The building blocks for digital business are connectivity (online, mobile, social), automation (process enablement) and decision capabilities (analytics, big data), says Joydeep Dutta, Executive Director and Group Chief Technology Officer (CTO), Central Depository Services India Limited (CDSIL) in conversation with Rakesh Roy of Elets News Network (ENN), and talks about transformation of Digital technology in the finance sector and its impact.
Having being into this sector for 35 years tell us about the Information Technology (IT) and Digital Technology evolution in the financial sector.
In today’s age of innovation and transformation, IT is considered as a strategic function and the key differentiator in many organisations because almost every process has an element of IT. Financial services companies, in particular, have been the leaders in adopting technology.
In India, processes pertaining to digitisation accelerated its journey in early 2000s, wherein enablements of processes over the alternate channels were gradually adopted by organisations. Traditionally, business volumes were directly proportional to physical work, and to increase business’s reach, companies opened up branches at locations that were likely to have the most customer walk-ins.
Earlier, companies preferred paper-based processes and interactions were face to face. But with the advancement and availability of internet, mobile and high-speed telecom connectivity, companies started offering products and services through alternate channels.
What changes did the business dynamics undergo with the rapid penetration of digitisation in the finance sector?
Shifting to new technologies from traditional systems and methods is not an easy step. Sometimes, the culture and ethos of the organisation hinder them from embracing change. However, keeping abreast with technology is mandatory and every organisation has to adopt it for being relevant.
While companies are increasingly focusing on re-skilling older employees with regards to new technologies and processes, a lot of effort is required from the employees for unlearning skills acquired over the years. While automation is expected to replace some jobs, it will also create new ones that are required to manage mature technology.
Companies that succeed in creating a digital customer value proposition do not get there by accident. They develop a clear vision of how they will meet their customers’ digital needs, set objectives against that vision, and execute often over the course of multiple years.
What are some of the key digital initiatives of CDSL Group?
CDSL was set up in 1999 as a financial market infrastructure company to offer depository services to customers. It nearly has 1.45 crore active depository accounts through 600 intermediaries (brokers, banks, custodians).
Some of our services include:
Our internet based platform allows investors to monitor their accounts and securely execute instructions. It is available to those who like to transact without the need to visit their depository participant. This channel is particularly useful for those customers who belong to depository participants and do not have their own internet channel offering.
The mobile based investor application is also available on Android, iOS and Windows platforms offering similar capabilities as the internet channel.
eVoting and mVoting are internet and mobile based voting platforms respectively wherein shareholders can login and register their votes on company resolutions during designated voting dates. Results to such voting can be published instantly to companies. A venue voting facility enables specific shareholders who prefer to vote at the meeting venue on the day of the meeting proceedings.
Consolidated Account Statement (CAS) is collaboration between two depositories and four Register and Transfer Agents (RTA). It helps in publishing consolidated customer statements, which are reconciled every month and sent over email in a largely automated manner. Bounced mails are sent physically to the investor to his registered address.
KYC Registration Agency (KRA): For Securities and Exchange Board of India (SEBI) regulated entities (stock brokers etc), Permanent Account Number (PAN) based electronic Know Your Customer (KYC) platform with five inter-operable Key Result Areas (KRA) are in operation. Financial intermediaries may sign up with one KRA and create KYC record for a customer only if he/she does not exist in any of the five KRAs.
Aadhaar based eKYC and eSign services of Unique Identification Authority of India (UIDAI) are offered to intermediaries by integrating their channels with our Aadhaar service platform.
Insurance Repository (IR): Demat of insurance was started for life insurance initially and later for general insurance products, wherein records are kept centrally in electronic form across insurance companies. This initiative is as per Insurance Regulatory and Development Authority of India (IRDAI) guidelines.
National Academic Depository (NAD): The NAD initiative of Ministry of Human Resource Development and University Grants Commission(UGC) holds academic records of students from Class 10 onwards. It is a single database of all student records, enabling electronic verification services.
Goods and Services Tax Service Provider (GSP): As a GSP licensee of Goods and Services Tax Network (GSTN), this service is being provided to GST Application service provider (ASPs) and end customers for their tax filings.
Commodity Repository is the most recent digital initiative under the regulator Warehouse Development Regulatory Authority (WDRA). This platform facilitates electronic issuance, holding, deposits, withdrawals and transacting of commodity warehouse receipts.