Digital transformation has brought a new culture in the BFSI Industry

Vinod Kumar, Chief Information Officer, Fino Payments Bank

In this era of digital explosion, understanding and adapting to the changing consumer behaviour is more important than ever for organisations. Also, the competition has never been so cut throat before and it can come from anywhere. Fintechs and new competitors are flooding the market at a rapid pace bringing some new technologies or business models. To discuss more about cloud banking, Vinod Kumar, Chief Information Officer, Fino Payments Bank, talked with Shruti Jain of Elets News Network(ENN).

How is data-driven banking making a difference for payment banks?

Today payments banks have become data driven institutions to thrive in a space with thin margins to play with. The services and offers are planned to increase the profitability by analysing various aspects such as industry needs, customer experience, personalised services, resource augmentation etc.

Significance of data, be it structured or unstructured, is increasing in all industries globally and banking is no exception. Customer demographic and transactional data collected through various forms play a significant role in the day-to-day banking activities.

Organisations are leveraging the collected data by applying various analytics to enhance customer experience, to create assets to the business growth. Payments banks, that operate more in rural India and with limitations of licensing terms, try to break through by identifying all available opportunities from the analysed data.

For the human resources deployed across regions that payments banks operate, the available data, predictive analysis using demographic and transactional data, trending etc, have become input to make the best out of the information.

Question every boardroom ask is for incremental gains, what all data is available? How the data available can help identify the opportunities? How fast and accurately can we use the data for prediction and action?

At the same time, the protection of data has also become a challenge for every organisation. This is where banks spend most of their technology spends to ensure customer information is safe.

The challenges every bank face will be how to use the data scattered across various systems, on-prim, cloud, several applications/geographies etc.

Finally, it is important for any bank to strategise their data identification, usage and timely prediction for the business bottom-lines.

What would be the future of banking by the year 2030?

Let us rewind and remember how the bank used to work 30 years back. Grill doors, fully protected teller counter, doors closed for public service after noon (say 3.00pm), for every transaction customer had to queue up at the counter with token.

Further, cheque book had to be collected from Branch, took 7-10 days for local cheque clearance and 15-30 days for outstation. Branch manager used to be our family member, helped in personal wealth management and so on.

Today we hardly visit our branches and many of us might not even know who the branch manager is. Almost all transactions are managed through our mobile or PC/laptop. Technological developments have changed life as well as banking in the last three decades.

Today, with advanced fintech solutions we know what the customers require and how the requirement can be met. How will banking will be like in 2030? Should be interesting!

Firstly, continuous disruption has become the norm as rapid changes, especially in financial services, leaves little time for organisations to react. Any inherent existing weakness within the banking business models, weak processes and high-cost solutions to manage customer requirements paved the way for fintechs to bring disruptions.

The future of banking will be all about digitisation-led services that will impact customer’s life on a day-to- day basis, public scrutiny of banking operations to avoid high level frauds, customer centric technology platforms and focus on continuous customer education for enhanced banking experience. We can expect a different world as video analytics, drones and robots set to manage banking operations.

Various controls to manage security standards like country-based data protection regulations, GDPR etc, will also make their own way to improve the security and customer acquisition. Banks might face competition from various other entities apart from fintechs. Data lead economy, digital enterprise and drive will change the banking development platforms.

The silos in banking legacy technology will take a back step or the enterprise converged technologies will mitigate the limitations due to legacy and silo-based operations. Enterprise services will institutionalise the banking service model with various digital mindsets and technology adoption.

Banks may move to a non-existent, but connected, available and focused operations while data drives the dynamic business models as per predictions for 2030.

As a CIO, how are you leveraging cloud banking to create new business frontiers?

Cloud technology can transform a bank’s digital landscape to achieve business goals, compliance and data security, and deliver an omni channel customer experience. As stated earlier, banks are expected to be invisible, connected and data-driven by 2030 and today cloud is a top agenda for every banking CIO.

Various technologies are expected to transform the banking landscape in the next 10 years. Cloud infrastructure is one such technology that will help banks meet the specifics. Technology allows the banks to upscale and downscale the infrastructure requirements.

CIOs are now increasingly focusing on leveraging the cloud technology due to its agility, efficiency and ease of adoption. With 5G coming up, the Indian industry will adopt much more from the cloud technology to optimise organisation, reduce cost and to provide better end point customer support. Banks are enabling multi-cloud technologies to increase the productivity, capacity enhancement and availability.

At Fino, we adopted cloud in the early stages of technology deployment. We used technology solutions to integrate with legacy systems and cloud managed systems that helped us be more productive in terms of cost and manageability. We started developing new technologies with cloud ready platform and architecture to ensure migration is smooth as and when the cloud adoption to be taken for any such applications.

Many initiations are taken at CIO level for enterprise-wide consolidation of applications and databases to provide common view, data insights etc to take informed decisions. These steps help organisations develop strategies to enable better customer experience, drive innovative ideas that can bring down the cost of operations, deploy various AI/ML technologies that can bring more value.

Along with the availability of data, data security is becoming easy to manage with consolidation and available cloud based off the shelf leveraged tools appropriate to each cloud environment.

Yes, it is still a challenge to get the right resources, retaining them and cost management while implementing high through out systems that are the backbone of banks.

In what ways does your bank emphasise the convenience of digital banking with traditionalist consumers?

Banks perform several important functions in the economy and Fino is always part of the ecosystem in this consumer decision making environment. Gone are the days where consumer accepts what is offered to them for engagement. Today, there are many platforms available for the customers to choose. Knowing this, Fino has always been a front runner to ensure customers get what they expect from the bank rather than bank pushing what it has got.

We bring digital banking closer to our customers’ doorsteps through a phygital network of tech-enabled neighbourhood merchant points. We have over a million points that cover 90 per cent of the districts and over 94 per cent of the country’s pin codes that provide assisted digital services to customers. A physical outlet with a digital experience has resulted in banking adoption and usage in rural areas.

Unlike traditional bank branches that are open for a limited time during the day, Fino merchant points are always available. Our points are the local small business owners such as kirana and mobile repair outlets that are open till late in the night, providing great convenience to customers. Anytime, anywhere, Hamesha!

With Fino Payments Bank, customers don’t have to worry be it opening new account, deposits, Micro ATM/ AePS transactions or money transfer, they can visit any point at the time of their convenience and do the transaction. Additionally, they get assistance to avoid mistakes. Therefore, for our customers Fino means Fikar Not!

Keeping banking transactions aside, Fino’s core business also consists of merchant and customer acquisition through various channels. All these enabled functions require appropriate monitoring mechanism to ensure smooth functioning. Fino services both the supply side to the customers and in parallel the demand side to sync up expectations of services. Gap in any part of the eco- system will have major impact on overall performance and customer satisfaction level.

Digital technologies overall impacted the industry in terms of increasing competition and contestability of banking markets. Fino has been up in the curve to manage the digital movement right from its initial days as a bank. The bank deployed customer centric platform-based models, Open APIs to ensure smooth integration with partners.

How is Fino accelerating its digital transformation to capture the customers wholeheartedly?

The consumer is the king, always! Therefore, in this era of digital explosion, understanding and adapting to the changing consumer behaviour is more important than ever for organisations.

Also, competition has never been so cut throat and it can come from anywhere Fintechs and new competitors are flooding the market at a rapid pace bringing something new, technologies or business models. In this scenario, adapting to consumer preferences will decide the future of any bank and Fino is no exception.

The bank is well aware that digitalisation is the way forward to meet customer expectations and if it fails to do so, customers will move to competition in no time.

Therefore, for Fino digital transformation means deployment of modern technologies to improve business functions, accelerated system processes and ensuring the enhanced customer experience. This also means reduced costs, better performance, increased productivity and higher profits.

Some of the major steps the bank has taken as part of digital transformation is to identify the right technology that enables internal and external customer facing applications. New technology platforms are made to meet the immediate and long-term goals of the organisation. Ready to adopt hybrid or cloud environment helps the bank choose an environment that is scalable and secured. New technologies are welcomed wholeheartedly by Fino that can support strategies around cost effectiveness and customised end user experience.

Building employee friendly applications that are more adaptable to on ground field staff, helps improve their performance, digitalise most processes that allows them to focus on their core job than working on documentation. This helped the bank increase productivity, reduce errors and ensure compliance is met.

At Fino, digital transformation is a continuous process. The usage of technology brought in a new culture with our human resources team welcoming the digital changes by believing the result that can bring out on the overall strategy.

The bank also provided necessary platforms for learning and development through various portals, digital information sharing, promoting the digital movements and importance of the same. These initiatives made the employees feel empowered and believe they are part of the evolving digital banking ecosystem.

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