Bfsi may june issue 2018

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CONTENTS MAY - JUNE 2018

COVER STORY

SECURITY PERSPECTIVE 48 Axis driving innovative network solutions globally Sudhindra Holla

Sales Director – SAARC and India, Axis Communications

TECHNOLOGY INNOVATIONS 46 Passport Seva Kendra Reaching the Last Mile

SOUTH INDIA EVOLVING AS NEW-AGE BFSI LANDSCAPE

Golok Kumar Simli Chief of Technology, Passport Seva

SPECIAL FEATURES

EMPOWERING WOMEN THROUGH BANKING INNOVATIONS AND EXCELLENCE

HYDERABAD, THE EMERGING BFSI CAPITAL

INDUSTRY PERSPECTIVE 16 Manappuram Finance, Future-Ready to Capitalise on Modern

DIGITAL PAYMENTS IN INDIA A SAGA OF POPULARITY VERSUS SECURITY

28 CONFERENCE REPORT

Technologies Puneet Kaur Kohli Group Chief Technology Officer, Manappuram Finance, a leading gold loan NBFC

24 IMImobile Easing User Service Delivery with Technology

Sudarshan Dharmapuri Senior Vice President (Product Management), IMImobile

50 Piramal Group Gaining Competitive Edge with Excellence in Innovation Khushru Jijina Managing Director, Piramal Finance and Piramal Housing Finance

MAY - JUNE 2018

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URBAN Ghaziabad Haridwar SMART CITY Smart City Summit Rajkot Smart Livable & Resilient City Conclave Pune Smart City Summit Udaipur Smart City Summit Kochi Smart City Summit Faridabad IT / GOVERNANCE / INNOVATION Rajasthan Tourism Summit Jaipur Road and Infrastructure Summit Mumbai Digital Social Innovation Summit Canberra, Australia BFSI NBFC100 Tech Summit Hyderabad BFSI CT0 Summit Goa BFSI Insurance Summit Mumbai BFSI CMO Summit Mumbai BFSI Cloud & Security Summit Mumbai NBFC100 Tech Summit Mumbai BFSI Leadership Summit Mumbai Cooperatives & NBFC100 Tech Summit Jaipur HEALTH Andhra Pradesh Health Festival Visakhapatnam Healthcare Leaders Forum Lucknow Healthcare Leaders Forum Pune Healthcare Summit Rajasthan Jaipur Healthcare Leaders Forum Hyderabad EDUCATION Elets Education Conclave, Bihar Patna Elets Education Conclave, Chhattisgarh Raipur World Education Summit Delhi Elets Education Conclave Jaipur Urban Development Summit Innovation Summit

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MONTH 21 June 20 July 22 June 29-30 June August 17 August 24 August 6 July July 30 November 13 June 11-12 August October November December January February March 21 June July August September October 22 June 27 June 9 -10 August 15 September

EDITORIAL MAY - JUNE 2018

South India — New Dawn in Nation’s Economic Growth Story With a multitude of bank branches dotting almost every city, town, and district of South India, the region is fast scripting an impressive economic growth story. Unsurprisingly, the banks density in southern region of the country is higher than rest of the India. The steady growth of banking services here has become an impressive reason to inspire the banks in rest of the India to ride the technology wave and deliver results for growth and expansion. Driven by this, the latest issue of The Banking & Finance Post magazine focuses on how South India is driving the innovations in the Banking, Financial Services and Insurance (BFSI) sector of the country. Through our cover story ‘South India Evolving As New-Age BFSI Landscape’, we have tried to explore and highlight the economic climate of six South Indian states -- Andhra Pradesh, Karnataka, Kerala, Puducherry, Telangana and Tamil Nadu. The latest issue also carries a special feature ‘Hyderabad, the Emerging BFSI Capital’ explaining how Telangana, the youngest State of India, is gearing up to add another feather to its cap by positioning itself as another financial capital of the country after Mumbai.

Dr Ravi Gupta Editor-in-Chief The Banking & Finance Post and CEO Elets Technomedia Pvt Ltd

Looking at the steadily growing role and involvement of women in the banking sector and banking sector’s influence in empowering the women at large, we’ve tried to analyse the level of involvement of women in India’s BFSI sector through a special feature ‘Empowering Women Through Banking Innovations and Excellence’. Our special feature ‘Digital Payments in India--A Saga of Popularity Versus Security’ highlights how India is transforming into a digital economy and the significance of security measures in the crucial period of transition. The magazine features a Summit Report of our ‘3rd NBFC100 Tech Summit’ held in New Delhi, highlighting the rising importance of NBFCs and its potential in the banking sector in future. Prem Narayan, Deputy Director General, UIDAI, Government of India, inaugurated it. Carrying on this legacy our 4th NBFC100 Tech Summit, Hyderabad is meant to confluence various stakeholders, technology partners, and the policymakers to focus upon changing dynamics of the financial sector and projecting the role of NBFCs in ensuring the same from across South India. The summit will serve as a platform for stakeholders from various segments of the BFSI fraternity to network and connect with fellow corporate leaders and other stakeholders of the ecosystem. This conference will also focus on Micro Finance Institutions (MFIs), Small Finance Banks and Payments Banks and Housing Finance Institutions. Our another special feature ‘Digital Payments in India--A Saga of Popularity Versus Security’ highlights how India is transforming into a digital economy and the significance of security measures in the crucial period of transition. Adding security perspective, we have carried interview of Sudhindra Holla, Sales Director – SAARC and India, Axis Communications. We hope with such a variety of special features, interviews and articles, the latest issue will evoke an invaluable feedback of our esteemed readers.

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COVER STORY

Economic climate of South India has shown a promising growth in comparison to the rest of India. A study has suggested six states of South India - Andhra Pradesh, Karnataka, Kerala, Puducherry, Telangana and Tamil Nadu are projected to become $1,200 billion economy by 2020. Rashi Aditi Ghosh of Elets News Network (ENN) explores how the second largest market in India is expanding in terms of the banking and financial sector.

SOUTH INDIA EVOLVING AS NEW-AGE BFSI LANDSCAPE 8

MAY - JUNE 2018

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COVER STORY

anking density in southern India is higher than rest of the India. According to Society of Automobile Manufacturers (SIAM), the South accounts for 28 per cent of bank branches in rural and semi-urban areas in India. During demonetisation, out of more than 2,00,000 cash dispensers across the country, a third were located in south India, according to statistics of the Reserve Bank of India. Experts ascribed several reasons to the southern surge. The degree of demonetisation’s impact is linked to banking density, which is higher in the south. Explaining the growing popularity of South India interms of banking and financial services, said Suresh Rajagopal, President, Software Business, FSS “Since India is considered to have 21 per cent of the world’s unbanked population, the nascent fintech industry in India is expected to grow bigger. South India in particular, focuses on savings as well as managing their investments.”

especially in the adoption of financial inclusion. With MoneyOnMobile’s extensive pan-India retailer network, we provide financial services to meet customer requirements by transforming the Cash Experience for the unbanked, underbanked or even to customers who reside in the remotest part of the country. We currently have 3,50,000

“In addition, South India market comprises of Public Sector Banks, Old Generation Private Banks and the Small Finance Banks. South India as a market - which is the second largest in India is keen to adopt the latest Digital Banking Technologies to service its customers and focuses on solutions which would generate revenues to the bank . It is cost conscious and seeks ways and means to arrive at an economical cost for the solutions to be deployed,” he added. South India, a Popular Choice for BFSI Sector Experts opine that South India is a very important market for banking and financial industry as it has a vibrant corporate and retail business environment.

Six regions of South India i.e Andhra Pradesh, Karnataka, Kerala, Puducherry, Telangana and Tamil Nadu when put together are among the top 30 economies of the world, contributing over 22 percent of India’s GDP and 28 percent of India’s employment.

“We see huge potential in South India

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retailers pan-India with around 14,000 retailers concentrated in South India. It is our constant endeavour to continue to expand our financial network across the region and the country”, said Harold Montgomery, Chairman and CEO, MoneyOnMobile. Chennai is the hub of automobiles, Hyderabad and Bengaluru are Information Technology (IT) hubs and Kerala is a strong market for bancassurance. In retail, obviously motor and health insurance are the dominant products. In corporate, in addition to property Insurance, liability lines are also very popular amongst the automobile and IT sectors. “It is a unique market in the sense that customers tend to continue with their existing insurers for long period, thus signifying loyalty and commitment. Bajaj Allianz General Insurance is a strong player in this market with very good market share in Chennai, Hyderabad and Bengaluru. This part of the country has always been a stronghold for us in both retail and corporate business,” said T A Ramalingam, Chief Distribution Officer, Institutional Sales, Bajaj Allianz General Insurance, while speaking about South India in terms of insurance market.

MAY - JUNE 2018

COVER STORY According to Care Ratings Report, South India forms around 56 per cent of the total education loan portfolio of the banks. Tamil Nadu and Kerala together account for 36 per cent of the outstanding education loan portfolio. Other states which account for a major chunk of the education loan portfolio include Maharashtra, Karnataka, Andhra Pradesh and Telangana. “The literacy rate in South India is considerably higher than North India, which makes it conducive for banking. South India is also the hub for start-ups and technology incubators. The cultural idiosyncrasy and the general mindset of the people of South India make it ideal for exploring newer forms of banking in the South,” said Abhishek Pandit, Director, Business Services, AISECT. Digital Payments --The Future of BFSI sector E-payments are gaining a lot of popularity in India due to initiatives like Digital India, Unified Payments Interface, BHIM app, mobile wallets and many others. The segment gained a lot of momentum post the unveil demonetisation drive by Prime Minister Narendra Modi-led government in 2016. Research study suggests that South India has a lot of scope in terms of digital payments as well. According to a KPMG report titled “Indian Languages: Defining India’s Internet” the number of regional internet users adopting digital payments is expected to grow by four times to 175 million by 2021 from just 47 million in 2016. Telugu and Kannada speakers at 37 percent, followed by Tamilians at 36 percent, are the highest digital payments users among non-English internet users across India, reveals the KPMG study. “Language barrier is one of the challenges that a financial institution has to face while expanding to greener pastures in the South. Technology plays an important

10 MAY - JUNE 2018

According to KPMG, Telugu and Kannada speakers at 37 percent, followed by Tamilians at 36 percent, are the highest digital payments users among non-English internet users across India.

Kannada and Tamil are expected to rise to 53 percent, 55 percent and 55 percent, respectively. Also, there is an untapped opportunity in speakers of other regional languages such as Bengali whose digital payment adoption rate stands at 9 percent.

role in creating a seamless customer interface across all regions. AEPS and other Aadhaar based intervention have helped the banking system in authentication. App based banking services have taken the banks to customers’ home,” said Pandit from AISECT.

“FSS has been crafting a compelling payments strategy through its domain experience gathered over 27+ years across products, services and infrastructure to give payments business a winning strategy. At FSS, we map consumer expectations with payment initiatives that makes transactions simple, fast and secure. Some of our offerings are - digital banking services viz., Toggle, Green PIN , UPI , QR Code , Internet Payment Gateway Services and mobile banking services. In addition, we run a Transaction Switch for Switching ATM, POS transactions and provide end to end ATM Managed Services to various banks on 24x7 x365 basis from our data center in Chennai. Further FSS has licensed its IP Owned products like Debit Card Management, Reconciliation, ATM Monitoring to the Banks in South India,” said Rajagopal from FSS.

The report further suggests that in next three years, digital payment adoption rates of internet users whose speak Telugu,

He further added, “In fact, we can proudly say that the first South India ATM (Indian Bank) is owned by us. FSS understands

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COVER STORY “Banks are working hard to strengthen customer relationships across channels, identify digital initiatives worth investing and conduct smart experiments. They look at digitising the entire customer journey and routes by developing new ways of banking which are novel and diverse,” said Rajagopal from FSS.

the challenges that financial institutions, banks, merchants, and payment processors face when it comes to enhancing revenues, improving efficiency, managing risk and expanding customer relationships.

According to Society of Automobile Manufacturers (SIAM), South accounts for 28 per cent of bank branches in rural and semi-urban areas in India.

“That’s why we’ve tailored our products to address the unique payments needs of our customers. In addition, our comprehensive suite of products focuses on making payments simple, secure, efficient and inclusive through continuous innovation. Our product portfolio spans the entire payment ecosystem.” Among regional language speakers in 2016, Tamil had the highest internet adoption levels at 42 percent followed by Hindi and Kannada at 39 percent and 37 percent,

respectively. Internet adoption among Telugu speakers stood at 31 percent.

“In addition, recent partnerships between FinTech companies and traditional banks clearly suggest that two entities are collaborating to bring about customercentric approach in emerging and rapidgrowth markets like South India. These initiatives have transformed the entire traditional outlook of South India,” he added. With several Start-up brands and IT sector investments, South India in particular is becoming a popular choice for industries across the globe. Banking, Financial Services and Insurance (BFSI) sector in particular sees a lot of scope in this part of country, which has a Gross Development Product (GDP) of over $300 billion. Six regions of South India i.e Andhra Pradesh, Karnataka, Kerala, Pondicherry, Telangana and Tamil Nadu when put together are among the top 30 economies of the world, contributing over 22 percent of India’s GDP and 28 percent of India’s employment. According to the British South India Council of Commerce, South India in the next three years i.e. by 2020 will become $1,200 billion economy. BSICC is a platform for the India and UK business community to enhance their business activity as well as support businesses which are exploring opportunities in South India and UK.

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The Banking and Finance Post

MAY - JUNE 2018 11

SPECIAL FEATURE

EMPOWERING WOMEN THROUGH

BANKING INNOVATIONS AND EXCELLENCE As banks are playing a major role in scripting India’s growth story, bringing the much-needed change across the country, they are also playing a vital role in women empowerment, Rashi Aditi Ghosh of Elets News Network (ENN) explores.

The banking sector in India is growing by leaps and bounds. Schemes like Pradhan Mantri Jan Dhan Yojna, introduced by Prime Minister Narendra Modi-led government in 2014, have helped doubling country’s adult population with a bank account, as compared to 2011.

financing at early age or financial assistance for setting up a source of livelihood; banks are important in enhancing financial inclusion of women in the Indian economy.

Banks Empowering Women

Indicating a positive trend, participation of women in the banking sector has inflated over the years.

Being the primary pillars of the Indian economy, banks have a pivotal role to play as far as women empowerment is concerned. Be it the schemes pertaining to educational

According to a World Bank report, women account ownership has inflated by 30 per cent between 2014 and 2017. Further, 29 per cent of women in India use digital

12 MAY - JUNE 2018

payments. This rise is accredited to the Pradhan Mantri Jan Dhan Yojana (PMJDY). The World Bank report also suggests about gender gap of 6 per cent in 2017, which is an improvement due to being a decline from 20 percent in 2014. Gender Disparity Women empowerment is an important component of India’s socio-economic growth. The government and many other agencies are undertaking measures to further

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SPECIAL FEATURE

improve the situation through various policies focussed on social reforms and generating employment opportunities. “One of the important factors that would lead to women empowerment in India is their financial independence. Women need to be empowered economically. This will make women self-reliant and give them the freedom to choose. This will enable them to benefit from the different options available at their free will. This will make women’s lives enriching and joyful. Once a woman becomes financially independent and can exercise her choices, she can also help her mother, sister, daughter, and other women in the society to become empowered. This will elevate women’s position in the society and will bring in equality,” said Dr Manisha Ketkar, Director, Symbiosis School of Banking and Finance (SSBF).

Financial Assistance: Due to their entrepreneurial skills, a number of women today are successfully managing small and big businesses . Banks offer credits and loans to such businesses that help women to grow their ventures. Many banks support micro, small, and medium size enterprises (MSMEs) specifically run by women under different programs.

“Women are now being recognised as the new crop of savvy financial product consumers, the decision makers, key influencers and the drivers of change. For sustainable financial inclusion, all stakeholders of the finance ecosystem – government, regulatory bodies, financial institutions and technology-backed service providers – will need to work together efficiently and seamlessly,” she added.

“The banking sector plays a critical role in spearheading the financial inclusion of women in the Indian economy. There have been, and still exist, several socio-cultural barriers for the true financial inclusion of women. Now, there are plenty of womencentric or women-only financial schemes introduced by banks to make banking

Priority banking (Mahila Banks)

services accessible to women everywhere – cutting across geographies and socioeconomic classes – adding impetus to women empowerment,” said Rati Shetty, Co-founder and Chief Product Officer, BankBazaar.

women. This is an innovative approach to encourage women to take benefits of banking in male dominated communities.

A bank run by women for women is a concept where priority is given entirely to women empowerment. Community-based Mahila Banks are set up in some parts of India where the local women run the bank offering benefits to local community

Banking is empowering women in India in multiple ways: Bank accounts: According to World Bank’s Empowering women through financial report “women are more likely to save, allocate, and invest money in order to be protected against unexpected expenses, and in their children’s education; giving an opportunity for a better livelihood to the next generation” Once women get access to a bank account, their natural tendencies to save are channelised in a productive financial discipline that earns them interest and gives financial security. They get the decisionmaking power on that money which increases the possibility that it is used for productive purposes. Educational loans: An educated woman is a possibly the best way to ensure that the next generation is also educated. Education helps women to practice the trade of their choice. Many banks offer educational assistance schemes for women at concessional terms and lower interest rates. Education helps in a big way in women empowerment.

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“There are women-special home loans and car loans with lower interest rates and other lucrative features if the primary applicant is a woman, or if the first co-applicant, in case of a joint application, is a woman.” “There are government-driven initiatives such as the Pradhan Mantri Jan Dhan Yojana (PMJDY) and Sukanya Samriddhi Yojana that are aimed at the financial inclusion and empowerment of women and girls.

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“The immense significance as financial inclusion is the first step to women empowerment. Bharatiya Mahila Bank was also a great initiative not only focused on women but also run by women. The bank provided easy collateral-free loans as well as insurance and pension policies to a woman that brings them an opportunity to be financially independent and pursue their entrepreneurial dreams. Technological advances have made it easier for women to do banking for which they earlier had to depend on a male member or a third party. Mobile banking and digital payments

MAY - JUNE 2018 13

SPECIAL FEATURE eliminate the need for women to make visits to banks and allows them to conduct banking transactions from their homes,” said Suresh Rajagopal, President, Software Business, FSS. According to Ministry of Finance, there were 498 exclusive bank branches for women in 2016 Self-help groups: Women’s bargaining power in the society increases with access to financial services. Self-help groups increase it multi-folds by bringing several women together to achieve economic independence. These groups promote small savings among its members which are kept with a bank and invested in a revenue earning economic activity of the group. This forms their own capital resource base. Banks too offer financial assistance to self-help groups on concessional terms. A report submitted by National Institute of Technology, Durgapur suggests that Micro Finance is emerging as a powerful instrument for poverty alleviation in the new economy. In India, micro finance scene is dominated by Self Help Groups (SHGs) – Bank Linkage Programme, aimed at providing a cost effective mechanism for providing financial services to the “unreached poor”. Based on the philosophy of peer pressure and group savings as collateral substitute , the SHG programme has been successful in not only in meeting peculiar needs of the rural poor, but also in strengthening collective selfhelp capacities of the poor at the local level, leading to their empowerment. Micro Finance for the poor and women has received extensive recognition as a strategy for poverty reduction and for economic empowerment. Increasingly in the last five years , there is questioning of whether micro credit is most effective approach to economic empowerment of poorest and, among them, women in particular. Development practitioners in India and developing countries often argue that the exaggerated focus on micro finance as a solution for the poor has led to neglect by the state and public institutions in addressing employment and livelihood needs of the poor.

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Explaining the role of Micro Finance Institutions (MFIs) towards empowerment of women, Dev Verma, Chief Operating Officer, Satin Creditcare said, “For more than 25 years now, Satin Creditcare Pvt. Ltd. (SCNL) has been helping women by providing them micro-loans to enagge in self-empowering projects that allow them to generate income and substantiate their household earnings. Furthermore, we at SCNL also organise learning sessions and workshops for these women to educate them on financial literacy and the importance of financial empowerment.

businesses. This training enables them to get knowledge of different aspects of trade and commerce. Banks also offer training to women from economically weaker section in various vocations that give them access to jobs. Paytm Payments Bank has launched an initiative that seeks to empower women in India’s smaller towns and cities by training them for financial services and creating new employment opportunities. Named as Paytm AshaKiran, the programme will enable these women to act as a catalyst in the nationwide roll-out of Paytm’s bank offerings. Employment:

According to World Bank, women account ownership has inflated by 30 per cent between 2014 and 2017. Further, 29 per cent of women in India use digital payments. This rise is accredited to the Pradhan Mantri Jan Dhan Yojana (PMJDY).

“By empowering women through financial knowledge and working capital, MFIs support them in alleviating poverty and improving their economic status significantly. Researchers have proved time and again that empowerment of women has always lead to the wellbeing of the whole family and the society at large,” he added. Training: Many banks have initiated special training programs for their women customers who have started self-help groups or own

Banks give employment opportunities both qualitatively and quantitatively to women and we see several women bank employees in urban and semi-urban areas. Growth in women education and financial inclusion will result in growth of women employees in rural areas too. There is also no glass ceiling in banking industry as we see many women reaching senior and top-most positions in state-owned as well as private banks. Puneet Kaur Kohli, Group Chief Technology Officer, Manappuram Finance, who recently joined the NBFC, said, “Definitely, I believe NBFC sector is empowering the women suitably. See, if I am here, that’s a testimony of the fact that the sector is very much prowomen. Its upto you, how you prove your worth and make your own mark in the sector. Just as in any other sector, it boils down to an individuals’ own caliber, potential and desire to succeed.” While the entire BFSI sector is collectively making efforts to support to cause of women empowerment, women in particular will also have to participate in these initiatives. Be it Financial Inclusion, Training or employment, women will have to make clear choices and help the banks in fighting the “Gender Disparity” prevailing in the country. 

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INDUSTRY PERSPECTIVE

MANAPPURAM FINANCE

FUTURE-READY TO CAPITALISE ON MODERN TECHNOLOGIES Getting digital-ready and be quickly adaptable to digital transformation hold key to the progress of Non-Banking Financial Companies (NBFCs) sector, says Puneet Kaur Kohli, Group Chief Technology Officer, Manappuram Finance, a leading gold loan NBFC, in an interaction with Ahmad Shariq Khan of Elets News Network (ENN). You recently joined Manappuram Finance as Group Chief Technology Officer (CTO), would you share how has been your experience? Certainly, working as Group CTO at Manappuram Finance has so far been a challenging yet an enjoyable stint. Right from its early days, Manappuram Finance knew the power of IT in transforming its core conventional business i.e. dealing in gold loans. That’s the reason why I believe it has always been such an IT-driven company. Today, apart from having the conventional gold loan plans, we also deal in digital gold loan, and it’s where my role comes into the play. My job responsibilities here entail supporting the Manappuram Finance actualise its various IT objectives envisioned by the company, these include not just formulating a robust and forward-looking IT /digital policy but executing it appropriately too. Besides it includes taking care of company’s IT infrastructure, keeping it future-ready and safe against any security threat. Manappuram Finance has always been an early adopter of industry-leading technologies. How are you making the best use of your expertise in taking forward this legacy? Right from its early days, unlike its

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competition, Manappuram Finance has been an early adopter of industry-leading technologies. That’s the reason you see, it developed its own proprietary solutions which has been one of its USPs too so far. Building upon my experience spanning more than two decades, (further, armed with my MBA in telecom and finance sector), I believe I am well-suited and equipped to contribute to the realisation of various goals of Manappuram Finance. Thus, apart from taking care of the mandate given here, I am taking a pragmatic approach in exploring the various ways in which futuristic technology paradigms such as robotics, chatbots, Master data management, anti-money laundering, anti-fraud management tools and adaptive technologies can be best employed to serve organisation’s various business interests. As your near-term priorities include e-KYC, transitioning the ERP on cloud, adoption of analytics for customer centricity, mobility initiatives and creating a single view of the customer, what is the roadmap envisioned to actualise such objectives? As a player active in online lending, our roadmap is quite clear. Right from shortrun, I have set my eyes upon achieving

Puneet Kaur Kohli Group Chief Technology Officer, Manappuram Finance

certain objectives in the two-three years for Manappuram Finance. Certainly, for now, e-KYC, transitioning the Enterprise Resource Planning (ERP) on cloud, adoption of analytics for customer centricity, mobility initiatives and creating a single view of the customer remain our key priorities. Besides, I am gearing up for strengthening our entire automation process, revamping of the IT architecture, mobile-user experience, facilitating a better- yet-secure B2B/ B2C customer experience, thereby contributing to value-chain in the entire ecosystem - and integrating all this into the common production database in

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MANAPPURAM FINANCE

order to arrive at a single view of our customers. So you see a lot of things are work-in-process and many more are in the offing. While going about executing the digital transformation of the gold loan, could you tell us the main challenge you face in terms of dealing with newer technologies? Yes, the digital transformation of the gold loan NBFC is one high-priority project for us. While executing it, cyber security in terms of e-transactions, e-payments, cyber laws and its compliance remain the key concern areas I would like to cite here. How do you perceive the readiness of Indian firms with regard to upcoming technologies such as blockchain and Artificial Intelligence (AI) etc? Are we well prepared to jump on the bandwagon or risk being left out in any way?

Headquartered in Cochin, incorporated in 1992, Manappuram Finance today has 4,148 branches across 27 States with assets under management (AUM) of Rs13,723 crore and a workforce of 22,112. We are gearing up for strengthening our entire automation process, revamping of the IT architecture, mobile-user experience, facilitating a better-yet-secure B2B/B2C customer experience.

No, in my view, we are not fully ready to best capitalise on the vast opportunities

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INDUSTRY PERSPECTIVE

these newer technologies offer to us. But going forward, certainly, the awareness has to be created on how best to employ these technologies and get the best out of them. On regulatory front too, things and processes need to be relaxed a bit. We need to be geared up for this. The need of the hour is to understand what kind of customers are we segmenting and what methodology are we adopting to achieve this because that holds the key to the success of the entire plan. How do you see the role of women in NBFC sector, do you think the sector is empowering them suitably? What is your message to them? I believe NBFC sector is empowering the women suitably. See, if I am here, that’s a testimony of the fact that the sector is very much pro-women. Its upto you how you prove your worth and make your own mark in the sector. Just as in any other sector, it boils down to an individual’s own caliber, potential and desire to succeed.

MAY - JUNE 2018 17

LENDING SOLUTION

NELITO SYSTEMS LTD

7 ESSENTIAL FEATURES OF NEW-AGE LENDING SOLUTION Cloud/SaaS Architecture: Software as a Service (SaaS) has proven its economic and operational benefits over on-premise origination of IT infrastructure and software characteristic of outdated loan origination systems. The benefits include faster implementation, secure access from virtually anywhere, high scalability, and minimal operational costs. Punit Jain Chief Executive Officer Nelito Systems Ltd

oday, Non-Banking Financial Companies (NBFCs) and banks are looking to upgrade their legacy lending systems since these are unable to match the requirements of a high growth fintech market. Some of the problems being faced by the lending industry are:  High Turn Around Time (TAT) to approve loan without compromising on the risk evaluation  High underwriting, transaction, and search cost  For judicious underwriting, prospective borrowers are asked to provide much more documentation than is necessary in making the process A new age lending solution should be specifically designed to overcome these challenges. Here are some of the features that should be present in every lending institution’s checklist before making their buying decision:

18 MAY - JUNE 2018

Mobility First Architecture In today’s world branches are not necessary to do business. Customers should come to you through digital channels and lenders should be able to reach customer’s doorstep. Simplified Product Configuration: The solution should be able to easily map and implement a lenders process since every organisation has its own unique lending processes based on past success, portfolio performance, market dynamics, and compliance with evolving regulations. The solution should be easily configurable by the users and must not take much time and efforts to make any change. Credit Risk Scoring Engine: Lending solutions are now vying for capabilities to aggregate credit scores from different rating agencies and build their own rating system on top of it to give maximum loyalty benefits to their existing customers, while making their offering attractive for prospects.

Application Programming Interface (APIs) In today’s digital world an IT system should be talking to many external systems like credit rating bureau, insurance companies, banks, UIDAI, e-wallets etc. Analytics Today’s powerful analytics tools provide an increased understanding of the efficiency, performance, and profitability of your loan operations. Customised reporting engines and configurable dashboards provide detailed analysis of performance; deal quality, competitive analysis which help continually optimise all phases of loan origination. Agile Services In addition to the product enabling, you also need an agile method of service delivery to ensure the growth is uninterrupted. The service delivery team should be Capable, Hardworking and Responsive to support you in every step on a continual basis. A buyer should carefully evaluate the product on the above features but should also look for an agile partner who can quickly support your unique requirements, so you stay ahead… always !! (Views expressed in the write up are of Punit Jain, Chief Executive Officer, Nelito Systems Ltd.) 

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Co n f e r e n Ce | e x p o | AwA r ds

11-12 August 2018

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IndIaâ&#x20AC;&#x2122;S BIGGEST

CTO Conference is Here! Elets Technomedia proudly announces the 3rd BFSI CTO Summit-Goa, a unique residential and networking conference for CxOs from across the Banking, Financial Services and Insurance (BFSI) Sector, to be held in 11-12 August 2018. This two day mega congregation will witness the presence of honchos from the leading commercial banks, senior level executives, technology innovators and solution providers, who will discuss and share their expertise on the issues pertaining to the technological innovations adopted by the banks and financial institutions.

Opportunities to Avail 1.

Get a Change to Reside & Network for Two Days in a Plush Property in Goa

Meet Top 50+ CxOs from Banks, NBFCs, Small Finance Banks, Payments Banks & Many more

Power Packed Conference

Insightful Panel Discussions

Industry Presentations

Awards & Expo

For queries contact: MANU RAJ SINGHAL Ph: +91-9871543890

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SPECIAL FEATURE

HYDERABAD, THE EMERGING BFSI CAPITAL Having already proven its mettle as country’s Information Technology and Start-Up capital, Telangana, the youngest State of India, is gearing up to add another feather to its cap by positioning itself as the next financial capital of the country after Mumbai, writes Sudheer Goutham of Elets News Network (ENN).

n a bid to attract investments, Telangana State Government has taken several steps and initiatives as part of its mega plan. Under this, Telangana has executed many initiatives in recent times, garnering the attention of numerous national and international financial giants feeling fascinated towards Hyderabad. While several global tech giants like Google, Amazon, Uber, Facebook among others have already chosen Hyderabad as their space for headquartering in India, following their footsteps, several international financial companies have also made their way to Hyderabad in recent times.

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Jayesh Ranjan, Principal Secretary, Information Technology, Commerce & Industries, said, “Hyderabad has been the preferred location for several banks and financial organisations. International organisations like Franklin Templeton, JP Morgan Chase Bank, State Street Corporation, HSBC have a large presence in Hyderabad. Globally- famed Indian banking brand ICICI Bank has set up its biggest campus in Hyderabad with over 15,000 employees, working and operating all their tech-work from the city. All these financial companies appreciate the fact that Hyderabad has created an exclusive cluster called Financial District that meets the needs of the Banking, Financial Services and Insurance (BFSI) sector.”

Cutting edge over existing financial capitals While the Telangana State government is determined to develop Hyderabad into the new BFSI capital of India, it cites its own advantages to realise this vision. “In this age, financial world is driven by technology. And to the fact that Hyderabad has a proven record in technology, we aim to become the new BFSI Capital of India. Ahmedabad has developed some incredible infrastructure like Gujarat International Finance Tec-City (GIFT), however, in terms of technology, Mumbai and Ahmedabad do not match up to Hyderabad,” said the Principal Secretary for the Telangana Information Technology Department. Talent Pool and Friendly Policies While Telangana state government’s industry-friendly policies, ease of doing business (EoDB) quotient, and quality infrastructure at lower costs are major

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SPECIAL FEATURE

Expansion of Financial District – Financial District -2 The existing Financial District of Hyderabad, spread over 75-acres of land, is now considered to be wholly saturated and fully occupied by various financial companies, with an ever-increasing demand for space from State’s BFSI sector. In this backdrop, the Telangana state government is considering an expansion plan. The Telangana State Industrial Infrastructure Corporation (TSIIC) is looking out to finalise the newer space which will allow the government to provide land for BFSI companies that are keen on either setting up new units or expanding their base in the city.

E V Narashimha Reddy Vice Chairman & Managing Director TSIIC

reasons for turning Hyderabad into an attractive investment destination, the abundant skilled and industry-ready manpower is another reason working in favour of it. “Many might not know this but Hyderabad has one of the best talent pool in terms of risk analysis and management. We are able to provide industry-ready talent that can hit the ground immediately for any operating company, thanks to TASK (Telangana Academy for Skill & Knowledge, a state government-run training organisation). This sets us apart from rest of the states, where the companies might have to make significant investments in training their workforce before hitting the operations. The only footprint in India of a foreign company like Warren Buffet’s is in Hyderabad with the name Berkedia Commercial Mortgage LLC. Mphasis, which is another premier software company, has created their niche unit to look after global risk analysis and derivatives management. Even the Bombay Stock Exchange (BSE) Data Recovery Center has been set up in Hyderabad,” said Ranjan.

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E V Narashimha Reddy, Vice Chairman & Managing Director, TSIIC, said, “The existing Financial District is saturated with complete occupation by financial companies. Expansion plans are on with the lookout for newer landscapes. Some of the land parcels including those in Kokapet, Tellapur, Osman Nagar and Kollur in Hyderabad, which also come under the limits of Hyderabad Metropolitan Development Authority (HMDA), are being considered for the project.” Officials also cite that the lower investment costs with good infrastructure compared to other southern metro cities make Hyderabad an attractive place for establishments. “Hyderabad is far ahead of other southern metropolitan cities including Bengaluru and Chennai where huge operations and establishments-related expenditures are almost double the amount here. If a premium-leased office space in Hyderabad’s IT hub is available at 40-50 per square foot (sq.ft), the same, for instance in Bengaluru will be in the 80-90 per sft range, lacking the basic infrastructure too,” explained a TSIIC official.

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The Banking and Finance Post

Jayesh Ranjan Principal Secretary, Information Technology Commerce & Industries

Telangana government’s own NBFC initiative In a major boost to State’s endeavours aimed at attracting more investments into its NBFC sector, the Reserve Bank of India (RBI) has given clearance to Telangana state government to set up its own NBFC initiative - Telangana Industrial Health Clinic Ltd (TIHCL). B Yerram Raju, Advisor and Director, said, “It is the first State-promoted, cofinanced NBFC.” TIHCL was floated in 2017 with a corpus of Rs 100 crore, which included contributions from the State and Central governments, financial institutions, industrial units and High Networth Individuals (HNIs). Lenders such as SBI, SIDBI, Karur Vysya Bank, Canara Bank, Union Bank and Vijaya Bank have so far evinced interest in partnering with TIHCL. According to Yerram Raju, the TIHCL’s innovative institutional intervention to resolve the stressed assets in micro and small manufacturing enterprises attracted the attention of policymakers at the national-level, and in the last few month,

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SPECIAL FEATURE its success can be gauged by the fact that the concept resulted in 23 micro and small enterprises contributing to the share capital to an extent of Rs 30 lakh. TIHCL advised these enterprises in the resolution of the stress they faced from banks. The SARFAESI Act 2000 notice was vacated for a few while for others it helped them get over stress that resulted due to improper management decisions. The Telangana government sponsored TIHCL as a Special Purpose Vehicle (SPV) of the State Industrial Development Corporation initially and registered it as a public company under the Companies Act of 2013 with an investment of Rs 10 crore from the State budget. The state government NBFC expects to pursue a multi-pronged strategy for filling in the credit gap that exists for micro manufacturing enterprises, helping small enterprises access equity markets and reviving and restructuring of viable manufacturing MSEs. In order to revive the MSEs, TIHCL will provide bridge finance, but not to those entrepreneurs who are willful defaulters, said the Director. Initial target is to support 5-10 enterprises a month in every district. In worst cases, it will handhold the enterprise for the first year of revival to ensure that the projected cash flows are realised and the financial discipline is adhered to by the viable unit. This institution is emerging as a support entity to help industrial units sustain in the newly-formed State, according to Yerram Raju. State Street Corporation, a catch for Hyderabad State Street Corporation, one of America’s oldest financial company, has set up its largest Indian base in Hyderabad with a capacity to absorb a whopping 7,000 people!

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The fact that Hyderabad could woo the Boston-headquartered State Street Corporation while competing against the serious contending metros like Gurugram and Chennai, is itself a testimony of the city’s economic prowess and its potential to woo NBFCs. This, over $10 billion turnover American company, already having presence in India

Officials also cite that the lower investment costs with good infrastructure compared to other southern metro cities make Hyderabad an attractive place for establishments.

with offices in Mumbai and Bengaluru, is further setting up its largest base in Hyderabad’s Hitech City, acquiring 2.3 lakh sq.ft space for the purpose. What makes State Street yet another big catch for Hyderabad’s BFSI sector is that it

is the second oldest financial institution of America that was set up in 1792. BSE sets up Disaster Recovery Center in Hyderabad The Bombay Stock Exchange (BSE) has established its Disaster Recovery Centre (DRC) in Hyderabad which would be a replication of the primary site and thus ensure that all data is available at disaster recovery site with near zero time lag. Telangana’s Information Technology, Industries & Commerce Minister K T Rama Rao inaugurated the facility. Besides showcasing many USPs, the automation tool provides a real-time monitoring of the sync status between primary and disaster recovery sites, and has also helped reduce manpower requirement for handling operations, the BSE said in a statement. With state-of-the-art infrastructure and allied facilities matching global standards, the DRC would ensure seamless continuation of exchange operations, aid in diversifying the risks, and fortify the capabilities in terms of processes, people and technology infrastructure. BSE DRC is designed in line with other global technology hubs. This, in turn, would encourage more premier institutions to invest in Hyderabad. 

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INDUSTRY PERSPECTIVE

IMImobile

EASING USER SERVICE DELIVERY WITH TECHNOLOGY In India, we work with the Governments of Karnataka and Telangana, which have taken the initiative to consolidate all their citizen-based services into a common platform. For this, we have deployed our IMIdigital platform, and have integrated it with respective government’s platforms, says Sudarshan Dharmapuri, Senior Vice President (Product Management), IMImobile, in an interview with Sudheer Goutham of Elets News Network (ENN).

Sudarshan Dharmapuri Senior Vice President (Product Management) IMImobile

How has IMImobile’s initial experience been and what is its current presence across the globe? IMImobile was established in India in 1999 with an aim to capitalize on the strength of a product company using Indian intellectual resources. Since that was the time when the telecom boom was about to happen, initially our vision was to focus on mobile data space and work with telecom operators and enterprises to provide them with a mobile data platform. Some of our early successes came as a result of working with mobile

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operators because they wanted to launch an array of consumer-facing revenuegenerating services. These services included infotainment-oriented content services (currently called the value-added services segment), with features such as portals, subscription services and content services for subscribers, which could be monetized. Thus, sensing a big business opportunity, we enhanced our platform to serve this objective. Following this, we started working with media companies like Yahoo, Star TV etc. and helped them run campaigns such as voting, contests and polls. The next opportunities for our growth came from the Middle East and Africa. Thereafter, seeking to expand into Europe, IMImobile acquired a UKbased company called ‘Win PLC’ - an Application-to-Person (A2P) messaging player that worked with UK-based mobile operators like Vodafone, O2 etc. We introduced IMImobile’s products to its client base and that, in turn, brought us great success. IMImobile now offers a whole range of products for customer engagement to some of the world’s biggest brands across wide-ranging sectors, essentially providing them the ability to interact with their endcustomers on multiple mobile channels. Can you tell us about your collaborations with various States in India? In India, at present, we work with

the Governments of Karnataka and Telangana. These two State Governments took the initiative to consolidate their citizen-based services into a common platform. For this, we have deployed our IMIdigital platform, and have integrated it with respective government’s platforms. Through this platform a variety of services such as applying for income certificates, land records etc. can be availed. Tell us a bit more about the USP of your m–governance initiative. The cases I mentioned above are two examples of how we are empowering millions of citizens’ digital interactions on a monthly-basis. So, the single value proposition that IMImobile offers, is a one-stop value proposition for all services, which includes multiple payment gateways implemented by integrating with credit cards, debit cards and net-banking tools. Furthermore, IMImobile has provided these services to a variety of rural-based customers by taking their unique requirements into account. Tells us about your product offerings aimed at BFSI players. For the BFSI sector, we chiefly provide three broad-based solution categories. One of these categories is Customer

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IMImobile

Communication. If you are a customer of a bank, you must be used to receiving OTPs regarding commercial transactions. We facilitate all such services. Besides, we help BFSI players orchestrate their customer-targeted communications across platforms. So, if you send an OTP over SMS and don’t get a delivery receipt within three seconds, then our platform detects this, and in turn, initiates a voice call to dispatch the OTP to you.

enterprises to talk to their customers on multiple digital platforms such as Twitter, SMS, email, Facebook etc.

We also offer what we call is an End-toEnd Customer Journey Automation. For example, you have a direct-debit scheduled on your account. If two days prior to the scheduled date, funds are low in your account, then our automated platform will send a communication to you, informing you about the low funds and possible modes of payment available. Our technology is about not only alerting customers but also opening a reply path for them to act on. Last but not the least, we focus on Customer Support Service. Here, we believe that customers today, prefer to interact with banks and businesses through social media such as Twitter and Facebook, like they do with their family and friends. Keeping this reality in mind, our IMIchat platform has been designed to allow banks and other

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With an aim to capitalise on the strength of a product company using Indian intellectual resources, IMImobile was established in India in 1999. Since that was the time when the telecom boom was about to happen, initially our vision was to focus on the mobile data space and work with telecom operators and enterprises to provide them with a mobile data platform.

The Banking and Finance Post

INDUSTRY PERSPECTIVE

What have been your recent industry takeaways that are going to shape IMImobile’s future priorities? Today, lots of organizations are beginning to realize that improving Customer Experience is the only way to remain competitive. This is because they are finally noticing that products and services are getting increasingly commoditized. If you notice, retail banking is the same across banks. So, going forward, the key differentiator for businesses would be how well their customers are treated and what kind of experience they are able to provide to their customers. And this is where, we come into the picture. Besides automating such processes, we also help businesses minimize related costs. One of our recent initiatives is aimed at developing Artificial Intelligence (AI) and Machine-Learning tools for automating various Business-toCustomers interactions. Because, you see, it’s not always possible for a human agent to respond to customer queries. In brief, I can say delighting end customers through latest technology and, simultaneously, helping our clients reduce their costs is going to remain our key priority! 

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INDUSTRY PERSPECTIVE

VISTAAR FINANCIAL SERVICES

NBFCs

THE EMERGING LEADERS IN TECHNOLOGY INNOVATIONS With changing times, Vistaar is continuously innovating to ensure that appropriate products are offered to the underserved small business community. Its financial offering includes unsecured as well as secured loans based on the business type and financial need, says Nikhil Bandi, Senior Vice President and Chief Information Officer at Vistaar Financial Services, in conversation with Elets News Network (ENN).

Nikhil Bandi Senior Vice President and Chief Information Officer at Vistaar Financial Services

How is Vistaar creating new economic opportunities for small businesses in India? Vistaar is one of the pioneers in lending to micro, small and medium sized businesses. The vision of company is to serve the financial needs of the “underserved” small business community of country. Vistaar has set a strong and stable foothold in catering to the credit needs of the MSME businesses over the last eight years. The demand for

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credit in the MSME segment has a very broad spectrum and it varies from few thousands to tens of lakhs. A large portion of this segment is still underserved. With changing times, Vistaar is continuously innovating to ensure that appropriate products are offered to the this small business community. Vistaar’s financial offering includes unsecured as well as secured loans based on the business type and financial need. As Digital India is moving from a dream towards a reality, Vistaar’s loan products are also continuously evolving where a loan can be provided to a small business based on its electronic payment receivable’s history and the years in business. Vistaar provides financial services to the missing middle business segment such as small manufacturing units, textiles/ power / auto looms, home-based enterprises, services (hotel, bakery, garages, workshops etc.), general stores and various kinds of shops, etc. The total unmet demand in the Micro, Small and Medium Enterprises (MSMEs) is close to Rs 2.9 trillion. What role is Vistaar playing in bridging this gap? With a clear focus towards micro, small and medium enterprise loan products offering, this is the only segment Vistaar caters to and would continue to cater to. As a company our vision,

mission and principles are focused towards the financial inclusion of small business. Vistaar, through its unique credit underwriting model, has proved that MSMEs, which are unserved, can be effectively given loans. This has paved the way for many players to enter this segment and start lending to MSMEs. Our product innovation team focuses towards changing needs to small businesses in India. As the gap is still huge, we are adding products and technologies that make lending faster and easier to right customers by understanding their asset creation, electronic payment history and provide loans a few times faster than typical secured business loan. With the product mix offered by Vistaar, we would certainly be a catalyst to the financial inclusion of small business in India. How Vistaar’s services are empowering women in the MSME sector? Micro enterprises are generally family owned and family-run businesses. Women play an important role in running these businesses. By extending credit to such enterprises, Vistaar is empowering women, both socially and economically. Certain small ticket size products of Vistaar focused towards women enterprises where women have to be the main applicant.

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VISTAAR FINANCIAL SERVICES

INDUSTRY PERSPECTIVE

capacity to service the loan but intentions are doubtful. Online psychometric assessments of customer are used by NBFCs now to assess the intention of customer to service the loan. This is a good scientific tool to help making fast and objective credit decision. d. Aadhaar-based KYC, Payments, E-NACH, E-Sign are adopted by NBFCs much faster than many other sectors. NBFCs adoption to these technologies has paved the path for a very fast growth in the MSME sector through faster loan processing of deserving businesses.

Banking, Financial Services and Insurance (BFSI) sector is transforming due to technology. What are the new technologies used by Non-Banking Financial Companies (NBFCs)?

Vistaar is one of the pioneers in lending to micro, small and medium sized businesses, the vision of company is to serve the financial needs of the “underserved” small business community of country.

NBFCs in India are adopting latest technology innovations much faster, even faster than many banks and insurance companies. Some of the innovations where NBFCs have embraced technology as early movers are: a. Lending based on financial score cards of customers which is a combination of parameters like bureau scores, customer’s business sector, demography and other aspects related to its business growth trajectory in last few years and potential to expand. This establishes need of business expansion and reflects customer’s ability to service the loan. b. Using Build Operate Transfers (BOTs) for interactions with prospects and customers for self-onboarding of customer, customer servicing and employee related services. These BOTs have now vernacular capabilities where acceptance of technology has become very easy even in rural and semi-urban India. The Natural Language processing capabilities in combination with vernacular capabilities have made the

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process much easier and cost effective. With this, NBFCs can reduce on their operating cost and pass the benefits to the end customers. This technology will not replace the mobile revolution but would enable it further by making some of the mobile apps redundant and mobile platform much stronger and simpler. c. Lending based on psychometric assessment of customer: Many times it is observed that customer has the

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The Banking and Finance Post

All these technologies in-combination would certainly revolutionise the NBFC industry in terms of portfolio quality, speed to process loan and business volume growth. While there are many other technology revolutions like Blockchain, Internet of Things (IoT), etc. which over the period of next three to five years change the avatar of how NBFCs would do business, there are very limited use cases in NBFC space today. Vistaar primarily works for MSMEs. How challenging is it for your brand to uplift the level of tech-awareness in the sector? With the adoption of technology across sectors it’s not going to be difficult for Vistaar or any other company to bring tech awareness in the sector. What’s more difficult is to make customer aware of what they should not do. With financial data, behaviour data and social data of customers, the profile of customers would always be available for Vistaar and other similar technology sensitive companies. It’s important to educate the MSME customers to have clean records of their business in future to have an easy access to finance. Vistaar with its initiatives around “Digital Office” (i.e. Assisted tab based onboarding) and Vernacular BOT (Self onboarding based on natural language communication BOTs), would lead the path of tech awareness and adaptability in MSME space. 

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SUMMIT REPORT

3rd NBFC100 Tech Summit: Highlighting NBFCs and the Tech-Driven Approach Holding a big potential and spark to innovate and remove several roadblocks currently existing in the banking sector, the Non-Banking Financial Companies (NBFCs) should be perceived as future leaders of the BFSI sector, experts opined at the 3rd NBFC100 Tech Summit held recently in New Delhi. Some of the experts stressed on exploring the reasons behind NBFCs’ success at a time when a lot of banks are not succeeding. Some of them underlined the game-changing role of technology be it in terms of customer onboarding or loan approvals where technology has been the key enabler for NBFCs. Prem Narayan, Deputy Director General, Unique Identification Authority of India (UIDAI), Government of India, earlier in the day inaugurated the summit organised by Elets Technomedia and powered by The Banking & Finance Post, Asia and the Middle East’s premier bimonthly magazine. Several other eminent dignitaries namely Raman Aggarwal, Chairman, Finance Industry Development Council, Alexis Bossuyt, Trade and Investment Commissioner, Flanders Investment and Trade, Embassy of Belgium and Deepak Kapoor, Co-founder, InfoAxon Technologies, were present on the occasion. Be it the role of NBFCs in redefining the financial inclusion scenario in India, technology transforming NBFCs, modifying framework of NBFC or the role of regulatory bodies etc. were included in the list of issues on which various esteemed dignitaries, who were a part of this congregation, deliberated. Here is a bird’s eye view of the grand extravaganza held in the national capital in April.

Prem Narayan, Deputy Director General, Unique Identification Authority of India (UIDAI), Government of India and Raman Aggarwal, Chairman, Finance Tech Summit, New in the ofonAlexis Trade [ bfsi.eletsonline.com ] Asia andDelhi, the Middle East’spresence Leading Portal BankingBossuyt, and Finance Sector and Investment 28Industry MAY - Development JUNE 2018 Council inagurating the 3rd NBFC100 Commissioner, Flanders Investment and Trade, Embassy of Belgium and Deepak Kapoor,and Co-founder, InfoAxon Technologies.

SUMMIT REPORT

INAUGURAL SESSION Non-Banking Financial Companies: Redefining the Financial Inclusion Scenario in India

PREM NARAYAN Deputy Director General, UIDAI, Government of India ....................................................................................................... Non-Banking Financial Companies (NBFCs) form an integral part of Indian financial system. It helps in reaching out to the unbanked sections of Indian society, especially the Micro Small and Medium Enterprises (MSMEs) segment. NBFCs are also embracing a lot of new technologies. Cloud Computing plays a significant role in this regard. The government does understand the value of this sector and therefore is committed to speed up its growth in every possible way. I believe due to government’s initiative such as Aadhaar based technology, including eKYC (Know Your Customer), the turnaround time for customer engagement has now been reduced drastically. There are many more developments in the offing that would be rolled out soon.

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The Banking and Finance Post

RAMAN AGGARWAL Chairman, Finance Industry Development Council ....................................................................................................... NBFCs were not regulated before 1991. Prior to that, there were a lot of scams that forced the government to take step against these financial institutions. Today, this sector has become a focus point of the Indian economy. NBFC is a young and dynamic entrant in the broader BFSI sector and in my view, country’s NBFC players, in many ways are trying to cover up what is lacking in the formal banking sector of the country. These offer unique solutions that are very much customised to the needs of today’s tech-guided customers and that in my view is the main differentiator working for NBFCs.

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SUMMIT REPORT

ALEXIS BOSSUYT Trade & Investment Commissioner, Flanders Investment & Trade, Embassy of Belgium ....................................................................................................... Technology is changing the way financial institutions are reaching to its customers and customers are using financial services. Technology is reshaping the future of banking. Fintech has a pivotal role to play in this segment. I see a huge growth of NBFCs in the years to come. Its assistance is definitely going to boost India’s economy that is already escalating.

DEEPAK KAPOOR Co-founder, InfoAxon Technologies ....................................................................................................... Unlike banks, the main strength of NBFC is that they cater to a different class of borrowers. At InfoAxon, to assess customers’ creditworthiness, apart for making use of info provided by the borrower, we match the data with whatever is available in public domain - such as the Ministry of Corporate Affairs (MCA) and GST portal. We also verify this using the social media profiling of the borrower. This gives us a holistic picture of the customer in question.

Esteemed diginitaries launching the special issue of The Banking & Finance Post magazine at 3rd NBFC100 Tech Summit, New Delhi.

30 MAY - JUNE 2018

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SUMMIT REPORT

PANEL DISCUSSION Embracing Technology for Secure and a Brighter Tomorrow of NBFCs

SARATH CHANDRA Chief Technology Officer, Airtel Payments Bank ....................................................................................................... Technology is so integral to NBFCs sector today that the sector cannot operate without it, let alone succeed. Concerning Airtel payment Bank, unlike others, I cannot talk about our digital transformation journey, since right from the day one, we have been a 100 per cent digital bank. Presently, the aspects we are improving include leveraging the use of technology and being more agile to customersâ&#x20AC;&#x2122; needs.

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PUNIT JAIN Chief Executive Officer, Nelito Systems Ltd ....................................................................................................... Today it is worth probing that why NBFCs are succeeding, when a lot of banks are not? The differentiator as I see is: Agility. So many banks today are in trouble, with high default rate and not being to penetrate the rural markets. On all these counts, NBFCs are doing a better job. In my view, the technology plays a game-changing role here. So be it, customer onboarding or approving of loans-in all such processes, technology has been the key enabler for NBFCs.

ASHISH OJHA Chief Technology Officer, Aye Finance ....................................................................................................... Thanks to technology enablement, Aye Finance grew from a start up phase to a mid size one in a span of just two years. We grew from 150 Crore to 500 Crore in a matter of a year. Last year our entire process was paper based, turnaround time was 10-12 days. Thereafter, thanks to consistent usage of automation technology, we managed to reduce the loan disbursal time to in 3-4 days.

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SUMMIT REPORT

VISHAL RATHORE Chief Information Officer, India Infrastructure Finance Company Limited ....................................................................................................... Digitalisation is not just about making your transactions complete in three- four clicks, but ultimately about cutting down your operational costs and risks, bringing about operational efficiency and end-to-end automation. Your back-end solutions should be agile enough to cater to the needs of the customer and your infrastructure should be capable enough to be increased in capacity, to accommodate any increment in resources.

TECHNOLOGY PRESENTATION: DELL EMC VxRail: Begin your Software Defined Data Center Journey

32 MAY - JUNE 2018

VAIBHAV PANDEY Co-Founder, i2iFunding ....................................................................................................... Since our inception as a P2P lender, technology has been an enabler for us. Right from customer acquisition to the credit evolution process, to the disbursal of loans, and to the servicing of loan in terms of collection and repayment, technology has been a lifeline. Dealing in loans with a ticket size of Rs 50,00 to one lakh, through our mobile app and getting customers’ insights on social media platforms, we triangulate this information to effectively judge the credit worthiness of our customers.

RAJESH RAMNANI Director – Converged Infrastructure, Dell EMC ....................................................................................................... If as a business, IT is important to you, then setting it up might be difficult for you. Processes like storage, servers, virtualisation is a complex job. Today when you invest in an infrastructure, you need to first identify the software to run on it, then you also have to buy the discrete layers of the sub-software. Then, you have to buy a piece of network for it, followed by specialised software to manage the same network. Subsequently, you need to hire people to manage the overall infrastructure. So you see the whole process calls for a multi layered approach.

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SUMMIT REPORT

TECHNOLOGY PRESENTATION: Making Digital Real & Rewarding Using a Platform Approach: Discover How Niyogin Fintech Launched India’s First End-to-End Digital Lending Platform

SHUBHAM NAGAR Director-Digital Solutions, InfoAxon Technologies Ltd ....................................................................................................... When it comes to digital , out learning is that it’s not the one thing that you do, but a host of things. it’s about thinking customers journey and partner’s journey and then having a platform approach that interweave these experiences for a seamless customer experience, and all along, creating value chains for our partners.

CEO ROUNDTABLE - Modifying Framework of NBFCs and the

Role of Regulatory Bodies

DEVESH SACHDEV Chief Executive Officer and Director, Fusion Microfinance ....................................................................................................... One of the reasons why in recent times the NBFC sector has grown to the stage where it is today is because of the role of regulator because they brought regulation to make sure that sector grows in a responsible and robust manner. However, given the thin line between under regulation and over regulation, there is always room for improvement.

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ASHOK MITTAL Chief Executive Officer, PrestLoans ....................................................................................................... As we see lot of digitalisation taking centre stage, the changes that should ideally accompany them and must be brought at regulatory level are a bit slow. Many reforms, regulations and sector-related decisions that have aready been okayed, are yet to see their implementation. Going by the rulebook, we hear that a particular regulation should come in force in six-months time, but that does not happen.

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SUMMIT REPORT

SOMYA SRIVASTAVA Chief Executive Officer, Prayatna Microfinance Ltd ....................................................................................................... Operating in microfinance domain, I notice that this sector is moving from semi-organised sector to an organised sector. Along with this, different platforms, sub-segments are not only emrging but are also gaining recognition e.g P2P lending platform has now started gaininig immense recognition. however, along with such opportunities, there are risks too.

RAKESH DUBEY Chief Executive Officer, SV Creditline Limited ....................................................................................................... Since a bank in India is synonyms with trust, hence, principally speaking, being a NBFC equals to being non-trust holder. Hence, to gain back the trust of the level of bank, the sector needs to be regularised. With NBFC players doubling in numbers recent times, the RBI thus need to revisit all the earlier regulations brought out before the advent of new age technologies.

PARAS MITTAL Managing Director, Gurdevi Leasing and Finance ....................................................................................................... Most of the NBFCs have to still improvise on the corporate social responsibility front. There are lots of incidents when customers have to shell out a lot in terms of charges such as balance maintenance or related transaction charges. These need to be curbed to promote ethical banking. With many corporate frauds surfacing in recent times, ethical issues on corporate governance need to be addressed on a prirotiy basis.

VIVEK TIWARI Managing Director, Satya MicroCapital Ltd ....................................................................................................... As I see, any kind of regulation imposed on a sector can also be seen as a kind of recognition being facilitated to that sector. This is the case with countryâ&#x20AC;&#x2122;s NBFCs too. However, there are few entities that have used the grey areas of the regulations for siphoning off the money and indulging in unetihcal practices. So, the dilemma before a regulator is to make sure that the entire sector behave more ethically.

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VAIBHAV PANDEY Co-Founder, i2iFunding ....................................................................................................... P2P lending space in India has seen intervention from RBI in its very early days. Compared to international regulators too, I think RBI was among the very early movers. We have seen a situation in china where until 10, 000 players no regulating was there which also led to many scams in that country too. In India, thus I believe, RBI did a great job in regualting the sector.

SHACHINDRA NATH Founder, Poshika Financial Ecoystem Pvt Ltd ....................................................................................................... I think NBFC regulations have evolved to a large extent. If you look at prior to 2013, NBFCs were regulated in one single brush. Size, type-nothing use to matter, but now you have a comprehensive segregation of NBFCs by size. Still Theydon do it by activity, whether you are a retail NBFC or consumer or wholesale or real state, for regulators you are just a NBFC license holder.

DEEPAK SRINIVAS Director, UC Inclusive Credit Pvt. Ltd. ....................................................................................................... One area RBI needs to look at is to be able to discern between high risk and low risk NBFC. There is a disconnect between RBI and the players itâ&#x20AC;&#x2122;s connected to, and to those itâ&#x20AC;&#x2122;s not. The RBI should not treat all players in one size fits all approach. There are small NBFCs which need not be subjected to many technological criteria but currently they are.

HEMANT B SONGADKAR Managing Director & Chief Executive Officer, Nabsamruddhi Finance Ltd. ....................................................................................................... While I believe in recent times, the last mile connectivity by NBFCs has been much better than even banks. They are now even reaching the unreached. There are many NBFC that are not able to avail financing from players like because their current ratio was less than one.

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SUMMIT REPORT

TECHNOLOGY PRESENTATION IMRAN IRAQI Principal-Technology Advisory, CtrlS ........................................................................................................................................................................................................................................ Everything connected to the internet could be subject to compromise. The idea of security on web is all porous. One of the lagging factor that I found in the CSOs of the NBFCs is that they are not effectively been able to propagate effectively to the board that these are the cyber security vulnerabilities we are living in. this leads to absence of required strategies that should be in place otherwise.

PANEL DISCUSSION - Implementation of Innovative

Technologies for NexGen Banking

NIKHIL BANDI Senior Vice President & Chief Information Officer, Vistaar Financial Services P Ltd ....................................................................................................... I find the topic today to be so apt and relevant. In NBFC segment, be it microfinance o MSME lending, Innovative technologies of the day like blockchain, natural language processing, IoT, virtual reality, we need to see how many of them are really implementable in our domain and what are contextual requirements of it.

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DEEPAK MUDALGIKAR Chief Technology Officer, SBFC India Pvt Ltd ....................................................................................................... Looking at the legacy applications that we inherited from karvy financial services, we explored how to transform them into the digital platform. We looked at making things easier for our employees and being true to our tagline i.e ‘loans made easy’. We aimed to make our processes easier both for our employees and stakeholders – in this, tools ranging from analytics machine learning and AI play a key role.

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SRIVATHS VARADHARAJAN Chief Information Officer, Niyogin Fintech Ltd ....................................................................................................... Initially, aimed at addressing the customers’ problems, aspects that we tried to address included the speed, the quality of decision and how it will take care of the health of the portfolio. Today, through API integration, we have parameterisation coming from bureau perspective, parameterisation from banking perspective from credit rule perspective along with such modeling we have also added social score.

VARUN GULIANI Head – IT, India Shelter Finance ....................................................................................................... I would like to touch upon the topic of privacy. Today, the moment we give our consent to a service provider to read our SMS, we are prone to security breach too. This is where business ethics come into the play. Now vision analytics has come, to vision. Google .com and you will not believe the amount of humongous data and insights a single picture can give us.

SARATH CHANDRA Chief Technology Officer, Airtel Payments Bank ....................................................................................................... Taking the next-generation banking solution across to far-flung areas of the country has now only been enabled through technology. Today, we are moving towards a near-real- time technology, event- driven systems. So we have real time AML solutions, making use of, we can scrutinise a transaction which in less than a minute.

RAJESH SINGHAL Head – IT & CISO, Indian Clearing Corporation Ltd ....................................................................................................... We guarantee the trade done by the end customer, security part and the settlement part of it. Today we have multiple applications, with each asking for different password. That used to be a security threat. It was difficult to remember all the passwords for all the applications. Now using Single-Sign-On (SSO), we now have a single user name and a single password that subsequently is authenticated by dual authenticator such as Google.

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SUMMIT REPORT

PANEL DISCUSSION - Relevance of Cloud Computing in NBFC Sector

DEEPAK MUDALGIKAR Chief Technology Officer, SBFC India Pvt Ltd ....................................................................................................... If you really see, cloud as a platform for service delivery has improved a lot, and has given a lot of benefit to many organisations. Be it private cloud which is very mature and developed now and has been helping many organisations cut costs. From that point to public crowd, I believe software as a service has been a great enabler and disrupter in the field of NBFC. Certainly, for achieving operational efficacy, cloud is playing a key role.

ANAND SHARMA Chief Technology Officer, Asirvad Microfinance Ltd ....................................................................................................... Right from the lending solutions to the in-house communication platform to analytics, we are 100 per cent on the cloud. If we were to look at cloud model and on-premises model, then there are five parameters we observe: security, scalability, CAPEX Vs APEX and privacy. These are four guiding principles for us while opting for a cloud service. From the financial side, its CAPEX Vs APEX from information security side, its security, and privacy of data. Such an analysis helps in our decision-making.

NIRMAL GUPTA Head – IT, SV Creditline Limited ....................................................................................................... We now have end- to-end cloud services but before opting for any cloud service, we analyse six aspects, these include: the cost, services, scalability, productivity, reliability and last but the least functionality. Now since we are 100 per cent on cloud, employing it end to end, we have reduced several of our expenditures.

GOUTHAM KS Head-IT, Auxilo Finserve Pvt. Ltd ....................................................................................................... The point I like to add to the whole discussion is the idea of integration. How best we integrate various stakeholders on the cloud? Now there are various services being availed via cloud. The software is a service, infra is a service too, and as such, we can’t expect every service to be provided by a single vendor, since each vendor has its own USP.

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TECHNOLOGY INNOVATIONS

PASSPORT SEVA KENDRA

REACHING THE LAST MILE With 37 Passport Issuance Authorities, 91 state-of-the-art Passport Seva Kendra (PSKs) across the country, the project has expanded the reach of passport services, ensured service delivery in a transparent manner with greater security and reliability. A Tier III Data Centre and an active-active Disaster Recovery Centre have been set up with 24X7 operations, says Golok Kumar Simli, Chief of Technology, Passport Seva, in an interview with Gautam Debroy of Elets News Network (ENN).

What makes Passport Seva Kendra easily accessible to the people?

Golok Kumar Simli Chief of Technology Passport Seva

The Ministry of External Affairs has initiated the Passport Seva program to make passport related services convenient and easily accessible at their vicinity through a blend of process transparency and accountability to the citizens as part of passport issuance ecosystem. To realise this vision, the ministry has extended its reach through 37 Regional Passport Offices (RPOs), 93 Passport Seva Kendras (PSKs) and over 200 Post Office Passport Seva Kendras (POPSKs) across the country. The project has been implemented by the Ministry of External Affairs in Public-Private-Partnership with Tata Consultancy Services as the Service Partner. The project demonstrates how innovative use of Information and Communication Technology (ICT) can transform the way citizens receive services from Government institutions. The entire process of citizen service delivery has been automated. The citizens feel alleviated right from application filing to delivery of Passports at their residence. At every stage of the issuance process, the citizens are informed the status of their application through various mode of digital communication, equally empowering them to appeal and lodge grievances transparently, in case of delay. The idea was to completely revamp and overhaul the service delivery mechanism keeping citizens at the core. What latest technology initiatives you have adopted in your department? The Digital India drive by the Central Government envisions delivery of citizen services in a transparent, efficient, accountable and convenient environment through streamlined processes and committed, trained and motivated workforce.

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PASSPORT SEVA KENDRA

The digital journey and the transformation in the Indian Passport services present a unique example of success for others to learn from and emulate. The technology sits at the core of the passport delivery system. Not only the entire processes and interfaces with the citizens and other stakeholders has been made online but harnessing the potential of latest and modern technology has always been the priority of the department, be it Mobility, Cloud or Analytics. A Tier III Data Centre and an active Disaster Recovery Centre have been set up with 24X7 operations. The state-ofart Network Operation Centre (NOC) and 24X7 Security Operation Centre (SOC) provides a sense of ownership and guided watchdog for the security sensitive passport related data and information. The system has built in interoperability to exchange information with other government departments. As the ecosystem around the passport services continues to evolve, further improvements in efficiency, elasticity and effectiveness would always be the core vision of the ministry. How do you define your reach to the remotest corner of India? With 37 Passport Issuance Authorities, 91 state-of-the-art PSKs across the country, the project has expanded the reach of Passport services, ensured service delivery in a transparent manner, in a comfortable environment with greater security, reliability and within defined service levels. The Government has recently announced the Post Office Passport Seva Kendra (POPSK) to provide larger reach to the citizens for submission and processing of applications related to Passport services. As on June 5, 2018, more than 200 POSPKs have been made operational across the country. The ministry has also launched mPassport Seva App for citizens, which would enable them to submit their passport application through hand-held devices including online payment and

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scheduling of appointment at any of the PSK/POSPK. The aim is to provide a passport facilitation centre within a radius of 50 km from applicant’s place of residence. A host of Application Program Interface (APIs) have also been created for integration with external Government entities like the Digital Locker scheme and other eGovernance Mission Mode Projects (MMPs) such as Crime and Criminal Tracking Network and Systems (CCTNS), National Intelligence Grid (NATGRID), Income Tax, Permanent Account Number (PAN), Electors Photo Identity Card (EPIC) etc. in the future. All these initiatives have one common aim making passport issuance process easy and speedy for the citizens.

Do you take the help of private players while implementing your projects? The ground reality is the result of composition of the core pillars of Passport Seva viz. citizen immediacy, process overhauling and digital infrastructure that has increased the citizens’ experience and assurance level to the maximum. The success also deserves equal appreciation for playing a critical role in creating a strong foundation for the core pillars/ aspects to evolve and adhere. These aspects include the systemic resources, bold leadership, win-win publicprivate-partnership (involvement of private player) model, effective change management approach, and ecosystem evolution. The business model being followed in Passport Seva ensures i) Minimal investment by the Government;

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ii) Best-in-Class Processes, System and People; iii) Protection against Technology Obsolesce; iv) Quick and Easy Staff augmentation; v) Better Working Condition and vi) Enhancement of Skills and better utilisation. The involvement of private players allows the department to effectively utilise the scarce manpower resources. What challenges do your generally face? There is a marked departure from the earlier practice where the citizens had to travel a long distance and wait for hours in the queue at the Passport Office, submit a lot of attested documents and would need to visit again and again in want of clarifying doubts, filing of missing papers etc. The exceptions were also discovered at a later point, for which the applicants were asked to reach out to their respective Passport Offices. Now, an end-to-end process is enabled by the underlying robust IT and digital infrastructure. Passport Seva Program (PSP) has gone the digital way, setting an example of a true digital enterprise. Some of the remarkable digital take away points of Passport Seva are:  Anytime, anywhere access  Process transparency and accountability  Governance to e-Governance to m-Governance  Technology adding to its business value by leveraging the digital platform  Dashboard, Reporting and Analytics helping Citizens, Stakeholders and Management The challenges were many which most Government initiatives pass through. However, careful planning, well thoughtout strategy and focused-outcome oriented outcome in mind with aim for long term sustainability make the project a success story to emulate and replicate by others. 

MAY - JUNE 2018 47

SECURITY PERSPECTIVE

AXIS DRIVING INNOVATIVE NETWORK SOLUTIONS GLOBALLY A cost-effective detector with visual confirmation for safety of both people and property in numerous environments is one of the core offerings of Axis’ thermal cameras, says Sudhindra Holla, Sales Director – SAARC and India, Axis Communications, in conversation with Souvik Goswami of Elets News Network (ENN).

your security needs be it medium or enterprise businesses. Our aim is to create high quality CCTV cameras and softwares that complement our product offerings to maximise security and efficiency. We are active in many verticals such as retail, government, transportation, hospitality and smart cities. Our solutions are designed keeping in mind, the end user applications. We have more than 2,800 dedicated employees in more than 50 countries around the world, supported by a global network of over 90,000 partners. Sudhindra Holla Sales Director – SAARC and India, Axis Communications

How is surveillance becoming increasingly relevant in the ecosystem of Smart Cities in India?

Give us an overview of Axis Communications.

I firmly believe in creating a safe city before a smart city. Providing core infrastructure along with a decent quality of life, a clean and sustainable environment and application of ‘Smart’ solutions is the focus of Smart Cities as per the Govt. of India. Security and surveillance is an integral part of all societies. For example, autonomous vehicles, which will become a reality in five years is a big area of concern as it can be prone to remote hacking. Risk of hacking traffic signals etc. would cause an increase in mishaps and accidents. Designing a fool-proof

Founded in 1984, Axis Communications is a Sweden-based company. We are the market leader in network video technology and offer intelligent security solutions that enable a smarter, safer world. Axis is driving the industry by continually launching innovative network products based on an open platform thereby delivering high value to customers through a global partner network. We are a company that provides end-to-end solutions for

48 MAY - JUNE 2018

security implementation for a smart city is of paramount importance.Data is a very powerful tool and is often misused if it falls into the wrong hands and we need to be very cautious. Hence, surveillance is one of the most relevant and important pieces of the smart cities ecosystem in India. How significant is the IP-based surveillance in providing a fool-proof security cover in the worldview of Smart Cities? Recording high-resolution videos with in-built compression is what today’s IP video surveillance technology is capable of. There are multiple benefits of using IP-based surveillance to provide foolproof security in the smart cities arena: Video analytics: Traffic control and monitoring and movement of vehicles and humans can be detected by cameras who in turn provide data on which areas are congested, peak time traffic hours, foot traffic count, vehicular count etc. Such analytical data is the cornerstone of smart cities initiatives. With increasing innovations amongst CCTV manufacturers, the same technology can be pivoted for other purposes. Citizens will be able to track parking spots in their area, traffic authorities can direct traffic through the most efficient routes.

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Environmental sensors: Environmental conditions such as air quality, temperature and humidity, water quality and noise levels, can be measured using sensors which are useful for city authorities to direct resources towards any mitigated imbalances. Support for law enforcement: Law enforcement agencies use video surveillance to gather primary evidence during investigations. Deployment of high-quality CCTV cameras are critical for civic authorities. Today’s surveillance technology is built in line with the requirements of the police departments —one can also get inclusions such as facial recognition, multi-angle recording and license plate recognition to aid in identifying criminals, cars and objects from far away. How can thermal-based cameras be a help in strengthening security set up of cities? The recent advances in camera technologies, such as thermal imaging and enhanced low-light capabilities have been significant steps forward. Thermal technology is renowned for ensuring reliable detection with a low rate of false alarms. A cost-effective detector

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with visual confirmation for safety of both people and property in numerous environments is one of the core offerings of Axis’ thermal cameras. These cameras have built-in analytics, such as Video Motion Detection that can send an alert when it detects motion from moving objects within a predefined area. In environments where the privacy of individuals is paramount – for example schools and care homes – thermal imaging detects incidents without revealing personal details of the people in the image. Together with analytics, these cameras can trigger alerts or alarms in response to patient or resident falls, allowing staff to take immediate action thereby making cities safer. Are there any specifically important projects in the offing for your organisation? Nanded Case study, Kolhapur, Aurangabad, Bhavnagar. Government Power, Oil & Gas segments, Crucial Govt buildings in CPWD. We had few successful installations in cities like Bhavnagar. Bhavnagar Police chose Axis surveillance solution which was deployed across the city to ensure

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effective traffic management in the city and identifying criminals and traffic violators. It has also helped to assist the on-field police in crime tracking, directly from the Command and Control Room and has enabled better governance and civic administration. Nanded Safe city project is one of the benchmark projects in urban security. The Axis smart surveillance solution deployed across the city of Nanded, has helped the law enforcement to assist the on-field police in crime tracking, directly from The Superintendent of Police headquarters’ and has enabled better governance and civic administration. The solution helps to monitor strategic places such as the SachkhandGurudwara, traffic signals, busy streets and other places of religious importance which are potential criminal/terrorist targets. Kolhapur Municipal Corporation deployed Axis surveillance solution to ensure Kolhapur is a safe and wellconnected city. We have deployed Axis surveillance solutions in Government Power plants, Oil & Gas focused organisations. Also, we have installed in crucial government buildings through CPWD.

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INDUSTRY PERSPECTIVE

PIRAMAL GROUP

PIRAMAL GROUP GAINING COMPETITIVE EDGE WITH EXCELLENCE IN INNOVATION The Piramal Group has adopted a customised and built to suit technology platform. It has helped the brand in achieving enhanced operational efficiency by eliminating data duplication, reducing paperwork, facilitating a seamless data flow for effective monitoring and control, and in implementing a robust compliance environment, says Khushru Jijina, Managing Director, Piramal Finance and Piramal Housing Finance, in conversation with Elets News Network (ENN).

Annual Growth Rate (CAGR) or a growth of 88 per cent. Our Corporate Finance loan book has also achieved an equally impressive 118 per cent growth when compared against the previous FY. The group recently completed the process of merging Piramal Finance and Piramal Capital with Piramal Housing Finance with the intent of streamlining the financial services business-another step in the direction of potentially unlocking the value that resides in each business vertical.

Khushru Jijina Managing Director Piramal Finance and Piramal Housing finance

Piramal Group underwent a major organisational change recently when it streamlined its financial services. What led to this change? Growth in financial services was primarily driven by increase in size of loan book, which grew by 69 per cent during last year to Rs 42,168 crore as against Rs 24,975 crore in Financial Year 2017. Construction Finance now accounts for 60 per cent of the company’s real estate loan book. Our Real Estate loan book has grown rapidly and achieved a five year Compound

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Post the merger, Piramal Housing Finance can now operate as a single entity that spans the entire capital stack from construction finance to housing loans. The combined entity would also be able to access financing on better terms and benefit from a ratings upgrade due to a well-diversified and granular asset profile. This consolidation of all financial services entities under one company is further expected to lead to significant long-term synergies including higher profitability, higher risk-adjusted returns, and return on equity improving by around 200 to 300 Basis Point (BPS) in the years ahead. Piramal Finance has set up a separate vertical to invest in affordable residential projects across the country. What is it aiming at?

Piramal Finance has set up a dedicated team to invest in affordable and midincome residential projects across major metros in India. We have identified an initial pipeline of Rs 3,000 crore with transactions across the major metros under active consideration. While many players in the market are focused on providing equity or debt capital towards affordable and mid-income housing, Piramal Finance’s unique ability to provide a comprehensive end-to-end solution – including both early stage equity as well as construction linked debt – is truly unparalleled as it helps the developer achieve financial closure for the project on Day Zero. Our ability drive sales through its platform Brickex and fund those sales through customised home loan products specifically tailored towards salaried as well as self-employed end users acts as a unique competitive advantage. Piramal Finance has a highly experienced team focused exclusively on scaling up its presence to $2 billion by 2020 within the affordable residential projects segment. Technology is reinventing the financial institutions in a big way. How is Piramal transforming? The country’s NBFC sector is

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INDUSTRY PERSPECTIVE

experiencing a rapid growth due to macroeconomic conditions and high credit penetration. It is also witnessing major disruptions through adoption of tech-driven innovations. In our early years of growth, the platform as a whole and the senior management, in particular, focused on building a standardised set of systems, business processes and underwriting standards that would enable us to achieve scale whilst also redefining the market with innovative products. The platform today is touted as having some of the best processes and governance standards as evidenced and validated at multiple instances by the regulators, various external service providers as well as the ratings agencies themselves. Technology has also played a significant role in aiding this growth. We adopted a customised and built-to-suit technology platform that spans the entire wholesale finance business and helped us achieve enhanced operational efficiency by eliminating data duplication, reducing paperwork, facilitating a seamless data flow for effective monitoring and control, and in implementing a robust compliance environment. For the recently launched Housing Finance Company (HFC), again we have relied extremely heavily on a technologyled solution in both customer acquisition and stakeholder (distributors and developer) management. We have the ability to send out well-targeted propositions, provide more personal access to customers, lower turnaround time and provide more efficient service. Over the medium term, this would significantly impact our ability to scale the size of our book, whilst also creating a USP, through our reliance on technology, when compared against the other players of scale that operate in this industry. What innovations is Piramal Group planning in near future?

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The Piramal Group has successfully created industry benchmarks time and again by launching unique strategies and relying on both product and process innovations to gain a competitive edge. In order to detect early warning signals, we created a unique asset monitoring model across our investments with the team monitoring each project on a regular basis. This includes conducting regular site visits for real estate projects, maintaining monthly MIS updates on progress of each investment, ensuring collection of receivables, conducting regular project monitoring meetings with the clients and more. Additionally, the fund management business also enabled the platform to bring to market certain unique and innovative strategies such as slum redevelopment (Mumbai Redevelopment Fund) or bulk buying of apartments (Apartment Fund). We have also translated this entrepreneurial mindset into the introduction of multiple new products within our wholesale lending business over the years – from a ‘Flexi-LRD’ to the ‘Piramal Preferred Partner’ program. More recently, we set up the Emerging Corporate Lending team to target small and medium enterprise lending. This

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will enable access to smaller corporate who are typically not covered by traditional wholesale lending channels. In our retail Housing Finance business, by structuring our business and stakeholder management around B2B rather than B2C, we have effectively increased our ability to acquire customers by using existing relationships with distributors and developers alike within our wholesale lending business. By creating a adapting a technology-led solution to acquire and onboard new distributors at a rapid pace, and ensuring that each inquiry is taken through the diligence and documentation process quickly and transparently, are able to significantly reduce our turnaround time to disburse. This ability to prioritise each stakeholder in the value chain underscores our desire, intention and ability to operate effectively and achieve scale in an already crowded market. And finally we have introduced various product-led innovations focused on servicing the end users. For example, we have created a unique “SUPER” loan product which factors their future earning potential whilst defining eligibility criteria thereby enabling them to purchase a larger unit today. 

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SPECIAL FEATURE

DIGITAL PAYMENTS IN INDIA

A SAGA OF POPULARITY VERSUS SECURITY

India is aspiring to transform itself into a fully digitised economy. To realise this dream, the Central Government with the cooperation of several organisations and individuals has brought in revolutionary changes in the recent past, Digital India is one such flagship programme. Despite the rising usage of digital payments, the security still remains a concern. Rashi Aditi Ghosh of Elets News Network (ENN) explores the safety quotient with regard to the increasing popularity of e-payments in India.

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SPECIAL FEATURE

Government Initiatives for Boosting e-payments

DIGITAL PAYMENTS GAINING MOMENTUM IN INDIA Witnessing a growth of 4.73 per cent, the digital payments in India reached a record high of 1.11 billion in January 2018. As per the Reserve Bank of India (RBI), the digital transaction value collectively inflated to $2 trillion in January.  In 2017-18, 20.3 billion digital transactions were reported in India.  The volume of transactions in e-payments grew by five times in the last four years, according to data by Ministry of Electronics and Information Technology. While the volume of transactions was reported at 317.60 crore in Financial Year 2014-2015, it inflated to 1605.30 crore in Financial Year 2017-2018.  Not just volume but the value of transactions in terms of e-payments also grew in 20172018 as compared to 2014-2015. It reported a growth of 1.5 times.  Centre’s flagship initiative Unified Payments Interface (UPI)-Bharat Interface for Money (BHIM) and USSD (Unstructured Supplementary Service Data) collectively achieved 7.6 times growth during November, 2016-February, 2018.  Data suggests that that Immediate Payment System (IMPS) grew by 240 per cent during the above mentioned period.

The Government has incentivised the usage of BHIM App for making digital transactions. With effect from January 2018 Merchant Discount Rate (MDR) on debit card transactions of value upto Rs 2000 is to be reimbursed to the banks by the Government in order to bring such transactions on par with cash. Several ministries and departments such as Railways, Petroleum and Natural gas etc are offering incentives to promote digital payments. Through the programme of Pradhan Mantri Gramin Digital Saksharta Abhiyaan (PMGDISHA) measures are afoot to train six crore persons in rural areas, across. “Most financial institutions believe that the younger, newer customers prefer digital banking over traditional banking. Digital banking also allows a bank to acquire new customers in newer territories quickly. The cost of managing these customers is also far lower,” said Abhishek Pandit, Director - Business Services, AISECT. States/UTs in various aspects of digital literacy including digital financial literacy, covering one member from every eligible household in about 40 per cent of rural households by March, 2019. There are 2,92,406 number of Community Service Centres (CSCs) of which 1,83,005 number are operating in rural area and these CSCs play crucial role in enabling and facilitating digital transactions.

“India is a cash-based economy with transactions from small disorganised merchants to organised retail being predominantly in cash. While the government and regulator have taken steps to grow the digital pie, the growth has been slow and steady rather than startling. With most of the Indian public now owning a debit card courtesy the PMJDY, the availability of new and convenient payment mechanisms like UPI and the focus on driving POS acceptance including rural India, the share of digital payments is slated to grow. As customers realise the sheer convenience of using digital platforms like cards, Ecommerce, Wallets, Unified Payments Interface (UPI), QR code payments, Mobile NFC etc, digital payments should grow significantly in the next few years,” said Avinash Luthria Business Head, Financial Processing and Licensing, at Worldline South Asia and Middle East. Safety Scenario of E-payments While the Centre is boosting the usage of digital payments with all its innovative

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measures, the concern over safety of online payments is still a matter of concern. According to a study by credit information company Experian and International Data Corp (IDC), India has the second highest risk of digital fraud in the Asia Pacific region, behind Indonesia and almost half of the consumers in India have directly or indirectly experienced retail fraud. The report reveals that at 8.1 index points, fraud risk in India was only second to 8.7 index points in Indonesia, which was much higher than the average 5.5 in Asia Pacific, the survey of 3,200 consumers in 10 markets across AsiaPacific between May and June 2017 said. The companies surveyed 320 consumers in India. “Secure banking based on technology and its ramifications including cyber-crimes in today’s digital banking landscape, has become a pivotal concern for banking and FinTech companies. Advanced fraud detection mechanisms, personalised security preferences and alerts have been implemented by the Banks to enhance the security in the payments ecosystem. The banks (Kaise likhte hain banks Third Reminder) in India are adopting the Security Standards prescribed by the Government of India, Reserve Bank of India and NPCI. Also, Banks are subject to Third Party Audits for their IT infrastructure. Banks also carry out the audits of their entire

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SPECIAL FEATURE resulting in debits to customer’s accounts/ cards as well as to protect customers from large financial losses on account of such fraud, the Reserve Bank of India (RBI) has issued guidelines aimed at limiting customer liability in fraudulent transactions. The RBI has set stricter rules for banks. According to RBI, customer will have zero liability in respect of a fraudulent transaction if there is contributory fraud or negligence on the part of the bank, irrespective of whether or not the transaction is reported by the customer.

Supply Chain to ensure the security standards are being followed,” said Suresh Rajagopal, President, Software Business, FSS. “FSS being a pioneer in payment ecosystem, has product lines that comply with the highest levels of industry security standards including PCI PA-DSS and are SaaS ready. They are benchmarked for high levels of performance and scalability to help financial networks be future safe and transact with total confidence. The products include ACS, Sentinel, Toggle, Token Vault and Paynalytix,” he added. According to official statistics, the number of online fraud cases in the September quarter of 2016 (before demonetisation) was around 3,100 involving Rs 1,546 lakh. This figure went up by more than three times to about 10,200 cases involving Rs 11,185 lakh in the December 2017 quarter. All these frauds pertained to online or digital mode of transactions, including ATM, debit or credit cards and internet banking. “Security is an important parameter considered by consumers before adoption of any digital based financial service. While organisations today give prime focus on building robust infrastructure with technologies like blockchain to provide safe and secure transactions, the government’s strict compliance policies have also helped maintain highsecurity standards in the industry. We at MoneyOnMobile follow stringent security protocols to offer the most safest and secure

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According a study by credit information company Experian and International Data Corp (IDC), India has the second highest risk of digital fraud in the Asia Pacific region, behind Indonesia and almost half of the consumers in India have directly or indirectly experienced retail fraud

platform to our retailers and their customers, thereby transforming their cash experience”, said Harold Montgomery, Chairman and Chief Executive Officer, MoneyOnMobile. Role of Regulators In view of the recent rise in grievances pertaining to the unauthorised transactions

In case of a third party breach also, where the deficiency lies neither with the bank nor with the customer and the customer notifies the bank within three working days of receiving communication from the bank regarding the unauthorised transaction, the customer will not be liable. Similarly, customer liability has been capped at Rs 25,000 if a person reports unauthorised transactions within seven working days. The regulator has also advised banks to ask their customers to mandatorily register for SMS alerts for electronic banking transactions. The SMS alerts shall mandatorily be sent to the customers, while email alerts may be sent, wherever registered. “RBI has consistently taken proactive measures like 2FA for online transactions, EMV CHIP and PIN mandate etc. in the past few years to ensure the security of digital banking and payment systems. With more people are embracing digital payments across India, such steps have ensured extremely low fraud rates in the country. It is also imperative that customers are aware of / follow simple guidelines prescribed by Banks while using digital payment products to further minimise the incidence of frauds in the country,” said Luthria from Worldline South Asia and Middle East. Challenges of Digital Banking In India, a significant majority of transactions happen through cash and the transition to a less-cash economy will not be a cakewalk. Customer education is key – for awareness about available digital payment products,

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significant convenience offered by such products, basic rules / guidelines for safe usage etc. Nearly one-fourth of the Indian population is illiterate and below the poverty line, the acceptance of digital modes of payment is a continuous challenge for many. Merchant acceptance is another important frontier. “There is a need to ensure strict and severe laws to dissuade cybercrime. The infrastructure to support digital payments is restricted to larger cities and towns, with rural India and regions like North East requiring clear focus. While the infrastructure surely needs to be ramped up, it needs to be done in a calculated and costeffective manner, making it worthwhile for all the players in the ecosystem,” said Abhishek Pandit, Director - Business Services, AISECT. According to MasterCard, 60 per cent small merchants are not aware of the benefits of digital payments. Therefore, the Government, businesses, and industry bodies need to jointly work towards creating the necessary awareness and to come together and develop innovative solutions that make it easy for users to make/ receive digital payments.

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The volume of Transactions in e-payments grew by five times in the last four years, according to data by Ministry of Electronics and Information Technology.

“We believe that India is at a very nascent stage in the digital transactions growth story. Digital transactions are witnessing a substantial increase post demonetisation. However, lack of awareness, the ease and usage, and concerns about safety and security of digital transactions are the roadblocks in this growth,” said Rajeev Kumar, Senior Vice President, Market Development, South Asia, Mastercard.

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Mastercard’s vision of a world beyond cash echoes the Government’s vision of a Digital India. We have partnered with the government, banks and acquirers to support the Government’s target of 30 billion digital transactions in 2018- 19. “Safety and security remains a fundamental block for everything Mastercard does. We have invested $1 billion globally in the last three years to reinforce product design, multiple layers and improve technology to address the needs of today and the threats of tomorrow. We have also launched and supported multiple programs to change the consumer behaviour from shifting from Offline to Online and from Cash to Digital,” added Kumar from Mastercard. While the demand for digital transactions is increasing with each passing day, the necessity to tighten up the safety measures is becoming the need of the hour. Further, experts opine that along with stringent regulatory reforms, relevant awareness pertaining to digital payments should also be ensured in alignment with the Financial Inclusion.

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ending has evolved—from customers travelling to the bank and financial institution to today’s lending processes which is digital and streamlined compared to the past. However, these banks and NBFCs fail to deliver an intuitive customer experience owing to legacy systems.

Lending institutions need to evolve out of their silos into an integrated system that offers a personalised experience taking into account customer relationships as a whole rather than one product or service at a time. INTRODUCTION One of the core drivers for digital transformation is the need for banks and NBFCs to transform the customer experience. Today’s customer has zillions of alternatives, and bad customer experiences will certainly make him move

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towards better avenues to serve his needs. Hence, retaining your loyal customers and attracting new customers can only be possible by providing seamless and personalised experiences, and making them a top priority every time. The need for an intuitive, frictionless digital borrower experience is increasingly becoming the key to lenders’ success. TRANSFORMING CUSTOMER EXPERIENCE Customer Experience is a top focus area for leading global banks and lending institutions. While expanding their footprints across varied geographies and catering to diverse customer demographics, financial institutions need to consider their customers’ expectations, realise the importance of cross channel journeys, and offer innovative cross-channel integrations, albeit on practical terms. They need to

engage a new generation of consumers, one built around digital natives—those who expect frictionless experiences, near realtime accountability, and continuity across digital and branch experiences. To meet these expectations, financial institutions need to start considering customer journeys—the high-value steps people undertake across channels. Current loan origination systems and processes have the following challenges, where customers are most likely to abandon the process and switch to a competitor.  Irrelevant products or services  Information captured multiple times, in multiple places  Delay in getting a pre-approval  Excessive or unreasonable document requests

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 Inability to transition between channels  Not offered relationship/loyalty pricing  Submission of multiple applications for multiple products  Multiple in-person visits to the branch  No visibility into real-time status of application Originations and on-boarding are the first customer touch points that provide banks and NBFCs with an opportunity to demonstrate a comprehensive understanding of the customer’s unique individual needs. It is an opportunity to exceed their expectations and deliver ‘wow’ moments.

and ecosystem maps as a unifying methodology to help them prioritise and build great digital and cross-touchpoint customer experiences.

Mobility Lending institutions have joined the race of going mobile owing to the demand of the smartphone users today. Leveraging the ground-breaking capabilities of smartphones have helped them to streamline their workflow and reduce their overall turnaround time. Lending institutions can now render information, services and applications for consumption in smartphones and tablets, and support it through experience managers that can easily enable the financial institutions

A good origination process will lead to good business outcomes—decrease costs to process the application, decrease manual processing, increase activation rates, and ultimately strengthen customer relationships.

Omnichannel Origination: Typically, the customer’s first touch point is initiation across multiple channels. While millennials prefer digital channels, older generations still make offline visits to the branches. Post initiation too, the prospective borrower continues to have multiple touchpoints across his/her journey. Having a single view of the customer is proven to reduce customer drop offs and enhance conversions leading to improved revenue streams. Hence, enabling multichannel onboarding and omnichannel origination supported by modern architecture and workflows is a must for lenders.

Customised Loan Journeys: Customer data, combined with machine learning, helps personalise the offerings and delivers effective customer-centric communication at the right time. Systems that provide the flexibility and agility to easily configure and launch new loan products enable customised loan journeys and provide customer journey

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to make field level changes of web and mobile.

Real time Loan Processing Real-time processing can act as a massive fuel in transforming the experience for customer. Today’s lending systems can support eKYC, e-sign and digital locker with integrations such as Indiastack to submit documents online, provide easy access of credit scores from credit bureaus, verify documents in real-time, detect fraud and integrate with payment gateways that can enable quicker decision making and disbursal. Personalisation Personalisation of digital content is a huge challenge for any lending institution, as it can drive a more meaningful customer engagement. There are multiple factors that can affect personalisation such as

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customer’s profile and demographics, historical data, transactional data as well as the behavior displayed on the platform in real time. Combining all these features will provide robust personalised content, which improves customer experience on the platform and derives a far superior engagement. Additionally, this can also enable financial institutions in remarketing/email campaigns/DSP buys. CONCLUSION As we move into new era, getting the customer experience right will become more important for lending institutions worldwide. Lenders that are able to successfully thread that needle in light of changing consumer expectations, emerging capabilities and shifting market conditions will likely find continued success. The growing appetite for technologies like artificial intelligence, machine learning, biometrics and chat bots, and increasing data sources each year will help lending institutions to focus more on their customer’s needs. TRANSFORMING CUSTOMER EXPERIENCE IN LENDING WITH KULIZA Kuliza’s Lend.In Suite prioritises customer experience along with operational excellence, to ensure that the customers will enjoy their interactions with the lender across their journey. Customers will have a seamless experience irrespective of the channel they choose to interact on. It will not only meet their customer’s expectations but will strive to exceed them resulting in better customer experiences. Rather than run-of-the-mill offerings, customers will be presented with tailored experiences and products suited to their needs. For more information on how Kuliza’s Lend.In can transform your lending experience, reach out to contact@Kuliza. com today. 

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