The phrase ‘paradigm shift‘ has been commonly used when it comes to describing the growth of the banking, financial services and insurance (BFSI) domain over the last few years. As positive disruptions have consistently given the sector multiple makeovers, the pandemic has proven to be a great catalyst in its tech transformation process.
India’s digital lending stood at US$ 75 billion in FY18 and is estimated to reach US$ 1 trillion by FY23 driven by the five-fold increase in the digital disbursements. Providing better services to customers and upgrading technology infra cohesively has become one of the top priorities.
Needless to say, this leads to a dire need for a tech enabled leader, one who has the knowledge, suitable equipment and foresight to take BFSI to the next level. While there are a multitude of things that leaders will need to work on, let’s take a look at three of the most critical tech skills that must become a part of the BFSI leaders playbook in 2021.
When there is a pandemic, there is a pressure to reduce cost, even more than before!
In 2021, the C-Suite will have to focus on reducing costs, sustaining productivity and increasing regulation measures. The Covid norms helped bring about a major behavioural shift in consumers as digital capabilities such as virtual self-service and instant and transparent transactions became highly in demand. This major change, coupled with the increased mobile usage, is challenging typical operating models.
Similar to other sectors, automation can be used for cost and time benefits when it comes to any repetitive process. According to McKinsey, the emergence of automation and AI in the coming few years will make machines manage 10 to 25 percent of work in banks.
To sum up, automation in banking enables better; faster and more accurate management at reduced operational costs. As the domain becomes more tech savvy with time, automation will gradually become hygiene for most players in BFSI.
Data should drive better and more competitive decisions!
As discussed earlier on, the operating model must now put the customer at the focal point. Analytics can equip decision makers with valuable inputs at each stage in the customer lifecycle. Harnessing all the data gathered from varied existing and new consumer points can enable intelligent services both in the short and long run.
With analytics, the most commonly or frequently asked questions can be identified and resolved using analytics, thus leading to more advanced use stages. Location intelligence is one of the many examples in this scenario, where data from basic levels can be used for expanding business networks, increasing customer wallet sizes and offering customized product suites.
Mastercard reported facing some 460,000 intrusion attempts in a typical day in 2020, up 70% from a year ago.
With digital prowess comes the uncompromising need to develop cybersecurity. With APIs increasingly inclining towards offering customers more convenience, security must not be overlooked. More digitisation and remote operations will lead to increased vulnerabilities and open up opportunities for phishing; malware and other cybercrimes, exposing banks to privacy breaches or hacking.
The recent news of Whatsapp risking customer data has spelt out that any business that is customer facing needs to put cybersecurity at the forefront. Business leaders in BFSI need to consider cybersecurity as a key differentiator and as an integral part of the new ecosystem they are fast building in 2021.
In conclusion, players in banking and finance will need to strengthen their tech frontiers as a way of sustaining business during the pandemic and thrive thereafter. The goal will be resiliently moving forward with a focus on a tech-enabled leadership strategy.
Gaurav Chattur is the Managing Director for Catenon APAC, which is headquartered in Pune, India.