The embracing of futuristic technologies has gained significant momentum across the banking and financial sector. From streamlining the services for the customers to cost savings, upgradation in terms of tech-deployments are fast gaining acceptance, opined experts from across the Banking, Financial Services and Insurance (BFSI) Sector during 3rd BFSI Leadership Summit in Mumbai, organised by Elets Technomedia.
Technology Rebuilding the Future
The banking sector in India is geared up for a transformational space in the next decade. With technology progressively becoming a crucial part in the household and digital servicing domains, we are not far from the time when customers would place their trust in robots or artificial ‘chat-bots’.
Implementation of advanced technologies such as applications of Artificial Intelligence (AI), Machine Learning (ML), Block Chain and Robotics, FinTech is now perceived to be the next big driver in a few years.
“Digital landscape is evolving at a very fast pace. If we observe the trend of technology implementation a decade ago, AI, Machine Learning, Chatbots, IoT and Blockchain were still a matter of curiosity. Back then, it was predominantly adopted by the stakeholders across the retail sector. These technologies are predicted to have a great future across the BFSI sector and AI, in particular, is expected to result in 30 percent cost saving and 20 percent increase in the revenues,” said Abhijit Shah, Chief Technology Officer, DCB Bank.
- A recent report by McKinsey on the use of technology in the BFSI sector mentioned that more than 30 percent of tasks in the industry will be taken over by machines by 2022.
- As of now, financial institutions only use 0.5 percent of their Big Data and are increasingly realising the unused prospective in accessing and effectively using the rest of the technology. As a result, the claim for skilled data scientists is inflating. In fact, data scientist jobs in India rose by 400 percent in the last one year.
- Blockchain technology is enabling several digital banking processes such as collateral management, Know Your Customer, smart assets and more. As of result of this, blockchain jobs have seen a 400 percent increase with salaries shooting up by 50-100 percent, in the past year alone.
“From Kotak Mahindra Bank perspective, technology has been at the forefront always. At the bank, everything revolves around customer’s expectations and customer service. UI UX (UX Design refers to the term User Experience Design, while UI Design stands for User Interface Design) is important in today’s era. Gone are bricks and mortar days of banking. Millennials need everything at one touch and to cater to this need, we were the first bank in India to unveil 811, a digital application that enables swift and convenient digital banking,” said K R C Murty Head of RTB Function (Information Technology), Kotak Mahindra Bank.
Artificial Intelligence: Agent of Convenience
Artificial Intelligence (AI) is rapidly evolving as the most popular technology for companies across the globe, enabling a personalised experience for individuals. The technology itself is refining itself and getting smarter day by day. The banking sector, in particular, is becoming one of the first adopters of AI. And like other industries, banks are also exploring and implementing technology in various ways.
“AI is significant for ensuring cybersecurity across the sector. However, its implementation for ensuring security is still at a pilot stage. We are still at the stage of Machine Learning where the data is studied, the correct algorithm is figured out and final analysis is made. The times ahead are interesting across the security scenario. It has given a lot of convenience to the customer and his onboarding,” said Samson Samuel, Technology Strategist, Positka.
- In 2017, the global spending in AI applications touched $5.1 billion. (Source: Fintech India report by PwC)
- 83 percent of Indian bankers believe that AI will work alongside humans in the next two years — a higher than the global average of 79 percent. (Source: Accenture’s Accenture Banking Technology Vision 2018 report)
“E-KYC as a used case has evolved over a period of time. It is one of the readily available examples of AI implementation in India. This particular model has a lot of challenges associated with it but despite that, it is one of the best digital ways to connect a customer with the bank without even visiting the branch physically,” said Sunil Soni, General Manager-IT, Punjab National Bank.
Rise of Chatbots: The intelligent banking assistant
The rising advancements of mobile technology have helped the users in exchanging details, authenticate and perform transactions seamlessly. The information which is literally available at our fingertips has eliminated the need for human support. In alignment to this, a platform is designed to understand, learn and converse like a human and respond to the impromptu queries in real time. This is commonly referred to as a chatbot. Chatbots have successfully attracted the attention of firms across industries and are viewed as a means to create differentiation in an increasingly crowded landscape.
Talking about the role of Artificial Intelligence (AI) or the Chatbots in the insurance sector Bhavesh Lakhani, Chief Technology Officer, SBI Mutual Fund said, “SBI Mutual Fund was the first one in the segment to introduce Google Assistant as well as Alexa. So you can now choose any of the platforms and talk to SBI Mutual Fund which in return will take you through common queries. But this alternative is yet to gain confidence across customers as they still rely on humans and willing to speak to salesperson prior to opting for a plan or make an investment.”
“Life insurance sector is a bit different from other insurance categories. The moment we ask a customer to get his medical test done prior to insurance, there are chances of him opting out. This is the scenario across 60 percent of the customers. So, to avoid this we make use of technologies like AI and ML to analyse the status of the customers without any medical examination,” said Srikanth Ramasubramanian, Senior Vice President-Business Systems and Technology, HDFC Life.
However, with the increasing deployment of technology and innovation the risk of getting infected to the malware also inflates. It is, therefore, important to verify the technology invitation prior to allowing it into the phones or computers.
“Great opportunities are associated with technologies namely AI and ML. But India is different and diverse. Here every state has different dynamics. In India, the biggest challenge is from the regulation point of view. You have to inform the customers that you are using his data and reason behind it. But again, if you provide lucrative offers, people in India willing allow all usage and agree to all the conditions,” said Lalit Popli, Head-Information Technology & Chief Information Officer, ICICI Prudential Asset Management.