With digitization making banking a whole lot easier, Bhuvanesh Shukla, CTO and CISO, AGD Bank, OnePay, discusses with Kalpana Singhal how this change has transformed customer experience as well as ushered in new challenges.
How do you see the future of banking in the current involvement of circumstances and technologies?
Banking has been evolving significantly. For instance, 2-3 decades ago there were stock computers available in banking and now you have centralised core banking servers that help manage transactions centrally. There are software processes which assist people in carrying out operations efficiently. This has resulted in the accumulation of data in one place, which is paving the path for business intelligence or analytics. Consider, for example, what happened when the BJP government announced demonetisation. Everyone was forced to move to digital transactions. The advantage with India was that the IT infrastructure backbone was already prepared to take on the load of digital transactions.
Meanwhile, UPI and the National Payment Operation of India have ushered in mechanisms to manage everything efficiently. The invention of ATM has revolutionised the money deposit and withdrawal concept and similarly the financial technology (fintech) app also has revolutionised payments. This evolution has come in handy during the ongoing pandemic because now there is a lot of flexibility within the banking system. The technological processes will become more complicated and banks will have to see whether their business processes have to be redefined with new capabilities or have to be made more flexible, efficient, extensible and secure.
How do you see the fintech landscape evolving in the last couple of years? Do you see it as a threat or a collaboration partner for banks?
Financial technology started bringing in the habit of digitalisation in the payment space, which was found to be useful and flexible. Going hand in hand, the mobile device and payment capability have together triggered the digitalisation of transactions. Now, fintech has become extremely important and it’s more widely used so that it will become the lifestyle norm for every person around the world. In Myanmar, people are purchasing gold using fintech. This has yet to become popular in India. Crowd-funding, for example, has become possible with fintech. Also, this technology will provide people in rural and remote regions access to banking channels.
While digital banking is used by almost half the population and financial institutions have enough data at hand to make operations more efficient, customer-centric and profitable, how are the banks equipping themselves to keep up with the competition?
When it comes to data acquisition, core banking systems capture numerical data. The size of the numerical data is about 2-3 TB. If one makes a data warehouse out of this database size and if you add structured data that includes customer demographics, you would have to deal with 150 TB of big data. This would indeed call for huge processing capability. Big banks like DBS, SBI, ICICI, etc. are in a position to do some level of big data analytics. If you talk about the smaller banks, they are not in a position to spend costs on data processing. The big data processing per year is USD 1 million. It is also important to note whether all this data will be useful. Up to 90% of the banks are using Power BI Pro from Microsoft as it’s extremely convenient. It addresses 60% of the needs. Ultimately, the data should serve the needs of both the bank and the customers.
Leading banks are making use of big data from boosting cyber security to cultivating customer loyalty through innovative and personalised transactions that provide highly individualised experiences. How are you relying on big data technology to provide customer experience and marketing initiatives?
Big data can be used to improve customer experience significantly. Every company talks about customer-centricity. There’s another parameter – the ease of use of the solution, which is used for excellent customer experience. The accumulated data taken with customer demographics can help a bank find out customer preferences and the applications they are comfortable using. We are on this path to improve customer experience and build their loyalty.
What have been your recent initiatives to further smoothen the process and customer interactions? What will be your top technology focus areas in the next couple of years?
Myanmar has got one big challenge of infrastructure. Under the economy, if the infrastructure is weak, financial inclusion becomes difficult. For instance, electricity is not available for 16 hours and so fintech is the solution. Myanmar is a country which is not technologically developed; however, we have very strong digital initiatives whereby we ensure that in the absence of any national ID an account can be opened digitally with just a mobile device. A customer sans complete KYC details can still use a fintech solution and make payments like school fees, electricity bills or even purchase gold.
The biggest challenge is that a majority of people do not know English and converting Myanmar language requires more digital space. Another level of challenge is security. Hackers are omnipresent and frauds have been on the rise. We would like to implement cyber security at an optimal cost. Meanwhile, we are beefing up security in our own way by having layered checks for authentication. For example, if the transaction amount is big, we ask for fingerprint authentication so that if the mobile phone has been robbed, it cannot be used by any other person to do a transaction. That is how we are trying to balance both cost and facility.
