What problems can FinTech solve ? | IIM Calcutta | FinTech
Good afternoon ladies and gentlemen and a very warm welcome to today's webinar on what problems can FinTech solve in next three to five years, FinTech has found great significance in the bfsi sector through its abilities and contributions. It has become a staple to bfsi businesses for solving finance operational bottlenecks, and delivering efficient customer experiences. Now with an increased focus towards financially including all start off our nation's population, through initiatives like Jan Dhan yojna, building up on technology to make banking and finance, easy to manage has become imperative. FinTech comes up as the answer to improving digital banking services, stronger security and regulation systems, better facilities for open banking and more. Today's webinar brought to you by Ed bfsi.com, talentsprint at iron Calcutta will deliberate or an advanced program in FinTech and financial blockchain for professionals in banking, consulting, financial services, insurance, management, and technology. The webinar will also explore the future of finance professionals powered by FinTech. We are joined by a panelist Harish Khurana current director of payments and FinTech at Pfizer, RBC QRadar retention had mortgages at a leading global bank, and Arthur Bhattacharya, Senior Director of Marketing and Sales for talent spread. I would also like the panelists to introduce themselves. And I will also want to remind our viewers and audience that we will be taking questions and queries at the end of the discussion. So do write in your queries and questions. Our panelists will be addressing them, or it row will be taking up these questions. Over to you all.
Right, thank you so much, Shawn. And like we said, We'd like to start off with a small introductions, I'd request hareesh to start off by introducing himself officiating go after that.
Thank you. And thank you, Shawn. Thank you for having me on board. It's my pleasure to be on this webinar. I'm Harish Karunakaran, I currently work with feistel by service, a large financial technology company headquartered in the US, and I work in the payments and fintechs division. So probably that's relevant into this webinar, too, because I come from the same industry, I've been part of the FinTech industry, what is called FinTech today, and probably what was technology in banking, for the last, you know, almost last two decades, so been around, I've been part of I work with banks, I worked with payment companies like MasterCard, being part of certain, you know, Indian payment companies, which went abroad, which became international product companies. So I have a diverse experience been around in this segment for almost 20 years. That's my profile briefly.
Oh, thank you. Thank you so much. Appreciate the over to you.
Yeah, sure. So good afternoon, everybody. And I thank oratoria Nishan having me here. So just to give you a brief introduction about myself, I work with a global bank, having a large presence in across the footprint on the globe. Being in India for more than 100 years now. My background has been into mortgages largely and worked with institutions like ici HDFC in my career earlier. So in the current role, I look after mortgages from the product side and for certain transaction aspects. briefly about me, that is what I would like to put on table and then obviously excited to go ahead and share us and address queries as they come up. Yep. Thank you, thank
you so much appreciate. So again, I'm Alyssa Macharia jharia and the Senior Director for marketing and sales here at talentsprint. Before I joined here, I used to head admissions for the Indian School of Business for the PG bro PGP program and Executive MBA program. I've also worked with more than 30 or 40, fortune 500 company in human capital consulting, leadership, identification, high potential identification, etc. And I, one of my passions is, you know, to counsel people, professionals, especially in areas of career improvement, you know, career switches, etc. And that's the role that I'm kind of in over here today. And both hareesh and Abhishek, our alums of RI in Calcutta FinTech program as well. And and they are here from the perspective of, you know, the alumni part of it, as well as the kind of industry experience that they bring in. So FinTech is you know, if you look at it has been growing leaps and bounds in the last few years and, and thank To your various aspects in activities that have happened, the government has played a large role. And if you really look at it to, you know, be UPI or being the D monetization though, I may be trading into a little bit of a controversial territory over here with D monetization was good or bad, but perhaps the one thing that we can abuse that he did, you know, provide a lot of impetus for the, you know, FinTech industry and payments as a whole to kind of come into being. So, you know, what, what I would like to start out with, like, a general question to both harnish and appreciate, probably appreciate, can take it first and Harish can go after him, you know, what are the kind of trends that you are looking at seeing in the FinTech ecosystem in India at the moment?
Okay, so that's a very interesting one to address, I would say, See, typically, we've known FinTech existed, even before we came to the new normal, as we know now, Now, having said that, there was a time when everybody knew that the technology and the amalgamation of technology into the finance brings in benefits. And and there were institutions. Largely, the mindset was that yes, we have time. Fortunately, for the industry, I would say, and for the end user, and the end, consumer COVID, brought in that pace of acceleration, which probably not a very right catapult or right catalyst, so to speak, but it actually propelled the whole thing, big time, wherein every institution realize that if they want to really reach out to people to be able to serve them, to be able to bring in their for the customers that need to be brought in, you know, digitization and technology is the only way. So I would say the changes have been a very, very increased pace, we have seen a lot of institutions. And as I work on the retail finance side, with a bank, having worked earlier with other institutions, including banks and nbf seas, I see a lot of action happening on that. And the fact that this brings in a requirement, sudden, I would say it's a certain vacuum that gets created a sense that people who would rarely know as to what is it that we are really talking about? What is it that we're trying to solve? While on the paper, it may look pretty decent sort of speed that you know, technology will make things faster, it will make more seamless, but how exactly? And what are those, I would say key points or key threads to pick up, which should be worked upon. So I feel that is that is very exciting. And there is a lot of action happening. We've seen so many names, just for the benefit of you maybe just flavor to steak without any preference, or liking to be very honest, PTM razorpay the Indian entities that we see and then when we talk of institutions, so I would say the house of Aditya Birla the Birla group where they're, you know, nbfc the house of Tatas, on the nbfc side. Not only these a lot of new age FinTech startups, to name one,
which is, if I'm not wrong, this is known tab. So the way they do things, and you grow as a new finance company, which came up, so I'm naming these institutions, because I have really been kind of charting and kind of following the journeys of these various institutions, the way they've been trying to do things. And I think there's a lot of activity happening. Exciting times a last thing that I would say to this is earlier probably FinTech was considered to be a push. Now it is more full, not a push up. And yeah, any very well for attending, if you really look at it in terms of the startup ecosystem, what some 2000 odd I was looking at this report a couple of days back so 2700 2100 or, you know, startups out there, if you really look at you know, Bengaluru Mumbai being the, you know, biggest hubs around 400 plus startups in both the cities, followed by the NCR region, and and we are all aware of, you know, you know, who will pay and the other commercial entities coming in, and, and, you know, kind of trying to make a space for them. So, what is what are the kinds of people you have been here in your introduction, you said that, you know, you but there will be industry before this became FinTech and it became such a big buzzword. So, what's your take in terms of what's going on in the industry? Sure. I
mean, I think the good you and he made two very good points. They were two points of acceleration. With regard to, right. I mean, obviously, the first one came in in the form of demand controversial of North territory that led to a big push in terms of you know, digitization, you know, payments going more proliferating. To the market. And second, obviously, you know, in obviously, it was a black swan event, we are still going through it, which is obviously COVID. Right? I mean, these two, definitely ensure that you know, the FinTech got the push that it deserved. The digitalization, that was the underlying, you know, need about with the FinTech was built, also got the push. Right. But I think I'll do a little few steps back, right. If you look at India, I firmly believe we had a great plan behind where we are today, right? I mean, we started off with other, he said, Let's build an identity for every individual in this country, right? If you don't have an identity, there is no finance, there is no financial inclusion. and India leapfrog we created other the world's largest biometric database, with the ability to do an online authentication was a fantastic infrastructure that we as a country laid right and that was there, it was given when all these events happened. We went ahead and open bank accounts. Yes, whether there's money or not a secondary, or at least majority of the population, I would say 800 million plus population had bank accounts. Obviously, other things are limited with direct benefit transfer. So we ensure those money into the account, right. And all this, you know, was already there. And India had a number of fintechs, who were you know, who had enough funding coming in, obviously. And they were just sitting there waiting for that big events to make that push happen. Right. And I think this already happened, as you rightly said, 2000 plus fintechs in the market, maximum number of unicorns created in the FinTech sector. So I would just say, we are in the hottest segment on planet earth today.
And the rise of India stack, I think, you know, Aadhaar and UPI he just mentioned, the two of the biggest proponents of futile and again, both both are kind of led to the bedrock of a lot of these things. But UPI then came in and kind of looked at, you know, the treasurer's list, paperless, cashless, consent based kind of inclusion, that that could be coming in India stack, again, was one big push, probably governments so to speak, which, which, you know, we've been able to benefit out of, so, the other bit, now, we look at this beautiful FinTech as a whole and, you know, we've been talking about startups etc. Just kind of, if we look at the market space over here, if you know, we are looking at the largest loan would be in the payment side, correct probably around what 400 plus would be the, you know, startups are the companies that are inside on the payment side of things, lending and wealth tech and all of that. So, who do they know you know, as people who are there you know, appreciate you are again in the lending side of things and also what are things that are going on over here? How is FinTech you know, changing the pace of lending slowly keep it the you know, you can shed some light on that, okay. So,
retro, very rightly, I would say pointed out asked, see, typically, we all know that the world has two paradigms, one goes pre COVID and now is the new normal. Now, before this came in the challenge was how to identify the customer better, how to really understand which customer would really need what and that is where the fact that our lives had already large amount of you know, perforation with technology, people being present on social media and so many other platforms, and then the usage of you know, plastic money, so to speak, or the digital spending habits increasing. So, the So, Add to add to what he said probably Aadhaar and the UBI was a deliberate thought out attempt de monetization also played its role in promoting the digital payments use it across the country. Now, having done having been through all this, the institutions realized the need to be able to identify the customer better to be able to source better prospect better. So, that is one thing which gets addressed largely and when it comes to lending. So there are certain products on the lending side. Essentially, you cannot really push a lending product to the customer saying that, you know, it's just like another maybe a packet of namkeen that you may buy, but he has there has to be a need. So to identify the need and how to really understand a customer need not be required to come out asking for a product, but for us to be able to preempt the kind of needs that would exist. So that is where you know the ability to churn out analytics on the demographics on the various age groups in groups and when you do this, we were doing this earlier not that we were not doing it, but when we you do it digitally and when you use technology to reach out to such customers and identify them as to what pockets would they be available in that makes your reach that much more better. So, that is one thing I would say on the lending side that is a second game the processing ability. Now, when we say processing abilities, obviously barrel process does take an X amount of time, apart from the fact that the time would get crunched while we are using things which are digital and more technology oriented. I would say it is more about the doing the first time right kind of an approach or having a better success percentage. So that gets that gets no paywall to a next level and document coming in to read the quality of print could be a question mark, but then there are technologies which we now use, which have been adopted where in a document at a certain level can still be legibly understood. So there are companies and there are things that have been done around that. So, so by and large, I would say lending has got impacted, it has got more deepened the identification of the customer has become better. Also the recoveries because once you learn the objective is to obviously recover and recover on time and recover continuously. The idea is not to have a customer would buy today, and then completely foreclose tomorrow because that is not where an institution would on. So so to be able to recover properly, technology again plays a good part a good role, understanding the customer. And then when you amalgamate your underwriting findings that you've done during the course of underwriting, and then the banking studies that you've done, and then you realize, okay, the cash flows would be there. So that analytics being used on the collection side gives you a better insight in being able to collect more effective. Now, this is all Yeah, so this is all by and large, that was being done post COVID. Again, that, you know, COVID is here to stay for at least some time as we go by the talk of the second wave coming in and I being in Mumbai happened to hear it quite a lot. So I think with the vaccine being there, we are definitely much better than the rest of the world. But having said that, I think the requirement for a low touch, and a requirement for a situation wherein not much of a physical intervention is required, I think this is where we are benefiting largely, I would say thankfully, to the government and to the regulator, things are moved really fast in being able to give credence to the whole thing, giving legitimacy to the whole, you know, the whole exercise that that needs to be taken. So I would really say that these things have been done quite well.
So a couple of you know, startups, like, you know, the early salary, you know, death money, and all of that, you know, I mean, we worked with early salary before in terms of the your ability to grant a loan, if I see that they are able to do the credit check, background check, you know, whatever. I mean, again, not promoting early salvage in any way, but the fact of the matter is, within the 22nd is the gap that they currently have, of, you know, they'll be able to do that versus, you know, another lender that we had in the traditional sense of the word who used to finance programs, you know, the financing for departments of the program, would take about, what five days and this I'm talking about, you know, couple of years back where you will know, they will get differentiate or all of that done, and be able to give that so, you know, there's a lot of interesting things that are happening, you know, in the in the lending space, especially, in terms of you know, in in what you're seeing professionally, if you can kind of share Google What are you looking at what are you seeing appreciate, and I will come to you horatia right after this you know, what are you seeing, you know, some of the large banks etc what what are the kind of opportunities that are there, you know, for professional services, if somebody were to, you know, turn up, you know, are understand the nuances working for FinTech How would he or she be working in a large bank, for example,
we are so very rightly pointed out I also see typically when you speak of a company which is lending to the salaried segment, typically underwriting a salaried customer, when it comes to underwriting I will say that, you know, prospecting sourcing, equal amount of effort and intelligence required whether it is salaried or self employed, but when it comes to underwriting a salaried is a more templated kind of a structure. Given the fact that, you know, you would have salaries either coming into a bank account or you will have a salary statement or a salary slip. Even if the bank's bank bankruptcy to the salary is not happening. You will still have some employer confirmation of Form 16 to corroborate. So all these things being there, but when it comes to underwriting credit assessing a self employed entity, that is where a lot of complications come in, and I would not say complications, but he has interesting complexities, I would rather do it that way. So, to be able to understand the cash flow to be able to understand the business model, and how can a machine be made to learn those business models or to be able to identify how a cash flow would would get generated in a certain situation. So, that is where a lot of effort has already been put in, I will not say it has been complete. But yes, as far as the authentication or the verification bit is concerned, that that loop, I guess, is closed, whether it is your GST, whether it is your itrs, whether it is your KYC, so all that loop is closed, even your bureau checks, and also everything beyond that, when it comes to funding a security, which is like a property or immovable property. Now the records have been digitized. However, creating a mortgage, or maybe, you know, there are certain pockets still were accessing the records, which are the revenue records. So are they digitally available to they might have been digitized? But are they digitally available? So those are the areas where things are, I'm sure things are being done as of now. And to talk of institutions. So surprisingly, and happily, happily surprised, I would say, our big banks in the country, which are the public sector banks, they have woken up to the reality. Not very long ago, I came across a request for a proposal from a large, you know, PSU bank, wherein they wanted to completely digitize their whole operations. So that work is already on at various stages of Completion with various institutions. But yes, and I personally feel that the way we are moving, I think, before this, maybe this year, by the time that this year ends, we have already seen the volumes come back into the business. I mean, we are almost at the pre Korean levels. Now, certain institutions claiming to be doing more than what they were doing pre COVID, and a lot of others almost there. So I think by the closure, or before the closure of this year, we will we should see about 85% to 90%, you know, perforation and you know, complete amalgamation with the digital things that we're doing. So finalize, that is what I would say my experience and my observations on the industry. Or you can probably add to it. Yeah,
yes. And honey, Sheila, before you look at this, you know, we've been talking about traditional institutions, the bishop just spoke about that, you know, this, this entire concept of, you know, traditionally the closed banking concept versus moving into an open banking kind of concept, you know, correctly, we want to talk a little bit about that, and your observations on, you know, this, what's happening in the space? Sure,
I think I think a lot has been covered already where we shake, so I'll just try to talk to what he just said. Right? So I think, to me, lending is all about, you know, availability of data, right? I mean, if you have enough data about that context, or the person or the institution in your hand, based on which you can underwrite, then obviously you can lend right you can make that decision thing. What is the worth, is the ability to pay is willingness to pay. A lot of that is all about data. Right? And I think if you look at India 1.3 billion population, I would assume the Sibyl the TransUnion sibyls of the world would possibly have, even today, maybe max find a million database that is less than half of the country right? And in that probably I would say 200 to 250 million is what is probably can be considered by a bank in a traditional sense as credit eligible credit worthy. That means, you know, such a small percentage of the country is today in a position to access credit from a true traditional, you know, data availability perspective. Now, there comes the FinTech world, there comes the open banking world There comes through digitalization right now, as I think Michigan rightfully mentioned, you know, if it process what will be that business, right, whether it is msme, lending, whether it is SME lending, whether it is personal credit card being applied, as long as you're able to capture as long as you know, or personal, a consumer loan being made available to pursue it, as long as you're in the flow of the transaction is performing, right, your ability to actually capture more data around that particular transaction, the context behind the transaction, and obviously overlap it with other data sets that you already have around him. It could be alternate data sets around social media, it could be bill payments. I think that is where this world is moving towards right I think, everybody understand If I just sit with the existing segment that everybody is targeting, then it would be very difficult. It's a highly competitive space, you're actually going behind that same set of if I talk about credit cards, which is where we work a lot from, like, you know, current company perspective, right? I mean, 58 million credit cards today in the country, right? It might become 65 million credit cards, but how do we go from that, to let's say, 200 million credit cards, I think that requires a very different thinking that requires, you know, into, you know, I would say, interfacing into a lot more workflows that exist in this country. And thankfully, that is where both the banks are now, you know, if a bank CIO earlier, if you think how I could automate within the bank, right, the process within the bank, now a bank CIO role has completely changed, I would actually call him a not a CIO, he should be a CB IO, G's Chief Business Information Officer, because now his entire thinking has to be how do I connect my bank into that external world? Where all the data exists, where actually the people are transacting? How do I go and pop my banking into that workflow is what you should be thinking of. And that's essentially what open banking is all about. Right? You want to open up your banking infrastructure, so that the external world can start talking to your, you know, banking infrastructure. So that's open banking in a very simple true sense, right. UPI is a great example Googles of the world, Facebook's of the world game and said, let me connect to banks, they would have not done that in any other country, even today. Maybe they're doing it in different phases. But India was ready, and NZ could do it. Now extend that open credit enablement network, which is coming in this country, right, which is the equivalent of UPI, and to go live, but work is happening tomorrow, Fred layer, similar layer comes in where financial institution sit on one side of this network, and you've got loan service providers and off that network, like how we have Google's with the UPI app, right? Tomorrow, Google with a loan servicing app is sitting there, I'm just using Google as an example, would be a Facebook could be anybody for that matter, could be a Patreon, suddenly, you know, you have the ability to you know, lend on behalf of all the lenders who are sitting on one side of the network. And depending on the use case, you're created for the lending, whether it is again, going back to you know, it could be credit card, it could be consumer loans, it could be just buy now pay later, any of those models work today, suddenly you have an access to a much wider, you know, base of lenders and a watch wider base of use cases to lend. So I think that's where eventually the world is moving India is definitely leapfrogging because if we let the world in terms of UPI, I firmly believe we lead the world in terms of how lending can reach the masses.
Absolutely. I know you've got a duty and kind of reminded of the time that you know, what sector when we were having about this entire concept of you moving from UPI to embedded banking kind of thing. So, so can you just, you know, for the interest of the audience, he will just, you know, talk a little bit about that aspect of thinking, Okay,
if I got your question, right, you want me to kind of talk about how banking would get embedded into our life, right? I mean, what you and me do on a day to day basis in life
that, by all I mean, FinTech is the underlying layer anyway.
Absolutely. Absolutely. So I think I think, you know, some of the common words in the technology world, right, you know, I would just use some of the right micro services, API, API banking, you know, cloud, these are very, very commonly used, easily used, you know, technology buzzwords today, right? I mean, I always take one step back and start thinking of the why all this game, right? When Why do I have all the sudden buzzwords in the market, think about industry earlier, when you are playing with little amount of data that you had, which is all because of your banking services, you're generating the data, suddenly FinTech said, bank is not the board. The devices that you call, this banking channel is no longer the channel that you and me are banking anymore. I might do my banking and in a Google pay or a euro ATM or, you know, on a loan tap or a money tab or you know, x Why is it so my horizon has completely changed as an end consumer. Now, I'm everywhere, I would want to see my financial services and my data at a place where I want to see when we were in that way, based on my consent, only five and consent. That's very important, I wouldn't want to, you know, leave my data out there and open so that I would still trust a financial institution or traditional financial institution. So when I give an E KYC, or a KYC document, which has all my critical data, I might still give it to a bank today. Firstly, if you ask me, if it is the same for most, and I may not give it to Google, or Facebook, I have to be wary about that. But I wouldn't mind I wouldn't mind processing a load up Applying for a credit card or opening a bank account, buying an insurance, I wouldn't mind doing all those as a transaction. on any of these apps, I'm okay, absolutely fine. But I would want my insurance to be issued by a proper insurance company who my trust could be analyzing, I'm just taking a traditional name, right? I mean, not that I have an affinity towards an institution, but just using an example. But that could come through any of this, you know, open apps which are out there, which is essentially connected through these API's into the core banking technologies that these banks have. So I would figure to get it to where I trust the banks for the data that I have, I trust the bank to give access to the data only when I say yes, and I might say yes, to any of the apps, which I trust.
And so that kind of, you know, the proliferation of proliferation of data, internet, 4g, and all of that kind of, you know, helped the FinTech ecosystem as a whole. You also have this, you know, the proliferation of artificial intelligence and blockchain, which are, you know, which are coming in and some of the big use cases are from FinTech company. Questions, Avi shake this time. So, in terms of, you know, adoption of AI, adoption of blockchain as technologies, you know, how do you see that impacting, you know, banking, because, you know, these are, again, related technologies, so to speak, and D kind of enabled, you know, different tech process to happen. So,
you know, what's your take on that? Okay, so, so to also know, to address this, I would also like to add to what Richard said, essentially, while what he rightly said was that as a country, we had that UPI structure in place, hence, we saw that Google was interested, which is a fact a small, trivial bit of information, but OTP by the way, is India's gift to the world. So odb does not exist as a model or a model of doing a transaction elsewhere outside of India. So, that is what we are gifted to the world. Now, I talk to people in the US and the Canada, especially for, again, these two in these two countries that I made named the geographies not naming one over the other, but yes, Indian banking system is far more reward technologically even before the FinTech, Advent started. So, we have been far ahead of these markets, I would say, having said that, like you said Now, what is the level of penetration of AI or machine learning or maybe the amalgamation of blockchain as a technology? So, machine learning definitely yes, ai definitely yes, models are being built around datum and when I talk of these things, I talk of it from the perspective that I happen to be in a plain Jane brick and mortar bank or working with plain Jane brick and mortar nbf seas earlier or banks, yeah. So, so these things are definitely in being worked upon. things getting done, systems being evolved to, you know, adopt these aspects. blockchain, I would say a little more time to go. Not that there is nothing anything lacking over there. My thing on blockchain a lot of interest and the the hype has been on the cryptocurrency so to speak, on the lending side of things. blockchain has a very important role to play given the fact that it is an immutable record and then the trust that comes with that immutability is is cannot be paralleled. So I think mortgages is one area where block blockchain will have a large us applicability in times to come. And it is just a matter of time. So by the way, as a country, we have our policy national policy on blockchain in place, and I am sure the forward looking approach that our governments have been taking whether at the central level or even at various states, several states have come up with their own blockchain policies and FinTech policies. So I think this is just a matter of time. But yes, to address your query retro very briefly, very shortly, ai definitely is machine learning. Definitely, yes. And where and how do we use it just to give you a brief idea to the audience, sort of people would maybe know a little more or a lot more, you know, assessing a bank statement, so to speak. So looking at a recurrent credit or recurrent debit, debit, and then matching it with the amount or a date or, or an institution and the narration or the kind of narration given to a different or to a particular legacy, a credit or a debit, and understanding it and then making a machine to learn to be able to identify that on a document which is a scanned image, converting it to a digital into a digital format where it is converted to letters and numbers on the system and then understanding that particular entry so all work around it. So, that is in place that is where I would say the usage of AI as well as both AI and ml comes in. Also to add to this is like Harish rightly said, that, since we have the broad framework, therefore, we have these Googles of the world coming in wanting to, you know, hook on because we are a big market. So, but then I would rather not be very comfortable sharing my KYC with Google knowing that a Google is actually making me do everything on a UPI interface with my back, I would share my things with my back very rightly said rich that is what a large part of the people the educated class would do and do otherwise we have certain series on Netflix also restocks of the way people get hoodwinked. So, that notwithstanding, I think you're right and when it comes to insurance, so, I think technology means the whole thing better, more sweeter, I would say knowing who wants what knowing who wants that person, when does he want it, how much would that person want, how to reach out to that person so that we are just there in time and also ensuring that that customer gets a journey, wherein he does not or she does not have to really
take a lot of pain in getting on boarded in really getting the service that one requires. So, whether it is insurance, whether it is regulations, whether it is lending, whether it is banking, whether it is I would say wealth management, investment advisory, we see that you know, one of the largest brokerage houses the securities, the stock trading platforms got taken over by a new age startup, both in terms of the volumes of the number of customers being addressed and also the volume of transactions happening. So so that is the power of the technology. Fine. Yes. All bastions have fallen earlier, I am no no prophet or a soothsayer to speak for the future. But yes, I personally, if I talk about myself, I am very open to surprises very open to pleasant surprises. So those are likely to happen, those are bound to happen. And things will only keep getting more interesting.
Absolutely. Very men for I mean, and you know how this, this is something that, you know, we've been, you know, asked you to respond to this, you know, we've been having this gender accounts, which has been I mean, looking at some of the questions, you know, that have come in from the family, from the audience, that they're gonna reach out to you and answer some of the questions. But john is, you know, big success story in terms of number of accounts, open the cetera, but still not there when it comes to financial inclusion as a concept. So where where is it that you know, think that the concepts of FinTech, you know, you know, we can talk about so many things we've been talking about? How is it that FinTech could help bridge this gap where we have accounts open, but then, you know, beneficiary? Perhaps not to the level that they could have reached?
Right, I think I think it's a you know, I mean, very interesting question, because, you know, agenda, obviously, was the first step where, you know, you basically bring them on to the formal banking channel, right. So that has happened in this country. So that's great. Fantastic. We know they have an account. Now, it's a question of, you know, whether they have the money in the account, right, it can come either in the form of their own savings, salary, etc, it could come in the form of government benefits, which obviously have started flowing in, which is great. And the third, obviously, the big way in which the money can come in is obviously giving access to credit. I think we discussed about that, too. So I think with FinTech being there, you know, I mean, I would only put it this way, you know, if I may just call financial inclusion, to I'll require it as financial enablement, right. It's a slightly bigger term. Inclusion is just that it's a ticking the box saying whether he's got a bank account as soon as he got access to banking, it's a very, very, very broad definition, right. does see, can we expand that to say has he got access to credit has he got access to savings and investment products,
it could be sashays, it could be mutual funds, it could be stocks, it could be any of those, but has he got access to it? Probably today, if you look at that database and feed, I would assume it is just still remaining a bank account in majority of the case they have not progressed from there to let's say, you know, if we call ourselves privileged, you know what we have access from a banking perspective. So Have they got access to production when I say production, which probably is going to masses, right? I mean, I'm not talking about those schemes. I'm talking about the general public products that you and me have access into maybe sash asides, sashes, devised to give access to some of those straight off to society, where, you know, you're able to actually take it to them digitally through a mobile phone today, because obviously, I think 800 million, approximately number is the smartphone penetration in the country. Right. And then there is, obviously the feature phone. Now there's a, you know, I am a firm believer that even before we create use cases for feature phones to catch up and give access to, you know, the banking for that state of the society, I think they will actually get access to smartphone itself. Maybe I'll pose a question back to Michigan, right? Why don't banks basically come up with a simple product, which says, Here's your phone, I'm going to lend it to you, right, based on the data that I have, at one preconditioners, you will bank with me on that. So enable him to be on the smartphone ecosystem. First, right? You want to collect this data, I want to see you data today, it doesn't have a smartphone. So maybe the first product he has a bank, along with the telco or with the mobile phone company will take you to the market, they just thinking about could be a fine
smartphone, I really I really I really like your enthusiasm on that. hareesh. And just to share with you so well, yes, we do have products where we fund consumer durables and the handheld devices also, having said that, the objective is not that, you know, see, Honestly speaking, it is a matter of choice. And the ability, or I would say the hallmark of a good institution is when you can really respect choices. So I would rather being a banker, on the asset side of business, and having handled liabilities also in part of my career. So so I would put it this way that yes, I would make myself and when I talk about myself, I'm talking of the institution, we would make ourselves available to the customer, as in when wherever required one, then I would leave it to the choice of the customer. Yes, it will be a push for my side to definitely, you know, project myself better project myself, the most optimum. Having said that, you know, when a customer starts using a mobile phone and a smart device, so there are a lot of I don't really exactly come to the term that I should use for it. But you know, your ability to be able to extract things, and your your, you may have a lot of desire to see into so many things while he is using a smartphone which carries your mobile application. But yes, there has to be a limit to that. And that is where the privacy comes in. And that is where I would say, as a country we require. See, again, when we talk about privacy law and privacy's of people and entities, and so on and so forth. There was a time when we as a country used to ride on a postcard, which was posted into a letterbox was collected by a postman. I mean, do we really have that? Did he have the time to read through all the postcards what is written? I don't think so. Or inland letters, so to speak. And inland was a four Fold paper document, which had no seal nothing. Today, we have emails today, we have encrypted messages today, we have so many things, and still we talk of the lack of privacy and a law should be around it. I don't discount that I say yes, it is required. But at the same time, I think the responsibility lies on organizations like ours, and professionals like us to be able to work in that manner. So that we uphold the sanctity of the whole exercise. Technology can be has always been a boon but we have known places where it has become a Bane. So that's the thin line that we walk. So while I agree with you Harish Yes, as banks as nbf seas as you know, maybe insurance companies or maybe wealth management companies, everybody has a target but then the target has to be for doing the right business for the right kind of customer. That's what one should look at. Fortunately, our country we have a lot of responsible companies, majority of them I would say I will not shy away from saying all of them because I am a very positive person. So unless proven otherwise, everybody is definitely good.
So you know, we've been talking about this which kind of brings me into you know, the the entire space of regulatory technology regtech you know FinTech right take what you know what's what's your take, you know Harish you could probably take it and appreciate can add where do we see that your view reg tech moving that itself as a concept? How will that ate the market or ecosystem as a whole?
Right? I mean, you know, I mean, this is the most according to me, this is one of the most important subjects in the, you know, in today's discussion, right? I mean, you cannot be non compliant, I'm sure I'm sure you will agree you cannot be, you know, not going with what the regulatory saying whichever country you're in, right. And thankfully, we have a fantastic regulator. Right. And probably, you know, the regulations come too often that, you know, I know, personally, right, I work with a lot of banks, they are always trying to catch up with the regulator, because there are so many regulations out there, and probably very little time to comply. And, you know, with whatever legacy technologies that let's say, you know, the banks used to run, they naturally struggle including us, right? I mean, if we're, if I'm a technology, I work for a technology company, and I run a legacy technology, I'll also struggle, it's as simple as that. So, today, the regulator is moving faster than probably know what the technology world is doing at some time, you know, and it's vice versa also. And that is evident from the fact that you know, RBI does the way I look at it at RBI themselves are said, here's my sandbox environment, come innovate with me, let me see what you're doing. And let me give you a safe PLC environment, because I want to see what you're doing, I want to help you, I don't want to stop you. But I want to see what you're doing. I want to see it from a regulatory lens, let me walk the path with you, and let you go and deploy it in landscape. So I think all those are great, fantastic things that are happening, right, I would like to sum it up saying, you know, I mean, you know, regtech is definitely going to stay, it is going to free up a lot of resources across the financial institutions, once it is able to do it using AI, ml, read the data, process the data, leave the people from the day to day routine data related jobs, right, which is going to eat up and suck up a lot of time for a lot of people in the bank. So in fact, I'm sure rubbish, I will agree, if assuming a lot of people from your business side, their time is also going into basically helping reporting something on the other for the regulator on a weekly monthly basis today, because that is the kind of ask because regulator is supposed to keep a keen eye on what is happening in the country with the banking system, and they will do it in full vigor. And banks have to respond. Now, if you're not able to do it with the help of technology, you will be sucked into, you know, losing focus from business to regulation. And that is not good for the business of the institution that you're running for. So I think regtech is here to stay, it is actually going to help eventually make the institution compliant to what the regulator is asking. And eventually, the regulator also understands that, you know, innovation has to happen, and hence, they have got the, you know, sandbox out there, the facilities like that, basically saying, Come innovate with me. So I think, I think it's a fantastic space. And that, you know, working in tandem with the regulator, as technology companies, as banks, and as regulator, if we can all join hands closer, I think the regtech was going to basically make you know, it's going to improve the efficiency of banks remaining compliant nbf seas remaining compliant to what regulators expectations, now,
I agree, I mean, z ratio has actually dropped on the, the composite aspect regtech has actually been there regulations have always been there. Technology has also been there, the fact that we would file our ideas online, but ultimately have to send a paper to Bangalore. So that has come down to down doing it everything online, whether you want to do it in the XML format or the other way around. So, so that is again, an example of regtech being there, there is a technology on certain regulations, the fact that your license would get punched, the fact that you know, you will not really be stopped by a cop and fined for something but the jalon are defined would follow you to your home, come to your bank, the fact that you would, okay, very interesting piece of information, which I came across today, the fact that you know, for all these tools on the roads and highways, now, the fastag is now mandatory. Having said that, and we as a country believe that things, things would be out there trying to get the better of us the authorities would try and get the better of us with due respect to all of them. So, I came across this very interesting thing that you know, if if you are crossing a fast tag, and if you have money in your faster account, linked accounts, but if the fostered machine or that gadget or the tool does not work, that toll cannot make you to pay cash, the tool cannot ask you cash, they have to let you go. So that is where I would say yes, I mean, if we're really adopting a technology, we should do it completely. You either have electricity in your home or you do not have it, it is not somewhere in between. Right. So, so so that is I would say and then not only regulation I would say, you know, every aspect, every aspect of our lives, whether it is from buying, whether it is buying anything, I mean not only finance, whether it is buying clothes, buying your consumer durables, buying books, buying your groceries, buying your daily needs anything or for that matter, automobiles, technology has already enabled us to do a better job, it will keep doing so, it is our servant at the end of the day, we do not get mastered by it, we are the ones who keep mastering it and Harish, being my co panelists here, and a lot of other people who are technically qualified, will ensure that, and I have full faith in my technically qualified Brethren, that it will always continue to serve us as technology, this will always continue to serve us. So that's all that I would say, I guess that's more or less the complete picture. Alright. One of the bigger problems or one of the biggest problems in in a century, I would say that we faced as a human race. But I think for everything negative that COVID brought, it brought out some very positive things first and foremost being that we as a country got recognized the world over the way we can handle with the kind of diversity and the problems and the complications and the complexities and the thought processes, which are myriad, you know, in our country, not as many would exist in any part of the other part of the world. We came out as a country which handled it superbly, excellently well. And then the way the, the system, the mechanism, the governance went ahead to support, you know, the general public, the masses, both on the business side, as well as on the, you know, the personal aspects to in terms of medical healthcare, and so on and so forth. We saw countries with a better medical infrastructure crumbling, and we stand as a country. So I think we have a lot of good times ahead of us. And FinTech and blockchain and AI and machine learning. All this only goes on to make the story better. That's about it. For myself.
Absolutely. One, okay, I'll do this because this year, we want the both of us You are also an alumni of the I am Calcutta FinTech program, so to speak. And really, when you're very when we talk to people, potential people who are considering, you know, upskilling themselves in this area, one question that you always get is that can FinTech replace, you know, banking vtvt normal, traditional banking systems in the future? So this morning for your labor advocate kind of question, but what's your take on that
care throw? I think you know, while I was in my first campus, visit the the IM campus in joka session taken by one of the eminence because there and to quote I guess it was none other than Mr. Bill Gates, who said that we need banking, but not banks. Now, having said that, see the boundaries have to merge banks will still remain to be there maybe we may not know a bank like whatever we know of them as today, the names may change the format may change we may not see okay, the branches are not going anywhere, I mean, I am a firm believer into it, the bank branches the physical branches will remain, we will see a surge of technology in the initial phase as we are doing now, it will only gather pace wherein the branches would start seeming to be a drag on the finances of the banks, the management's might feel that they can do with less number of branches, but I think beyond a certain point in time and human interface cannot be done away with you know, augmented reality can help you see the beauty in Switzerland sitting right in the comfort of your own living room. But and also make you maybe make that ambient temperature using for days or whatever those things are that that same level of breeze blowing your face and the temperature being monitored and made met to that same level what it would be there in Switzerland and then you have that that we have thing on your eyes using the same visuals. I mean, you really cannot beat it, take a flight go there. Take out the shoes, walk on the grass, you know barefoot it let the do rub you on your head as well as on your feet. So those things will stay I do not see banks going anywhere. I do not see finance companies going anywhere. Just that the format's will change. And yes, they will become much more available than they are today.
That is I mean that's what my take on. Yeah, I would just like to add their shake. I mean, you Completely in agreement with you, I will just probably put it in a slightly different way as a you know, as an individual, right? How I have seen it right. 20 years ago, when I started working, right, I used to visit a branch when the salary used to come, then slowly I migrated myself, I'm sure there is a path most of us direct, we migrated towards an ATM, then came into grid banking, then came mobile banking, and the banks were all there, these are all bank channels. And as you rightly said, banks will definitely remain Right. I mean, but how often will I use a channel provided by a bank, I might say that might reduce as time goes, because, as we explained before, as we discussed before, we said, I know if it is embedded in banking, I might see the bank on some other channel, which is actually a third party channel, and hence, my direct interface with the bank, while the I know the bank is there, right behind, when direct interface with the bank might come down in the future days, just because it's all about open banking, embedded finance, right, and there are value added, you know, third party apps, which are sitting there, which is utilizing the data, not just the banking data, but the data around my life, my workflow, you know, they got so much of data that they are able to add more value in my interaction, and then in the process, get the banking done. So I think over a period of time banks won't go anywhere, but my interaction with bank while I know a bank is behind might come down as my take,
just but I will definitely go back to the bank as and when I feel I need to interact with the bank directly
Correct. Correct very, very to see as I also I mean, completely in sync with what you say arranged, see, the banks will stay, but the boundaries will get so, so much that you will not really today you realize when you enter a bank, you say that you stopped going to a bank, and now you stopped going to an ATM, let me tell this to you in the audience here. I don't give a wallet in my pocket, I never carry cash now. I mean, I have not out of the 100 times it's only been probably once or twice that I really felt that you know, I cannot make a payment. So the plastic money whether it will exist or not, that is the next level of question or the question that has already been deliberated upon, it is available in the public domain, will plastic money remain as a money will it exist or come to an end? So that I mean, there are so many interesting things we can go on and on. But I have a I have a meeting coming up after this in my bank here. So overdue you are
okay. So we are we are almost at the towards the end of two questions that have cropped them up a little bit and look at it. Both of you, though, are very senior positions working, you know, in your respective companies. What made you look at, you know, specializing or kind of getting into a course in FinTech, that the first part of the question, the second part of the question, is that, you know, why is it that you looked at the iron calculator program, when there were a couple of other programs available in the market as well? And thirdly, you know, what are the kind of competencies that people should be building when it comes to you know, being successful in this space? Okay, I have a longest question, but in the interest of time, you know, either if you can take a crack at it, and and then the other panelists can pick up from there.
Okay, why did I take up IMC course? Maybe after 20 plus years being in the industry? I think the simple answer to that is I was looking for, I would say a course which can endorse, add a brand has can formalize the learning that I had last 20 years, and probably, I would say put an IMC brand on top of it right? I'm saying he's a FinTech specialist. And here's an AMC, which is saying he's actually gone through six months of rigor. And here's a guy, right. And when I actually I was part of the first cohort. So when I actually looked out at that point of time, which was in 2019, right, they were not too many FinTech and blockchain courses out there, right. I mean, I did see some of the international universities offering some courses with what IIMC was offering. I knew I was part of the first cohort. So obviously, you know, you are jumping in without really having a reference of what the course actually means. But to get at it, let me go in. And I should say the last six months was a fantastic learning, especially from the academy side, there was a good rigor because obviously, you're dealing with the best professors in the country in their respective domains on one side, and on the other side, a cohort of 100 Plus, FinTech professionals or aspirants coming together, right. I mean, there's an all of them have their own experience that they bring along, and they have their own specializations, their own skill sets, and it was all about collaborating and trying to do case studies, solving it together, applying your experience onto it. I think it was fantastic journey overall, right? I mean, so that that is that is all about why AMC, you know, what did I probably gain out of it, I think both summarized into that 111 answer, right. What are the second question or two? Sorry, I missed.
The third part of the question was in terms of professionals, you know, what is it that they should look at, to succeed in this space?
Sure, I think I think it's also in any space right, I always you understand the concept, you have 20% of it, right? Say the balance 50% is applying the concept. So it goes like this obviously makes some of the concepts especially very difficult concepts like blockchain if I, if I'm a state so right. I mean, I don't know how many people can explain blockchain in a very simple way today, right? But you keep hearing blockchain you keep hearing central bank digital currency, you keep hearing cryptocurrency, Elon Musk has invested in it. Right? So which are 500? Right? So if you don't even understand what is blockchain? And you don't understand cryptocurrency, you don't understand, you know, what are you actually dealing with it? So, you know, I think in FinTech, it is very simple. understand the concept for which you know, whether it requires formal education, go learn yourself, learn from your work, that is fine. Applying that with the business sense behind it, is the next 50%. If you master these two, you're then
after a quick take from you. And then we kind of close this session off today,
Maurice, that's where I wanted to actually for you to start first, because you would cover up and help me save the effort. But yes, very succinctly put it. For me why I am Calcutta while there were others who were given similar kind of programs, I wanted to do it with the best to be honest. And I consider that in finance. And when it comes to talking about finance, I am Calcutta has an edge over other institutions. I was watching it to get selected into the court too. So that's where I would say, why I chose IBM. And the fact that you know, once I've gone through the program, so I understand that the, the platform provided by talentsprint is excellent. You have life teachers teaching you, you have good reminders coming in for people like us who are two decades into work life, you know, having somebody remind you for the coming assignment, or a test or a class or whatever, that's a great help. So overall, it was this that brought me in here, and I another bigger Spark, to know why to do something of this type was to be very honest, I am a non technical person. And I did not want to because, you know, I had read only a few pages of future shot by Alvin Toffler. And I realized that, you know, I don't want to be sidelined. And I don't want to become irrelevant. So I had to remain relevant. And I had to remain contributing. And I had to remain, you know, I had to keep challenging my own intellect and thought. So that's why, just to put it this way. Yeah. There was another part to your question as to which I may not have answered, so maybe you could help me with that. Yeah. So
in terms of, you know, a couple of takeaways from you, from the program itself, and you know, about any one, whatever that is, you know, required to be successful, according to you.
So, I've been selling off loads. Yeah. So I've been into selling off loans. I've been into designing products, I've been into designing processes. And after having done this program, I can very well sit and talk on what we should what we what is it that we should be doing? Or how is it that we should be doing it going forward? When we have the onslaughts of the early salaries and the loan types and the money and all the money lines and whatsoever coming in? And not that only I would like to support the brick and mortar banks or nbf seas? But yes. Working with these organizations, which are new age, definitely younger, and a lot more challenging. Or maybe, you know, maybe two years or maybe five years, you one does not know what holds industry, but having something of my own Why not? So, so I'm open. And I never restrict myself two things. No, any which ways in every any aspect of my life. But yes, I'm open. So for me, this program was the thing that I wanted to do, from the best place in the best manner possible to be for me to be able to understand in the best that is coming in the best, from the best. That's why Simply put, that's it? Yeah,
I think we've overshot our time by around seven minutes. So a shine, you know, over to you for the concluding part of the webinar.
Well, gentlemen, that was an insightful discussion on fintechs technology regtech and open banking and lastly, the importance of upskilling in the financial services all thank you so much retro, avishek and hareesh. And also thank you to the audience for joining in and shooting your answer questions. We hope you had an enjoyed the insightful webinar. Take care and stay safe and stay tuned to et bfsi.
Watch the entire interview here https://www.youtube.com/watch?v=0yVyR9NKSoM