Technology interventions have made the National State Exchange (NSE) operations much less prone to fraud and manipulation, and helped attract much greater participation as compared to erstwhile manual operations, says Sankarson Banerjee, CTO-Projects, NSE, in an interaction with Poulami Chakraborty & Harshal Desai of Elets News Network (ENN)
How would you define a CTO’s role in financial institutions and his contribution to business development?
Initially, the role of a CTO was envisaged as the head of existing technology, who would ensure the organisation’s investment in technology is the right one, and that the technology is purchased and implemented effectively.
In any department or division of any organisation, software and hardware evolve rapidly. But these tools are required to be updated regularly. So, previously, a CTO was considered to be responsible for managing all the necessary changes in the area of Information Technology implementation in the organisation. However, the BFSI sector in particular saw increasing dependence on technology visa-vis new product innovations. In fact, new product innovations came from technological ideas only. Technology made business models viable and practical, and companies started taking the initiatives further.
So, a CTO actually helped a business model run and work for the betterment of the institution and customers. Whether it is any loan product or any kind of mobile digital channel, CTO’s involvement became crucial in building a feasible strategy rather than just maintaining and managing the existing IT infrastructure and solutions. And, as this trend started evolving, CTOs became a part of planning sessions along with CFOs and CEOs. Several technologies, including the Block Chain technology, are a result of increased active role of CTOs.
How has the banking sector evolved in last few years?
The BFSI sector, which has always been an aggressive user of technology, is primarily an information-based business. Since it does not deal in any physical product, technology can benefit the banking sector better than any other manufacturing company. So, technology has enormously expanded the reach and scope of the sector in the last four-five years. The increasing number of products, like loans, credit cards, products related to saving accounts, asset products and insurance products, clearly exhibit the expanded scope, which has been possible following the technological innovations. There are plenty of choices for customers today. All these choices have been enabled with the help of the advanced technology. Further, the modern technology has also enabled the institutions to deliver products in a much more committed way.
The reach of financial institutions has also expanded to a great extent. We now don’t have to restrict ourselves to 9 am to 3 pm to complete the banking tasks, as we can use our mobile phones and computers to perform several banking-related work. In India, banks have actually taken a big leap and have not even stopped issuing cheque books by default. IMPS options have performed very well in India. We have come a long way from branch banking to digital banking.
The NSE is a child of technology… Manpower-wise, it is a lean Exchange — we have less than a thousand employees, as our system is completely automated
How has the technology been adopted in the NSE ecosystem?
The NSE is a child of technology. We are the first fully electronic exchange in India. We had become a market leader in the very years of our inception. Technology is much less prone to fraud and manipulation and it has helped us have much greater participation in India, and take out footprints to most of the parts of India. And, the expanded reach and participation ultimately helped customers, as they have access to several technologyenabled products offered by the Exchange. Our Nifty 50 is probably the largest index. It is purely an electronic creation. All these benefits have made the life of customers easy.
Manpower-wise, the NSE is a lean exchange — we have less than a thousand employees, as our system is completely automated.
What are your views on the increasing number of e-Wallets? Are they threats to mobile banking applications?
e-Wallets are not fundamentally different from mobile banking. They are not regulated the way banking applications are. However, there are a few limitations with them, especially on amount it can store, though e-Wallets can certainly ignore several rules, which a banking application can’t. However, all the money travels through the banking systems.
Are new trends like mobile, social media or internet banking a threat to regular banking system?
The banking sector is happy to adopt all these new trends and technologies. However, these may pose a challenge to individual banks. So, the banks, which are not able to keep pace with the changing trends in demand, will suffer. According to a survey, only 4-5 per cent people want to visit a branch. So, the banks that can move with the time will ultimately benefit. Better payment options better bill payment and better money management are some of the major requirements of today’s customers.
Is the NSE exploring technologies like biometric authentication for their customers?
We don’t do biometric authentication ourselves, because it is complicated. We rely on Aadhaar. We are not a B2C company. We don’t directly serve customers – we serve brokers, who serve our customers. We have started linking things to Aadhaar, but customers do not login to our system. We are actually the backend. However, internally we have started biometric system at our data centre. We have also experimented with voice verification technology. We are actually working on India-specific requirements.
Can you share your opinion about the Unified Payment Interface (UPI) system?
UPI is a unique innovation. It allows people to transfer money to other people in a secure way instantly. This feature is going to change the way payments are made in the country in the days to come.