What is giving C-Suite officers sleepless nights?

Digitisation is sparing nothing and no one, and banking is no exception. The digital transformation comes with its own pros and cons for the companies to grow overall. This changing phase of technology every second day is, however, making it difficult for the companies to stay ahead in the game and is giving sleepless nights to the top-notch leaders in the Banking, Financial Services and Insurance (BFSI) sector. On the basis of experts’ opinions, Anupama Suresh Mehra of Elets News Network (ENN) explores the areas that are keeping C-suite officers up at night?

The BFSI sector is the backbone of any economy and more to say it is a driving force for the economy of the developing countries like India. It is one of the fastest-growing sectors and has been contributing to a great extent in development. The Asian Development Bank (ADB) has forecasted that the Indian economy for Financial Year 2019-20 to grow at 7 percent from that of 7.2 percent estimated earlier. This is in line with the estimates by the Reserve Bank of India (RBI) as well as the Chief Economic Adviser in the Finance Ministry Krishnamurthy Subramanian.

Despite this, India will remain one of the fastest-growing major economies in the world, as China is projected to grow at 6.1 percent in the financial year 2019-20, according to the ADB’s estimate. “India’s growth is expected to be driven by factors such as accelerating investment growth and options, the decline in interest rates, and creating a conducive atmosphere of doing business in India coupled with Make in India’s policy boost.

BFSI is the industry that has to take the lead in speeding the progress of the economy.  Definitely, there are challenges that need to be continuously addressed and so is the case for CXOs of BFSI, who have to burn the midnight oil,” Kersi Tavadia, CIO, Bombay Stock Exchange Ltd said. However, the default on payment obligation of bank loans by IL&FS Financial Services, a group company of IL&FS, has ignited a panic button not only in the BFSI sector but all across the businesses of the country.

Failure of IL&FS had a cascading effect on the overall health of BFSI and other sectors like auto, reality etc, which in turn has multiplied the burden on the public and private sector banks. Failure of JetAirways, defaulting on loan payments of DHFL, the poor financial health of Reliance Anil Dhirubhai Ambani Group (ADAG) companies, rising Non-performing Assets (NPAs) of almost all the public and private sector banks, etc. are indicative of poor health of BFSI in specific and overall the economy of the country in general. The financial crisis initially started with a fraud of approx. USD 2 billion of Punjab National Bank (PNB) two years back, is unstoppable and the chief executive of BFSI’s are facing such situations periodically after that.

The financial crisis is inducing restlessness and sleepless nights to the top-notch officers of the BFSI sector as well as to the industry in general. The recent suicide incident of Cafe Coffee Day (CCD), Founder and CEO, V G Siddhartha is a live example of real pressure on the executives to perform in the present political, social and economic environment of the country.

As per the media reports, Siddhartha had written a letter to the Board of Cafe Coffee Day’s directors, wherein he had alleged harassment by Income Tax officers and expressed regret for not being able to create the right profitable business. He had taken his life in spite of having 30,000 acres of plantations of coffee, 1,700 stores of CCD and stakes in many other companies.

After the incident, Anand Mahindra, Chairman of Mahindra Group has advised that the entrepreneurs should not let their business failures destroy their self-esteem. The life of professionals in the BFSI sector is entirely different and more demanding than earlier days. They have to work for more than 60 hours a week with low raises and zero job security. The recent examples being: Barclays, Deutsch Bank, Citibank and many more.  “Sudden collapses of companies leading to a domino effect creating liquidity and profitability challenges. In spite of doing all the due diligence, such events are inevitable. You don’t only lose sleep, you also lose a job,” believed Kewal Handa, Chairman, Union Bank of India.

The situation was different a few years back. The people at the higher position used to guide individual for their career as well as work. Some of the executives have spent their entire career in one company and have attained the position of the C-Suite officers. The work ethics of HDFC, Tata, and L&T are well known in the entire industry and many young ones have risen to the C-Suite level in these companies. For example, Aditya Puri, MD, HDFC has been leading the bank for the last 25 years. He has recently been named as the highest-paid bank chief executive officer with the monthly basic salary of Rs 89 lakhs for the Financial Year 2019.

 The pressure on the BFSI chief executives of the country has increased many folds with the slowdown in the Indian economy and further escalation of a trade war between the world’s two largest economies i.e US and China. Though, to some extent, the trade war has helped India, as the oil prices have lowered from USD 80 per barrel and are hovering at around USD 60 per barrel in the past few months.

 It has also helped in controlling the inflation rate of India and also easing of the Monetary Policy of the Reserve Bank of India (RBI). Despite the low inflation and crude oil prices, experts are of the opinion that there is a structural slowdown in the Indian economy and Q1 results of the Financial Year 2019-20 of most of the companies are reflective of it.  The top and bottom lines are witnessing declining quarter-on-quarter results of BFSI, FMCG, auto industry, reality, and other sectors. It can be said that to some extent almost all the sectors have performed poorly in the past many quarters.

 This slowdown is exerting tremendous pressure on chief executives to improve top and bottom lines for the survival of their companies. Just to run the show in adverse circumstances, companies are taking loans, mortgaging their own properties and shares, which further reduce the bottom line of the companies.  Another pressure on the CXOs today is to protect the integrity of their organisation’s security architecture and safeguard its data against attack, damage or unauthorised access.

Talking about this, Akhil Handa, Head (Fintech & Partnerships, Mobile Banking), Bank of Baroda said, “The anxiety for us is to lose touch with the evolving aspirations of the customer and not being able to innovate as per their requirements. The trust of the customers is our most important asset.

We take this very seriously to ensure customers do not have to worry about cybersecurity incidents while banking with us.” With technology changing every now and then, it has become a matter of concern to many experts in the field to make sure that the expectations of the customers are fulfilled. With a 22 percent jump in cyberattacks on Internet of Things (IoT) deployments in the country, India was the most attacked nation in the IoT space last quarter, as per the data revealed by Bengaluru-headquartered telecom solutions provider Subex.

 “Cyberattacks breaking the best security arrangements are nightmares, which no CXO would like to go through. In a zippy, the amounts are transferred and it becomes impossible to track and retrieve. It may happen even when you are awake and may then give you many sleepless nights,” Handa added. “Sleep is not a luxury,” said Dr James O’Brien, Medical Director of Boston Sleepcare centre in Waltham, Massachusetts. It is a necessity for optimal functioning. When one sleeps, the brain catalogues the previous day’s experiences primes the memory and triggers the release of hormones regulating energy, mood, and mental activity. To compete for the work, the brain needs seven to eight hours of sleep.

When it gets less, the concentration, creativity, mood regulation, and productivity all take a hit, added O’Brien. However, most successful people have a different perspective of long hours of sleep. According to the Daily News, The President of the United States Donald Trump credits his success to sleeping only three to four hours each night to stay a step ahead of his competition.

One of the world’s most prominent female executives since getting Pepsi Co. top job in 2007, Indira Nooyi used to sleep a meagre four hours a night, according to CNN Money. She is no stranger to long hours, having worked the graveyard shift as a receptionist while getting her Master’s at Yale. Nooyi was both the first woman and person born outside the US to hold the role of CEO of Pepsi Co. She was also named the number 1 most powerful woman in the world twice by the Fortune Magazine. Most of the world leaders and CEOs are habituated to get 4-5 hours of sleep due to work pressure and pressing engagements.

During a press conference, when the then President of the US, Barack Obama, visited India in January 2016, he was surprised to know that Prime Minister Narendra Modi sleeps less than him and still manages his hectic schedule effortlessly. The CEO of Reliance Industry, Mukesh Ambani, is also known to complete his daily tasks until early in the morning. There are many numbers of such outstanding people, who are managing their work. According to the media reports, Elon Musk, CEO of Tesla, SpaceEx and many other companies has been taking pills to get proper sleep. In a recent interview with the New York Times, he repeatedly broke down and revealed that the stress of the year is undermining his health. His tough year has come as a result of increased pressure on Tesla to manufacture more cars.

That pressure led him to work 120 hours a week, as per the media reports. Further, the Tesla board was concerned that the medicine is not always helping him to sleep, and there are the other things that are fuelling the late-night unusual or controversial tweets. The executives of BFSI has to learn from the world leaders to stay afloat in this competitive and highly demanding sector as aspirations of the 130 billion Indian people is bound to grow further.  The BFSI sector has to grow exponentially as the government is taking bold steps to achieve a target of USD 5 trillion economy by 2024-25. The BFSI industry has seen innovative reforms in the last 10 years and will continue to be the top priority focus industry for India’s economic development based on inclusive growth.

However, there will be many bolder reforms in almost all the sectors, including BFSI, to attain a 9 percent growth rate for USD 5 trillion economy. It is bound to put more pressure on CEOs of BFSI and in turn more sleepless nights.  “Customer retention, brand loyalty, customer acquisition remain the topmost tasks for CXOs, owing to the magnitude of options available to customers today.  The BFSI infrastructure has to shoulder the commitment entrusted to maintain the uptime of its critical systems, work continuously towards the maintenance of cybersecurity and upgrade technology for the betterment of stakeholders of the financial industry. CXOs have to continue to worry to remain in the race of digital transformation, disruptive technologies, use of robotics, etc. to give business and IT systems a platform for today and tomorrow,” Tavadia added.

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