Technology Enabled Inclusive Financial Service
Suvrata Acharya has been a global IT service leader with expertise in financial service industry for over the past 19 years. From being a research scholar in Indian Statistical Institute, he started his career in NIIT Technologies Limited as Capital Market Manager and currently serves as Global Delivery Head & SVP. His experience in the industry made visible impression on IT transformation programs related to straight-through processing, back office automation, and end client experience.
As we are moving towards more digital lifestyle every day, we are looking for few specific things in every transaction we do in life. We are more price-sensitive, we prefer more transparency, we expect unlimited service and we demand omni-channel experience. At the same time, we do not want to be deprived of traditional approach that consists of human touch, variety options and customized products and services. In case of dealing with our financial transactions, we are attracted towards new digital experience offered by fintech firms but we keep our loyalty with traditional banks. We trust financial service institution to preserve our money and help us to meet our financial goals through various products and services. We expect them to be more inclusive in our digital lifestyle which they are not able to match with fintech firms due to cost pressure and stringent regulatory controls.
The only solution for the financial institutions is to reshape the overall value-chain by adopting latest technology. This helps in reducing human involvement wherever it can be automated and moving the human involvement to the area where they can make the difference. This will help in bringing more values and better customer experience without increasing the overall cost. Traditional processes can also be transformed using latest technology to build more revenue streams. To give an example, KYC process is typically used as a regulatory exercise to minimize any risk. This can be enhanced by making it self-service so that it will reduce human intervention. The client profiling process in KYC can also use latest technology like big data and machine learning, which can help marketing new product and services. This will also help customizing the
service experience as per customer’s digital lifestyle.
Today’s technology helps in innovation in two ways. First, it creates transparent and easy to use interfaces that remove the unnecessary human intervention. Secondly, it generates connected actions by integrating with social profiles and other data sources. Business can redeploy human effort for those connected actions to generate more revenues. Relationship managers should be able to build complex solutions for their customers to meet their need. Portfolio managers can innovate new portfolio models faster by using effective machine learning algorithms. This will not only increase the speed in overall value chain but also brings the right solution to price-sensitive customers.
Data is critical to business actions. Traditionally, regulators expect institution to retain the transaction data for audit purposes. With increasing usage of technology in financial crime, regulators are looking for more transparency in every touch point. So, Institutions are retaining additional data such as facial, speech, video interaction, finger print etc. A number of countries including India have implemented digital identity program. This should help institutions to use the digital identity for authenticating the transaction and prevent financial crime. It increases the speed and reduces the transaction cost. Institutions can also use facial recognition data to offer additional services at branch, retail store or through remote interaction to improve the convenience at a reduced cost.
There are a lot of opportunities available for financial institutions to break the current product and tighter-regulation centric closed business model with more open and inclusive business model
Real-time integration technology has led to development of various open platforms and related business models that has changed the way we book services such as taxi, food, hotels etc. Financial institutions with the support from regulation such as open banking, PSD2 and government sponsored programs like digital India, are able to create open platforms that can aggregate customer’s financial information. This helps in real time assessment of customer’s financial position and guide customers to take suitable decision. Asset managers can do a real time risk analysis of the portfolio models and create a better return in cost efficient manner.
Money management is complex as the benefits expected are linked to human life goals and journey. As predicting life is most difficult, the financial judgement linked to life is equally difficult. At the same time, years of research by product institutions and complex regulations have made the financial system value chain very complex. Moreover, customer segments also vary based on the size of their wealth and life goals. There are four common expectations every customer has from a financial institution: Security, Growth, Liquidity and Easy of Use. New technologies have enabled the Institutions to focus on providing cost-effective, easy-to use services. But, there are a lot of opportunities available for the institutions to break the current product and tighter-regulation centric closed business model with more open and inclusive business model. It is expected that Blockchain based technology will become the heart of new open business model that can make the money more secure. Quantum computing based technologies will increase the volume and velocity of data processing which can help managing the risks and meeting the growth and liquidity objective. Newer data sources such as health and DNA can help developing micro-level customized financial goals. So, the future certainly looks bright for the customers as well as institutions.