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Digital Transformation

Mani Mulki, CIO, Tata Capital Ltd

Mani is responsible for the complete Information Technology functions across all lines of businesses within Tata Capital.

The Digital Landscape in India is evolving rapidly. There are tectonic shifts in Consumer behavior fuelled by rapid advancements in technology like AI / Robotics / Voice, Text, Image recognition etc. With about 700 million internet users and 400 million smartphone users, India is one of the largest and fastest growing digital consumer markets. It's not only growing rapidly, but also becoming pervasive across consumer segments. Until recently, India’s digital consumers were mostly male population of metros and millennial. Now, 50 percent of them are from rural, 40 percent are women and nearly a one-third are above the age of 35 years.

The Indian Consumers now treat information as an integral part of their shopping experience. 85 percent of the consumers check at least two data points before buying anything and nearly 50 percent conduct some sort of an online research. This is true even for a simple product like Yogurt which can come in many varieties like flavors, calorie content etc. The instances of transacting financial services online is growing rapidly. For example, the number of people applying for a loan online has gone up from almost zero a few years back to 25 percent now. The technology architecture existing in financial institutions today allows them to process the applications, assess the creditworthiness and disburse the loan in a matter of minutes.

The Indian Consumers have also become very demanding and want personalized service on a real-time basis. Organizations that do not recognize this and embark on an aggressive digital transformation exercise, will soon face an existential crisis.

A key component in the execution of the Digital transformation journey in any organization is a well calibrated adoption of Technology. It is the bedrock on which customer journeys are reimagined, processes simplified and platforms are created to engage with the customers on different channels. The customer has to be at the center of any

Technology strategy and not the sophistication of the technology per se. The two most important parameters leading to a delightful customer experience are speed and convenience. Ergo, the technology architecture that is defined has to be very flexible, modular, and based on open architecture which would allow them to connect to various external partners easily and quickly.

However, despite the implementation of advanced technologies, many organizations fail in their Digital Transformation exercise, because of inadequate or poor Transformations. People often read and treat ‘Digital Transformation’ as one term which in reality are two very distinct terms. Digital means putting in place the necessary technology framework be it apps, bots, middleware, portals etc. to enable an organization to change its business models, improve operational efficiency, enhance customer service etc. and Transformation means actually doing it. And herein lies the most difficult part and the most challenging hurdle to cross. It essentially means questioning the status quo, dramatically changing the existing business models, destroying some of them, creating new processes, and completely re-imagining the customer segments and journeys.

It isn’t easy for an organization to let go of its wisdom and learning that are carefully constructed over the years in favor of new ones which seem very radical. This is where the buy-in and the commitment of the top management play a crucial role. It is absolutely critical for the top management to be completely soaked into the new Digital paradigm and come out with a compelling digital value proposition and create a continuous roadmap for a new customer value. A true Digital Transformation can only be driven top-down and not bottom-up and is always accompanied by cultural and behavioral changes.

What started out as a competitive distribution channel to the financial services sector, is now morphing into a strong collaborative partnership

Another structural change that is causing a major disruption in the digital landscape in India is the advent of Fintechs. Interestingly, what started out as a competitive distribution channel to the financial services sector, is now morphing into a strong collaborative partnership. While the banks and NBFCs have the scale and deep domain expertise, Fintechs provide the nimbleness and the technology which acts as a great equalizer.

It would be difficult today for financial services organizations to serve customers at a large scale and simplify processes for greater efficiency without adopting the technology prowess of the new age Fintechs. Many of the complex segments in a financial digital journey like credit assessment, e-KYC, reading of bank statements, document uploads etc. provided by Fintechs as open APIs can easily be integrated into the technology ecosystem of any financial services organizations resulting in a much faster deployment of digital banking products. The collaboration between Fintechs and Financial services organizations is here to stay and will only become stronger in the years to come.

To sum up, a Digital Transformation in an organization is not a one-stop solution to be implemented by a small core separate team. It requires a massive organizational upheaval in terms of rebooting age-old processes and business models and can only be successful if driven strongly by the CEO and the top management. It’s also important to note that it’s a continuous journey and it’s not necessary that all that is attempted will succeed. It's better to fail fast, absorb the learning, recalibrate the journey and move ahead quickly.

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