Bahwan CyberTek-Empowering Banks with Predictive Analytics Solutions

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Jaya Vaidhyanathan
Jaya Vaidhyanathan, President, Bahwan CyberTek

Bahwan CyberTek has an array of solutions for digital transformation across the Banking, Financial Services and Insurance (BFSI) segment. Being a specialist in governance, risk and compliance technologies, we were the first in India to build and implement a predictive analytics solution for Early Warning System for large banks in India, says Jaya Vaidhyanathan, President, Bahwan CyberTek, in an interview with Elets News Network (ENN).

Give us an overview of your products and services.

The Banking, Financial Services and Insurance (BFSI) arm of Bahwan Cybertek specialises in the Risk Management area, commonly known as Regulatory Technology (Reg-Tech), done through the Asymmetrix product suite. Asymmetrix risk management for banking domain offers solutions across credit risk, liquidity risk, model risk and operational risk.

The modular solution suite allows for implementation of each module separately, and empowers banks to be fully compliant with latest regulatory standards. The Asymmetrix umbrella consists of the following:

  • Early Warning System (EWS) is a solution that alerts bankers pertaining to the incipient stress in accounts much before they reach the default stage, so that corrective action can be taken and credit recovered.
  • Enterprise Risk Management (ERM) is a platform for operational risk management system covering Risk Assessment, Monitoring, Measurement and Reporting. The solution is scalable for AMA modeling and facilitates capital charge calculation.
  • Model Risk Management (MRM) helps institutions in the model life cycle including DIY performance monitoring and validation of their models for a variety of applications across corporate and retail businesses.
  • Asset Liability Management (ALM) helps financial institutions balance their assets and liabilities, through data aggregation as per BCBS239, optimisation and modeling for scenario analysis and stress testing.
  • RAROC Calculator is a handy tool that computes the RAROC (Risk Adjusted Return on Capital) so that the bank’s relationship manager has the expected profitability from the account on his/her fingertips before giving a quote.
  • Capital Engine facilitates capital computation for Credit Risk, Market Risk and Operational risk.

Your brand offers solutions in 20 countries across North America, the Middle East, Far East, Africa and Asia. What challenges and opportunities do you witness is India in terms of digital transformation?

  • Digital Revenues is a critical reason why India SME INC, India INC, and Governments will eventually move to digital, especially the B2B sector.
  • Reducing transaction costs, in turn facilitating small value payments, is welcoming massive numbers of first-time customers into the banking ecosystem. Customers, who have never used cheque books/demand drafts, have leapfrogged into mobile wallets, thereby resulting in an explosion of e-payment volumes as well as data on consumption habits.
  • Artificial Intelligence, Chatbots, Virtual Reality (VR) will pervade the B2C space over the next two years. In B2B, technology will improve ease of doing business and bring transparency.
  • While Micro, Small & Medium Enterprises may find cost factors prohibitive, yet it would be inevitable. • This will drive the need to be operationally efficient, which will happen automatically as these technologies extend throughout the customer journey lifecycle.
  • There is going to be huge pressure on IT companies to respond to the increased demand at moderated costs.

 Tell us about I@Bank. How significant is its role in today’s Indian banking industry?

‘I@Bank’ – Intelligence at banks, enables us to have hassle-free banking experience without visiting a brick-and-mortar outlet through disruptive technologies. India has been at the forefront of change, constantly investing in technologies to be where their customers are, and we believe this will bring a dramatic change in the way customers are going to experience banking services. Virtual Reality can help financial institutions improve intimacy with their customers where they can engage with the bank without a branch visit, and can visualise what happens with their savings, investments or borrowings. While Chatbots are already helping customers find answers to their queries without having call or email, Artificial Intelligence will work with Machine Learning to dramatically improve processes and bring customer empathy. AI along with Predictive Analytics can continually provide insights on how these services are performing and how customers are handling them. AI can help both the bank and the customer make intelligent decisions about the choices they have. We also believe that when banks do that, regulators will keep a close watch.

How do you look at risk and regulation technology across India? What should be done to ensure predictive analysis amongst financial organisations?

The Reserve Bank of India (RBI) has been paying special attention on detecting frauds or payment default, early. However, to understand the readiness of the banks, we did a quick survey, the results of which are summarised below:

  • Banks unanimously voted that they wanted a New Solution for “Early Warning System”
  • Automation was selected as a critical factor for compliance, and only a handful of banks claimed their systems were fully ready
  • Banks said they want a scientific method of selecting Benchmarks through a combination of statistical and intuitive approaches
  • Banks wanted an Integrated Organisation structure for Risk Management
  • Data & risk expertise ranked amongst the top two priorities in Credit Monitoring for Banks
  • Data-Driven Decision Making through predictive models ranked first amongst the top five priorities

BFSI has been a key focus for Bahwan CyberTek since inception and has an array of solutions for Digital Transformation in this vertical. Being a specialist in Governance, Risk and Compliance Technologies, we were the first in India to build and implement a predictive analytics solution for Early Warning System for large banks in India, for which we see demand growing.

The uniqueness of the product is that it is a pre-built framework based on RBI regulations that need minimum customisation and is at the same time, expandable to meet futuristic needs of credit monitoring.

In addition, we have predictive analytics solutions for the whole gamut of risks banks face, aimed at empowering banks with their strategic intent of profitable growth.

We have built products for:

  • Asset Liability Management to help banks tackle Balance Sheet Risks
  • Enterprise Risk Management for enhanced operational efficiency resulting in profitable operations
  • Model Risk Management to evaluate the wide range of statistical models used by a bank for analysis and decision making and manage risks arising thereof.
  • Capital Engine for capital computation based on credit risk (based on standardised and Internal Rating Based (IRB) approaches), Market Risk (SDA) and Operational risk (BIA).
  • Risk Based Pricing of advances, enabling banks to grow their asset book and trade finance operations profitability

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