be difficult for people to understand or unattractive to adopt on a sustained basis. Users tend to fall out of these back into traditional channels. Now that covid has closed the traditional people-centric channels, it is more important than ever to understand why people use (or not use) something, and what helps them adopt it over the long term.”

“Part 2: Front-to-back, we’ve been shifting from traditional monolithic stacks to micro-frameworks and lightweight back ends. The reasons are many - monolithic stacks have long learning curves, large deployment cycles and are often limiting when it comes to paradigm evolution. Micro-frameworks can be mixed and matched, and because they tend to be small and specialized are often quick to learn. They are also more agile when it comes to shortened deployment cycles. As paradigms evolve, micro-frameworks are easy to discontinue in favour of newer frameworks in newer paradigms,” he concludes.

It is common knowledge that customer experience is often the deciding factor when it comes to banking. Today’s customers want personalized interactions, simplified banking and access to their accounts through technology. Banks that can innovate and meet customers’ needs have a huge competitive advantage.

[email protected]

How does top management of financial institutions view cloud and hybrid cloud in terms of expected benefits?

Sanjay Gupta lists managing costs, risks, infosec, performance, dynamic scalability, integration, maintainability, use of AI, and skills to sustain as the areas that have to be addressed as the journey towards cloud takes shape. Cloud usage, he affirms, is an increasing trend and the speed of adoption is expected to increase as we keep advancing these parameters. The alignment of stakeholders is happening naturally as usage and adoption increases, he adds.

Sankarson Banerjee maintains that the convergence among stakeholders has been increasing in pace, especially as the knowledge of operational risks and procedures about cloud becomes more widespread. Earlier, he says, it was up to the CIO/CTO to articulate the benefits, but now the businesses are able to understand and evaluate the benefits directly.


Insurance

The strategy has paid rich dividends and helped Magma HDI General Insurance to develop digital muscle:

When Magma HDI General Insutance Co started process of formulating its digital strategy

about 5 years ago, one of the first steps it took was doing an impact assessment across the value chain. And V Ramesh, the company’s Head – IT, says what he did first was to identify key areas that would make the largest impact on the business and then actively manage the transformation in these areas. “Those bets have paid rich dividends and helped us develop digital muscle,” says he, elaborating: “Considering that a big chunk of our portfolio is motor insurance and is sourced through partners, we had made strategic investments in digitizing processes that would ease doing of business with us. For customers, policy and claims servicing are the areas that we have focused on.”

FRONT, BACK END PARTNERSMagma HDI General Insurance has a robust agent portal, which is actively used by all its partners. It has a fairly easy front end, and a very robust back end of underwriting rule engines, which ensures sourcing of quality business. Its key operating word for digital strategy for partners is ‘enablement’. Says Ramesh: “In these lockdown months, more than 2700 partners across India have issued policies from their homes, making payments digitally through wallets, cards, links, UPI and bank transfers. The rule engine is so configurable that our underwriters can, sitting ad their homes, permit or deny issuing any type of policies 1000 miles away. We take pride in being one of the fastest in executing tech integration with partner systems thus reducing our go-to-market time. Our digitally supported commission payment process has enabled our partners to choose commission pay outs based on their convenience: daily, weekly, fortnightly or monthly. 100% of our distribution partners are digitally enabled and use our platforms and apps on their digital devices such as phones and phablets.”

CLAIM, HEALTH APPSFor its customers, the company has made the claims process completely contactless. The app caters to claims services like uploading of claims documents and helping in claims tracking and management. Ramesh says the claims app - I-survey - shifts the control to the hands of the customers. The company is also administering claims on soft copies during the lockdown period and one can track claims on the app, intimate claims on the go, download e-card and download claim forms / policy wordings, etc, on the go.

The company has a lso made enhancements to its health app to provide customers with counselling on call to deal with the stress in the times of corona. It is also providing free consultations via video calls with leading specialists.

Explains Ramesh: “Our health app helps in delivering a superior experience and offers a host of benefits. We provide free consultations via video calls in some 15-20 specialties. Customers can now order

medication online via a pharmacy and avail of up to 23% discounts on medicines ordered via the app and receive medication on home delivery basis within 24-48 hours. Keeping health of the customers in mind, we also provide nutritionist on call service free of cost and the nutritionists issue a customized diet plan post an extensive on call lifestyle and dietary mapping of callers.”

TECH PARTNERS, IT BUDGET The company works with some of the best in the IT industry including TCS, Wipro, SAS and STT, Newgen, TCPL, etc. It has earmarked, a little less half of its IT budget for digital initiatives in FY 2021 and will grow in line with its business aspirations, says Ramesh.

The company has been keenly watching for scope for partnerships/investments/ supporting/tie-ups with fintechs and startups if there is a strategic fit. Says Ramesh: “We are associated with web aggregators for policy sourcing and digital payment startups and companies for payment collection. We also actively engage with startups for content development and delivery, digital services and technology support.”

ONLINE PRESENCEMagma HDI General Insurance has just begun its social media journey and is present on Facebook, LinkedIn and YouTube. It has revamped its company website www.magmahdi.com. Claims Ramesh: “It has a refreshing design, solid technology and highly relevant content. Since its launch, we have invested in optimizing its usefulness and making it more user friendly.”

TARGETS, PLANS FOR ITRamesh adds that the company is now exploring the dynamics of recovery and making strategic decisions in the areas of remote working, service management, RPA based transaction processing and training & re-skilling, that he expects will take it to a renewed future state.

[email protected]

App shifts control into hands of customers

V Ramesh explains how Magma HDI has been one of the fastest in executing tech integration with partner systems, thus reducing go-to-market time

Insurance


Anjali Malhotra, Chief Customer, Marketing, Digital & IT Officer at Aviva, discusses PR strategies in the context of digitization and lockdown:

Ravi Lalwani: How has PR agency role

changed in the last 12 months at Aviva?

Anjali Malhotra: PR communication has always been our top priority, and our agency partner, Avian WE, plays a key role to drive awareness, brand resonance and build trust among the customers. Over the last few months, we worked together to weave the story of our purpose in our PR strategy and adopted multiple channels to engage with our ecosystem. We closely monitor trends in the external environment and ensure insight-driven reporting, and during the recent constantly evolving situation the team has been collaborating with the product, HR and finance teams regularly to understand how the business is evolving and we have accordingly fine-tuned the PR strategy. This has helped us deliver our customer centric narrative and new developments to our customers at the right time.

We have been working continually to build strong corporate credibility for our brand along with positioning Aviva as a good corporate citizen. The consolidated efforts have strengthened our thought leadership and our position as India’s most trusted private life insurance company in the last 2 years.

Can you share recent PR initiatives that

Aviva has taken up?

We had launched our new brand campaign #HelloLife. Hello Aviva and the new brand purpose ‘With you today, for a better tomorrow’ in January 2020. The earlier brand purpose was ‘Defy uncertainty’. The campaign encourages

people to welcome life with all its surprises, detours, challenges, and reassures customers that the company stands with them. Our PR strategy was to keep the conversation positive and forward thinking, and yet retain some seriousness associated with financial goal planning. Leveraging this route with the right media mix helped us create better brand awareness.

During this time of uncertainty, every organization is facing unique challenges and our PR team took up the challenge to convert this crisis into an opportunity. The team showcased the might and the impact of our digital-first initiatives, with a special emphasis on how we used these assets to

enable business continuity during this time, resulting in an extremely positive impact on our customers, employees, and other stakeholders.

Creating customized storylines for each spokesperson based on their expertise and audience has always been our primary focus. We adopted various new formats like videos, social media posts, etc, to bring the leader’s voice centre stage in key publications, with a greater focus on online publications. We brought focus on the leaders’ first-hand experience and responses during the rapidly evolving situation and the innovative processes being put into motion to tackle the challenges brought up by the covid crisis.

How are PR activities helping Aviva during

lockdown? Please share some examples.

The sudden lockdown presented unprecedented challenges across sectors and there is still a strong sense of scepticism in the environment. The PR industry is aiding many brands to sail over the tide, and we strategized with our PR team to remould our business narrative to align with a covid impacted world. Our campaign addressed various challenges, conveyed to our stakeholders that our business continuity plans and strategies are in place, resulting in no negative impact to them. During the lockdown we also highlighted the commitment to our purpose to cut through the clutter of uncertainty and to showcase how the company continues to engage with the stakeholders.

The PR team proactively secured opportunities for us to highlight Aviva’s

PR for Corporate Credibility & Positioning

Anjali Malhotra confirms that virtual experiences will be the new normal


digital and customer first approach. We have been able to strengthen our thought leadership for our spokespeople in their expert domains. PR activities helped us in creating good quality conversations for brand recall and brand positioning throughout this tough phase to keep the business running digitally. We consistently and empathetically communicated our larger narrative of enabling our customers in their business continuity at multiple levels. We are also participating in the industry articles and contributing authored articles in the various esteemed publications of India.

Please share some of your activities on

evolving technology and digitization in the

PR activities.

Integration of data, technology and the force of digital to create virtual experiences is going to be the norm. Going ahead, conducting important events such as product launches, introducing key communication strategies and interacting with consumers is all going to be in real-time. That is why communicating through the right channels and utilizing digital platforms has become important.

We are already using these tools and technologies to make ourselves heard in this new environment. We are focused on owned and earned strategies and we are engaging with our stakeholders on our social media platforms. Be it our official LinkedIn page or the Instagram story to even signatures where our social handles can be leveraged, detailing is the new discovery. Our agency has given us a

unique edge to think multi-media, multi-platform to build a strong narrative.

What changes do you expect in the PR

agencies’ role in the coming times?

We all know that the PR and media industry go hand in hand. Keeping a connection with the masses is productive and essential for any business. In the coming days, relevant, original, and responsible content that drives appropriate action will

be critical. A good and planned strategy always creates an image of positivity and trust around the brand. Agencies will continue to deliver stories uniquely, and consumer centric and purpose led stories will take the centre stage. Consumers will seek more accountability from influencers and regional language social media platforms will be an important tool for mass outreach.

Integrated channels of communication using marketing mix will create a longer-lasting brand recall among the public and influence the buying decision-making. Media-brand relationships will be redefined with multi-channel engagement such as earned, paid, barter or collaborated campaigns. Further, brands need to focus on deeper collaboration between marketing, PR, digital, policy, media buying, creative, and data analytics teams to reach new heights. The importance of curating the right content and communication strategy in the pandemic cannot be overstated.

[email protected]

Social Media Strategy


Social media channels have been aggressively used by the BFSI companies during the covid lockdown. Banking Frontiers interviewed 3 marketing heads on the use of platforms like Facebook, Instagram and TikTok for reach and customer engagement activities. The study is divided in to 3 different articles:

Facebook is a good platform to reach many demographics & age groups:

Digital platforms have always been a major part of Aegon Life Insurance Co’s marketing and advertising

strategy. The company is using Facebook for reaching out to its customers and disseminating messages. It believes that Facebook is the most used social media platform in the world, with over 2 billion people using it.

Satishwar Balakrishnan, CFO and Principal Officer, Aegon Life Insurance, says Facebook is not bound by a certain set of demographics; people of most age groups use this social media platform for their various communication and information needs.

He says the huge userbase of Facebook makes it an ideal social media platform

for the company to communicate with its customers and market its products. S “We have leveraged Facebook to reach out to our customers and engage with them on subjects that are relevant and useful. We have also reached out to potential customers with product related messaging that they may be of interest to them,” he explains.

Users, he says from across the country have shown interest in the communication that the company puts out and since the internet penetration is high in urban areas,

there are more users from metros and mini metros.

EFFECTIVE SELLINGAll the information about the company’s products is available on Facebook as also other major social media platforms. Satishwar Balakarishnan says the company’s term insurance product has generated maximum interest on digital platforms but Facebook being the most used social media platform, it is ideal to disseminate the messages about the company’s products.”

IN COVID TIMESAegon Life Insurance has dedicated a significant budget for promoting its brand online. Besides Facebook, its marketing budgets are also allocated to platforms such as Google, Instagram, etc. A major part of the spending even before the pandemic has been concentrated on digital platforms, hence, there were no major changes in the marketing communication strategy during the covid times.

Satishwar Balakrishnan says: “During these times of crisis, we realised that it is our responsibility to educate people about this pandemic. Recently, we have launched an industry-first hospitalization + death cover for covid on the Flipkart app; majority of our Facebook campaigns were concentrated on this announcement. Apart from this, many of our campaigns on

Facebook, Instagram, TikTok - How BFSI chooses among them

Aegon uses Facebook for announcements & education

Satishwar Balakrishnan advocates Facebook to reach people of most age groups


Rise in campaign views on Instagram after covid:

Shefali Khalsa chooses Instagram for its high engagement rate

SBIGI health & travel covers are popular on Instagram

Facebook marketing campaigns• #savethesaviour,whichisanodetothedoctors,astheygivetheir100%tothe

society, especially during the covid phase. They have dedicated themselves to the service of the patients and the society. However, despite their hard work and dedication, cases of violence against them increase each year.

• Mother’sDaycampaign,whereAegonLifeurgedtheyoungsterstobethoughtfuloftheirmothers’needsandwellbeingandberesponsiblechildren.

• Acampaigntoeducatepeopleonhowtobesafeandmaintainhygiene.

• OnNoTobaccoDay,thecompanyurgedpeopletoquitsmokingandeducatedthem on the benefits of such an action and encouraged them to lead a healthy life.

SBI General Insurance has been effectively using Instagram to engage with its customers treating it as an

equally important media platform. The company has started using the platform in 2018 and has been evolving its strategies. It believes that Instagram is the next new thing after Facebook, and mostly there is a transition and duplication between Facebook and Instagram.

Shefali Khalsa, Head – Brand & Corporate Communications at SBI General Insurance, says the followers on Instagram are comparatively lower than on Facebook, but the effectiveness of platforms is now measured via engagement ratio. “So far, we have seen a particularly good number of engagement rate on Instagram ranging from 20-60%,” says she.

CUSTOMER SEGMENTS, CAMPAIGNSSBI General Insurance is targeting customers in the age group of 18-35 years through Instagram. There is high male presence on this platform and the company receives majority of customer traction from metros and tier 1 cities. Shefali Khalsa believes that all social media platforms have their own DNA (tonality of the platform) and Instagram is more pictorial along with content. The company

has taken up the route of usually posting creatives that interests netizens, and stories as user generated content. Live videos have also seen good traction. “The best thing of all social media platforms is that there is a constant improvement/addition of features. Even Instagram has evolved from only creatives to 15- second videos, to full 60-second videos, and now live videos too!

This allows the brands to take up newer campaigns,” says she.

BUDGET FOR INSTAGRAM Social Media is an important digital asset for brand, and the company is doing its best of the possible campaigns on Facebook, Instagram, Twitter and LinkedIn, using official brand handles. “Overall, we give about 25-30% weightage for Instagram in the kitty of all social media campaigns,” says Shefali Khalsa.

RISE IN VIEWSIn the last 2 months, TV has seen a higher viewership because people have been largely indoors because of the lockdown. Shefali Khalsa says the company has gone slow on its marketing pitch/campaigns but continued the topical/BAU campaigns on social media. It did see a rise in the number of followers in the last month by 21%, purely because of campaigns. Also, some topical posts as well as a product launch have seen an engagement rate of about 50-60%, says she.

MARKETING PRODUCTS Insurance being a complex subject, usually sharp pitches in regular campaigns is avoided or rather put across very subtly. Says Shefali Khalsa: “We try to promote the product categories of health, motor,

Facebook during covid were educational and a few were activity campaigns to keep

people occupied and entertained during the lockdown.” [email protected]

Social Media Strategy


The new age bank is actively using TikTok platform to drive customer engagement: (The interaction took place before the government banned TikTok.)

Fino targets `20-70K income range customers on TikTok

Fino Payments Bank had started using TikTok for marketing in early March 2020. As per the bank, TikTok core

audience age group is 18-25-years. While the bank is focussing on the age group of 25-35 years, who have incomes in the range of `20-70K per month. The bank is also using TikTok’s rural focused platform Vego.

Anand Bhatia, Chief Marketing Officer at the bank, describes a story behind the adoption of TikTok platform for marketing: “During our field visits, we saw some of the customers and merchants talking excitedly about TikTok. They were sharing content, and some were creating it too! We then thought this would be a great tool to engage with an audience and build a connect with them. Personally, I am optimistic that such a platform is a great way to tell my consumers ‘how to use’ my bank for things such as a micro ATM, banking point, BPCL outlet, etc.”

REGIONS, COMMUNICATION STRATEGY TikTok is more of a top 15-20 city platform and Vego is more rural. The bank is getting

good response from states like UP, Bihar, Rajasthan and MP on TikTok. Says Anand Bhatia: “It’s still early days for us. We are right now running our OTT communications

and a few user generated videos on TikTok. The treatment of content must change for extracting the best from the platform. It must have the rough edges of user generated content. We are exploring ways to work with influencers who can help us drive traction. I can foresee a 10% marketing budget allocation to the platform soon.”

IDEAL PLATFORM FOR ‘HOW TO USE’ The bank used to have 150-200 conversations over social media platforms like Facebook, Twitter, YouTube, LinkedIn, etc, daily, but post 27 March it is averaging 500 conversations a day.

Anand Bhatia also talks about the effective use of the TikTok platform: “This is an excellent platform to present ‘how to use’ a product or how a product is woven into daily life. Hence, things like applying for a loan, availing a debit card offer, going to a BPCL petrol pump and withdrawing cash from a Fino micro-ATM, even opening a bank account can be communicated well.”

[email protected]

Anand Bhatia believes that TikTok is an ideal platform to educate customers

travel and home insurance, in a surrogate fashion, weaving in user friendly content

/ campaign. Considering the DNA of the platform, health and travel categories are

working relatively well.” [email protected]


Software Development

Byju Joseph, CTO, Future Generali Life Insurance, discusses key issues associated with inhouse software development:

Ravi Lalwani: What are the commonly

used programming and productivity

tools used in Future Generali Life

Insurance?

Byju Joseph: We use Visual Studio and open tools to create and deploy modern web applications. Development for the web is by using ASP.NET, Node.js, Python, JavaScript, Angular, jQuery, Bootstrap, Azure, Vision AI, Android Studio, Flutter, VS Code, Ionic, SQLite Manager, Notepad ++, Git, Java SDK, Android SDK, JetBrains, Sourcetree, etc.

What new programming tools and

programming productivity tools are you

looking to adopt to empower digital

transformation?

Migration to Visual Studio Code enables us deep remote development and helps connecting to a container running a different OS (build, debug, test, and deploy software containers). In addition, we will be migrating from .NET Framework to .NET Core. Moving code to .NET 5 is not only about supporting future Windows releases, we see it as an opportunity to deliver it to many more platforms and users.

How do you prioritize between better

technology vs talent availability vs cost

vs other factors?

The way we do business is changing at a breakneck pace. We are spending a large chunk of our budget on adopting new technologies. It is given that technology is going to change just about everything. The thing is, when technology becomes complex, talent becomes even more important to the business because we need skilled employees to successfully use the technology that we have invested in. These days, all the best talent wants to be part of leading-edge organizations that are innovative and efficient. So, if organizations do not invest in technology, existing talent won’t stay, and new talent won’t be attracted. The key lies

in balancing talent and technology at the right cost. We look for people with an aptitude to learn new technologies and are able to apply them in different environments and who have the skills to integrate new strategies and resources.

How do tools from smaller companies

compare with those from giants like

Microsoft, Oracle, etc?

Many fascinating smaller companies that have come from nowhere over the last few years are building best tools and seemingly doing good in otherwise dominant ecosystems. And it has been done largely by creating a new market, rather than competing with giants. There are opportunities to be both found and created, and it is still possible for the right combination of skill, timing and smartness to carve out a niche where the big players will not squash small.

Are the tool costs rising, falling, or steady?

The required sophistication of digital presence continues to accelerate. Unfortunately, the skills required to develop and maintain even a basic app, are in short supply. In my experience,

the modern development tools are available at reasonable prices and steady for quite some time. The rising cost of programming talent is the key concern while we still face right skill shortage.

From your perspective, how do open

source tools compare with proprietary

ones today?

Most important open source engineering software is essentially free, continually evolving, less prone to bugs and no locking into using a particular vendor. Open participation enables co-creation and faster problem-solving, will get quick access to the support offered by technical community. Free exchange of ideas creates an environment where people can learn from each other and contribute to the creation of new ideas. In open source communities, the best ideas win, and everyone has access to the same information. People with the same principles bring together diverse ideas and share their work, facilitating rapid prototyping.

Despite the many benefits, there are many reasons why open source software adoption is widespread as proprietary alternatives. Since creating a commercial software that would generate revenue is not a requirement here, the needs of the end user tend to be neglected in favour of developers’ preferences. As a result, there are several disadvantages of using purely open source software.

The software interface is much less user-friendly, and often difficult to use unless you have extensive coding experience. When you run into problems, you have only the community of fellow users to rely on for support, which they provide on a voluntary basis. While one benefit of an open system is that many people are identifying and fixing the bugs; however, that also means that it will be vulnerable to users with malicious intentions.

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Balancing talent & technology at right cost

Byju Joseph

Cover Story


A product revolution could be brewing in the insurance sector:

Insurance has always been a tough product to manufacture (underwrite) and a tough product to sell. But there

is a glimmer of change on the horizon, in the form of parametric insurance. How is it different? Fundamentally, it is a contract that insures a policyholder against a specific event, and if the event happens a set amount is paid based on the magnitude of the event. This is unlike traditional insurance which pays against magnitude of actual loss. The amount payable, the parameter and a third party responsible for verifying that the parameter was triggered – all these are in the parametric policy. The third party will usually be a government agency. For the insured, payments are quicker - usually made in a matter of days or weeks after the specified event occurs,

as against months or years in the case of traditional insurance policy.

Parametric insurance solutions have been available since the late 1990s, but have become popular in corporate insurance recently. Newer products are being developed around the world and are often described as ‘elegant solution for risk-transfer concerns’. Parametric insurance is being introduced in Africa and south-east Asia, where extreme weather is a common problem. Sri Lanka has a unique parametric product - offered jointly by charity Oxfam and insurance company Sanasa Insurance - for possible losses due to natural disaster in cultivations of rice, pepper and cinnamon, which are the country’s major items of agricultural exports. The product has inherent processes based on distributed ledger technology to cover risks

and uses weather stations to automatically trigger claims.

“Parametric insurance in India is a fairly new concept and will slowly gain momentum in our country,” says Tapan Singhel, MD & CEO at Bajaj Allianz General Insurance. He points out that as of now, it is majorly being used by the government under the weather-based crop insurance scheme (WBCIS) with index, to assess the damage to crops.

POTENTIAL IN INDIA“I believe that parametric insurance has a huge potential in our country,” avers Singhel, adding: “We see risks becoming increasingly diverse and unpredictable. With renewable energy generation gaining momentum, we will see parametric insurance for renewable energy considering its unpredictable power

Cover Story

THINK SIMPLE THINK DIFFERENT


sources and the corresponding financial risks.” Natural calamities undoubtedly set back an individual by years in his/her life, with the kind of damage they can do to assets - and parametric insurance for such events is the need of the hour to ensure that there is stability in the society, and consequently in the economy.

He is of the view that parametric insurance with triggers like magnitude of the earthquake, wind speed of a tropical cyclone or water levels for flood/rainfall intensity will go a long way in bridging the painful gap between economic losses and insured losses.

Additionally, parametric products for banks to cover NPAs due to nat-cat events and also for risks which are hard to insure like transmission and distribution lines, land value, etc, can be explored in the future.

CROP INSURANCEM. S. Sreedhar, Managing Director at Royal Sundaram General Insurance, says weather-based crop insurance is the most popular insurance product in India currently under parametric insurance. “There have been various agriculture-related parametric covers in India since 2003, but there has not been much uptake for these covers due to high risk and cost involved. There is tremendous scope for such products,

particularly, in disaster risk financing for the state governments,” he adds.

DISASTER RISKHe points out that recently the Nagaland State Disaster Management Authority had signed an MOU with Tata AIG (backed up by Swiss Re for reinsurance support) to provide insurance protection for this year’s monsoon season – that is parametric insurance for excess rainfall events leading to severe flooding. “While the above cover is only for monsoon, a similar concept can be applied to other natural catastrophes with an agreed trigger that does not indemnify the pure loss but ex-ante agrees to make a payment upon the occurrence of a triggering event. With the increase in the frequency of catastrophic events in India and the disparity between economic and insured losses, these covers will provide the necessary relief to central and state governments. These covers are common globally but are generally not cheap which would explain the low uptake in India,” says Sreedhar.

Sanjay Datta, Chief - Underwritings, Claims and Reinsurance at ICICI Lombard General Insurance, explains that parametric products are of various types and in India weather-based insurance WBCIS, is popular and it works on various parameters like temperature, rainfall, humidity, etc. It helps in better understanding of the products and it becomes easier to name the risk like earthquake insurance,” says he.

Parametric insurance looks like the apt response to risks arising from frequent weather disturbances.

NEW OPPORTUNITIESRavichandran N, CTO at Kotak General Insurance, too maintains that the most popular form of parametric insurance product in India is weather insurance for farmers, which caters to trigger-based cover for farm activities. “In near future, I foresee growth prospect in parametric insurance in the form of ‘Solar Shortfall Insurance’ and livelihood protection to protect economically weaker sections against natural disasters. One can also expect peril specific parametric cover for commercial as well as retail households to complement conventional

insurance protection,” he adds, indicating the huge scope.

Another use of parametric insurance is travel industry - to cover flight delays and cancelation, avers Dr Shreeraj Deshpande, Chief Operating Officer at Future Generali India Insurance. He explains how information regarding delays and cancellations is received by the insurance companies directly from the airport authorities as well as apps that provide information. “So, if a flight gets delayed for more than 3 hours, then that information directly goes to insurance companies’ internal system and claims get paid to the insured passengers. This is the most common thing that insurance companies have adopted, these days,” says he. Such products are easy to sell as well.

Deshpande also says crop and weather index-based insurance are the 2 types of agriculture insurance. “For example, in weather index-based insurance, if 60% of the rainfall has not happened, then damages are paid to the people staying in that area and covered by insurance. The percentages can be defined in the policy. Insurance companies are dependent on the weather bureau for the information,” he explains.

He suggests that India must have similar parametric products for earthquakes. For

Tapan Singhel points out that parametric insurance is the hedge of uninsurable risks, which may not be possible to cover under traditional products

M S Sreedhar highlights that parametric insurance covers are common globally but are generally not cheap, which explains the low uptake in India

Cover Story


example, if an earthquake crosses the Richter scale 6, even irrespective of whether there are damages or not, insurance amount gets paid to the insurer based on the indicators.

BROAD SPECTRUMAdarsh Agarwal, Appointed Actuary at Digit Insurance, too points to weather-based crop insurance as a parametric insurance product in India. “Other than this, there are no significant parametric insurance products, but some insurance companies are offering insurance against loss of revenue for windmills and solar power plants resulting from low wind/sun,” he adds.

Bala j i Cuddapah, Pres ident - Commercial Lines SBU at Liberty General Insurance, says WBCIS is intended to mitigate the hardship of the insured farmers against the likelihood of financial loss on account of anticipated crop loss resulting from adverse weather conditions relating to rainfall, temperature, wind, humidity, etc. He sees immense potential for such insurances for covering cover contingencies such as flight delay and cancellations in travel insurance, wellness incentives under health insurance, etc.

“Parametric covers can be a good risk mitigating tool in the management of catastrophic perils like flood, earthquake,

etc, and help in bridging the protection gap,” he adds.

Nirmal Bhattacharya, Chief Underwriter at Universal Sompo General Insurance, too refers to the insurance cover against floods offered in Nagaland and believes such covers may be devised for other catastrophes like earthquake, forest fire, cyclone, etc.

Tapan Singhel of Bajaj Allianz General Insurance says a comparison between traditional insurance products and parametric insurance is not possible as under parametric insurance, the pay-out is as per the exceedance of the parameter threshold, while in the case of traditional insurance it depends on the occurrence of insured loss. Parametric insurance, he points out, is considered to be the hedge of uninsurable risks, which may not be possible to cover under traditional products.

For the customer, 2 options are better than 1.

PARAMETRIC HOME INSURANCE“One of the key things about this insurance is that it enables a quick pay-out to the insured. I have been proposing for a long time in multiple forums that the government can introduce an affordable parametric home insurance scheme in association with insurance companies that can cover losses to property during nat-cat events. This has become even more important considering the increase in frequency of such events. An index-based scheme can be adopted to compensate for the damage caused due to catastrophic event, as per the pre-defined triggers for such events. The premium for the same can be collected along with the property tax and once the claim is triggered, the amount can be directly transferred to beneficiary’s Jan Dhan account linked to the home insurance policy. Thus, it would help people lead a life of dignity and recuperate faster from losses,” he elaborates.

Ravichandran of Kotak General Insurance explains parametric products are easier to design and administer and claim settlement is faster as the payout is based on an index and removes the need for loss adjustment. Besides, it brings in transparency to both the insurer and insured. Transparency is a powerful factor that enables trust, which is a pillar for doing business.

“However, on the other side, the payment may differ from the actual loss. Also, it requires an objective and accurate historical data to structure a solution. Nevertheless, it is an effective tool which addresses the shortcomings of traditional insurance to otherwise uninsurable risks,” he explains.

Sreedhar of Royal Sundaram General Insurance explains that the biggest pro from the policy-holder’s perspective is that the loss settlement happens quickly as the trigger criteria is straightforward, once established. So, the relief will be provided quickly as compared to traditional insurance where the loss settlement happens post-survey and assessment, which is often time consuming. “The con would be that the actual loss can be different from the loss payout condition agreed to resulting in either short (underinsurance) or excess payout benefit to policyholder compared against the actual loss,” he explains.

COMPLEMENTS TRADITIONAL INSURANCEShriraj Deshpande of Future Generali emphasizes that parametric insurance products may not be able to replace regular insurance products. “It can be used for travel insurance by way of travel delay product, but

Sanjay Datta explains weather-based insurance WBCIS is popular in India and it works on various parameters like temperature, rainfall, humidity, etc

Ravichandran N points out that parametric products are easier to design and administer and claim settlement is faster as the payout is based on an index and removes the need for loss adjustment


nobody purchases the travel delay product. Everyone opts for a comprehensive travel insurance product,” he points out.

Parametric insurance, he states further, is possible in the agriculture insurance segment, where insurance can be based on the crop cutting experiment and on the individual approach. But individual approach is lesser dependant on weather conditions. “Agriculture insurance is 90% crop and 10% weather based in India,” he adds.

Sanjay Datta of ICICI Lombard General Insurance reminds that regular insurance products are indemnity products and based on investment. On the other hand, says he, parametric products are structured, fixed pay-outs happening when there is a trigger. These insurance products are able to attend to events which are rare but impacts many people. This contrast is definitely meaningful.

Liberty General’s Balaji Cuddapah also says regular insurance policies are triggered by actual loss of or damage to a physical asset and includes deductibles, exclusions and conditions. “However, parametric insurances rely on set parameters / indices, a pay-out grid and defined compensation / coverage. Some of the advantages of parametric insurances are quick / instant compensation,

wider coverage, lesser number of restrictive conditions and exclusions, guaranteed pay out when pre-defined parameters are met i.e. insured event exceeding parametric threshold. Insurance payments are made simpler without the burden of proving a claim. However, parametric insurance carries a higher basis risk,” he posits.

Nirmal Bhattacharya of Universal Sompo points to a distinct difference: “For the traditional insurance products, the policy holders pay premium and they are covered if an incident or event happens. But payments are generally made after an investigation or assessment has been carried out. This is underpinned by the idea that the cover will put the person to the place they were immediately before the loss. However, with parametric insurance, there is no assessment and the agreed payout occurs once the agreed metric is reached, which could be based on everything from wind speed or temperature to rainfall.” Quite a difference indeed.

Adarsh Agarwal of Digit Insurance argues that in parametric insurance, claims administration becomes easier, since no question on admissibility/claim amount assessment is required. However, like how a customer might get a claim settlement without suffering a loss, a customer may suffer a loss and yet not get the claim – opening the doors to confusion and resentment. “Careful examination of correlation of insurance and insured loss is very important for product designing,” he avers.

UNDERWRITING SKILLSUnderwriting traditional insurance is a challenge….what about parametric insurance?

Adarsh says that unlike traditional products, underwriting skills require knowledge of weather and geology in the case of parametric insurance. Someone should be able to predict and interpret weather models. “Underwriting and designing such products are difficult. Establishing correlation in insured loss and claim incidence occurrence is especially important. Pricing is another challenge,” he says, adding Digit Insurance is not thinking of launching such products as of now. Some homework is definitely needed.

Singhel explains further: “Underwriting of parametric insurance products is very different as it doesn’t have much of historical loss experience. Hence, it’s difficult to arrive at burn cost (which is normally used in regular insurance products). For parametric underwriting, stochastic models are widely used to calculate the damage factors and fix pay-outs. For instance, in case of flooding, parametric trigger is based on the accumulated rainfall (amount of millimetres within a specific time-period, eg 10 days) for each pre-defined hazard zone. Depending on the hazard zone, severe flooding can be triggered by different amounts of rainfall occurring within an aggregated number of days. Hence the pre-defined hazard zones are clustered into different categories (e.g. low, medium and high hazard zones). Stochastic models help in determining the return periods, which translates to damage factors and aids in arriving at a price for the specific cover.”

Sreedhar pitches another dimension. He says traditional insurance includes deductibles, exclusions and conditions that balance insurer and insured interests. Parametric insurance, on the other hand, determines risk using pre-defined parameters (eg, selected index), a pay-out matrix and the defined limit. Both types of

Shreeraj Deshpande observes that parameters for parametric insurance products come under third party, so neither the insured nor the insurance company has control over this parameter

Adarsh Agarwal emphasizes that unlike traditional products, underwriting skills in parametric insurance require knowledge of weather and geology in the case of parametric

Cover Story


cover do have a basic risk. “However, the basic risk tends to

be greater for parametric solutions as it requires the clients to have an in-depth understanding of their exposure to the peril in question,” says he, adding: “Hence, if the trigger design is not well aligned with the underlying risk exposure, the insured will suffer a loss net of the insurance payment. The underwriting for parametric insurance requires an in-depth understanding of the exposure to the peril in question and a well-aligned trigger design, in a way it involves more sophisticated technique and modelling.”

There is more. Underwriting in parametric insurance is done at the portfolio level, points out Ravichandran, based on objective historical data and hence individual risk is not assessed. Whereas in regular insurance products, underwriting is done on the quality of the risk on a case to case basis.

DATA DRIVEN PRODUCTSAbundance of data is a big positive for parametric insurance. Sanjay Datta points out that parametric insurance products are data driven and hence the availability of long-term data, accuracy, period, and

history of the data are especially important. Since this is the case, says he, the source of data based on which claims information is to be given should be independent, and data should not be tampered.

Shreeraj Deshpande opines that parametric insurance products are difficult when you design them, but the underwriting of these products is easy. “If you give a product for a particular location with fixed parameters and if it achieves that parameters, insurance companies provide claims for it,” he explains simply.

Balaji Cuddapah also feels parametric insurance requires superior product design capabilities, appreciation of climate risks, data generation and modelling skillset, leveraging of AI and newer technologies. Nirmal Bhattacharya adds that while regular insurance products can be underwritten at pre-determined rates computed on the basis of actuarial analysis, parametric underwriting is more dynamic based on actual data for the specified insured contingency and also for deciding trigger point and compensation payable. Big data and analytics are sure enablers for this.

PARAMETRIC VERSIONS? There are regular insurance products popular in the market. But it may not be easy or feasible to create parametric version of such products. Sreedhar concurs saying products which are guided by principle of indemnity like liability would generally not be feasible as parametric insurance products would ideally be a benefit product.

Singhel says parametric insurance has many advantages, but it is primarily used for uninsurable risks. “For traditional products,” he explains, “the indemnity matches the loss on occurrence of insured loss. Hence, the traditional products such as commercial insurance (industries / home / marine) would always be required. Parametric insurance helps in bridging the gap. Lack of sunlight which affects the production of solar plant is not covered under traditional insurance, but it can be covered through parametric insurance.”

Ravichandran posits that parametric insurance is a complement to traditional insurance products and not a substitute. It is useful in a pure economic loss and

exposure to natural catastrophic events, he adds.

Shreeraj Deshpande is emphatic that parametric insurance products cannot become stand-alone products; they can complement and supplement regular insurance products. There are ways in which insurance companies can introduce parametric insurance products, which may not indemnify the loss they suffer, but it should supplement the actual loss. The gaps are covered by the parametric insurance products. It is still in the development stage, but requirement of this product will increase in the coming years. “We should look for simpler products that are digitally available,” he avers, which is quite in line with the new trend.

Adarsh Agarwal maintains that wind/solar power industry can use parametric insurance products. Large manufacturing companies can also use it for business interruption. Companies, where revenue is dependent on weather can use it – such as commodity warehouses, he cites.

NO SPECIFIC REGULATIONSWhat is the status of regulations for parametric insurance?

Sreedhar says currently, there are no

Balaji Cuddapah feels parametric insurance requires superior product design capabilities, appreciation of climate risks, data generation and modelling skillset, leveraging of AI and newer technologies

Nirmal Bhattacharya is of the view that parametric underwriting is more dynamic based on actual data for the specified insured contingency and also for deciding trigger point and compensation payable


specific regulatory guidelines relating to or focussing on parametric insurance. “However, IRDAI had released regulatory sandbox regulations in 2019, which are aimed at promoting innovation in insurance in India. These essentially provide guidelines for insurance companies to make an application to the authority for the insurance product or any other innovation in a specific format and upon reviewing the information, it can grant permission whose validity is for a period of 6 months,” he elaborates.

Singhel, however, says the regulator has given approval for parametric products such as solar and other covers. Sanjay Datta explains that structuring the product is particularly important and key for regulatory guidelines relating to parametric insurance. “How you measure the data for parametric insurance claims should be clearly available,” he avers.

Pointing out that there is no specific guideline relating to parametric insurance, Ravichandran says, however, a suitable product needs to be filed with the regulator as per product filing guidelines before introducing it in the market.

EARLY ADOPTERSWhile parametric insurance is more in vogue in more developed markets like America and Europe, it is particularly popular in regions like the Caribbean that are prone to natural catastrophes. Nirmal Bhattacharya cites the instance of CCRIF SPC (formerly the Caribbean Catastrophe Risk Insurance Facility Segregated Portfolio Company), developed under the World Bank’s technical leadership, as a pioneering regional fund utilizing parametric insurance to cover catastrophe-related losses. Each nation benefits from quick pay-outs even before

actual damages are assessed, providing much needed financial liquidity that is critical for recovery efforts. “This was also the motivation behind the record $1.36 billion CAT bond issued by World Bank in the past which relies on parametric triggers to cover earthquake risks in Chile, Columbia, Mexico and Peru,” says he. All these are developing economies like India.

He also refers to AXA Climate, a subsidiary of global insurance company AXA, releasing a mix of weather-related risk, including lack of sun resulting in less power for China’s solar firm and also the impact of drought on Nigeria’s small holder farming community.

Also, innovative index-based risk transfer solutions have been used extensively across the globe, especially in the US, the UK and Bangladesh for relief in flood havoc. Singhal points out to the Indian government using parametric insurance for ‘disaster risk financing’.

He adds: “There has been push for renewable energy in many countries. Hence, there’s an uptick of parametric insurance cover for lack of solar irradiation cover, which has also started in India. To name a few global instances, Uruguay has a parametric product for energy production shortfall due to drought, Caribbean for earthquake and hurricane risk and Bangladesh for flood protection.” Given India’s massive push towards sustainable and renewable energy, can the country afford to lag in parametric insurance for these projects?

CONCLUSIONThe risking risks to business from all kinds of natural calamities and extremities, the grit with which insurance companies are innovating, the ability to use analytics to underwrite parametric products, the easy availability of a wide variety of data, the rising levels of digitization and automation – all these factors are coming together in 2020 to create tremendous opportunity for parametric insurance to emerge as a practical alternative to traditional insurance.

Banking Frontiers will continue to unveil more stories on parametric insurance and other such new opportunities.

[email protected]

FRAUDS UNLIKELY

The biggest fear for insurance is frauds. How fraud-prone is parametric insurance?Fraud is not at all possible in such products, since insured has not even a slightest control

on claim incidence, argues Adarsh Agarwal. Since they are very transparent, parametric products are less prone to frauds, argues Singhel. Besides, payments are made upon the occurrence of a triggering event and the triggers are pre-defined and measurable.

“An independent third party is pre-agreed from where data source would be collected to measure exceedance of parameter threshold and accordingly pre-defined and quick pay-out is made,” he explains further.

According to Sreedhar, even in more developed markets, these products are currently niche products and are specifically designed to suit the needs of the insured exposed to natural, catastrophic perils and the product design takes into account exposures, past history of losses and modelling outputs, triggers, payouts and pricing for the set triggers, which is normally high. Claim payouts are made based on defined triggers and there is pre-defined clear-cut understanding of what the triggers are and the basis of reckoning them. “Therefore, I do not think these products are more prone to fraud,” he claims.

Shreeraj Deshpande has a different explanation: “The parameters for the parametric insurance products come under the third party, so neither the insured nor the insurance company has control over this parameter. So, chances of frauds are removed.”

Pointing out that insurance frauds are universal in nature, Balaji Cuddapah highlights that parametric insurance does away with elaborate claim adjusting process and are faster in disbursing the payout. “As the payout is dependent on occurrence of an event rather than magnitude of the loss, it is assumed that frauds are lesser here,” says he.

All the respondents so far have given a very positive perspective. Nirmal Bhattacharya, deviates slightly: “Since no assessment is required following loss for such products and pre-agreed pay-out is made to the client in case of any deviation from the trigger point, possibility of fraud may not be ruled out. However, such situation can be avoided by close monitoring of the insured portfolio.”

Adds Ravichandran: “The advantage in this type of insurance is that it avoids adverse selection, which eliminates issues at the time of claim. As it is the case in any other product, monitoring and administration of such products is important.”

Insurance


The insurer also leverages technologies like RPA, NLP, bots, analytics and much more:

Girish Nayak, chief - Customer Service, Technology & Operations at ICICI Lombard, provides

detailed account of how the company has been making extensive use of technology in the times of COVID.

Mehul Dani: How is ICICI Lombard

leveraging technology tools to ensure

continuity of business?

Girish Nayak: ICICI Lombard has always been at the forefront of adopting new technologies that helps the company in acquiring, retaining or in better servicing customers. We have always been focused on digital adoption by customers, agents, dealerships, garages and hospitals. Even before the lockdown began, most of our sales partners were already enabled with digital solutions that helped in selling and servicing customers digitally. Over time, we have also adopted several artificial intelligence (AI) and machine learning (ML) driven solutions both in sales, such as chatbots and robotic process automation (RPA); and in service, image and video-based inspections, ICR/OCR (intelligent character recognition and optical character recognition) and algorithm-based claims authorizations.

In view of the prevailing covid pandemic, our technology teams worked round the clock to enable IT infrastructure to help most employees work remotely.

What have been the benefits of these

technologically advanced offerings in

your business?

We are leveraging AI & ML for solving problems relating to distribution, claims and customer service. With ever-increasing customer expectations, customer centricity has become more important than ever. Moreover, organizations today no longer have years of time to experiment and get their model

right in this VUCA (volatile, uncertain, complex and ambiguous) world. We would have to design new insurance products and distribution partnerships which can suit the lifestyle of today’s generation and fit in seamlessly. So, we continue to move in the direction of helping the customers to buy an insurance policy as seamlessly as possible and in settling claims for such policies in near real-time. Here are a few examples on how we have leveraged technology to better service our customers on the distribution.

Digital platform: All our agent partners use digital platforms for most of their day-to-day work such as quotes, policies and other transactions. They are also able to gather all the information that they need in terms of products, processes and even payments. Intermediaries and agents can also follow renewals due, claims intimated and paid and they can

do complete lifecycle management of their customers through these digital platforms.

AI based Bots: Today, our customers and partners can instantly get answers, quotes or can easily complete various transactions without any manual intervention through our AI based chatbot platform - MyRA - for example, buying 2-wheeler insurance or renewing health and motor policies.

RPA & NLP: We are leveraging RPA & NLP for automating the manual process of quote generation and policy booking for our corporate and SME customers. For certain SME products, almost 90% of our policy issuance is done through our automated system.

A few examples on the claims and customer service front:

Digital surveys: In 2018, we started Instaspect, our virtual survey solution that helps process motor claims more quickly. With Instaspect, a garage operator can conduct a video survey of a vehicle using our mobile app and an ICICI Lombard surveyor who has access to the live stream can instantly process the claim on this basis. Similarly, customers can also report a claim via our ILInsure app and get in touch with us instantly via video streaming to do the survey on the spot and get assistance on filing claim and finding the right garage for repairing the vehicle. These have resulted in significantly enhanced customer experience and a reduction in claim processing time.

AI based damage assessment: We launched in December 2018 our AI based break-in inspection service where customers whose motor insurance renewals have expired can instantly renew their policies. All customers need to do is to take several photos of their vehicle and our cloud based, AI powered algorithms decide on instant policy issuance or on passing this case to a human adjuster for further

ICICI Lombard: AI accelerates, ML customizes

Girish Nayak hopes that the benefits of WFH might lead to increased flexibility for both organizations and individuals


verification. This has reduced the time taken to issue a policy for such cases.

AI & ML based approval algorithms: We launched India’s first AI based technology to facilitate instant health insurance claims approval for cashless cases. Similarly, in cases such as non-surgical hospitalization where the treatment amount can vary a lot, we have developed advanced machine learning models to determine the optimal amount to be auto-approved, thereby reducing the time taken to approve a cashless claim from 90 minutes to 90 seconds.

IoT/Telematics: In the marine cargo space, we offer comprehensive consignment monitoring solutions which includes features such as location tracking, critical parameter monitoring (temperature, vibration, humidity, etc.), excursion alerts and detailed reports for both domestic and international shipments. Last year, we had deployed various devices across several large corporates and have already diffused multiple hijacking and theft attempts. Similarly, we have prevented temperature excursion for a high value temperature sensitive pharma consignment when the truck met with an accident on road. In the private car space, we are leveraging telematics to identify and segment customers basis their driving behaviour and offer suitable pricing. In the health insurance space, we are using IoT based instant health check facility at corporate offices for our key corporate customers.

What touch less so lu t ions and

technologies has ICICI Lombard deployed

for employees and customers in the light

of the COVID crisis?

Touchless and contactless are the new buzzwords in the light of the covid pandemic and both consumers and organizations are leaning on digital means of fulfilment. The insurance industry is no different and is continuing to create more digital means of servicing the customer. Customers today can purchase insurance across various channels such as bank tie-ups, motor dealers, agents, brokers or directly through online and telephone channels. We see customers continuing to have different channel preferences for buying insurance during this time as well. To cater to our customer’s needs across channels, we are

focusing our energy on enabling each of these channels to have a seamless digital experience for the customer right from acquisition to policy issuance to servicing.

On the servicing front, we are seeing more customers adapting to our digital solutions. We have seen an increase in the number of motor customers using our Instaspect virtual motor survey solution in the case of an accident. We are also seeing customers using our tele-consult feature ‘Hello Doctor’ on the IL Take Care app. This solution gives customers 24x7 access to a doctor for consultation to resolve their health issues.

From an employee perspective, to help service our customers, we enabled IT infrastructure that helped most employees work remotely. Employees across locations were assigned laptops and access to systems over VPN or cloud proxy that would help them to carry out their regular business. At the first signs of the virus spreading, even before the lockdowns were announced, we had moved half of our employees to start supporting business from home and ramped it up in accordance with both state and central government directives.

Majority of our workforce already had laptops assigned to them for carrying out their daily work. For those employees where we were not been able to give laptops, we enabled the required applications to be available on their mobile devices in order to allow them to discharge their duties in a work from home (WFH) environment.

What are the other solutions in pipeline

in the times of social distancing and

avoiding contact?

The entire world continues to move to a new normal amid the covid pandemic. Social distancing and WFH enablement are the new norms at most organizations. As offices resume functioning gradually in parts of the country, seating layouts in offices and cafeteria have been remodelled to help follow social distancing norms for those employees who will return to office. We continue to adhere to both state and central government directives.

However, as an organization, we believe that this is a great opportunity to test the work-from-home concept. Many organizations already allow this for some portion of their workforce, but this is an opportunity to test if this concept works. In the long run, if productivity stays the same or improves, employees will actually spend less time traveling, will have fewer sick days and therefore take less time off, be less distracted and take smaller breaks. Overall, it should also reduce the carbon footprint driven by lesser use of cars. These new ways of working will hopefully highlight benefits of WFH and might lead to increased flexibility for both organizations and individuals.

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+ICICI Lombard recently launched a unique home care service for customers in collaboration with home service providers Portea and Healthcare at Home. Here, doctors prescribe a treatment through tele-consultation after diagnosing the patient. The home care service will also include remote monitoring by a medical professional. If the need arises, nurses, doctors or physiotherapists can also come and check the patients at their residences.

Survey


Entertainment during

LockdownT

here is no second thought that the covid induced lockdown has

become a pain for everyone. People just want to be free like they were before. Is there a way out of this pain? Interestingly, the human mind is creative and knows one way to mentally escape such pain and the boredom that it brings – that way is entertainment. Even while being shackled at home, people were finding a variety of ways to entertain themselves including reading, movies, serials, painting, gardening, cooking, and much more.

Banking Frontiers did a mini-study and reached out to several people to find out how they are entertaining themselves, and 18 people responded, of which 4 were women. Here are the questions we asked:

(i) What are the top 3 ways you are keeping yourself entertained these days, (ii) How much time you get in a week, (iii) Whether the timing is fixed or flexible, and lastly (iv) Whether you want more entertainment or the current level is adequate. If it is a book or series you are watching, please share the name. If it is movies, please share what genre.

Here is a summary of the answers we received. The most common entertainment a c t i v i t y a m o n g o u r

respondents is watching serials on OTT platforms like Netflix, Amazon Prime and Hotstar. Some of series that were named include Scorpion, Special Ops, Money Heist, Patal Lok, Panchayat, The Manifest, Homecoming, Fauda, Ragnarok, Upload and The Valhalla Murders. Seems that action and comedy are the main antidotes to boredom in a lockdown.

Web series has become as a great father and son bonding opportunity for Ritesh Doshi, Director - Enterprise Sales at Cisco System and his 10-year-old son Aarav. Both are enjoying Scorpion on Amazon Prime.

While bonding with boys takes place in the living room, kitchen is a place for bonding with daughters. Milind Kharkar, Director Marketing - South Asia at ACI Worldwide, joins his daughter every Sunday to cook up delicious Italian, Chinese, American and ofcourse Indian dishes. So

does Vidya Ramakrishnan, Head - Marketing Content & Thought Leadership at Aspire Systems.

Shweta Ratnaparkhi, Head - Marketing - South Asia at Refinitiv has another kitchen hobby – she is trying her hands at making healthy

desserts – “health bhi, taste bhi.”

Then there is Rajeev Bhatia, Head - Professional Services (India & South Asia) at SWIFT. He keeps himself entertained during these times playing with his

8-month old twins. He does spend time watching web series, but only about half an hour a day. “I would definitely love more entertainment. WFH is hectic and it burns you out. Managing both work and family and any such

entertainment time helps in maintaining balance,” he says.

E t i G u p t a , G r o u p Manager – Marketing, ESRI Shweta Ratnaparkhi

Vidya Ramakrishnan

Rajeev Bhatia

Eti Gupta

Ritesh Doshi

Milind Kharkar


India spends some of her free time playing Carrom and Ludo with her kids. She also watches series and movies on Amazon Prime.

Masterchef Australia was mentioned by 3 of our respondents.

Madhusudan Warrier, Chief Information Officer at NIIF Infrastructure Finance

has taken to virtual travelling watching shows on Travel XP. The second most common activity after web serials among our respondents is watching movies online.

Reading is a favorite past time for many. Vidya Ramakrishnan calls herself a book person and all the time she has saved in travel is being effectively spend on reading all her fiction favorites. Among non-fiction aficionados is Rajnarayan Krishnankutty, Head Sales - Banking & Retail at AGS Transaction Technologies. He is reading books such as Ikigai,

The Power of Focus and Jaya by Devdutt Patnaik. Harish Ramachandran, CEO of Sumeru Software Solutions is an odd reader – he is reading an old Tamil novel - Ponniyin Selvan. He says he is making very slow progress - perhaps one page a day!

Another is a retired RBI official who is reading spiritual books such as Bhagvad Geeta and Ramcharitmanas and also watching motivational speeches by eminent speakers on Youtube. While reading is entertainment, for Subhendu Pattnaik, Global Head - Marketing, Cigniti is reading to catch up for his PhD related stuff.

Sanjay Tripathy, CEO, Agilio Labs has read a few books and the one he liked

best is Atomic Habits by James Clear. “Lockdown has given an opportunity to recalibrate our life and change our bad habits and add some good habits which

can be life altering in the long run. Atomic Habits gives lots of practical tips to make that happen. Real change comes from compounding effect of lots of small changes/ decisions and lockdown has given me an opportunity to pursue it,” he avers.

Though it cannot be termed as entertainment, but many people have responded saying they have taken up physical activities such as yoga, jogging, etc. Sanjay Tripathy practices yoga with Cure.fit and is also part of a running group. Harish Ramachandran of Sumeru

Software Solutions has taken up yoga and meditation and also teaching meditation to people online. “I regularly meditate with Gurudev Sri Sri Ravishankar ji,” he shares. Anand Ekambaram, Country Manager India at Tableau Software and Rajnarayan Krishnankutty too have taken up fitness routines, whi le Ra v i ndra Soni ,

Director Sales at Cisco claims: “I have kept my discipline on physical fitness and have not missed a single day in the lock down.” That apart, he has watched some interesting web series on the weekends and made an effort to be in contact with his colleagues by calling them up regularly.

O n l y o n e p e r s o n mentioned sports, and that is Milind Sathe, Head - Insurance Vertical at Birlasoft. He has re-started with golf and plays on Saturdays and Sundays. “It’s a sport where I can practice social distancing,” he says. None of the 4 women mentioned any physical activity as entering their new routine.

So all these are the typical entertainment activities. Now let us look at some outliers.

Anand Ekambaram of Tableau Software is enjoying rock music.

M i l i n d S a t h e , w h o has never painted before,

started painting when the lockdown started. He uses a concept called ‘Constrained Creativity’ which says if you put constrains on creativity it strives. Constraint is on time and subject and extreme-focus. “I do painting for an hour every day on weekdays and 2 hours on weekends. I have made great progress.” He has shared some of his paintings.Rajnarayan Krishnankutty

Madhusudan Warrier

Subhendu Pattnaik

Sanjay Tripathy

Harish Ramachandran

Anand Ekambaram

Ravindra Soni

Survey


A n o t h e r o u t l i e r i s Mohan Vizhakat, Director - Customer Success - India & APAC at BMC Software. While so many people have taken up reading, he has taken up writing. He is writing a novel combining two extremes - artificial general intelligence and mythology.

Sure will be interesting to see what he comes up with.

Milind Kharkar i s tending to his terrace garden and has grown 4 types of roses - Peace Lilly, Orange Jasmine, Ixora and Hibiscus. Eti Gupta of ESRI too has taken up gardening.

So, all these activities will give you a picture of what kinds of activities and entertainment people have taken up during the lockdown. Now let us look at the time and duration aspect. Most people expressed satisfaction with the quantity of time they get for entertainment, while a few would like some more. With busy work schedules, most also get most of their

entertainment over the weekend. On a daily basis, people spend anywhere between half an hour and 3 hours on entertainment, and over the weekend it can be most of the day for the lucky few.

“I think I the current level of entertainment is good; I explore more on the weekends, and I don’t want to get into a binge-watching habit,” says Shweta Ratnaparkhi.

Puja Singh has a pointed observation about TV and online content: “I think now that the families are at home there is a serious lack of family shows and content. Content has become very specific to age groups and content for

families is lacking.”The bottomline of this

study is that most people seem to have out maneuvered the stress of the lockdown with traditional and innovative ways. The corona virus has created a lot of fear and a lot of people have died, but the spirit and enthusiasm for quality of life is still intact. Cheers to that spirit.”

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Mohan Vizhakat

Puja Singh

Milind Sathe

Gardening by Milind Kharkar

Paintings by Milind Sathe



Cash Availability

Sumoth C, Head - ATM, Federal Bank, discusses the bank’s strategies in cash management during the lockdown:

Ravi Lalwani: What are the new problems

that you have faced in cash management

during the lockdown? Have ATM frauds

risen or fallen during the lockdown?

Sumoth C: There were problems in cash management during the lockdown. Movement of cash between our branches and currency chests was affected due to the restrictions imposed. As per RBI instructions, our branches are allowed to re-issue cash received from customers only after 48 hours of acceptance, resulting in branches holding the cash for a longer duration. We could, however, ensure that our ATMs were fully loaded with the required cash ATM frauds during the lockdown.

How is the bank optimizing cash

availability across branches and ATMs

in urban and rural areas?

We have a robust tool for capturing cash availability (denomination wise) at the branches and ATMs. The data is available centrally, including the denominations of the currency and this has enabled us to take appropriate steps for optimizing cash availability at the branches and ATMs.

How are you managing your ATMs and

cash in containment and red zones?

We are using a monitoring tool for ATMs and cash in containment and red zones. We can ensure that the required level of cash iss made available in all our ATMs (onsite and offsite) with the help of our branches, currency chests and vendors. Our vendors are advised to take full protection to load cash in containment and red zones.

In which cities have you deployed

mobile ATMs after the lockdown? What

has been the customer response?

We have deployed mobile ATMs in 6 cities - Mumbai, Bangalore, Chennai, Pune, Coimbatore and Mangalore. These are intended for delivering banking services at customers’ doorsteps and thus helping them stay indoors as much as possible. We have also extended the facility of having ATMs on vans which move to different places in cities. Customers of any bank can withdraw

cash from these ATMs free of charge. Customers who wish to avail the service for themselves or their neighbours can make requests and the the ATM van will be in the concerned vicinity. The facility can be used by apartment owners, housing societies and companies and all they have to do is to contact the bank branch. Our staff coordinates with the apartment owners, housing societies and companies to schedule the visits of the mobile ATMs. Public having accounts with any bank can withdraw cash from these mobile ATMs. We have received tremendous response from customers for this endeavour.

What is the volume of transactions

at these mobile ATMs compared to

regular ATMs?

During the lockdown period, the number of hits per ATM has considerably reduced as the public were reluctant to use ATMs due to the fear of infection and travel restrictions. However, on an average, the transaction volumes handled by mobile ATMs were less than the regular ATMs. But in metro cities, customers responded very positively, and in some locations, the volumes were higher at regular ATMs. We are intending to augment the routes of mobile ATMs to cover those areas where there are only few regular ATMs.

What measures have you adopted to

sanitize currency notes and ATMs?

Our branches are keeping all inward remitted currencies wrapped in covers for 48 hours and then only issuing these to the general public. All ATMs and cabins are regularly disinfected, and we are also keeping hand sanitizers at these locations. High touch areas like handles of the entrance door, ATM side buttons, keypad, etc, are regularly disinfected. In case of mobile ATMs, the keypad is being sanitized after every transaction.

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Mobile ATMs are a hit in metro cities

Sumoth C says the bank has deployed mobile ATMs in 6 cities - Mumbai, Bangalore, Chennai, Pune, Coimbatore and Mangalore

Payments Processing


From the traditional use of cash to the availability of multiple digital payments options, one doesn’t

necessarily need to be an expert to trace an evolving payments ecosystem. Even the cashless payment infrastructure once primarily limited to cards is today aided by multiple digital payment options. In India alone the overall digital financial transactions are predicted to grow at 18.3% (CAGR 2020-2023) to reach US$134,588 million by 2023. The rising internet penetration and the e-commerce growth forecast ensure an ever-stronger emergence of a digital payments ecosystem.

But all this number crunching or the growing popularity of e-commerce is just one part of the story. What completes the financial payments landscape story is how transforming payments processing industry is fulfilling the demands of its young smartphone led online shoppers with convenient, instant and secure payments. And because of these offerings, the use of cards and digital wallets are gaining prominence over cash. Today, BHIM, UPI, GooglePay, Paytm and the likes are no longer financial possibilities but a routine for everyday financial transactions. What’s more, this change in the payments industry is not just reliant on e-retail alone but is also making its way to areas like financial remittances and B2B transactions replacing cash.

So as India turns digital in the true sense, the payments processing industry is showing the way forward making India a true global front runner in this evolution of digital payments ecosystem.

Evolving PaymEnts EcosystEmAs the world strives to move towards a digital and cashless economy, payments ecosystems have a much broader and essential role in enabling such a transformation. Jeremy Wilmot, in his capacity as the Group President, ACI Worldwide, and someone who has traced the evolution of the global payments ecosystem, says “E-payment is

all about taking cash out of the system. The ecosystem is moving towards a real time capability with real time payments and settlements.” Complete digitization of the cash for every stakeholder, be it a bank, merchant, corporate or a consumer, is the ultimate goal for the payments industry ecosystem development.

Echoing a similar sentiment, real time payments and their direct correlation with customer experience are important factors in the evolution of payments ecosystem, says Praveena Rai, COO at NPCI. “Real time payment has created a world of digital and instant from a consumer’s standpoint. Today consumers are able to pay anytime anywhere driven by the real beauty of API which is its simplicity,” says Praveena. This continuous removal of friction in payments underlines the inherent strength of the whole payments processing ecosystem, she adds.

Showcasing the coming together of various systems in a new single workable ecosystem, Phil Heasley, President and Global CEO of ACI, says: “We have been helping more than 24 countries to bring together cash management and digital opportunities.” ACI, he says, is helping nations join the dots to open up their foreign markets in an increased globalized world. All these are essential cogs in the global

payments ecosystem. In his experience with ACI, Phil shares how the evolving ecosystem has helped nations to set up a card network side by side with other digital networks: “We have been very specific in our support of mobile as we see mobile as the dominant factor is this new ecosystem.” While as the new ecosystem evolves, ACI is also focusing its energy on existing systems including ATM business, which has evolved and become a digital workstation, says Phil on global payments.

challEngEs and solutionsCost of digital payments systems continues to be challenges both for the governments and digital payments enterprises. Tracing the challenges and possible solutions to bring down cost of digital payments, Phil Heasley reveals how ACI is driven by the mission to ensure real time payments. “What’s inherent in our mission is that we have to be able to deliver low cost to produce such a delivery.”

“We strive to move very large transactions as very low cost per transaction. Since cash, cheque, ACH and cards are all expensive, digital transfers are both real time and pocket friendly,” he adds.

Suggesting redefining of a digital currency, he believes it is time for every

transformation of Payment Processing industry

Praveena Rai Vijay Chugh

Four experts in payments processing industry speak about their views on India’s standing in the sector in an audio-visual interaction:


Phil Heasley Jeremy Wilmot

currency to take a cue from Bitcoin and have its own digital transformation.

sEcurity challEngEs in an Evolving PaymEnt EcosystEmAlong with the costs, security remains at the forefront of the evolving payments landscape. Sharing his views on how security challenge must be tackled efficiently, Phil says: “In order for something to be trustworthy, it has to always be there.”

Making the customer, including the sender and receiver, feel comfortable is the key, he reminds, maintaining the use of tech enabler tools like using Artificial Intelligence (AI) helps build such trust and enhance the overall security.

Praveena seconds the strong emphasis on security as one of the pathways to strengthen the payments processing industry further. “Security is the key as chance of recovering from an error reduces with less friction in the ecosystem. It is therefore important to have a strong risk management framework,” she says.

The industry on its part understands the significance and is investing regularly on the technology side of security, she adds, highlighting security is the top priority.

Trust of the consumer and corporate is critical, believes Jeremy Wilmot. “Trust is hard to build but can be lost in seconds,” he says. Factors like prominent use of OTP to registered mobile phones as well as using facial recognition authentication significantly reducing risk must be a part of the financial ecosystem development strategy. As the ecosystem progresses, Jeremy foresees a more prominent use of patterns tracing a

consumer’s spending patterns to watertight the system further. In terms of the future, Jeremy pins hopes on real time scoring of the transaction with the emergence of 5G networks. “Fraud levels can be kept low and in single digits further strengthening the growth of payment industry,” says he.

Evolving PaymEnt systEms and gloBal standardsThe evolution of payments processing industry has meant the need for a global standard to ensure smooth transactions. Phil Heasley shares how ACI acts neutral while enhancing its ability to connect UPI, ASEAN or Chinese Union Pay. “We don’t take sides as ACI is just like an honest broker creating connectivity,” he explains. Infrastructural upgradation facilitating real time payments

Sometimes infrastructural issues can create problems in payments, which can be attributed to rising growth in the volume of digital payments across channels. Praveena Rai is, however, of the view that the whole ecosystem is ramping up for upgradation, including smarter ways to architect technological solutions.

india - thE FrontrunnEr India today is in a great space as a front runner in the payments space ecosystem. This massive lead opens an opportunity to become a truly world leader leading by example. Phil Heasley believes that there has been significant success in terms of volume in the Indian payments processing industry as it enters its maturity period. Phil terms the Indian market as one of the best systems in the world. The uniqueness of the Indian ecosystem, according to him, is the ‘democratization’ of the immediate payments systems, which is what makes India a standout performer in the industry.

Vijay Chug, well known industry luminary and a consultant/former CGM – RBI, echoes a similar positive sentiment on India and even urges Indian companies to take a global leap. “From back office boys, India has become a front-end people,” says he. “India, unlike any other country, has its own set of unique features, requirements and people, which made it create its own unique hybrid systems,” says Vijay. Indian innovation is need-based and unique and the

presence of efficient platforms ensures more unique developments in the future. “India can definitely play a lead role and start by taking NPCI and IDRBT concepts commercially forward to other nations as a start,” says he.

On the downside, he expressed concern on the lack of efficient marketing of Indian financial tools in the global markets.

Terming the payments ecosystem in India as extremely smart, Jeremy Wilmot believes many countries can take example from India’s payments model and build up digital financial scalability. “India is very much at the forefront of modernization of payments processing industry with digitization of payments and can definitely lead the world by example,” he stresses.

innovations ahEadThe emergence of sandbox is helping with innovation in the segment, which augers well for the future, highlights Vijay. “A sandbox environment where everything gets documented and IPR gets protected automatically, will help with future innovations,” he believes.

And not just Vijay, but the entire spectrum of industry experts seem to agree. Praveena believes a lot many more services will be provided on API banking framework in the near future. RBI issuing a framework around open banking is a clear signal for more innovation happening in the segment.

The Indian payments processing industry is likely to emerge stronger with more innovations churning at much faster rates than ever before as the sector scales and transforms rapidly.

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Webinar


Banking Frontiers hosted 3 industry experts - Vivek Chaturvedi, Marketing Head at Digit Insurance, Anuj Pandey, Chief Operating Officer at U GRO Capital, and Mohan Kumar Sahni, Head of Cards, Payments & Digital Banking at Utkarsh Small Finance Bank - for a panel discussion on the challenges in attracting and serving non-tech-savvy consumers into the digital ecosystem:

The average banking clients are today much more than just account numbers or account holders. The

era of digital transformation with online shopping, focus on cashless economy and digital India has meant banks no longer can ignore the tech disruptions. Banks, however, face a dilemma as they press on the digital transformation accelerator. Not all clients are as tech savvy and some still rely heavily on traditional human touch and paper-based methodologies. The future is digital but banks face a huge challenge to bring all non tech savvy consumers including semi illiterate or less tech savvy consumers on board. .

Digital - work in progressWith the sudden onslaught of the covid and its immediate fallout, the focus shifted to ‘digital’ in a big way, but most banks were already following a roadmap to expand their digital umbrella for all consumers including the less tech savvy ones.

Sharing his experience as the Chief Operating Officer of UGRO Capital, Anuj Pandey shared how they started with the premise of digitizing and digitalizing together to handle problem of tech adoption and logistical hassles concurrently. Giving an example, Pandey shared how they at UGRO Capital are digitizing the sourcing via an intermediary for small business lending. “Typically, when a small business applies for a loan, it applies with a load of documents including balance sheets, P&L sheet, bank statements etc. Lenders over the years are also used to that physical touch and feel of such a file and documentation.”

Explaining how UGRO Capital changed the norm, Pandey revealed it developed a software platform that scanned all documents, digitizing them at the source while adding to the rule engine to ensure an instant decision making. Changing

mindset, developing technology capabilities and integrating the same as a philosophy are what Pandey believes contribute to getting digital transformation truly embedded in the future. “In small business lending it’s not the lack of being tech savvy as a consumer but the complex digital ecosystem which is a challenge,” he added.

To make consumers incubate and be comfortable with U GRO Capital’s digital processes, Pandey says all it takes is one successful transaction proving how going digital was more a mental block at the consumer level.

“During the covid crisis we contacted our customers for a survey sent to them as a link on their mobile phones, and most consumers were comfortable answering the same,” revealed Pandey.

Customer enrollment JourneyTracing the journey so far to enroll non-tech savvy customers, Vivek Chaturvedi, Marketing Head of Digit Insurance, highlighted the need to keep it all simple. Accessibility is one essential parameter, and rapid transformation happened mainly

due this, he said. He also explained how paying using a barcode for daily chores may well have been pure fantasy some years ago but is today the norm as digital wallets are accessible to a large number of consumers.

Security and trust have helped non-tech savvy consumers come on board after successful first transactions, he added, also pointing out that in the previous e-commerce journey of cash on delivery mechanism helped consumers build trust to buy digitally. The benefit and convenience of going digital has also helped consumers the digital plunge and the third parameter was simplicity in communicating with the consumers. Introduction of simple board games to help consumers understand the importance of insurance and having insurance documents written in a language easily understandable have been a few proactive measures implemented successfully in Digit Insurance.

Mohan Kumar Sahni, Head of Cards, Payments & Digital Banking at Utkarsh Small Finance Bank, shared how the challenges were paramount for banks when enrolling a semi-literate and non-tech savvy consumer.

onboarding non-tech savvy Customers: Challenges & solutions


As money is involved, the trust factor remains paramount along with security concerns for the consumer even in the first step and with majority of small shopkeepers, traders etc dealing predominantly in cash, it is also a difficult for banks to suddenly switch them to a digital ecosystem.

Digital payment systems to the resCueThe introduction of digital payments has to a large extent helped remove the initial barriers, said Sahni. “If you look at recent digital payment services like UPI and Aadhaar enabled payment systems, Google Pay, Phone Pay, etc all have played a major role in transforming the entire payment space,” he felt, stressing that convenience is what has been at the forefront of such a transformation at the consumer level. Once the consumers understood the power of digital, the process of onboarding even the non-tech savvy customer becomes that much easy, he added.

Sahni is of the view that rural is now almost at par with urban and semi-urban areas when it comes to using digital banking applications. The pandemic and the lockdown have actually made customers go digital. Earlier they were sitting on the fence when it came to digital adoption.

Giving an example from the insurance world, Vivek Chaturvedi of Digit Insurance explained how digital transformation for non-tech savvy segments like commercial vehicle drivers was smoother than anticipated. “While they assumed such consumers may be dependent on a physical agent to help them with their insurance needs, it was found that they are also comfortable in an online setting having vernacular online searches. The simplicity of digital setting and developing vernacular searches for insurance show that consumers across demography and irrespective of whether low- or high-tech savvy are adopting digital ecosystem provided the ecosystem is simple to follow,” he added.

importanCe oF CommuniCation Communicating with the consumers is paramount and various industries use either mass communication or customized messaging to increase their digital footprint.

Anuj Pandey explained how customized campaigns helped U GRO Capital to communicate with the appropriate clients instead of mass communication. “The messaging should relate to the customer keeping in view the sector, the sub-sector and the challenges faced. “The use of chatbots have also led to high level of engagement with consumers compared to communicating over email or traditional forms,” he added, stressing on proactive communication.

On communications a Digit Insurance, Vivek Chaturvedi stressed on avid open communication with agents rather than mass communication with consumers. This, he said, helps in offering customized solutions, which are easy to manage for the end user. “Communication for us involves a lot of live video content that can ensure that users once adopting digital do not go back to the non-digital segment for further needs,” he added.

O n m a s s v e r s u s c u s t o m i z e d communication, Mohan Kumar Sahni highlighted on the importance of geo target-based communication for best results. “Personalized visual messaging has had a much higher success rate than mass marketing techniques. Communication in various vernacular languages and the use of smart short videos are collectively offering the best results for us at Utkarsh Small Finance Bank,” he added.

the Digital push anD Business growth roaDmapPeople are coming online and making more online purchases using digital channels, but to consider digital will offer a massive surge for enterprises to gain exponentially may be very industry centric, said Vivek Chaturvedi. He felt in some industries like insurance, a human touch remains much more relevant for new on-boarded buyers. “It’s going to be a hybrid journey with online, machine-based assistance channels like WhatsApp along with a human contact like an insurance agent as showed by successful European models” he said, maintaining that removing friction and hand holding support while onboarding new clients digitally are the 2 prime focus areas businesses across industries should

have to drive scalability and growth. Mohan Kumar Sahni agreed that a new

normal post the lockdown is likely to bring multiple changes in the ecosystem. This alone can be an able driver for businesses to grow at a much faster rate provided they play their cards right. Sharing an example, he said Utkarsh Small Finance Bank has witnessed a 300% jump in customer registration in one and a half month, using digital. “Digital revolution in banking is already a work in progress; it offers a good chance for banks to maximize the benefits of digital channels thanks to a post covid era. The one big platform is likely to be on the acquisition side on QR based solutions,” he said.

The covid-19 aftermath will help customers move away from touch-based card payment systems to adopt either QR-based payments or use NFC-based contactless payments. This gives banks a good scalable opportunity to offer products and solution and in turn generate growth and revenue, he added.

opening CollaBoration opportunitiesAll the three agreed that technology enablers will offer many more chances for all players, especially in the BFSI space, to work closely and opening up space for mutual collaborations.

[email protected]

agile transformation

Summary: Surviving and thriving in a tough situation calls for transformation with agility. India’s largest bank SBI has chosen to transform towards digital excellence to meet the sudden impact of corona and lockdown.

kunal kaulDirector Enterprise, CISCO

sunita handa CGM - IT Channels & Opeations, SBI

Country Report - Blockchain


South Africa is just beginning to understand how blockchain can bring major changes in its financial system:

The South African Reserve Bank had run a proof of concept project in June 2018 called Project Khokha

experimenting a distributed ledger technology-based wholesale payment system in a ‘real world’ environment. The trial, which the central bank later described as a success, found that the typical daily volume of the payments system could be processed in less than 2 hours with full confidentiality of transactions and settlement finality. The objectives of Project Khokha were to build on the initiatives previously undertaken by global peers and to gain further insights on DLT developments in a South African wholesale payments context. The project provided the opportunity to broaden the DLT skills base in the South African banking industry.

The central bank’s initiative had one very positive outcome. Today, all the major commercial banks in the country recognize the disruptive potential of the technology and have initiated pilot projects for a variety of use-cases. Blockchain is gaining acceptance and massive investments have happened. Experts say the country is at an inflection point and banks are now starting to explore some practical ways to apply the technology to real-world needs.

NO STANDARDS, PROTOCOLSHowever, while different banks are running various PoCs, the industry does not have consensus on key standards, protocols and processes. Financial and payments services regulators are still working on modalities for creating a regulatory framework that would govern the blockchain networks, ensure security of transactions and promote innovation. Also there is major issue of integration of legacy backend general ledgers and records that are already in use with the new blockchain based system.

A MAJOR INITIATIVEOne positive aspect as far as regulators are concerned is the fact that the South African government is fully positive on the

use of blockchain in the country and it has empowered the Office of Digital Advantage to support projects involving blockchain. The office comes under the Council for Scientific and Industrial Research (CSIR), which is driving the Information and Communications Technology (ICT) sector in the country. The CSIR has introduced a mandate to look into new areas that blockchain has applications and run programs that will attract investment from the private sector and the government. It is also proposing to launch the South African National Blockchain Alliance later this year to develop opportunities in the blockchain industry and to enable collaboration with other sectors. Potential projects using blockchain could include digital identity, eVoting, food tracing and safety, health care and eTenders.

Today, apart from digital currency systems being used for cross-border remittances, several projects have been exploring blockchain-based solutions for problems that have eluded solutions for decades. While banking and trading have seen meaningful use of the technology, sectors like media, energy and telecommunications too are evincing interest in the technology.

SELLING SOLAR ENERGYOne outstanding use of the technology is by the Sun Exchange, which trades in solar energy. Africa has an estimated 2000 kilowatt-hour per square meter of sunshine reaching the surface on an annual basis. Using DLT, the Sun Exchange is able to create a platform for P2P solar cell micro-leasing for schools and businesses in Africa.

Having said these, South Africa does not have any specific laws or regulations governing the use of blockchain technology and the legal status of Bitcoin is undefined.

CONTROLLING CRYPTOHowever, the regulators have proposed strict oversight over cryptocurrencies in the country. A policy paper by the ‘Intergovernmental Fintech Working Group’, the fast growing

cryptocurrency asset sector is due for strict financial oversight, possibly a licensing regime and closer cash flow monitoring. A recent survey indicated 10.7% of South African internet users invest in bitcoin. The group felt crypto assets and the various activities associated with this innovation can no longer remain outside of the regulatory perimeter. The group comprises representatives from the South African Reserve Bank, the Financial Sector Conduct Authority and the National Treasury, among others. One interesting suggestions in the policy paper is a prohibition against using cryptocurrency as a settlement tool within South Africa’s financial infrastructure. However, it feels that cryptocurrency should be recognized for domestic payment purposes, and be regulated accordingly.

South Africa has some 49 blockchain startups. Among them are the Sun Exchange, VALR, which is a cryptocurrency trading platform, Centbee, an app-based Bitcoin cash wallet, Custos Media Technology, which offers a media rights management solution to content owners and providers, Wala, a neo bank, offering a variety of services to customers, Augmentors Game, a developer of augmented reality games based on the Bitcoin Blockchain, OVEX, cryptocurrency exchange, ZapGo, a wallet with a number of conveniences built into it and CashBag, a decentralized cashback store, which allows brands to attract customers by offering them rewards points.

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South Africa banks in blockchain experiment

Solar panels of Sun Exchange, which innovtively uses blockchain to sell solar power


Country Report - Open Banking

While Israel has strong banking system, it has been a late mover in initiating open banking:

Israel is in the process of implementing open banking. The country’s central bank, the Bank of Israel, has recently

released a draft of the Proper Conduct of Banking Business Directive on the implementation of open banking standards and the draft contains stipulations banks and credit institutions should follow like enabling licensed and supervised third parties to get access to customers’ bank accounts, of course with the customers’ explicit consent, in order to retrieve information or execute transactions. Israel had about 2 years ago enacted a legislation, titled ‘the Increasing Competition and Reducing Concentration in the Banking Market Law and this law too requires financial institutions to enable service providers to have access to customers’ financial information.

SETTING STANDARDS The Bank of Israel says the Directive is intended to set the grounds for ‘open banking’ in the country and to strengthen the control of private clients over their financial information and bank account management. The draft Directive covers the duties and obligations of banks and credit card companies including information and cyber security protection requirements, consent management requisites and risk assessment tools. Banks and credit card companies will also be required to provide other regulated financial institutions with access to account information on the customer’s behalf, subject to the customer’s consent. Such access shall be granted without charge and without any contractual obligations arising between the disclosing and receiving institutions. One special provision that is mentioned in the draft Directive is that the board of directors and senior management of banks and credit card companies should conduct a thorough risk analysis, specifically with respect to the areas of

information and cyber security, privacy, fraud, legal, money laundering and strategic risks. It also deals with issues of consent management, including how consent should be provided, obtained, retained and withdrawn, and which information should be provided to the customers before obtaining the required consent.

COMPETITION, INNOVATIONThe Bank of Israel wants to promote competition and innovation in the Israeli banking system, joining the likes of financial regulators across the UK, Australia, Singapore, the EBA, and others who have published Open Banking principles for the financial system. It believes open banking will be a step forward in the development of new services and products across the payments industry, which may subsequently increase competition for financial services.

Initially, the Directive specifies that access will be provided to information on balances and transactions in the customer’s current account, while information on bank and non-bank payments will be made accessible in the second phase, which will be actioned in 18 months, allowing banks to initiate payments in the customer’s bank account. The Bank of Israel’s target is 2 years within which banks will gain access to additional customer information on the customer’s credit and loans, deposits and savings, and on the customer’s securities portfolio.

STILL SOME WAY TO GOIn January 2019, the Israeli Parliament Knesset had enacted the Payment Services Law, which was supposed to become effective on January 2020 but it is now likely to happen in August 2020. The Payment Services Law when it comes into force is Israeli equivalent of the European PSD 2 and sets forth similar

(although not identical) requirements regarding disclosure obligations and other obligations on the payment service providers (vis-à-vis either the payer or the beneficiary of the payments). It also includes provisions regarding means of identification of users, and provisions regarding cancelation of payments due to fraud, unauthorized use, card-not-present transactions and other types of transactions.

While the open banking has not yet reached Israel, it is a fact that most of the IT systems of banks are not adapted to it and there are no regulatory demands in this direction. While the Bank of Israel notifications from time to time indicate its intention to consider applying this reform. Today, most of the commercial banks in Israel allow limited API access for very specific modules of them. Most banks allow access to a securities trading system via the API, while some allow for foreign currency trading and some for limited-scale information. Besides, the core computer systems of many banks are proprietary and relatively old and for banks to support of open-banking, they will require to make investment in IT infrastructure.

[email protected]

Israel releases draft directive on open banking

Bank of Israel

Research Report


Ransomware and malware, exposed data, compromised accounts, and cryptojacking to blame; GDPR shows promise with Europeans suffering least:

According to The State of Cloud Security 2020, a global survey by Sophos, 93% of Indian

organizations experienced a public cloud security incident in the last year – including ransomware (53%) and other malware (49%), exposed data (49%), compromised accounts (48%), and cryptojacking (36%).

Europeans suffered the lowest percentage of security incidents in the cloud, an indicator that compliance with General Data Protection Regulation (GDPR) guidelines are helping to protect organizations from being compromised. India, on the other hand, fared the worst, with 93% of organizations being hit by an attack in the last year.

“Ransomware, not surprisingly, is one of the most widely reported cybercrimes in the public cloud. The most successful ransomware attacks include data in the public cloud, according to the State of Ransomware 2020 report, and attackers are shifting their methods to target cloud environments that cripple necessary infrastructure and increase the likelihood of payment,” said Chester Wisniewski, principal research scientist, Sophos. “The recent increase in remote working provides extra motivation to disable cloud infrastructure that is being relied

on more than ever, so it’s worrisome that many organizations still don’t understand their responsibility in securing cloud data and workloads. Cloud security is a shared responsibility, and organizations need to carefully manage and monitor cloud environments in order to stay one step ahead of determined attackers.”

The UninTenTional open Door: how aTTackers Break in Accidental exposure continues to plague organizations, with misconfigurations exploited in 44% of reported attacks on Indian organizations. Detailed in the SophosLabs 2020 Threat Report, misconfigurations drive the majority of incidents and are all too common given cloud management complexities.

Additionally, 55% of organizations report that cybercriminals gained access through stolen cloud provider account credentials. Despite this, only a quarter of organizations (29%) say managing access to cloud accounts is a top area of concern.

Data from Sophos Cloud Optix, a cloud security posture management tool, further reveals that globally 91% of accounts have overprivileged identity and access management roles, and 98% have multi-factor authentication disabled on

their cloud provider accounts.

The silver liningAll respondents (100%) admit to concern about their current level of cloud security, an encouraging sign that it’s top of mind and important. With 76% organizations using the public cloud, detection and response is leading cloud security concern for Indian IT managers while data security remains a top concern globally for businesses.

93% are cyber victims on cloud

key survey Findings for india

u India saw the most security incidents in the cloud while Europe saw the least

u More than 1 in 2 (55%) Indian b u s i n e s s e s r e p o r t t h a t cybercriminals gained access through stolen cloud provider account credentials

u 44 % Indian IT managers report misconfigurations, e.g. port accidentally left open to public internet, exploited

u Organizations suffered a public cloud security incident in the last 12 months through ransomware (53%) and other malware (49%), exposed data (49%), compromised accounts (48%), and cryptojacking (36%)

u Detection & response is #1 cloud security concern for Indian IT managers

u 32% of Indian organisations hold themselves responsible for maintaining the security of their organization’s public cloud environments while 55% organisations see it as a shared responsibility between them and their cloud services providers/partners

The impact of ransomwareThree quarters of ransomware attacks result in the data being encrypted

73%Cybercriminals succeeded in

encrypting data

24%Attacks stopped

before the data could be encrypted

3%Data not encrypted but victim still held

to ransom

94% of organizations get their data back

73%Of attacks result

in data being encrypted

56%Used backups to get the data

back

94%Of victims get

their data back

The role of insuranceOne in five have holes in their cybersecurity insurance

84%Have cybersecurity

insurance

20%Paying for cybersecurity insurance that DOESN'T

cover ransomware

64%Have cybersecurity

insurance that covers ransomware

Cybersecurity insurance and ransom payments

73%Ransomware attacks

resulted in data being encrypted

26%Organizations whose data was encrypted

paid the ransom

94%Organizations that paid said the cybersecurity

insurance paid the ransom


Research Notes - Investment Banking

Asia Pacific, excluding Japan, investment banking fees reached an estimated US$11.6 billion during the

first half of 2020, a 4.2% increase from the comparative period last year and the highest first half period since records began in 2000. According to a report by Refinitiv, a global provider of financial market data, equity capital markets (ECM) fees totaled US$3 billion and this was the biggest increase with 35.7% from a year ago, the highest first half period since 2015. Debt capital markets (DCM) underwriting fees amounted to US$6.2 billion, a 6.8% increase and surpassed the record period last year. Fees generated from completed M&A transactions fell to a 6-year low and totaled US$1.2 billion, down 22.8% from the same period last year. Syndicated loan fees declined 23.8% from a year ago and reached US$1.2 billion. DCM fees accounted for 53% of the overall Asia Pacific investment banking fee pool, followed by ECM underwriting fees with 26%, and syndicated lending fees with 11%. Completed M&A advisory fees represented 10% of the region’s investment banking fees. Bank of China took the top position for overall investment banking fees in Asia Pacific, excluding Japan, in the first half of 2020, capturing 5.1% of the wallet share.

Mergers and acquisitionsThe value of announced M&A deals involving Asia Pacific companies, excluding Japan, stood at US$352.3 billion during the first half of 2020, down 14.5% from a year ago, making

it the lowest first half period since 2013, the report said. The number of announced deals fell to a 6-year low and declined 14.9% from the first half of last year. Majority of the deal making activity involving Asia-Pacific targeted the real estate sector which accounted for 15.3% market share worth US$53.8 billion, down 33.3% from a year ago. Financials and Industrials followed behind and captured 15.1% and 13.9% market share, respectively. Charoen Pokphand (CP) group’s pending acquisition of Tesco’s operations in Thailand for US$9.9 billion is currently the largest deal in Asia Pacific, and the biggest-ever Thailand-involvement M&A deal on record. In addition, CP Group also agreed to acquire the entire share capital of Tesco Stores (Malaysia) Ltd for US$700 million.

equity capital MarketsAsia-Pacific, excluding Japan, saw equity and equity-related issuance a 5-year high and raised a total of US$135.0 billion worth of proceeds during the first half of 2020, a 26.1% increase from a year ago. Number of issuances also grew 15.2% compared to the first half of last year.

Initial public offerings (IPO) amounted to US$30.1 billion in proceeds, up 31.1% from the first half of last year. This was driven by Chinese IPOs which accounted for 77.0% of the region’s IPO proceeds, and 40.4% of the IPO proceeds worldwide. Beijing-Shanghai High Speed Railway raised US$4.4 billion via IPO in January, making it the biggest IPO globally for the first half of 2020. Follow-on

offerings witnessed a five-year high as proceeds grew 67.8% compared to a year ago, raising US$83.7 billion during the first half of this year. Reliance Industries’ priced its US$7 billion rights offering in June - the biggest ECM offering in Asia Pacific for the first half of 2020. The deal is also currently India’s largest-ever ECM offering, surpassing the previous record from ICICI Bank’s US$4.6 billion follow-on offering in June 2007. Asia-Pacific convertible bonds raised US$21.2 billion and fell 38.0% in proceeds after witnessing a record first half period in 2019. Asia Pacific Healthcare saw the highest equity capital raising so far this year with US$18.1 billion, more than double the proceeds raised from a year ago and captured 13.4% of the market share. Financials and Industrial followed behind with 13.3% and 11.7% market share, respectively.

deBt capital MarketsPrimary bond offerings from Asia-Pacific-domiciled issuers hit an all-time high and raised US$1.5 trillion during the first half of 2020, a 12.3% increase from a year ago, making it the strongest semi-annual period on record. China accounted for 75.0% of the region’s bond proceeds worth US$1.1 trillion, up 13.3% from the first half of 2019. South Korea and Australia bond issuance accounted for 6.6% and 5.1% market share, respectively. Asia Pacific investment grade bonds reached US$830.5 billion, up 17.7% after surpassing the record set during the first half of 2019. Bond offerings from Government & Agencies captured 39.6% market share, and raised a record amount of proceeds worth US$578.0 billion, an 11.4% increased from a year ago as number of issuances saw one of the busiest periods and grew 28.5% year-on-year. The Australian Office of Financial Management issued a record US$12.2 billion bond offering in May. The Financials sector accounted for 34.0% of the region’s bond proceeds and totaled US$496.3 billion, up 8.9% from the same period last year. This was driven by two jumbo issuances: Agricultural Bank of China’s onshore perpetual bond issuance worth US$12.0 billion and Postal Savings Bank’s US$11.4 billion perpetual bond.

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asia-pac sees higher investment banking fee

ASIA PACIFIC EX. JAPAN INVESTMENT BANKING FEES

TOP FEE PAYING INDUSTRIES TOP FEE PAYING COUNTRIES

27%

20%10%

12%

6%

25%

26%

21%

11%

7%

7%

28%

65%9%

6%4%

5%11%

69%

9%

5%

4%4%

9%• Outer Rim: YTD • Inner Rim: YTDLY

Investment Baking Fees by Asset Class

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20

noilli

M$

SU

BONDS

EQUITY

LOANS

MA

Financials

Government and Agencies

Industrials

Real Estate

Materials

Other

China

Australia

Hong Kong

South Korea

India

Other

Regional Rural Bank


Lucknow-based regional rural bank Aryavart Bank has adopted frictionless customer experience to onboard customers for insurance policies. Shiv Bajrang Singh, chairman of the bank explains the salient aspects of this strategy:

Mehul Dani: What is the total income

from third-party insurance product sale

in 2019-20? What is the number of life,

general and health insurance policies

sold by the bank?

Shiv Bajrang Singh: Third-party insurance sector has always been a lucrative segment for banks. It not only ensures appropriate hedging of risks by insuring the assets, but also contributes to the income through commission. The products are modeled based on the needs of the customers as well as the banks. The premium income of our bank has decreased to `274.14 million in 2019-20, from `359.34 million in the previous year. Also our income through commission too came down to `44.24 million in the last FY from `53.84 million in the previous year.

The infograph shows that premium as well commission during 2019-20 has plunged 23.71% and 17.82% respectively compared to the previous year. Insurance business is more pronounced normally during the months of February and March, but this year, this has been adversely impacted by unseasonal rains and hailstorms in February and covid outbreak in March 2020, leading to negative growth in life and health insurance business.

How is the bank pushing insurance sales?

Growth in sales in insurance products is always linked to awareness of the products available, to bank employees and also to the targeted customer segments. One needs to have a thorough understanding of all the available options so as to pick the one that best suits the customer. For this, we have posted one marketing officer at each regional office and a specified person on cluster basis. Specified persons, who are well trained and well versed to address the issues promptly in the branches, are

delivering product knowledge to the customers and their family members. The sales results can be largely attributed to top-down guidance and control mechanism that is exercised by the department at the head office. A thorough monitoring of insurance sales figures and giving necessary guidance like changes in regulatory guidelines, training on new products and special focus on untapped areas, have helped us. Also, in this technology-driven era it is essential to provide details of the products and address grievances of the customers promptly.

How are you leveraging technology for

customer service?

Typically, our customer base is mostly low income rural households. Hence, we are more inclined towards the micro-insurance segment. In order to effectively

and timely aggregate the policies, we are in the process of adopting point of sales person - life insurance (POSP-LI) policy, adhering to IRDAI guidelines. With this concept, we would be providing tab-based support to the POSPs for capturing the KYC and selling micro-insurance policies on end-to-end automation basis. The policies would be registered through tab on a real-time basis and the customer will receive the corresponding information on his/her mobile.

For grievance redressal, customers have a plethora of options. They can connect with the insurance providers directly, either through their website or through the toll-free number provided on their policy certificates. Customers can also connect with the specified person, branch managers or conce4rned staff at the regional offices. They may also raise their grievance or request through the complaints portal of the bank on our website.

What were the digital initiatives for

insurance sales in 2019-20 and the

current year?

All our branches and regional offices are on CBS platform. RTGS/NEFT facility is enabled in all the branches. We have been working in close collaboration with our insurance partners to implement digital facilities in order to help customers with the onboarding process. Few initiatives like onboarding through tab-based application, OTP-based authentication by both specified person and customer to speed up solicitation process, generation of e-receipt as a proof of acknowledgement of policies and delivery of information about customers along with details of premium paid to the insurance companies through auto mailer have been implemented. With the help of these initiatives, the policy documents can be

POSP + Digital for Insurance Sales

Shiv Bajrang Singh reveals that trained marketing professionals and specified persons top the hierarchy in achieving the growth in insurance sales


delivered to the company faster and policies can be generated electronically.

Which insurance companies have you

tied up with? And the new tie-ups in the

last financial year?

We have tie-up with Bajaj Allianz and Star Union Dai-chi for life insurance, with United India, Future Generali India and Universal Sompo for general insurance and with Religare for health insurance. Except for Universal Sompo General Insurance, the tie-ups existed from the days of the erstwhile Gramin Bank of Aryavart. After the amalgamation (Gramin Bank of Aryavart and Allahabad-UP Gramin Bank), we tied up with Universal Sompo and discontinued Life Insurance Corporation of India last year.

Can you list the customer segments

that have shown the highest interest in

insurance products?

At Aryavart Bank, we cater to a highly diverse clientele, ranging from farmers in rural areas to professionals in urban areas, from illiterate workers to educated service class. Our varied customer segments have different needs for finance as well as insurance and we solicit the best matching products from the customer after an in-depth need-based analysis and personal interview of the customer. For any asset created out of the bank’s finance, there is always a risk associated with it. These risks can be due to any loss caused to the asset or any loss to the owner himself. In either of the cases, the bank’s finance is always subject to uncertainties of return. Here comes the role of insurance companies, which are helpful in myriad ways to hedge all such types of risks. Normally, low-ticket endowment policies are preferred by rural population in life segment, whereas term insurance is preferred by semi-urban and urban population. In health insurance, family floaters without exclusion

are the preferred policies in the range of coverage from `50,000 to `100,000.

We have financial literacy centers (FLCs) in 10 districts and have created a novel scheme for sustainability of BC model named as ‘BC as BF’ (Banking Facilitator). The FLCs are functioning well and are bringing awareness among the masses and developing resource persons by organizing training of trainers (ToTs) apart from addressing queries of people / customers. This scheme aims at utilizing the bank mitras /bank sakhis for various activities as extended hands of the bank in a cost-effective manner incentivizing them to earn sustainable income. The bank has been allotted 2429 sub-service areas (SSAs) in rural areas and 491 wards in urban areas, out of which 2038 SSAs and nil wards are unbanked. We have engaged 4 service providers to provide services through its field staff and bank mitras / bank sakhis.

How do you see the corona virus crisis

impacting the demand for health insurance? We have been selling health insurance

policies for the last 4 years. Since our collaboration with Religare, we had organized several campaigns and literacy programs throughout the villages to spread awareness about the need for health insurance. This has helped us in managing good business in the health insurance segment. Although the customers right now are thronging our branches for cash withdrawals, we believe the demand for health insurance is bound to go up in the light of the awareness we have been able to create and realization of the importance of personal security among the people. The covid epidemic has certainly raised the demand for term insurance and health insurance. We are expecting 25% growth in insurance business during FY 2020-21.

In what ways the crisis has impacted

loans to farmers and crop loans?

The covid crisis has had a very serious impact on every financial institution worldwide. We were compelled to shift our priority from providing loans to farmers to restricted banking operations. Our business, particularly loans to farmers and rural population, has been adversely impacted by the epidemic during March and April 2020. We have already sent instructions to our branches to saturate the beneficiaries of PM-KISAN (Pradhan Mantri Kisan Samman Nidhi) with Kisan Credit Cards. We have started a specialized credit scheme in the form of personal loans to provide aid/finance for rural godowns, SHG credit, etc. We have also lowered the interest rates on advances.

We are continuing our Aryavart Star Mission this year to boost the credit flow and improve the financial stability. Through this campaign we would be providing fresh lending to 125 newly identified families per branch, through multi credit linkage activity. Free accidental death cum disability insurance scheme, with provision of `200,000 insurance cover to all the existing borrowers of the bank, has also been continued for 2020-21.

We have taken up an initiative on mission mode to upload the data of the farmers on the MSP portal so that the proceeds of their agricultural produce can be remitted directly to their respective loan accounts. This would not only reduce activities of the middlemen, but also help our bank in upgradation of some out of order accounts.

We think these initiatives will help the farmers/customers in our command areas to minimize the impact of the pandemic. I hope the year ahead will offer tremendous potential for all-round growth of the economy.

[email protected]

Shri Shiv Bajrang Singh, Chairman, Aryavart Bank, donating a cheque worth `11,945,569 towards Chief Minister’s Distress Relief Fund-Covid-19 Care Fund to Yogi Adityanath ji, Hon’ble CM, Uttar, Pradesh.

Aryavart Bank, branch Khargapur, Lucknow installed manual barricades as part of social distancing measure.

Cooperative


To focus on operations, processes, infrastructure and management:

Banks and financial institutions have faced a huge crisis as a result of the covid pandemic and for bnks the

connect with the customers has to be an ongoing process all through, says Dhimant Turakhia, Chief Development Officer, Kalupur Commercial Cooperative Bank. But he says the pandemic has challenged the traditional way of contacting people and generating business for an organization. “Therefore, I feel, there is an urgent need to adapt the virtual and do interactions to counter this this dynamic, ever changing business environment. We consider it as an opportunity to update our digital initiatives and help the customers go digital,” he says.”

IT INFRA UPGRADATIONThe bank had recently upgraded its IT infrastructure to take care of increased business transactions. Its LAN & WAN have been upgraded with new switches and centralized management capabilities. In addition, the data center infrastructure is in the process of being revamped with new technology. The ATM network has been upgraded for EMV compliance and to install anti-skimming devices and terminal security software.

IT TRAINING TOPICSThe bank had organized training programs on topics, including API programming, cyber security, RTGS/NEFT, network security, advanced database administration on Oracle DBMS.

Says Turakhia: “The topics for training include digital transformation and technologies, cyber security, business process re-engineering, Microsoft technologies, Linux administration and operations and PostgreSQL DBMS and administration.”

The bank recently organized a workshop on ‘Upload of Reports on Fin Net Gateway’ in collaboration with FIU-UND Delhi and Gujarat Urban Cooperative Banks Federation. Turakhia says more than 150 participants from 86 cooperative banks in Gujarat participated in the workshop.

Anand Gokhle, Deputy Director, FIU-IND and Geetha Krishnan from Wipro, resolved many issues related to uploading of different reports (CTR, STR, etc.) through the Fin Net Gateway.”

USE OF DIGITAL SERVICESKalupur Bank is multi-state scheduled urban cooperative bank and its branches are predominantly located in urban centers. The bank has 53 on-site and 5 off-site ATMs. All its branches have been connected under CBS. It has 59 branches in Gujarat and Mumbai, offers internet banking. Theportan E-Banking, provides anywhere, anytime, online access to accounts for the retail and corporate customers.

Turakhia says the bank’s experience has been that customers are now using more electronic channels such as mobile banking, RTGS/NEFT 24x7, internet banking, IMPS, UPI, ATMs/POS, etc. The lockdown has given an impetus to this trend and the usage of cheques, and physical visits to the branches by customers have sharply reduced. “In fact, our customers are now

demanding more features and transaction types to be incorporated in the mobile banking, internet banking and the ATM channel platforms. They have taken the advantage of our digital services and they have made extensive use of net banking, ATMs, online payments through Bharat Billpay services, online FDs, UPI, etc. The E-Banking application is developed using the latest cutting-edge technology keeping end user security in mind,” says he.

Last year, the bank had done well in retail loans. Turakhia says there is not much impact on savings accounts, but the overall challenges that the economy faces are bound to have some impact. Loan inquiries and marketing activities have been taking place through emails, SMS, WhatsApp and website.

VENDORS, PARTNERS, IT TEAMThe major technology service providers of the bank are Dell, HPE/Aruba, IBM, Hitachi Vantara, Infosys, Oracle, Microsoft and AGS. The datacenter of the bank houses 8 racks, with nearly 25 physical servers, and close to 75 virtual servers. Storage Area Network comprises storage systems from Hitachi Vantara and Dell EMC. Networking hardware is from HPE/Aruba and Cisco. The bank also has technology partners like Ashtech Infotech, BBSSL, Litmus Consulting, Mobileware, AGS, TM Systems, TCL, BSNL and ANS Enterprise. Its internal IT team comprises hardware and software engineers, network/server administrators, database administrators, IT management, and help desk personnel – a total of 35 people.”

PLANS FOR IT, DIGITALThe bank intends to bring about a complete digital transformation in its operations, processes, infrastructure and management. Turakhia says this will entail changes in business processes and automation to a large extent. This is a multi-year project and challenges will be in changing the culture and ethos of the bank rather than technology, he feels.

[email protected]

Kalupur Bank plans complete digital transformation

Dhimant Turakhia sees Kalupur Bank’s customers demanding more banking features on mobile, internet and ATM


Regional Rural Bank

The number of bank’s average daily NEFT transactions shoot up to 1000

Arunachal Pradesh Rural Bank is serving the trans-Himalayan state, which significantly has

international borders with Bhutan, China and Myanmar. Sponsored by the State Bank of India, it has 30 branches and all the districts of the state are covered catering to the banking needs of some 1.38 million population as per the last census. According to Dr Deepak Kumar Gupta, Chairman of the bank, the bank is committed to provide banking facilities to all the segments of the population with a state-wide branch network that is being expanded based on needs. The bank, he says is proposing to open 2 new branches by the end of this financial year. “We do not have our own ATMs as of now but we have already placed a request with NABARD for acquiring micro-ATMs and it is proposed that 50 micro-ATMs will be procured. In addition, we are in the process of deploying 50 PoS machines,” he adds.

CONNECTIVITY, CHANNELSThe bank is now introducing new technologies and multiple channels to provide banking services to as many people as possible in the state. To upgrade its connectivity, the bank has ensured that all its branches are connected by leased lines / radio frequency (RF). The bank also has VSAT facility connecting all the branches. The bank functions on a serverless systems and to that extent it has solved most of the connectivity issues. Gupta says the bank has implemented IMPS, UPI, NEFT, RTGS, etc, to cater to the increasing needs of the customers.

CTS, AVERAGE TRANSACTIONSThe bank has recently introduced cheque truncation system with the aim of easing clearance of cheques - both inward and outward – eliminating the delays that happen in the manual system Gupta says the average weekly cheque scanning at present is 15 since many of the branches are yet to move into the system which has been affected by the lockdown.

The number of average daily transactions for using various channels during FY2019-20 was 800 for NEFT and 40-70 for IMPS. For RTGS it is 50-100 on weekly basis, since it is only for inward transactions. “The number of average daily transactions for NEFT in the current year has shot up to 1000,” says Gupta, adding: “Mobile banking is being implemented and UPI transactions too will be introduced soon.”

The bank has implemented biometric verification process for account opening for Corporate Salary Package and it is planning to offer PoS machines to its BCs.

DIGITAL LITERACYOne key focus are of the bank is enhancing

digital literacy of the customers and the bank has been organizing financial and digital literacy camps at its branches. Says Gupta: “We have held 64 literacy camps in the last financial year and in the current year, 2 such camps have been organized but there has been a pause because of the lockdown. The camps – financial literacy and digital literacy – are being held on a rotational basis.”

PFMS: TRANSPARENCYThe bank has also implemented Public Financial Management System to facilitate Direct Benefit Transfer of government doles to beneficiaries thereby avoiding delay and ensuring the benefits reach the deserving people. Says Gupta.: “Through PFMS, we have been transferring subsidies directly to the people through their bank/post office accounts, which is really convenient for the beneficiaries. PFMS aims at timely transfer of benefits to the citizens by bringing efficiency, effectiveness, transparency and accountability in the government system.”

TECH VENDORSThe bank has its website - apruralbank.com - which offers adequate information about the bank and its various products and services. The bank’s technology partner is C-Edge, which has provided all the banking solutions, technology services and networking infrastructure. The IT of the bank comprises 4 members and network services are provided by NELCO and Airtel.

MULTIPLE TRAININGSThe bank has undertaken various in-house and outside training for its staff in 2019-20. The topics of these training programs included CKYC, AML-KYC, GST, mobile banking and CTS. Training sessions were held by NABARD, NPCI, C-Edge, etc. Says Gupta: “As part of these training programs, our IT department too has conducted multiple training sessions on C-KYC and AML-KYC for various regions and branches. Our IT staff has also attended training sessions provided by NPCI, NABARD, BIRD, etc on reconciliation, cybersecurity, etc.”

[email protected]

Arunachal Rural Bank: Mobile banking coming soon

Dr Deepak Kumar Gupta reveals that the bank has 50 PoS machines under deployment

Cooperative


The ordinance amending the Banking Regulations Act 1949 giving RBI control over cooperative banks is timely and opportune, feel cooperative banking veterans:

The central government has issued an ordinance amending the Banking Regulations Act, 1949, bringing all

urban cooperative banks and multi-state cooperative banks under the supervision of the RBI in order to protect the interest of depositors. The government said the Ordinance seeks to protect the interests of depositors and strengthen cooperative banks by improving governance and oversight by extending powers already available with RBI in respect of other banks to cooperative banks as well for sound banking regulation, and by ensuring professionalism and enabling their access to capital. The amendments do not affect existing powers of the state registrars of cooperative societies under state cooperative laws, it added.

The amendments do not apply to PACS or cooperative societies whose primary objective is to offer long-term finance for agricultural development.

GOOD FOR RETAIL DEPOSITORS“Since cooperative banking sector had been under dual regulation involving the Registrar of Cooperatives, RBI did not have adequate jurisdiction over these banks,” says Jyotindra Mehta, President NAFCUB and Chairman, Gujarat Urban Cooperative Banks Federation. “Now,” says he, “RBI will ensure corporate governance in UCBs and it will have enough powers to safeguard the interests of the retail depositors in cooperative banks. We believe that bringing the sector under complete RBI regulation at par with other scheduled commercial banks will go a long way in improving the health and operating practices in the sector. It will also provide comfort to depositors.

Some of the UCBs may need to raise capital from their members to mitigate their asset quality risks and further, a consolidation in this space may get a momentum involving the merger of weaker banks into stronger ones.”

Mehta pointed out that there are over 1500 cooperative banks in the country with

over 80 million depositors and estimated deposits of `4840 billion, making them systemically significant. He also felt post-ordinance some of the cooperative banks would be required to raise capital from their members to mitigate their asset quality risks. A consolidation in this space may get a momentum involving the merger of weaker banks into stronger ones, he added.

BETTER GOVERNANCEUmesh Chand Asawa, MD and CEO, AP Mahesh Cooperative Urban Bank, and a member of the managing committee of Indian Banks Association (IBA) as cooperative banks’ representative, says when there are irregularities noticed, RBI can now remove the board of directors and appoint its own administrator without the intervention of the registrar of cooperatives. Besides, prior approval of the RBI will be a must for the appointments of MD and CEO of these banks.

Asava further explained that as per the Banking Regulations Amendment Act 2020, all cooperative banks have already been brought under RBI control, while powers of the cooperative department will remain the same. However RBI need not have to write to the cooperative department for suppression of boards of these banks.

REVIVAL OF PMC BANKRatnakar Deole, former senior officer of RBI and a cooperative banking expert, feels that the ordinance will help expediting the revival of PMC Bank by exercise of new powers RBI has acquired. “I hope the position will be clear now. The whole Banking Regulations Act is made applicable to cooperative banks. The RBI will have all powers of merger, amalgamations, reconstruction etc wherever considered necessary. The Registrar of Cooperatives will have powers relating to the management, ie conducting elections to the boards of directors as per the criterion prescribed by the RBI,” he adds.

BETTER SCOPE FOR COOPSVinod Dadlani, CEO, Kalupur Commercial Cooperative Bank, pointed out that in the past, whenever NAFCUB or other representative organizations requested RBI to take swift steps to protect the interests of depositors when a cooperative bank went into difficulties in the same manner as it acted in respect of commercial banks, the RBI would point out that it could not do so because it did not have adequate powers. “With the proposed amendments, the RBI will have almost all the powers to regulate all UCBs. UCBs may now face more stringent regulatory regime, which may be for their good in the long run. The RBI will also be able to address delinquency in UCBs in incipient stage so that these banks either recover or get merged/taken over in good time. The public trust in UCBs should also improve by these amendments,” he said.

Dadlani also pointed out that boards of UCBs can now be superseded by the RBI without RCS/CRCS approval. Appointments of CEOs will be with prior approval of the RBI and governance and professionalism will improve. It is possible, he said, that these banks may now issue shares at premium, as also issue preference shares and may even go for listing. Also, there could be restrictions on refund of share money, he added.

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RBI control will make coop banks more professional

The ordinance is expected to prevent scams of the like of PMC Bank


People Track

Natarajan Balakrishnan to head HR at RBL BankRBL Bank has appointed Natarajan Balakrishnan as Head - HR Risk & Governance, Employee Relations in the bank. He was HR Business Leader at L&T Financial Services, where he was heading employee relations for the company, besides overseeing Group HR operations. He has also worked with HDFC Bank as Head - Employee Relations & Contract Staffing, Dena Bank and Union Bank of India.

Bharat Ravuri to head Principal Asset India Principal Financial Group has appointed Bharat Ravuri as MD Principal Asset Management in India. He will spearhead the business and operations for the company and be focusing on improving financial inclusion, providing better access to solutions and, enhancing long-term financial security for customers. Ravuri joined Principal India in 2019 as MD for Principal Retirement Advisors. He has over 26 years of corporate and entrepreneurial experience in the financial services industry across multiple countries. With a strong understanding of Indian fintech landscape, he successfully launched MintZip, a fintech firm that helps simplify financial decisions for customers. He holds an MBA in Leadership & Change Management from Indian School of Business.

Gaurav Maheshwari is new CFO, StanChart IndiaStandard Chartered Bank, India has appointed Gaurav Maheshwari as its new CFO. He has taken charge or 22 June. He replaces Subhradeep Mohanty, who has been elevated as CFO, Africa Middle East (AME) region. Maheshwari has over 23 years of experience across financial and corporate sectors. This is his second stint at Standard Chartered Bank wherein he had put in 17 years in various roles in the finance team. He has also worked with reputed companies like Reuters, India and Coca-Cola, India. In Standard Chartered India, he is reporting to Jean Fernandes, regional CFO, Asean and South Asia and Zarin Daruwala, India CEO. Maheshwari did his Bachelor of Commerce from Sydenham College of Commerce and Economics and then completed his Chartered Accountancy.

Pralay Mondal to join CSB Bank CSB Bank said it has appointed Pralay Mondal as president (Retail, SME, Operations and IT). He is expected to join the Thrissur-based bank in September 2020. He had recently resigned as ED and head of Retail Banking at Axis Bank. Mondal has about 30 years of banking experience across multiple business and functions including retail assets, retail liabilities, business banking, products and technology. Before his job in Axis Bank, he was the Senior group president and head of Retail and Business Banking at Yes Bank, where he set up the entire retail franchise in a record time.

Shiju Rawther is CIO, Poonawalla FinancePonawalla Finance, a part of the highly diversified $13 billion Dr Cyrus Poonawalla Group, has appointed A Shiju Rawther as Chief Information Officer (CIO). Shiju has been with IIFL Finance as Executive Vice President – Technology. In his new assignment, he will be spearheading the IT function, strategies and designing the digital roadmap for the organization along with Plan, Build, Run, Secure and Analytics functions. He is a technology leader with business acumen with 2w decades of experience in major operating tenets as driving

digital transformation through thought leadership, innovation, analytics and delivering value to stakeholders.

SIDBI has a new DMDV. Satya Venkata Rao is the new Deputy Managing Director of SIDBI. He has taken charge recently. He has more than 29 years of experience in financial institutions like IFCI and HUDCO and has handled several departments including legal, human resources, corporate communications and worked as Central Public Information Officer and Appellate Authority under the Right to Information Act. He has also served as a director on the boards of a venture capital company, a real estate company and societies registered under the Societies Registration Act.

Paul Thomas elected Chairman, Sa-DhanK Paul Thomas MD and CEO of ESAF Small Finance Bank, has been elected as the Chairman of Sa-Dhan, the largest association of community development finance institutions in India. The election was held at the 22nd annual general meeting of Sa-Dhan. Mukul Jaiswal, MD, Cashpor Micro Credit, was elected as Co-Chair, and H.P. Singh, CMD, Satin CreditCare Network, as Treasurer. Sa-Dhan is an RBI-recognised self-regulatory organisation for non-banking financial companies and microfinance institutions.

Sumit Bali moves to Axis BankAxis Bank is appointing Sumit Bali, who recently resigned as CEO at IIFL Finance, as head, Retail Businesses. Reports in the media suggested he will be replacing Pralay Mondal, who recently resigned from the bank to join CSB Bank. Bali is expected to join the bank in July as president- Retail Assets. He was associated with IIFL Finance for 2 years as its CEO. He had also worked with Kotak Mahindra Bank between 2014 and 2018 as its senior vice president and with Kotak Mahindra Prime as its CEO. He is a graduate from St Stephens College in Delhi University and a post-graduate from IIM, Ahmedabad.

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

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