Vol. 18 No. 4 August 2019 `75 Pages 52

Alternate Channels @ Indian Bank HFCs and Risk Management Fintechs in Switzerland Corporate Communications www.bankingfrontiers.com

GH VIJAY CHU I R A ND ANGAJ BHA A ND SUNITA HA

L A ITT MUNISH M AN LALIT MOH

A RM A R DEEPAK SH A NIKHIL KUM

CyberOPEN Insurance: BANKING Baby stepsRevolution for a big Ahead leap? Country Report Top in innovation, Switzerland sees maturing of fintechs Switzerland’s fintechs are mostly in cryptocurrency and blockchain and investment management:

hile Switzerland is known for its superlative banking system, Number of fintech companies in Switzerland

it is also placed on the top in 250 W n=220 the Global Innovation Index. The country 26 200 n=190 has seen transformative developments in 12% 12% n=162 28 digitization of its banking and financial 53 150 services sector. It is an established fact 29 40 34 2017 22% that nearly 10% of all fintech business in 29 24% 100 31 n = 220 Europe is based in Switzerland, and most 27 33 21 of it in Zurich. In global terms, every 10th 21 50 Number of fintech companies 46 48 15% fintech startup was founded in Switzerland. 37 15%

19 24 26 Investments in Swiss fintech enterprises 0 total around CHF 15 billion. There are 300 2015 2016 2017 plus fintech companies in the country and Analytics Banking Infrastructure Distributed Ledger Technology Deposit & Lending Investment Management Payment a majority of them belong to 2 significant Note: (n2015=162, n2016=190, n2017=220) categories - cryptocurrency and blockchain and investment management. handholding, operating, marketing traditional or innovative means. There There are over 100 startups engaged in and profit-generating in the startup is close monitoring of new technology developing cryptocurrency and blockchain regime in the country is becoming more developments and the government is ready systems. Switzerland’s Federal Council streamlined, as the Swiss government to make changes in regulations in order recognizes blockchain as an industry has taken several crucial steps to reduce to reduce administrative constraints. The and the existing laws in the country are bureaucratic interventions that normally Federal Council has introduced a sandbox conducive for its growth. There is a distinct prevent the younger generation from exemption, which is available to all geographic area, called Zug, which is setting up ventures. Investment in early companies. Under this, the acceptance of described as the Crypto Valley as most of stage startups is on the increase because public deposits of up to CHF 1 million will the blockchain startups are located here. of the growing network of angel investors not require a license under the Banking Act. Investment management is also an and venture capitalists. In 2018, there has In addition, the exemption from the license area where several startups are engaged been an estimated CHF1 billion worth of requirement under the Banking Act for in developing newer and efficient systems. investments in startups in the country. pure payment service providers which only There are 75 noteworthy startups in this accept deposits for settlement purposes has field and there are also called wealthtechs. SUPPORT FOR INNOVATION been expanded. They offer technology-enabled tools for What really encourages entrepreneurs to the HNIs, like full-service brokerage set up ventures in the country? EASIER REGULATIONS alternatives, automated and semi- As mentioned earlier, Switzerland is The Federal Council has created an automated robo-advisors, self-service a country that wholeheartedly supports innovation area and his enables firms to investment platforms, asset class specific innovation, and this includes innovations test a business model before they are finally marketplaces and tools to keep up with the by fintechs. Apart from having easier required to obtain a bank authorization changing dynamics in wealth management. financial market laws, the country has from the Swiss Financial Market Besides these 2 sectors, there are also established an attractive tax model Supervisory Authority, or FINMA. Fintechs successful startups in crowdfunding which for startups and provides financing can also obtain a new banking license ‘light’, focus on offering loans to private persons opportunities for innovative companies. which enables the commercial acceptance and companies, students, SMEs and other One important factor is that the country of public deposits. There is a more lenient institutional borrowers. has no specific fintech regulation. It has taxation regime and startups are taxed only a technology neutral approach, which on net asset value “until representative STREAMLINED PROCESS means that the same rules apply to the business results are available. Today the whole process of funding, same businesses, whether they are using One instance where the government

8 Banking Frontiers August 2019 has proactively intervened is in the case of crowdlending, where several startups have been operating. The government revised the Swiss banking ordinance to provide that the acceptance of funds for settlement purposes is allowed for up to 60 days without triggering a banking license requirement. This exception is particularly helpful as most of the firms collect money from supporters in a separate account on the platform before transferring the total Crypto Valley amount to the borrower. Which are the government agencies fintechs are the Banking Act, the Collective CRYPTO VALLEY that regulate fintechs in the country? Investment Schemes Act, the Stock The creation and growth of the Crypto The Parliament and the Federal Exchange Act, the Anti-money Laundering Valley was not coincidental. Many experts Council are mandated to regulate the Act, the Financial Market Infrastructure feel a combination of the good conditions financial markets on a statutory level. and Market Conduct in Securities and in Switzerland and the clustering of FINMA, has the authority to specify the Derivatives Trading Act, the Financial innovative entrepreneurs, a business- legal requirements through its ordinances Market Supervision Act and the Consumer friendly administration and the presence of and explain their application in circulars. Credit Act. In addition, startups as in the leading research institutes in and around The laws that govern the financial services case of already established institutions are Zug, resulted in a lively and self-enforcing in general and which in turn apply to the expected to self-regulate. ecosystem. This has helped the country benefiting from the global ICO boom, as it is one of the leading places globally in terms Crypto, blockchain, Treasury to P2P lending of capital raised through this alternative The top fintechs in Switzerland Neon offers fully-service digital accounts that form of financing. Besides the large growth Amnis Treasury Services provides services in provides visa debit /credit card tracking and in the ICO volume, the traditional venture the fields of international payments, treasury, controlling facilities. capital volume invested in the Swiss fintech risk management, or plays an advisory role in PriceHubble is a proptech company which sector also increased significantly. any of those fields for SMEs. aims to improve on the understanding and The IFZ FinTech Study 2019 shows that Apiax is in the regtech space and aims to transparency behind real estate markets, via the fintech sector grew strongly in 2018. At become a digital lighthouse in a regulated world data-driven insights. the end of the year, there were 356 fintech by making compliance lean, easy and efficient Proxeus offers a tool that enables the creation companies in Switzerland, with a growth via an app, or integrated into banking processes of blockchain applications that can be integrated rate of 62% over the previous year. The via API. into existing systems. study says the sector has become more Bitcoin Suisse provides private and institutional Rice Exchange is a digital rice trading mature, as demonstrated by the growing clients with a wide-range of crypto-related platform with an integrated supply number of employees and the increase in services such as brokerage, hyper-secure chain solution. the capitalization of companies. In terms of storage of crypto-assets and bespoke ICO Selma Finance is a robo-advisor aiming to bring risk capital investments, the fintechs have services. investing down to earth, by freeing their investors set new records in 2018, with 68 financing Crypto Finance provides blockchain-related from having to learn the lingo and allow them to rounds for a total of CHF 324 million raised. services and facilitates implementation of avoid pricing confusion. Zurich and Geneva are at the 2nd blockchain technology in the global economy. Splendit connects students with private investors and 3rd positions in the global fintech Loanboox is a P2P debt financing platform for on the basis of serviced crowdfunding of student ecosystem, just behind Singapore. London public sector borrowers, institutional investors loans. is at the 4th position, and Amsterdam at 5th, and banks. Viac is a robo-advisor for pension management at the end of 2018 as per the IFZ FinTech MelonPort is building Melon Protocol, a fully without asking for minimum deposits, minimum Study. Significantly fintech companies in decentralized asset management protocol which fees or minimum terms. the country do not directly compete with allows anyone to set up, manage and/or invest in Yapeal is a neo-bank based on blockchain- traditional banks, since the revenue models an investment fund of digital assets. inspired technology, and some features in the fintech sector have continuously NetGuardians offers artificial intelligence-based include a fully-digital onboarding process, shifted from the commission business solutions to fight financial crime, targeted at AI to figure out one’s lifestyle and towards IT-driven models, ie, license fees banks worldwide. habits etc. and SaaS models, over the past two years. [email protected]

Banking Frontiers August 2019 9 Cover Story

OPEN BANKING Revolution Ahead

While open banking is creating a buzz in Europe and several countries, bankers in India are curious to know the progress and the prospects. Banking Frontiers spoke to a few banking technocrats and discovered a promising scenario:

pplication programming interfaces, or APIs, are and services. It is also a key factor in creating competition among leading a wave that’s transforming today’s banking banks, which means better products and services. Ascenario. Standardized and easy-to-implement APIs are supplementing several other disruptive technologies that ADVENT OF PSD2 are making inroads into banks. Most banks are adopting such What has indeed become a fillip for open banking is the revised technologies whole heartedly to gain agility and move ahead of Payment Services Directive 2, or PSD2, a regulation enforced by the competition. APIs could actually become the greatest banking the European Union, which came into effect in January 2019. innovation in the current generation. If there is any resistance to It seeks banks to open their services to third parties so that they mass proliferation, it could be the slower evolution of standards and can initiate payments and aggregate information for customers. regulation whose support is critical. European Payments Council has asked developers to make banking APIs are today heralding what is described as open banking, APIs follow certain uniform standards. This is expected to create which is enabling third-party developers to build apps and services a banking system where services of banks can be availed of by around more traditional banking and financial services. Open individuals, corporates, other banks and market players in a more banking leverages open data to create better financial transparency. cohesive, transparent and efficient manner. It is crucial because a bank customer can access his or her data, Indian banks are privy to these developments and are quite facilitating better and informed decisions on choice of bank products eager to adopt the system. Of course, lack of standards and

10 Banking Frontiers August 2019 regulations are points of worry for them. Let active, and this facilitates financial inclusion us first discuss regulations. Indian regulators for larger strata of society,” he explains. have 3 options - pro-active, active or reactive. Mittal also points out to the NBFC The question here is - what is the best fit for account aggregator model, which is coming India? Is it better to be a pioneer or to learn up. Online validation of credit report using from the experiments of others and then put API, etc, and other pilots being done using in meaningful regulations? Where should blockchain, 26AS, etc, are pointers to the the regulator seek the balance between proactive stance that the country has taken. innovation and stability? NEED FOR ORGANIC MODEL REGULATORS NEED TO BE BALANCED Angaj Bhandari, country manager for India Deepak Sharma, chief digital officer at & South Asia at FIME, raises the issue Kotak Mahindra Bank, feels that Indian whether regulators should follow an organic regulators need to be balanced and active or prescriptive model. He believes that each by bringing global insights, innovation, risks market should take an individual approach, and the financial inclusion framework as the Sunita Handa opines that but regulators and interbank networks (like foundation for open banking. He commented: NPCI) can learn lessons from other markets, “India follows the account aggregator government regulations such as Europe’s PSD2. “Ultimately, though,” standard for sharing customer data with on open banking ensure he argues, “each market should design customer consent among regulated entities. that banks share customer a regulatory framework and innovation The purpose is quite similar to open banking information over regulated initiatives that suit their own financial sector / PSD2 standards. We have well-defined frameworks and unique consumer sentiment.” API interfaces and clearly defined roles Vijay Chugh, former CGM & head of and responsibilities between the financial Department of Payment & Settlement information provider, financial information user and the account Systems at Reserve Bank of India, feels PSD2 will bring in more aggregator in the account aggregator ecosystem. Various banks have competition and hence lower pricing, which will be beneficial to the already begun working on an account aggregator model.” customers in Europe, where risks are high, and costs too are high. Sunita Handa, chief general manager (IT-Channels & Ops) at What PSD2 does is limit the risks and hence lower the costs, as it State Bank of India, believes that while it is true that most of the time reduces the cost of branches, reconciliation, etc, by creating an open innovation will be ahead of regulation, the regulatory authorities in banking model, he explains. India are not much behind in promoting and participating in digital “In contrast, India is taking baby steps. Our UPI is an open banking innovations. “For example,” she said: “UPI and account aggregators platform. So, there is no need to go to each bank for a tie-up. PSD2 is a showcases the pragmatism of the Indian banking regulators as far handshake platform. It empowers companies like Google and others to as open banking is concerned. Initiatives like setting up a regulatory provide APIs and connect customers with their banks,” says he. sandbox provide a structured avenue for the regulator to engage with Nikhil Kumar, co-founder & chief evangelist at Setu, which the ecosystem and to develop innovation-enabling or innovation- builds low-cost, modular API infrastructure, concurs and says responsive regulations that facilitate delivery of relevant, low-cost that regulators have been pro-active for a lot of policies including financial products. RS like tools enable more dynamic, evidence- platforms like UPI. However, he believes there is no one size fits all based regulatory environments which learn from, and evolve with, as the world is changing at a rapid pace, and hence recommends an emerging technologies. So, in my view, the best fit is a mix of pro- active-active approach. Regulators, says he, should do the minimum active, active and reactive intervention by the regulators.” and allow enough room for banks to innovate. This could be a combination of setting standards and allowing banks to innovate MOTHER OF ALL OPEN BANKING on their API offerings. Unified Payment Interface, or UPI, developed by the National Payments Corporation of India (NPCI) can be considered as the CUSTOMER CRITERIA mother of all open banking APIs in the world, maintains Munish “How does open banking consider the needs of customers? The key Mittal, CIO at HDFC Bank. He believes India does not have any issue is trust between fintechs and the customers and, indirectly, it is dearth of regulatory institutions and experts. “With people like the banks that are exposing their data through these fintechs. Crucially, Nandan Nilekani and organizations like the RBI, Niti Aayog, NPCI, it is the responsibility of banks to welcome these new participants etc, the country (and thus the regulator) has done a fantastic job into the transactional e-banking channel without compromising the with UPI. Aadhaar validation means that the country offers an integrity of payment data and user experience. This is the biggest authentication API for the identification of a citizen for facilities challenge facing banks today in the age of open banking,” comments such as open telecom, open commerce, etc. The government, Angaj Bhandari of FIME. regulators and the department of financial services have been pro- These challenges aren’t limited to the compliance of bank

Banking Frontiers August 2019 11 Cover Story

interfaces (APIs) or the securing of third-party open banking. As for India, the RBI has channels, but to the authentication journey permitted only NBFCs to perform the role of the payment service user too. In Europe, of account aggregators. The NBFCs would this has been the source of a lively debate provide account aggregation services in between TPPs (fintechs) and ASPSPs (banks). response to a specific application by the Deciding how strong user authentication is customer for such a service and would be (Secure Customer Authentication (SCA), backed by appropriate agreements and 2-Factor Authentication etc.), through which authorizations,” she explains further. authentication channel it will need to go An account aggregator will be required through (redirected from banks or decoupled to have a board-approved policy for pricing and via Fintechs), and how it impacts the user services. The pricing will be in strict experience are all central points of contention. conformity with the internal guidelines Bhandari adds that this is fundamental adopted by the account aggregator, which for banks, “Demonstrating that their API and need to be transparent and available in authentication methodology do not create any the public domain. Further guidelines unnecessary points of friction is important in are expected once the above system goes ensuring end-users aren’t dissuaded from Deepak Sharma affirms that live and provides new experiences for all using the services of fintechs.” API security revolves around stake holders. the strategies for rollout and SEAMLESS JOURNEY implementation CONCRETE PRACTICES Vijay Chugh emphasizes that the ultimate goal Deepak Sharma of Kotak Mahindra Bank of open banking is to provide one seamless stresses on 4 concrete practices: (i) have end-to-end journey for the desired outcome of the customer. A an internal centralized repository for APIs to ease discoverability seamless experience is safer for less educated customers, which is a of existing APIs. (ii) use standards such as WADL/Open API major criterion in any developing country, including India, he adds. specs to build and publish APIs, which will help in long-term Nikhil Kumar avers API banking has the ability to improve manageability and auto generation of codes. (iii) have a micro customer experience multi-fold and he suggests that it is the strategy services framework to build and deploy APIs faster. (iv) publish that banks will adopt in future to add value to existing customers external APIs through a developer portal / API manager, which and acquire new customers. “There is no reason why a small business will help scaling of integration with partners, in addition to owner cannot access his bank account from his accounting software. enhanced security. We have the tools for it and that will be the future - when banking Munish Mittal of HDFC Bank outlines the standards and will go where the customer goes,” says he. practices followed by his bank in this regard: “We have a formally designed process of standards for opening our APIs for partners such NEED FOR BEST PRACTICES as Zerodha, Swiggy, etc. This is under our IT policy – how APIs should Have standards and best practices evolved in APIs? be conceptualized, developed, onboarding, legal agreement, how to Lalit Mohan, senior domain expert, at Institute for Development inspect payload, encryption, O-AUTH2, etc. It also clarifies what and Research in Banking Technology (IDRBT), points out that should be approved by IT head, business head and risk head. It also there are recommendations and guidelines that can be drawn from includes who will approve what type of API each partner should use PSD2, BIAN, W3C, regulators and government bodies in India, New for pulling data, payment, etc.” Zealand, Hong Kong, etc. He strongly believes banking industry The bank has done this standardization last year and the base in India has an advantage of less legacy systems and processes to foundation is now complete. There is a review frequency defined contend with compared to some of the old global banks. “However, in that for test of design and operating effectiveness and the bank the work on standardization (naming, signature, versioning, etc) and keeps improving on this. best practices on APIs are in the early stages. I expect this to quickly If a bank is operating in different areas, will it have to follow mature in the next few months to strengthen API banking,” says he. different standards? Angaj Bhandari of FIME argues this is more of Sunita Handa of SBI is of the view that government regulations a strategic decision for banks to take. “International banks must give on open banking ensure that banks share customer information enough flexibility to local branches to decide which API standard over regulated frameworks. This will help banks and third- to implement and which API standard to give fintechs access to, party service providers gain additional insights about customers, simply because many fintechs have already started to perform their and, in turn, innovate their banking products. “Following the integration testing against existing APIs.” implementation of the PSD2 regulation, banks in Europe will need to provide customer transaction data to account QUESTION OF API SECURITY information service providers (AISPs). In the UK, the Open APIs are now graduating from trial stages to mainstream usage, Banking Working Group (OBWG) has released the standard for but there remains a vital question about security, how security

12 Banking Frontiers August 2019 systems can be strengthened and the need with the financial and technology sectors to for certification. recommend good practices. Nikhil Kumar of Setu points out that in HDFC Bank looks at various parameters the early days, APIs in banks were mostly for strengthening API security. The first is developed and used internally. Externalizing incoming data schema validation, which these services requires investment in includes things like what kind of data format technology, people and partners. The industry is being used, JSON data types, xml, etc. The is very nascent but there are a lot of playbooks second is authentication and authorization on how to make this happen. using device identification, time window, Tackling the tech aspect, Deepak geo-location, digital certificates, user id+pwd, Sharma explains that APIs are controlled by etc. The bank’s strategy is to have a layered authentication (SSO, JWT, SAML, OpenID approach. For open banking, O-Auth is connect) and by authorization (O-Auth). very important as it is 2-way SSL. The Deployment of an API manager ensures third is threat detection and checking if any security validation for the public API uses, malware is being injected. For this, there is with additional security measures - such as need to decode any attachment and apply Rate Limit (number of requests/second), server grade virus scanning before saving Quota Limit (daily usage access to APIs), Munish Mittal maintains that it. The fourth is SSL everywhere to secure Access Control (whitelisting IP or Domain) the channel and establish mutual trust and API Key Verification, Request Validation UPI can be considered as the integrity. The bank ensures that all these are (header validation, content type), Certificate mother of all open banking never done away with. Finally, it looks at rate Authentication and Mutual SSL Handshake APIs in the world limiters to limit the number of transactions. - all enhancing security. API security is similar to financial services Web services security, SOAP and REST providers using various methods to authorize APIs security have been topics of continuous research. These are as and authenticate payments. A trusted environment with policies critical as mobile and web applications except that the interface is for authentication and authorization is a must. Nikhil Kumar says, different. Lalit Mohan of IDRBT says while there are existing guidelines as emphasis on strengthening API security is increasing, there is and best practices, banks are expected to continuously monitor on need for designing standards to ensure security practices are not authentication, authorization, DDOS protection, data encryption and monolithic by design. As mobile scales, much more needs to be done other protection mechanisms. He adds that IDRBT too is contributing to ensure new users who are using digital are safe and have enough by preparing an API security and governance document in collaboration protection, he adds.

Future Course of Innovation thanks to API Banking se of new technologies has dramatically with collaboration “Banks are expected to take technology Ualtered the course of innovation several 3. Generating additional revenue streams with innovations to the next stage. They are expected times in the past. So, the critical question arises new business models to work with fintechs to co-innovate on various whether open banking will change the course of 4. Distributing of banking products and services use cases for making API possible. UPI has innovation for banks. If so, in what direction? in 3rd party ecosystems. already been a disruptor and driving innovation According to Deepak Sharma of Kotak Sunita Handa of SBI views open banking in banking industry. These changes are expected Mahindra Bank, it will. He elaborates as new basically as creating a data architecture where a to make existing core banking software more as a business models are driven towards the network of institutions can share the data through system of records rather customer engagement.” ecosystem-based model, open banking / API APIs. The data architecture is used to create Vijay Chugh sees open banking as a catalyst for banking will become a critical foundation to guidelines on how customer data can be created, new data revolution. It will enable bank switching create one’s own ecosystem or embed in another structurally stored and securely accessed. If this and bank will not be able to demand loyalty as ecosystem. “I expect more innovative solutions happens, she is sure, it would open the doors to they have done so far, he believes. “Open banking to be launched by banks with fintechs/startups. a lot of innovation benefitting the single most also makes banking more agile and collaborative. I believe that the future of banking would be important entity, that is, the customer. She goes Banks will also have to design business models to around embedding banking services directly in on: “If the aspects relating to customer consent meet agile customer,” he concludes. the preferred app of the customer,” he asserts. for data share and the authentication piece are Angaj Bhandari is of the view that the rising He highlights 4 impacts derived from API well addressed, the innovation will be worth all acceptance of new payment channels, particularly Banking: the effort at all levels. Collaborations between the mobile money transfers (P2P and Account-to- 1. Building customer centric solutions in banks and fintech will go to the next level to serve Account transfer) and authentication methods collaboration with fintech partners the customer in best possible ways.” such as tokenization and biometrics are making 2. Enabling faster launch of innovative solutions “Absolutely,” asserts Lalit Mohan of IDRBT. these new payment channels more secure.

Banking Frontiers August 2019 13 Cover Story

COMMONLY USED METHODS the request originates. Handling of access / Sunita Handa lists some of the commonly security token and input validation are the used methods: key security standards the bank has deployed. 1. Use of tokens: Establish trusted identities & Lalit Mohan reveals that IDRBT is then control access to services & resources reviewing the existing ISO 27001, OWASP, by using tokens assigned to those identities. W3C, PSD2, PA-DSS and other standards/ 2. Use encryption and signatures: Encrypt guidelines to validate its applicability to APIs. data such that it requires signatures to Angaj Bhandari offers an interesting ensure that the right users are decrypting perspective and discusses the company’s and modifying the data involved, and no recent launch of an Open Banking API one else. test platform, TrustAPI, that provides a 3. Identify vulnerabilities: Keeping up suite of API conformance tests to support with the operating system, network, Open API developers (Open API platform drivers, and API components is essential. vendors, banks, interbank networks, third Know how everything works together and party providers and technical service identify weak spots that could be used to providers). Harnessing the power of various break into your APIs. Use sniffers to detect Vijay Chugh emphasizes standardization efforts globally, the tool security issues and track data leaks. that the ultimate goal of supports testing in-line with the STET – a 4. Use quotas and throttling: Place quotas open banking is to provide a major European automated clearing house on how often your API can be called and – open-access API standard, with work track its use over history. More calls on an seamless end-to-end journey underway to incorporate other standards API may indicate that it is being abused. It for the desired outcome into the test library such as the Berlin Group’s could also be a programming mistake such NextGenPSD2 and Open Banking UK as calling the API in an endless loop. Make rules for throttling to (OBUK) API standards. This ensures players can quickly test they protect APIs from spikes and Denial-of-Service attacks. have implemented APIs according to the selected or locally enforced 5. Use an API gateway: API gateways act as a major point of API standards. Not only does this ensure interoperability with other enforcement for API traffic. A good gateway will allow you to actors, it also serves as evidence to the ecosystem of compliance, authenticate traffic as well as control and analyze how your APIs including regulators. are used. Munish Mittal points out that there are API-related certifications for UPI, RuPay, Mastercard, Visa, Diners, etc. SECURITY CERTIFICATIONS Surely, banks cannot be secure by focusing only on their own EVOLUTION & TESTING systems. What security standards or certifications do they seek in What are the challenges in testing the APIs? Deepak Sharma reminds the APIs of the companies they are connecting with? us that API security revolves around the strategies for rollout and Deepak Sharma says in Kotak Mahindra Bank all the implementation - to identify and mitigate the unique vulnerabilities communications are encrypted and O-Auth2.0 is used for securing and security risks of APIs. The key challenges to address in payment access. Access is limited by whitelisting the IP address from where system testing, he says, are to do with performance and security. “We perform load testing, functional testing, penetration testing and How is FIME helping banks? application security testing to identify and address the vulnerability IME provides a range of testing solutions and services – from initial before deployment,” says he. Fconsultancy to test tool development support. It has already helped He also points out that API Manager is a critical tool both in a major French bank to comply with STET’s open banking API standard terms of scaling the integrations and enabling standard security and supported banks in defining their strategy. FIME’s experts are also across APIs published on it. API security standards are defined for supporting banks and fintechs to design, develop and deploy API test implementation of new APIs on the API Manager. plans and ensure alignment with the regulatory technical specifications Lalit Mohan feels security and performance have always been a from PSD2. Its strategy is to bring to the digital hub, a mutualized testing focus area for payment systems and this continues to be a focus for infrastructure and services that can be exposed to members of interbank APIs as well. “Usability to enrich user experience of payment systems networks. The aim is to incorporate a number of API standards, as well is gaining momentum and importance of API standardization is as regulatory specification standards, to deliver a totally customizable, going to be pertinent to bring consistency and reduce development agnostic solution for players to ‘pick and mix’ elements in-line with their time of banks and fintechs,” he adds. needs. FIME can cover any type of test requirement and deliver tailored test He says Swagger is becoming a prominent tool for API plans. The company is in touch with some 15 national interbank networks in testing. “Performance testing is going to be key as the human Europe and with more than 40 payment authorities worldwide. driven lag for CRUD operations is going to be machine driven. Existing performance and security tools can continue to be

14 Banking Frontiers August 2019 leveraged to ensure ISO 27001, PA-DSS migrates to a new channel only when he/she and other guidelines applicable in banking. sees a clear value addition there. Although Microservices, continuous integration testing consumers’ demand for transparency and and DevOps will gain momentum with change is the main driver pushing this change increasing adoption of APIs in the IT heavy in the consumer interface side, the impact banking industry,” he predicts. on existing channels is perceived to be slow Angaj Bhandari of FIME dives deeper. and steady. He divides the entire testing landscape into Munish Mittal of HDFC Bank says there 5 major components: will be newer channels in addition to the 1. Functional testing: Ensuring Open existing channels like branches, website, Banking API functionality and validating mobile apps, relationship manager, etc. “For compliance with technical open banking example, a bank can now reach customers standards, such as the Berlin Group’s using WhatsApp and Facebook messengers NextGenPSD2, OBUK and STET’s API using APIs. In Google’s search engine, if standards. a customer is searching for personal loan, 2. Security testing: Carrying out a risk an HDFC loan offer can pop-up. This is an analysis to determine the main threats and Angaj Bhandari avers that extension of the existing channel. In fact, the vulnerabilities to the system and which banks should welcome bank is wherever the customer is on Netflix, payment service providers are vulnerable. fintechs into the e-banking MakeMyTrip, BookMyShow, etc, as long 3. Integration Testing: Simulating the as we can enable the customer to make a connection to a real bank via an open channel without compromising payment using any device and anywhere in banking API during the integration phase. data & user experience cyberspace,” he elaborates. 4. Performance testing: Exhaustive integrity He also adds that corporate customers use regression testing to ensure all portions of ERP systems with which they are comfortable. the software are operating correctly as new third-party apps are “Those systems can become bank channels. We were probably the integrated into banking apps. first to do host-to-host connectivity,” he commented. 5. Strong Authentication testing: Functional and security Deepak Sharma says open banking starts with creating an Open evaluation of multi-factor authentication solutions. API environment that allows systems to connect to the bank’s internal portfolio of resources. At the basic level, says he, private and proprietary WILL CHANNELS CHANGE? APIs will be tightly controlled for access to the core platforms Finally, what could be the impact of Open APIs on existing bank processing general ledgers, transaction systems and so forth. There are channels? Channels are a major driver of digital transformation. also internal business APIs accessible by product managers within the Sunita Handa sees API-based banking co-existing with legacy institution that they can use to compose new offerings by connecting channels for a fairly long time. She points out that a consumer microservice functionality. Coordination among Banks deally, who should coordinate the API roadmap He also shares another perspective: “While Customer Authentication and Secure Channel Iamong Indian banks – RBI or IBA or some other APIs sound like a technology innovation, business implementations. body? Deepak Sharma says for APIs which are teams are expected to be equally involved and Munish Mittal sees it is a collaborative governed by regulations (for example, account see this as a new opportunity for greater outreach responsibility of RBI, IBA, NPCI, IDRBT, policy aggregation and sharing of customer data), is and value creation.” bodies like Niti Aayog and banks themselves. He better to be governed by RBI. For remaining APIs, While APIs will likely provide the most secure says regulators are playing a proactive role and the roadmap can be decided by the bank covered and effective solution for access to accounts, banks should be able to see value proposition of the based on the market segment and risks. This would standardizing and harmonizing the access to regulators and put up the merits and de-merits for encourage healthy competition and faster rollout accounts will provide open and equal access debate for the larger interest of the consumer and of innovative API-based services. Sunita Handa for all TPPs. Angaj Bhandari lists 3 must-have country and consensus should be arrived at. “Also points out that RBI is looking to its experience deliverables for an Open API standard body: there is a role for PFRDA, NSDL, AMFI, SWIFT, Ripple, and regulatory outlook on banking matters, u Developing technical standards and etc. All major concerned parties have to collaborate. while Lalit Mohan says IDRBT has started work in specifications for Open API Even NIBM can play a role. So could IIMs and IITs. collaboration with banks on API standardization, u Governing adherence to relevant API, Strong They are playing a consultative role by being on RBI security and governance. It is expected to provide Customer Authentication and Secure Channel committees. Regulators should be active. guidelines and best practices to banks, fintechs standards. It is a big change for the regulator to be pro- and other stakeholders. u Providing security guidelines for API, Strong active,” says he.

Banking Frontiers August 2019 15 Cover Story

He believes that transformation and a published set of new technology. As partner APIs may customers adopt be used by strategic digital products partners that the and services across institution wants to various aspects of use for productivity, their daily life, they HR functions, and so increasingly expect on. And finally, there the same seamless may be a set of public experience from their APIs that are open to banking too. Until 3rd-party providers recently, customer (TPPs) to access a financial data was more limited set of centrally held within functionalities and financial institutions, data. “As TPPs begin Nikhil Kumar suggests no Lalit Mohan reveals that IDRBT but this power is gaining access to the one size fits all as the world is is reviewing existing standards shifting. In the age institution’s platforms rapidly changing, recommends & guidelines to validate their of open banking, this through the APIs, an active-active approach applicability to APIs focus has shifted to and as the institution the consumer, and itself begins to share how more valuable customer data outside its own walls, robust governance, security and services can be delivered. privacy policies and practices must be put in place to control and audit With an array of open banking activities already taking off the new connected environment. The 4 key areas of data and security across Europe, the Middle East and Asia, it seems even those that access that must be addressed are (i) data quality (ii) authentication fall outside of regulatory mandates are looking to open banking as (iii) customer consent (iv) data governance and (v) analytics.” an inevitable, exciting and more valuable future. Lalit Mohan predicts that the existing digital channels would Multiple standardization and interoperability efforts by RBI become more agile and will be tested for scalability and extensibility. have propelled the modernization and expansion of India’s banking He expects banks to do due diligence for relevant APIs and integrate sector. And, in this regard, India’s systems are in a strong position to with fintechs and have first mover advantage. Banks will innovate continue its transformation. It’s clear that continued standardization and compete with fintechs to ensure customer experience is combined with the adoption of open APIs is the next step for the sustained and customer stickiness is maintained. nation, with defining a more seamless and secure API infrastructure Nikhil Kumar, however, emphasizes that nothing is bigger than an urgent need to realize this vision. what UPI has done for payments in India. It has managed to enable It remains unclear exactly which path this will take: fully 100 million plus customers to get on to mobile banking in no time. proactive, active or reactive, but as Angaj Bhandari at FIME noted, With the account aggregator initiative kicking, India is also looking a combination is perhaps most likely and best suited. Learning from to lead the data race and not just payments! Europe’s open banking trailblazers will take the market far, but only when considered in parallel with the unique attributes of India will KEY TAKEAWAYS open banking APIs realize their full potential. Undoubtedly, the banks of the future will be guided by digital [email protected]

FIME’s Open API testing platform TrustAPI ith TrustAPI, banks and third-party providers no advanced knowledge of test scripting “We’re the first to totally automate the testing W(TPPs) can now quickly verify APIs against languages of APIs. TrustAPI enables the creation of multiple, PSD2-compliant standards, fast-tracking the launch u Constantly adds new Open API standards, customizable test plans - it is unique. The tool has of open banking services. The platform: including Open Banking UK, NextGenPSD2 been designed to test against today’s existing u Simplifies functional API regression testing Access to Account, STET, etc. API protocols, with the flexibility to add other API u Enables the creation of customized API test TrustAPI has been built to comply with large standards. Banks get full control – with a modifiable plans and case scenarios number of API standards and technology. FIME’s test plan and quick and easy-to-assess test u Delivers quick and easy-to-assess reports and approach is to write tailored, customizable test plans coverage, they can edit and update their test plans test coverage (visuals & reports) that are defined to test against the functionality and as requirements change,” explains Angaj Bhandari u Provides a user-friendly interface that requires features the banks and fintechs want to implement. in simple terms.

16 Banking Frontiers August 2019 Country Report Home loans come easy for Kiwis New Zealand has an organized mortgage loan structure:

ny Kiwi would want to own a home, for that is his dream. But, in Arecent years, the property climate in the country has become increasingly challenging. Besides, in cities like Auckland housing there is absolute shortage of supply of residential homes posing graver challenge for first-home buyers. And buying a home is no more possible without a loan.

TYPES OF LOANS In New Zealand, there are different types of home loans. For example, there are fixed rate home loans for which the interest rate is ‘fixed’ for a certain period of time, floating rate loan, for which the interest rate will vary over the period of loan, interest only home loan, where only the interest is paid, rather than both the interest and the principle and line of credit home loan, Affordable homes in Auckland which is a loan borrowed against the equity in the home. Besides the interest payable, which are often joined and described as buy homes. There were instances of wealthy home loan seekers are also required to semi-detached and are usually 2-storied or Chinese buyers outbidding New Zealanders pay several fees like account keeping fee 3-storied. The facade is in a pre-fabricated on suburban homes in several cities. It was to help cover the administration cost of material rather than wood. Finally, there are estimated that about 3% of New Zealand maintaining the loan, annual fee which is apartments, which are low-maintenance homes were being sold to foreigners, but in lieu of an ongoing account-keeping fee, living spaces. this had risen to 5% in Queenstown and redraw fees, which is levied if the home House prices are often determined 22% in Auckland. loan has a redraw facility (an agreement by negotiation between the buyer and whereby one is able to redraw some or all the seller, or by auction or tender. An CURBS REMOVED of any home loan payments in advance and indication of the price the seller wants is The Reserve Bank of New Zealand has fees like application fee, valuation fee, late sometimes given. There are codes like BBO, maintained that risks to New Zealand’s payment fee and a discharge fee in case of which means Buyer’s Budget Over. Another financial system have eased over the past 6 early payment of loans. indication is the government valuation, or months and it is time to reduce restrictions New Zealand, like many European GV, or ratable value, or RV. on mortgage lending. From 1 January up countries, have several types of homes for Homes in New Zealand are more to 20% of new loans will be allowed to be sale. There are villas and cottages, which expensive at present than ever before. This to owner-occupier borrowers with equity were generally built around the 1900s is especially so in cities like Auckland or of less than 20%. At present, only 15% of and usually have wooden weatherboards. Christchurch. new lending can be to this group. Up to These are larger, often with bay windows It can take some 3 or 4 weeks to finalize 5% of new lending will be allowed to be to and high ceilings. Cottages are smaller, a transaction once the place is identified investors with deposits of less than 30% usually with one or two bedrooms. Then and the price is agreed upon. against the current threshold of 35%. there are bungalows, which are also large, The top mortgage lenders in New Zealand one-story, 3-bedroom homes with wooden FOREIGNERS CAN’T OWN are: The following home loan providers are weatherboards. New Zealand has banned most foreigners listed on Canstar’s home loan comparison Then comes the 1970s houses, which from buying homes as a measure to control tables: ANZ Bank, ASB Bank, BNZ, Kiwibank, are boxy, often 2-story houses that are housing prices. Previously the housing Resimac, SBS Bank, Sovereign, which is an functional but without much character. market was open to investors worldwide, insurance company, The Cooperative Bank, These usually have weatherboards. The but the government has enacted legislation TSB Bank and Westpac. modern homes are called townhouses, that allows only New Zealand residents to [email protected]

Banking Frontiers August 2019 17 Digitization Alternate channel usage rises 68% at Indian Bank The bank sees 4-fold increase in mobile banking transactions

ndian Bank has taken numerous increased awareness among customers initiatives to make digital banking about the ease of doing transactions with Ipopular among its customers. Its less cost and by bringing in more secured, digital strategy is three-pronged, viz (i) customer-friendly features, the share of enhancement of ease of transaction to digital transactions will go up further,” says customers with required security, (ii) Padmaja Chunduru. alignment with the digitalization program of the government and (iii) scaling up DIGITAL INITIATIVES efficiency of operations for the bank for At a time when the entire country is driven reducing costs. by ‘Digital India’ slogan where speed and Padmaja Chunduru, MD & CEO of efficiency are the clear distinguishing factors the bank, says the bank has revamped its in service sector and increasing number of internet banking module to make it more tech-savvy citizens, the bank understands user-friendly. It is offering POS terminals the need for ushering in technological to its premium current account customers disruption in every facet of its operations. free of cost and the POS terminals can “We are in the process of deploying accept NFC cards for low ticket contactless chatbots powered by AI so as to respond to transactions. For the convenience of customers’ queries on a real time basis. We merchants, it offers free biometric devices Padmaja Chunduru outlines deploy middleware solutions to provide the for accepting payments through BHIM the bank’s plans to deploy comfort of API banking to customers and Aadhaar Pay. Its ‘IB Collect’ digital product chatbots powered by AI to data analytics engine to understand their enables institutional customers hassle-free respond to customer queries behavioral patterns to enable us offer them collection of fee, subscription, payment, need-based, personalized services,” says donations, etc, from their constituents. on a real time basis Padmaja Chunduru. By offering ‘V-Collect Plus’ product, the The bank saw a bigger opportunity to bank facilitates corporates to collect credit risk management solution (CRMS) innovate across all forms of digital payments funds through online and offline remitted to track loan asset quality by capturing the – UPI, IMPS, V-Collect and merchant through any Bank, provide online response early warning signals. adoption. Offering more language options and seamless reconciliation. Says Padmaja Chunduru: “Our efforts in internet and mobile banking, regular The bank also provides for online have resulted in 21% increase in new net addition of features, facilitating faster opening of savings bank accounts – IB DIGI - banking users and 25% increase in volume collections through V-Collect Plus, online which is has received encouraging response. of net banking transactions. Mobile opening of PPF, NPS and SB accounts, It has onboarded the ‘psbloansin59minutes’ banking registrations too have increased by integrated mobile banking/UPI app, issue platform of the central government to ease 38% accompanied by a 4-fold increase in of multi-currency travel cards, CPMS, Fast the process of funding and also the TReDS transactions, besides about 600% increase TAG for collection at toll plazas, are some platform for enabling timely funds flow in UPI transactions volume.” of these. Its constant focus is to ensure through bill discounting for receivables to The bank has emerged on the top for pleasant, courteous and efficient service at facilitate for MSME entrepreneurs. PFMS and issue of RuPay Platinum cards all times, according to Padmaja Chunduru. Besides being a pioneering bank in and in ATM transactions, 2nd highest PFMS platform to disburse payments/ among PSBs and 5th highest among all 99% BCS ACTIVE funds under government schemes, it banks. It ended FY2019 with impressive On 31 March 2019, the bank had 3022 has also developed centralized payment business growth and improvement in all business correspondents (BCs), all equipped management system (CPMS) for parameters. “In 2018-19, transactions with micro- ATMs that are capable of doing government, institutions and corporates for through alternate channels in our bank interoperable transactions through RuPay disbursement of salary, pension, subsidy, increased to 68% of the total transactions and AEPS modes. “To our credit, 99% of etc. Internally, to strengthen its credit vis-a-vis 62% in 2017-18. We are sure that these BCs are active on the field, which monitoring system, the bank has introduced with the continued thrust given for creating is one of the best. Each BC carries out on

18 Banking Frontiers August 2019 an average 1100 transactions per month phenomenal increase in the volume and which is the highest in the industry,” claims value of transactions in all our alternative Padmaja Chunduru. channels is an ample proof for their enhanced customer experience,” she adds. DEPLOYING ANALYTICS For its CRM project, the bank is Indian Bank has all along been using the sourcing data and information from in-house developed MIS for analyzing data CBS, varied digital channels, customer to cross-sell products and for business grievance portal, social media, transaction decisions. Last year, it installed a BI and repayment patterns, credit card usage, analytical tool for this purpose. It has also etc, analyze them, and from there identify developed centralized payment system their needs. “This helps in redesigning, for effecting bulk payments across banks revamping and reorienting our products by its customers. “We have now initiated and delivery thereof. During 2018-19, our data analytics implementation with a view bank’s business has grown by about 16% to have a 360-degree view of our business which is above the industry average, with and customers. We believe this will help almost even contribution from both assets us to more effectively meet our customers’ and liabilities side. Varied digital initiatives requirements and expand business. contributed significantly for addition of During the current year, we are planning new customers and this level of business to implement data analytics for improving growth,” says Padmaja Chunduru. operational efficiency for accelerated promotions through video in YouTube business growth, enabling various options SOCIAL MEDIA PRESENCE and lead generation through LinkedIn. in our POS machines like Cash@POS, EMI Indian Bank has official presence in 5 Discount offers with e-sellers, app and options on credit cards, merchant payments platforms - Facebook, Twitter, Instagram, social media marketing, digital lead through UPI, etc. We simultaneously focus LinkedIn and YouTube. It engages with generation campaigns, etc, are part of the on giving impetus to popularizing all our customers as well as public at large through bank’s current digital promotion efforts. digital initiatives among large section of these channels to disseminate information our clients through specialized digital on product bouquet, physical and digital MAJOR VENDORS, IT TEAM marketing teams,” says the MD & CEO. touch-points, campaigns, offers, etc. For CBS, the bank has partnered with besides safe banking advisories and field TCS and IBM extends hardware support CUSTOMER EXPERIENCE, CRM activities. “During FY2019, over 500,000 at its datacenter and DR site. Padmaja Indian Bank is always known for ‘deep impressions were clocked across all pages. Chunduru says the bank is also making use customer-connect’ in all its 112 years A monthly e-Newsletter - Ind Navya, is of the services of renowned IT companies of operation and enhancing customer released on website besides being sent by like ACI Worldwide, HP, FSS, Infrasoft delight is the core of its objective. This email to customers. We bring out customer- Technologies, Wipro, HCL Comnet, etc, for distinct characteristic enabled the bank to centric initiatives and keep them abreast support in different IT related areas. quickly adapt to tech-driven banking in an with the developments. Also, customer The bank has a strong in-house environment of large-scale emergence of grievances are collected through bank’s technology team manned by 200 plus next-gen and new-gen tech-savvy customers. official SPGRS/ Query/ Feedback page and officials. There is also a dedicated Padmaja Chunduru says in keeping the back-end integration takes their request Information Systems Security department with the times, the bank has facilitated into the bank’s mainstream resolution consisting of specialists who take every round the clock deposit of money, secured, process,” says Padmaja Chunduru. effort to ensure the cyber security. faster remittances, online account opening, The bank continuously creates “We believe that good internal online nomination facility, installation of awareness about its digital products and marketing is essential to spread and about 3900 ATMs/cash recyclers, mobile alternative delivery channels so as to enhance the digital literacy of the frontline app (IndPay) with the best of features ensure the safety and security of customers’ employees who are ultimately dealing with for carrying out transactions like funds transactions. In addition, there is a close customers and guiding them in using the transfer, cheque book requisition, mobile group Facebook account for employees, digital channels. Therefore, we regularly recharge, etc. Another mobile app ‘IB Smart which helps in collaborating and sharing organize training programs for the digital Remote’ facilitates restriction and locking experiences. marketing officers stationed across the of debit/credit cards, e-filing of IT returns, Last year, the bank carried out digital country who in turn, can support the payment of utility bills, etc. Simultaneously, lead generation campaigns for retail frontline staff in their jurisdiction, on the the bank also ensures that security features and MSME loans, cash back campaigns digital initiatives,” says Padmaja Chunduru. are constantly upgraded. “We have seen a on debit card and in the social media, [email protected]

Banking Frontiers August 2019 19 Risk Mitigation HFCs scout for people and technology to manage risk MDs and CROs of housing finance companies discuss current trends in risk management:

he National Housing Bank (NHB) has recently asked all housing finance Tcompanies (HFCs) with more than `50 billion in assets to appoint chief risk officers, citing the need for strengthening risk management practices in the industry. The directive comes in the wake of some HFCs and NBFCs facing liquidity issues after the IL&FS defaults came to light, underscoring the mismatches between assets and liabilities in this sector. As per the NHB directive, the CRO is required Deepak Patkar Anuj Mehra Naveen Uppal to function independently to ensure the highest standard of risk management. there can be substantial delay in project identification and mitigation practices NHB stipulates that the CRO, who will completion. Their restricted ability to and monitoring risks. It is now seeking to have voting power in credit sanction complete and hand over premises to appoint a CRO. Anuj Mehra, MD of the proposals, should be a senior officer with home buyers will lead to stress on their company, says the office of the CRO of adequate professional qualifications and repayments to banks and HFCs.” the group helps the company identify the experience. Boards of HFCs can appoint Sanjeev Srivastava, CRO at IIFL risks faced by the business. “At present, this CROs for a fixed tenure. Her/his role in Home Loans, concurs and adds: “High exercise is coordinated by the office of the deciding credit proposal will be limited to cost of borrowing, decreasing funding CRO with the MDs, COOs and CFOs. Once that of an advisor and will be involved in the options, seller impersonation and data the risks are identified, risk champions process of identification, measurement and misrepresentation are the other risks faced relevant for that risk, monitor these risks mitigation of risk. by HFCs.” as well as initiate risk mitigation steps. For According to Sanjay Chaturvedi, CEO, example, risks related to liabilities would be TOP RISKS Shubham Housing Finance, his company handled by the CFO, credit related risks by HFCs today face risks involving liquidity, faces risks on account of delinquencies and the chief credit officer, etc,” he adds. credit, ALM, operational and lack of losses as also reputational and regulatory For the last 3 years, Naveen Uppal has funding. The availability of funds for HFCs risks. “We have developed a tool in-house been heading the risk function as risk head has reduced significantly from all sources - ‘key matrix’ – which helps us to identify at Indiabulls Housing Finance. Following and this further restricted the ability for what had gone wrong and then fix the the directive from NHB, he has been fresh lending and maintaining of healthy wrong. HFCs should give due weightage for redesignated as CRO of the company. book sizes. credit and liquidity risks,” he says. Deepak Patkar of Magma Fincorp Deepak Patkar, group CRO at Magma points out that the NHB directive applies Fincorp and Magma Housing Finance CRO APPOINTMENT to companies with an AUM of `50 billion explains the top risks faced by HFCs: “The Most of the larger HFCs, after the directive and above. “However, we have plans to have asset liability mismatch, or ALM, risk is a of NHB, are in the process of appointing a separate CRO for our housing finance crucial risk. Prudent HFCs have started CROs. Many HFCs are taking internal and unit in FY2021 when our book size will be correcting their positions of mismatch over industry references and have appointed crossing `35 billion,” says he. the last 3-4 quarters. The liquidity crisis recruitment agencies for the purpose. Capri Global Housing Finance has has slowed down that process, which could Mahindra Rural Housing Finance does the position of head, Risk, who oversees lead to stress on cash flows in the short to not have a CRO at present, but the Mahindra the risk functions at the HFC and NBFC medium term. Another major risk is the Group has CRO office, which helps group wings of the company. Rajesh Sharma, one associated with construction/builder companies identify and manage risks MD of the company, says the company financing. With banks becoming allergic associated with their respective businesses. will be appointing a separate CROs in the to even reputed real estate developers, The company has been following risk coming months. “Whether the regulator

20 Banking Frontiers August 2019 suggests or not, there is need for efficient risk management in any entity which is handling money and where asset quality maintenance is required. We have risk managers at branch, regional and national level and they are manging the risks and underwriting,” says he. The bottomline is that risk management function is getting focused and centralized.

CREDIT RISK POLICY How are HFCs ensuring effective credit risk Rajesh Sharma Sanjay Chaturvedi Sanjeev Srivastava management? IIFL Home Loans has broadly revised TECH FOR RISK MANAGEMENT Finance says the internal tools the company its policy under categories like affordable HFCs use a variety of risk management has developed like the dashboard and segment borrowers, increased funding basis software to manage risks. Some use custom- trackers are helpful in managing risks. It is reported income and restricted eligibility built credit appraisal systems integrated with also using analytics for manging customer calculation through various surrogate bureau analyzers and fraud deduplication data and portfolios. programs. It has made the balance transfer platforms. Most of them are in an advanced norms more stringent with eligible stage of developing credit rule engine for STARTUPS VS ESTABLISHED financial institutions. Multiple funding to housing loans and have deployed statistical Today companies handling risk mitigation same borrowers is restricted and project tools for risk segmentation to sharpen the use advanced technologies, including AI and approval norms have been tightened for collection strategy. ML. These companies are willing to try new builder properties. Naveen Uppal speaks about the various things to solve some of the industry’s most Says Naveen Uppal of Indiabulls software in use at Indiabulls Housing Finance: critical problems like fraud detection using Housing Finance: “We continuously evolve “Our core software is FINNONE, which is OCR, extracting financial information from our risk policies and framework. Our risk powered with multiple plug-ins, which in bank statements and helping companies to management committee reviews our credit turn provide alternate data to mitigate risks. automate decisioning. However, scarcity and policy and operations on an ongoing basis These plug-ins are integrated with our CRM sanctity of data available with companies and places recommendations that would for PAN verification through NSDL, Perfios limit the scope of such companies which are curtail/averse potential risks. In the recent for bank statement verification, Automated purely data driven. past, we have modified our policy for loan Credit Score using CIBIL and Experian, Sanjeev Srivastava explains: “Established valuation basis which now every loan would Hunter from Experian for pre-application solution providers have deep domain have two external valuations.” check, Finfort for ITR verification, Email knowledge and provide solutions which are Deepak Patkar of Magma Fincorp Verification services of CreditVidya and easy for companies like us to understand and outlines the mechanism adopted by the Deduplix by Xcite to avoid reduplication.” consume. Since we are in a transition state company for the credit policy: “We follow Sanjeev Srivastava mentions IIFL where we are moving from heuristic to data a rigorous review mechanism for our credit Home Loans’ tie-up with fintech companies driven models, for us a blend of risk-tech policy. This is guided by our regular analysis for risk management. These tie-ups are and established providers is more preferred. of the customer segment performance and essentially at transaction level and portfolio However, going forward, we may be focusing market conditions. We have consciously level. “At transaction level, we have SaveRisk more on risk-tech companies.” avoided taking high ticket exposure on LAP for company checks, Finfort for income Naveen Uppal believes in complete and construction finance and increased document validation, Perfios for bank automation rather than relying on focus on retail loans for affordable housing statement analysis and Whatsloan for KYC standalone tools/solutions. Technology is customers.” validation. For portfolio risk management, a boon to all, he says, adding the company Anuj Mehra of Mahindra Rural Housing we have management decks with early continuously explore options that would Finance says the company has developed warning triggers,” says he. help in its credit decisioning process. a credit scoring model using machine Capri Global Housing Finance uses a Deepak Patkar maintains that all solution learning. This was done by analyzing the combination of touch and tech. The company providers are progressively moving towards repayment pattern of 200,000 customers. mainly serves small entrepreneurs like garage providing technology solutions. “The gap “For risks other than credit risk also, we owners whose transactions are in cash. between risk-tech and traditional companies keep changing risk mitigation action plans Technology is used in backend processing, is narrowing very fast. All solutions need to be depending on our assessment of the risk at data analytics and generation of MIS. evaluated and tested for suitability,” he adds. any point in time,” he adds. Sanjay Chaturvedi of Shubham Housing [email protected]

Banking Frontiers August 2019 21 Micro-finance Branches & apps drive business growth at CreditAccess Grameen Bangalore headquartered MFI takes the next step from data warehouse to analytics:

reditAccess Grameen (CAG), the infrastructure, competition, historical Bangalore headquartered micro- performance trend, socio-economic risk Cfinance institution, promoted by and growth potential,” says Udaya Kumar. CreditAccess Asia, focuses on providing “Contiguous expansion provides significant micro-loans to women customers, scale and diversification advantages. predominantly in non-urban areas in Familiarity of the loan officers with India. It had 573 branches as of Q1 2018- demographics of nearby districts enables 19, which increased to 670 at the end of effective customer evaluation and better the last FY. That was accompanied by a servicing. We have lower exposure to a 31.4% growth in number of employees, particular district, with 97% of districts rising to 8641. Udaya Kumar Hebbar, MD having <=3% of GLP and no single district & CEO of the MFI, says there has been a has > 5% of total GLP,” he adds. consistent growth in infrastructure marked by 31.4% yoy growth in branches to 753 LOWERING BORROWING COST spread across 170 districts in 9 states and CreditAccess Grameen is uniquely 1 union territory. The company continued positioned to capitalize on the highly deepen its presence in existing markets and underpenetrated credit in rural areas expanded in new geographies by entering with one of the lowest lending rates and Jharkhand, Rajasthan and Gujarat. Today Udaya Kumar Hebbar one of the best operating cost efficiency. it has 6165 loan officers, which is a 32.4% believes CreditAccess The NBFC crisis has not affected the growth in last 12 months. Grameen is uniquely company directly or indirectly in terms positioned to capitalize on the of fund raising for disbursements. It has STRONG RURAL FOCUS been diversified in its liabilities since many The company’s gross loan portfolio has highly underpenetrated credit years with large portion of its resources grown by 39.4% yoy to `76.19 billion in in rural areas being long term and from international Q1 of the current FY. Disbursements, net borrowings. “With positive ALM mismatch interest and net profit have grown by 42.9% expansion strategy, focusing on deep and thanks to continuous support from (`23.10 billion), 32.4% (`2.46billion) and rural penetration. It has a district centric our lender base, we have been able to raise 32.7% (`958 million) respectively. Says focus on achieving deep penetration adequate funds for our growth. We have Udaya Kumar: “Growth in gross loan within a particular district in 3 years of raised close to `9.5 billion during the first portfolio was mainly driven by 32.1% commencement of operations. “We have quarter of current financial year, wherein growth in number of borrowers to 256,000 systematic methodology in selection of our weighted average cost of borrowing yoy. We have been growing consistently and new districts based on availability of is 10.2% compared to 10.5% a year ago our continuous focus on rural geographies helped us to acquire new business. Liability Mix - Institution Wise (%) There has been strong focus on non- 14%, urban geographies with 82% borrowers. FPIs - Foreign Customer centric business model, flexibility in products and process to our customers, 22%, strong rural focus and robust audit and risk FIs - Domestic management practices have been helping us in our growth.” 3%, NBFCs - Domestic 58%, STRATEGY OF GEOGRAPHY Banks - Domestic 4%, The company has been following a PTCs - Domestic calibrated, contiguous district-based

24 Banking Frontiers August 2019 and marginal cost of borrowing is 9.4% Liability Mix - Instrument Wise (%) compared to 9.6% in corresponding quarter of last FY. We do not see any major changes 0%, Sub-Debt in terms of business growth in the current 82%, Term Loan FY vis-a-vis last FY. We have good liquidity 11%, NCD and over `28 billion in pipeline as of now to support our growth for coming quarters. 3%, ECB Positive ALM continues to contribute in growth,” says Udaya Kumar 4%, PTC

GROUP LENDING DOMINANT The company has a classical joint liability customer requirements. It is now 100% GROWTH TARGETS group (JLG) model. Group lending is cashless in retail finance business. According The company has been growing more than 95.1% and retail finance 4.9%. Segment- to Udaya Kumar cashless shift is happening 50% CAGR for the last 5 years. Udaya wise GL loan usage is animal husbandry based on customer’s preference. Small and Kumar is targeting PAT of `4.25-4.50 43%, trading 19%, partly agri related 16%, larger loans are happening cashless. 100% billion in FY20. With increased base, he production 8%, housing 4%, education 3% of our branches have been enabled for hopes to have a healthy growth of 30-35% and others 7%. Udaya Kumar says 810,000 cashless disbursements. Currently, 52% CAGR over the next 4-5 years. group borrowers have completed 3 years, disbursements are on cashless mode.” He also says the company will continue with strong client retention and collection to focus on rural hinterland. “Increasing frequency is fine for group lending (53% VERY LOW GNPA borrower base and high borrower retention weekly, 39% bi-weekly, 8% monthly) and CreditAccess Grameen’s GNPA rose from will drive our AUM growth. This will be retail finance (100% monthly). Collection 0.04% in 2014-15 to 0.08% in 2016-17, determined by our ability to consistently efficiency is 98.8%.” then marginally increased to 0.82% in grow our branch infrastructure, train our 2017-18, but came down to 0.62% in the employees and invest in technology to SHIFT TO CASHLESS last FY. Udaya Kumar reveals net NPA is further improve our customer offerings, The company launched its retail finance 0%, with provisioning being 1.10%. Total business processes and controls leading to portfolio in 2016 to support the enhanced equity and debt/equity ratio as well as better customer service and healthy asset credit needs of its graduated customers, return ratios and capital adequacy have quality,” he adds. making it a one-stop-shop for various been good in Q1. [email protected]

Digital Initiatives: Credit Access finance division, which caters to customers lending and retail finance business, Grameen’s management believes that with individual lending, works on end-to- enable management at different levels IT and digital initiatives should help in end digitized platform right from customer with various dashboards, identifying gaps improving customer experience and make sourcing to collections. The company in field level process to improve efficiency. its processes efficient. It has invested in has also initiated SMS service to bring in Having invested in a data warehouse, CBS in 2015 so as to create a platform for more transparency and improve customer the company aims to use analytics various product and process initiatives. experience. At present, it provides SMS for better risk management practices, It has taken a number of initiatives that service for providing real-time status of improve operational efficiency and target include introduction of field apps on customer onboarding, loan application and customers with right kind of products. tablets for customer onboarding, loan disbursement. There are a host of other Analytics is going to be critical part of our application and collection management, SMS services in the pipeline which will be future growth plans. introduction of audit app to make the introduced over next 6-12 months. There entire audit process online, introduction of are also several other digital platforms and IT Partners: The company’s major field monitoring app for strengthening the services which the company is currently IT partners are Temenos for CBS, IBM internal control framework, introduction working on and will be made available to for data center and disaster recovery of insurance software for lives and claim customers over next 12-18 months. infrastructure, Software Group for mobility management and disbursements directly solution, Power BI for business intelligence to the bank account of customers. Analytics, Future Growth: tools, Microsoft for email and collaboration, Currently, Credit Access Grameen tracks Sysfore for audit automation and field SMS Initiatives: According to Udaya customer credit behavior and competitive monitoring and i-exceed for insurance & Kumar, Credit Access Grameen’s retail landscape, generating leads for group claims management.

Banking Frontiers August 2019 25 New Normal Marketing landscape: people vis-a vis technology CMOs of BFSI companies discuss the changing role of technology in marketing:

n these times of intelligent banking, BFSI companies are making use of AI and Iautonomous solutions to grow revenue and margins, even while using the most effective channels. Leveraging their data, they hyper-personalize communications and systematically maximize sales conversion. Chief marketing officers in these firms are also using predictive lead scoring, deploying real-time trigger campaigns to deliver dynamic content at every phase of the consumer journey. Proliferation of Pankaj Gulati Rohan Kumar Anand Bhatia online and social media channels has made marketing content richer and engaging. All AI & ML TO REPLACE MARKETERS work without any human involvement. these have dramatically changed the job When there is a discussion on replacement Once the basic rules and segments are in and skill profile for marketing employees. of human jobs the buzzwords often heard place, AI-based orchestration will take are AI, machine learning and automation. over to decide which channel to use, what BIG DATA, CHATBOT AI is enabling study of patterns, communication to send and when to send Technology is enabling functions like precise interpretation of queries, targeting of ads. It for optimum results.” profiling of consumers. Pankaj Gulati, chief is helping marketers to create a customer- He adds that another area where people officer at Fincare Small Finance Bank, centric marketing strategy. technology will end up doing a superior job says using of big data has revolutionized data Angel Broking is using self- service is tracking and reporting. More and more collection. It has also made targeted and technologies in its marketing activities. The channels now support an open data import personalized campaigns a reality. “Beacons company has launched its Angel iTrade, a / export policy along with API support and and chatbots deployed in-store to answer cost-saving platform affording self-service this is making it easier for everyone to have customer queries look for products and facility for the customers. The company also a central tracking of marketing expenses make recommendations,” says he. uses chatbots for consultation and robot and performance, thereby eliminating According to Rohan Kumar, CEO advisory for faster processes. human need to collate data, says he. at Toffee Insurance, automation across Anand Bhatia, CMO, Fino Payment Ritesh Jain, co-founder, Flexiloans, market intelligence, data analytics, Bank, says data and media buying jobs will using machine learning, the company on-ground activation and campaign be replaced by technology. “Human work is developing systems to check critical management over time will replace human is to design the experience and technology documents while deciding whether a marketers. Says he: “Market intelligence work is to push that experience,” says he. particular user is eligible for a loan and and data analytics tools facilitate active Aniket Thakkar, VP-Marketing, if so the quantum. “In a normal scenario, listening and predicting consumer Coverfox Insurance, believes that campaign it would take a few minutes for a human behavior, which is critical for making management roles which largely cater to being to review the nuances of a financial marketing and communication decisions bid optimizations will be the first to go. statement, make decisions based on in any corporate. Tech- enabled point of “Not just Google search, but all major that information and check if other KYC sale displays can be controlled centrally, products / services have seen an influx documents are authentic and readable. But and this will indeed reduce the need for of AI capabilities to make real time bid pass that through a machine, and it takes human interventions at ground level. changes to achieve the desired goals. The mere seconds,” he points out. Personalized advertising and engagement only reason they have not replaced these can be efficiently run through these devices. jobs already is that for most firms, the NEW MARKETING JOBS Automated schedulers can run campaigns underlying data tracking and pushing that Digital skills are becoming a must have in across various digital outlets and optimize back to the tools as feedback is not in place. a marketing professional’s resume. But, spend in real time.” Email / SMS / push marketing would also digital skills are changing the way marketers

26 Banking Frontiers August 2019 work. Today, there are new marketing jobs like data analytics scientist, AI & MI experts, sentiment analyzer, chatbot manager, online to offline engagement manager, digital marketing artist, etc. Data science is going to play a major role not just in performance management, but in measurement of creative effectiveness too. With machines taking up most of the manual work around bid-management, it is possible that a marketeer who understands machine learning to give the right input to Aniket Thakkar Ritesh Jain Prabhakar Tiwari the platforms and negate the outlier events. it helps you to pre-empt a bad situation to partners to achieve marketing objectives. For example festive season offerings, or a snowball into something worse, or on the It also takes the help of freelancers and period where data was entered incorrectly other side engage in positive conversations influencers/ bloggers for a host of activities, to ensure that the platforms optimizes on with your user and understand what made including content, design work, SEO the right data sets. A blend of marketing them happy. Online to offline engagement activities and more. and data science roles will become the new manager helps to relate more realistically Prabhakar Tiwari explains the campaign managers. with the brand or celebrity.” importance of digital and IT partners to According to Prabhakar Tiwari, CMO, achieve market objectives: “Digital matters Angel Broking, machine trainer, data PREFERRED PARTNERS to every modern day marketer and CMOs analytics expert, data scientist and digital BFSI marketers face challenges of technology, use IT infrastructure for sales and marketing marketing artist are the new marketing jobs competition, customer segmentation, ROI activities. Performance marketing agencies that will help in customer driven campaigns. management, content and design while help in campaign management on a large Rohan Kumar believes data science and achieving their marketing objectives. There scale, digital age communication agency machine learning specialist professionals are also other broader risks like political, and the growth hacking agency help us in create better automation, personalization geographical, economy and natural achieving our marketing objectives.” and engagement tools for marketers. calamities. Fino Payment Bank takes the The user experience professionals help help of analytics partners, customer behavior TECH TO DRIVE MARKETING in development and implementation agencies, experience partners and content Technology will continue to play a crucial of user-centric products, services and creators to position the bank’s products. role in BFSI marketing. Big data, AI, communication. The augmented reality Google, Adobe and Amazon Web ML and analytics will help CMOs in professionals help in the integration Services are the preferred partners for achieving their marketing objectives. Data, of digital information with the user’s Coverfox for achieving its marketing technology and AI together are already surroundings in real time. objectives. Aniket Thakkar elaborates: accelerating the digital sales engines of Pankaj Gulati explains that marketing “Google is currently leading the pack on the BFSI companies, which are evolving teams require people with knowledge of advertising, analytics and ML/AI front. to ‘intelligent sales’, improving the ROI tools which help understand, interpret and Adobe has great solutions for analytics, of their sales and marketing campaigns. monitor big data. “A marketing automation media optimizer and communications. Personalized conversations make the tool can evaluate correlation between data With AI and voice rapidly taking center communications and interactions with and produce a report with findings, but stage in most things we do in marketing the customers and prospects more relevant. it still requires a human to interpret the sleeping giant is Amazon Web Services. The Chief Marketing Technologist is a results. While automated advertisements solutions around email / SMS / push and buzz word these days, which is expected to are taking over from traditional ones, it big-data analytics are not only robust, but eventually become the new normal, which takes a human to write, design and monitor also are very priced.” the chief marketing officer will fade away. ad campaigns and attach meaning and Fincare Small Finance Bank makes use Knowledge of technologies like web, mobile, connect to the bottom line”, he adds. of social media channels like WhatsApp, voice, machine learning, artificial learning, Ritesh Jain describes the role of YouTube, Facebook and Twitter as its AR and virtual reality is no longer optional. sentiment analyzer in marketing: preferred marketing partners. Flexiloans Businesses which will not find a use case for “Sentiment analyzer allows you to build a uses marketing analytics for better control these will be endangered species. A working stronger understanding of the reactions, on performance, smart optimization and knowledge of how these work, and how to feedback and communication that your to receive insights. The company has a make the best use to achieve a specific objective userbase is giving you or about you on marketing agency, an affiliate agency and would be the key for the financial marketers. different channels. This is important since a programmatic company as its preferred [email protected]

Banking Frontiers August 2019 27 CorpComm How CorpComm overcomes tough challenges

Communication with stakeholders - customers, employees, investors and public at large - is key for any corporate, especially so when it is a BFSI institution:

or any business to succeed, communication is an essential tool - Fwhether it is internal communication or external. It is a question of how well this is managed that makes or mars an enterprise’s effectiveness and reputation. May be the products and services the enterprise offer could be the best in the market, maybe it has several competitive advantages, yet lack of a cohesive, clear and well planned corporate communications strategy could negate all these advantages. Some of the successful global corporations have started including corporate communications teams while devising business strategies, discussing major sales plans, or preparing for board meetings. Such experimentations have resulted in better impactful corporate messaging. Getting them involved from the start can help you avert a potential image disaster, be it internally or externally. Three heads of corporate communications department of Indian financial services companies discuss the primary internal stakeholders,” says parents (co-borrowers). The team’s strategies they have and how they provide he. “Our external customers are media activities cover business partners, media, effective communications channel both stakeholders, be it publications, magazines customer and internal communications. within the organization and externally. or online mediums. Last but not the least “We fund higher education of Indian it is our company partners, customers and students, taking up 1500+ courses in 2500+ 5 STAKEHOLDERS potential customers, whom we intend to institutes, across 38+ countries. Hence, our Bajaj Allianz General Insurance, which reach out to with our communication. communication has to be customized for a has an in-house team handling corporate A strong relationship and rapport diverse set of higher education aspirants communications, handles both internal with our stakeholders and keeping our with customized loan solutions. The content and external communications - right from communication contextual and relevant is tailored to reach them with relevant and ideating to strategizing and implementing plays a key role in communication.” timely information, based on their life cycle communications. According to Nikhil and destination of study,” says she. Bharadwaj, there are 5 stakeholders as far TARGETS - STUDENTS as the department is concerned - customers For Chandini Sehgal, head-Marketing TARGETING 4 SEGMENTS and potential customers, company partners/ & Corporate Communications, HDFC Rakesh Wadwa, CMO, Future Generali intermediaries/ agents, employees, senior Credila, the company’s key corporate India Life Insurance Company, there management of the company and media. communications is directed towards are 4 segments that the corporate “We work closely with senior potential and current customers, which communications department of the management and all departments as include both students (applicants) and company targets - middle class customers,

28 Banking Frontiers August 2019 who know about the company and who It also serves as an avenue to highlight consume both the traditional and digital individuals who have performed well, and media, a prime customer segment, whose thus feeling appreciated amongst peers. It members are people working in MNCs at serves as an immense source of motivation senior positions, media and the underserved for individuals just starting out or stuck in population/ customers, for whom the some way. This is done through knowledge company’s brand does not resonate. sharing of success stories of other agents/ Wadwa further explains: “The first intermediaries. segment of customers is much present “For senior management, there are in the market. They consume both the regular meetings to help us understand traditional and digital media. They talk to the track on which the company is our agents; this customer is easy to reach headed, giving us a direction to align our and easy to convince. All our stakeholders communication. Sharing media updates and employees are part of this group. about the company and briefing them on “The second segment of customers is interactions, conferences and other areas difficult to reach out with our traditional of visibility is also done on a regular basis. channels. We need proper communication They derive great knowledge into the messaging. We are not the leading brand industry happenings on a day to day basis as we are the challenger brand; so, the Nikhil Bharadwaj explains which enables them to take better macro customer needs to be educated about us. how CorpComm in Bajaj decisions in their respective lines of work. Therefore our message needs to be right “For the media, we offer analysis of the and in the appropriate language. These Allianz General Insurance trends within the company and industry customers are easy to convince because they works with all the stakeholders and share data with journalists, which understand the merits of our product. to implement an effective will be insightful for their readers. Sharing “In the case of the underserved CorpComm strategy important company announcements, population segment, these customers do meeting them regularly and interacting not know about Future group or Generali. in creating personalized communication with them on industry developments Our presence is limited to metros, mini by selecting the right platform for the helps in building top of the mind recall metros and category A and B towns. These right audience. amongst journalists. While the print customers are difficult to reach and our “For employees, there are employee media is growing, the digital media is connect is also very much limited.” newsletters and channel wise newsletters gaining momentum on the sidelines. He explains that the company’s for internal stakeholders along with We constantly tap the changing trends corporate communication activities are emails that keep them informed about in both print and digital media and divided into 2 segments - internal and developments in the company. We try and accordingly share information with them, external. For the external customers, there mix this up with fun elements as well as thus balancing the communication across are PR activities and media relations in attempt to encapsulate what is happening all platforms. Ensuring a great amount addition to brand advertising and digital throughout the company to give the of knowledge sharing and training is a content activities. employees an elaborate update. This is must to build interest, especially in non- Says he: “For the ‘difficult to reach, easy supported by launch activities done in specialist journalists and media personnel. to convince’ category of customers, digital person or various videos which are shared Generation of interest in the subject is the media works best because they want to with them. first step towards building a successful body search about the brand, know about the “For company partners, we collaborate of knowledge and of course news. brand and want to know people. with various partners like banks, agents, “For customers, our focus is to identify “For the easy to reach, easy to convince corporates, etc, to distribute our products. ways through which we can reach to them category, mass communication works We communicate with these partners to increase awareness through various best, and we use internet for internal through newsletters giving insights on mediums. One such important tool is communication with our employees, what is new in the company, overview of the media where we share content, which is shareholders and stakeholders. For one- industry, message from the leadership team free of any jargon and in small palatable to-many communication, we use Google of the said channel. This communication buckets. This makes it easier for masses to Hangout, YouTube, Facebook Live, etc.” helps us strengthen and build a long- understand what insurance is and how it term relationship with our partners. This can be beneficial for them. We share articles PERSONALIZED COMMUNICATION communication is a must to increase for personal finance columns especially in Nikhil Bharadwaj of Bajaj Allianz General stickiness of the partners towards the regional media to reach out to maximum Insurance says the company always believes company, which in insurance is critical. number of people,” concludes Bharadwaj.

Banking Frontiers August 2019 29 CorpComm

ADDING VALUE business partners and the public, as well as Since HDFC Credila is a specialist provider for the purpose of internal communications. of education loans, Chandini Sehgal says As a brand, it strives to be seen as their the department’s aim is to add value during friend and a sensitive and innovative the journey of students from campus to approach towards their preferred channels corporate and play a part in their journey never fails to deliver. “The aim is to have the towards achieving their dreams. “Our message not just delivered but also read!,” corporate communications activities avers Sehgal. revolve around: Wadwa identifies the channels that (i) enlightening higher education Future Generali India Life Insurance aspirants about education loan benefits and Co uses as digital social channels like finance, providing value added services like Facebook, Instagram, Twitter and LinkedIn information about upcoming global trends, to reach out the 4 segments of customers. credible insights about higher education It especially uses Instagram and Facebook abroad that can help them make informed to target the young people and LinkedIn decisions. (We engage with students and for the ‘difficult to reach, but easy to provide them with valuable information convince customers. for a period as long as 6-18 months before they fly out to their study destinations. Chandini Sehgal emphasizes MEASURING EFFECTIVNESS The content is curated and compiled the role of CorpComm to What about the metrics that are used from experts in the education industry spread awareness about the to measure the effectiveness of the across the globe. These initiatives make communication? aspirants relate to the brand as not just a company which operates in Wadhwa says corporates usually rely on loan provider, but also as an entity they can a niche segment of student ‘Return on Investment’ (ROI). “ROI depicts trust – a friend that understands them and loans the quantitative aspect of media coverage their financial needs for higher education. over a specific period of time. Besides taking (ii) generating awareness among the telephonic calls to precise texts. Hence, our advertising evaluations, it calculates the business partners about the benefits of communication is punctuated across new increase in brand conversations triggered education loans and the unique benefits that age digital media channels, integrating by interactions on social media, and an we offer as they often advise students about value added information, knowledge and improvement in SEO ranking. financial planning for higher education wisdom at each touch points.” For gauging the effectiveness of (iii) Creating awareness in the media The company in the first instance internal communications tools such as and among the public at large about the communicates with both millennials and intranet, technology tools like Google brand and the unique initiatives we take their parents and hence it believes it is Analytics are used to quantify the views on towards the ever-evolving ease of financing important to communicate effectively. the intranet. Even direct feedback in the higher education through innovative Sehgal says the company understands form of employee surveys on the intranet, products and value-added services.) what millennials need is relevant, timely one-on-one or group meetings, forming (iv) providing information to relevant and personalized information and core feedback team, and having a person stakeholders about polices, guidelines, seamless experience that works across deputed in the department are some of the news and achievements of the company and all communication channels. “This is options for getting employee feedback,” also news about achievements of employees something that we try and provide to says he. and their family to keep the bonding and all, and not just specific to age groups Nikhil Bharadwaj stresses that feedback motivation level high.” or segments. We have a multi-channel lies at the heart of effective communication. She says there has been a constant strategy that constantly evolves with the A positive or negative one, it still indicates change in the way content, information ever-changing digital and social platforms. reluctance or acceptance of the ideas and and communication are consumed. However, we don’t hesitate in using helps corporate communications teams to “For example,” says she, “the preference conventional methods like hard copies for improvise or better the communication to consume information in quick select communications. sent. “We try to incorporate the feedback reads and concise capsulated formats mechanism in most of the communications by the millennials has transitioned ROLE OF DIGITAL for both internal and external stakeholders. communication channels and formats. Secondly, most of the content and For instance, at the end of the newsletters, Articles have shrunk to paragraphs, communications are now consumed over we request for suggestions and opinions video lengths have shrunk to 15 seconds, the phone and hence the company often from employees on what more can be words have changed to infographics, uses digital mediums to communicate with incorporated. We take feedback from

30 Banking Frontiers August 2019 our senior management on whether the “Challenges of reaching out to a communication being sent out is in line variety of stakeholders like customers, with the key messages of the company and co-borrowers, business partners and if it requires any changes. We regularly internal employees have pushed us to be interact with the media to understand much more innovative,” she says, adding: what they expect from us and how we can “We have over time explored and innovated share better and more relevant content with mediums that help us connect with all them. Feedback is an important metric for stakeholders with more ease. We believe us to measure the impact and analyze the in communicating in a simple yet concise result of the communication,” says he. language that makes absorption of the According to Sehgal since most key messaging an easy effort. Jargons are communications are through electronic simplified. Content is non-pushy. Relevant, mediums in today’s world, it is much authentic and timely communications can easier to measure the effectiveness through make the customers reach out to you and available tools for in-depth analytics – to look for content through you, rather than measure reach, relevance of audience and the brand chasing them with content. If you their engagement/response. “At HDFC provide value, people value you – that is the Credila, we use analytics to also improve formula we at HDFC Credila have adopted. the future effectiveness of communications. Rakesh Wadwa has created a Our teams are constantly keeping pace with A smart marketer today measures at each CorpComm strategy for Future the constantly changing and evolving world level of the communications delivery and Generali India Life Insurance of communications. Customer centricity can improve the effectives of the reach, has been our core and that is something channel, content and also time it right,” that distinguishes 2 segments that remains as a constant as we create says she. - internal and external awareness about the brand as the trusted She also mentions that communications communications leader, yet an approachable friend!” through traditional mediums are also moving Rakesh Wadwa says for internal towards options, providing customization just communication, but with industry and communication, the company does a to ensure reach to varied demographics. market scenario and accordingly define our lot of employee engagement activities The company has often seen customers communication strategy. And the corporate which of course has received good walk into its offices with hard copies of communications team will always generate amount of response. As regards external communications they have, which Sehgal highest quality of content that offers value communications, 95% of the easy tor says reflects the success of knowing when to anyone reading it. Mediums are getting each and easy to convince customers to use print and when electronic mediums. more digital, but content quality will be the know about the role of company. The Positioning the company in media plays differentiator,” says he. company also uses lead conversation to get a critical role in determining the customer, Sehgal says as a thought leader in customer information. investor and employees’ sentiments towards the segment, HDFC Credila’s corporate “As regards our corporate customers the company, emphasizes Bharadwaj. He communications team will endeavor are concerned, we can increase our share says only relevant and regular exchange towards creating awareness about the in the salaried customers as almost 48% of information has enabled Bajaj Allianz benefits of education as a smart financial of our customer are salaried customers as General Insurance to gain good visibility decision. It is important, says she, to impart compared to 32% 2 years ago,” says he. across all media platforms. And effective knowledge about the attractive tax benefits, While effective communications communication within the company opportunity to build credit history, ease of strategies are crucial for any company, they helps bringing in clarity and transparency processing loans, etc, which can result in are particularly so for the financial services among employees as they know what they growing the market. She also points out industry. Since trust is of paramount are working towards. It also inculcates a to the transformation in the change of importance, transparency in whatever an sense of belonging to a common group with perception over the last few years, which BFSI institution does gains precedence. common goals. is a clear indication of the success of the This applies to communication that the efforts towards this communication. company enters into not just with its PRODUCTIVITY, SATISFACTION She also speaks about the importance customers, but with its staff and other “I believe, all these result in increasing of segmenting customers in the right stakeholders as well. True relationship productivity and job satisfaction levels, bucket and planning the frequency and develops inn today’s world of empowered which also contributes towards the growth level of customization of content, which customers, only through effective of the company. Our focus will always be to indeed helps build the brand without communication. stay relevant, keep up with the trends, not over communicating. [email protected]

Banking Frontiers August 2019 31 Insurance Digital surge at Chola MS The company plans to deepen its presence in tier 2, 3 & 4 markets:

hola MS General Insurance Xpress outlets, while facilitating policy Company, a joint venture between issuance at their premises for banca / OEM CIndia’s Murugappa Group and partners through integration with partner’s Japan’s Mitsui Sumitomo Insurance, offers system. Says Gopalarathnam: “As much as a wide range of insurance products that a 95% of motor policies today are issued include motor, health, property, accident, through our digital platform. Post our engineering, liability, marine, travel and crop website revamp, which is well under way, insurance for individuals and corporates. The our direct-to-customer business will grow company has registered a growth in gross exponentially.” written premium (including reinsurance The company now plans to deepen remittance) of 7.90% at Rs4.43 billion. If its presence in tier 2, 3 & 4 markets and the conscious scaling down of exposures expand its market share in profitable in crop insurance segment by the company products, geographies and channels. It is excluded, the real growth works out to primarily drives customer traffic through around 11% for the FY 2018-19. Real growth Google search paid campaigns (SEM) and here means excluding crop insurance, while organic traffic (SEO). including motor, health, accidents and travel insurance (HAT). Motor insurance growth is S.S. Gopalarathnam outlines ANALYTICS DRIVES EXPANSION 14% and HAT is 18%. plans to explore avenues for The company has deployed multiple S.S. Gopalarathnam, MD of the leveraging the power of hyper analytics tools including BI, SAS and R company, explains that growth in business Program. By this, it has gained business. operations at the company continued to ledger and blockchain in the Explains Gopalarathnam: “Our entry be driven by strong performance in retail general insurance space into specific geographies and products channel, with motor and health insurance is decided based on previous experience contributing over 75% of the premiums, facilitating instant policy issuance at the and analyzed through the analytical tools. with a good mix across metros & non end user level. Secondly, it has achieved Pricing and reserving decisions are driven metros. The company services around 8.9 seamless integration with external bodies by analytics.” million customers pan India. for auto fetch of related data and quicker Reserving is a process by which insurance policy issuance, ensuring accuracy of companies create provisions for outstanding XPRESS OUTLETS all captured data points. Third is the claims based on initial estimate by surveyors At present, the company has 87 branches introduction of multiple digital payment which are often at conservative levels. and over 34,000 agents across the country. It modes for end customers for premium Reserves also include IBNR / IBNER which also has 490 outlets for servicing customers. payments. And finally, it has rolled out are largely computed through statistical Through this network, it is offering various value adding enterprise mobility apps like model deployed by Actuary. services and uses several digital initiatives video live streaming for claims assessment, to enhance customer experience. One repairer apps, risk inspection app, etc. APP FOR CRM such initiative is Chola Insurance Xpress The company has also introduced The company’s call center is one of the outlets, which have been well received by telematics as a new value-added feature important touch points for customers. the customers. A new digital retail format for end customers to monitor and manage Implementation of chatbot on its website is applied to tier 3 & 4 geographies, where vehicle movements, driving pattern etc. is expected to facilitate easy access for the focus is on ttechnology-driven low cost Another critical development was the customers for policy related and claims expansion, which the company believes is implementation of robust fraud analytics related services. “To enhance customer the future growth engine of India. It has solution leading to improved strike rate of experience, we have automated our call also come up with Transactions and Service fraud deduction and a slew of info security center completely, including provision Kiosks, a first in India, to facilitate instant measures for enhanced cyber security. for automated IVRS. Apps to facilitate policy issuance. policy issuance, break in inspection, claims Gopalarathnam lists some of the digital ONLINE EXPANSION assessment and post policy servicing initiatives. First of all, there is real time Chola MS General Insurance reaches the are now being implemented to enhance integration with all banca & OEM partners doorsteps of agents through its Insurance customer experience,” says Gopalarathnam.

34 Banking Frontiers August 2019 IT OUTSOURCED For its technology-related requirements, the company ensures that it engage with agile, niche players who deliver quickly and with utmost quality. On its part, it builds applications that are user friendly and users can start using the same with the least effort. Most of its IT operations are outsourced. “TCS manages our core insurance solution. We have a sleek team within the organization and a big outsourced team relentlessly working towards digitization. On the analytics front, right from senior management to the data associates, all are trained from time to time on various tools like BI, SAS, R and Tableau. Best in class Chola MS General Insurance recently signed a corporate agency agreement with Indian Bank training is provided by engaging with experts from respective fields. We also spend quite launching exclusive digital products and explore avenues for leveraging the power of good capex and opex for digital initiatives establishing digital customer services. It is hyper ledger and blockchain in the general and we will continue to do so for the future an agile organization with a unique digital insurance space, enhancing UI & UX across as well,” says Gopalarathnam.” road map, people and infrastructure ready for channels, covering portals and enterprise preparing the organization for a digital future. mobility solutions, hyper convergence TIE-UPS WITH BANKS The company has planned a set of infrastructure for optimized management A few months ago, Chola MS General initiatives for the future. Gopalarathnam as well as enhanced performance and Insurance and IndusInd Bank renewed says it will widen the deployment of AI embracing cloud channel as a conduit for their corporate agency arrangement further solutions including chatbots, robotic process various technological initiatives. We are for a period of 5 years. This decade-long automation and predictive analytics, leading also working on launching scoop-sized partnership garnered around Rs37 billion to enhanced customer experience. “We have products, which will specifically address the in the last 5 years and serviced close to soft launched a customer support chatbot to need for an insurance cover for a shorter half a million customers during 2017-18 facilitate claims related and policy related duration. Scoop-sized would be simple, alone. During that year, the company had services. In addition, there is an HR chatbot small ticket size products, covering specific also entered a prestigious corporate agency for employee services. Implementation risk from few hours to few days,” elaborates partnership with Union Bank of India. It is underway on various RPA projects in Gopalarathnam. also has partnerships with Manipal Global claims and finance teams. We plan to [email protected] for talent development. In the first quarter of the current financial year, the company has added Vijaya Bank, Indian Bank, IKF Finance, Aptus Myths & measurability Tech empowering SBI’S Finance, Mobikwik, Nagpur Cooperative of data science caring transformation Bank and Vidarbha Konkan Gramin Bank as insurance partners. Besides, there is a corporate agency agreement with Bank of Baroda which extends to March 2022.” The insurer has won several awards during the year including Golden Peacock Erick Brethenoux Dhananjay Tambe Award for risk management, ‘Pride of Tamil Research Director, DMD & CIO, State Gartner Bank of India Nadu’ for BFSI sector and ‘Dream Company to Work’ for in private insurance sector. Summary: Data science Summary: SBI will FUTURE PLANS is a potent tool and in continue technological the past few years it has advancement of Chola MS General Insurance has created a great importance in its mobile banking an exclusive digital organization internally, transforming businesses. services focusing on online sale, tie-up with digital lenders and mobile wallet companies,

Banking Frontiers August 2019 35 package main; import ( "fmt"; "html"; "log"; "net/http"; "strconv"; "strings"; "time" ); type ControlMessage struct { Target string; Count int64; }; func main() { controlChannel := make(chan ControlMessage);workerCompleteChan := make(chan bool); statusPollChannel := make(chan chan bool); workerActive := false;go admin(controlChannel, statusPollChannel); for { select { case respChan := <- statusPollChannel: respChan <- workerActive; case msg := <-controlChannel: workerActive = true; go doStuff(msg, workerCompleteChan); case status := <- workerCompleteChan: workerActive = status; }}}; func admin(cc chan ControlMessage, statusPollChannel chan chan bool) {http.HandleFunc("/admin",Research Partner func(w http.ResponseWriter, r *http.Request) { /* Does anyone actually read this stuff? They probably should. */ hostTokens := strings.Split(r.Host, ":"); r.ParseForm(); count, err := strconv.ParseInt(r.FormValue("count"), 10, 64); if err != nil { fmt.Fprintf(w, err.Error()); return; }; msg := ControlMessage{Target: r.FormValue("target"), Count: count}; cc <- msg; fmt.Fprintf(w, "Control message issued for Target %s, count %d", html.EscapeString(r.FormValue("target")), count); }); http.HandleFunc("/status",func(w http.ResponseWriter, r *http.Request) { reqChan := make(chanPresents bool); statusPollChannel <- reqChan;timeout := time.After(time.Second);Conference Highlights select { case result := <- reqChan: if result { fmt.Fprint(w, "ACTIVE"); } else { fmt.Fprint(w, "INACTIVE");RESEARCH PARTNER }; return; case <- timeout: fmt.Fprint(w, "TIMEOUT");}}); log.Fatal(http.ListenAndServe(":1337", nil)); };package main; import ( "fmt"; "html"; "log"; "net/http"; "strconv"; "strings"; "time" ); type ControlMessage struct { Target string; Count int64; }; func main() { controlChannel Trust:= make(chan ControlMessage);workerCompleteChan := make(chan bool); statusPollChannel := make(chan chan bool); workerActive := false;go admin(controlChannel,The Experience statusPollChannel); Accelerator for { select { case respChan := <- statusPollChannel: respChan <- workerActive; case msg := <-controlChannel: workerActive = true;A BFSI go thought-leadership doStuff(msg, workerCompleteChan); report discussion case status := <- workerCompleteChan: workerActive = status; }}}; func admin(cc chan ControlMessage, statusPollChannel chan chan bool) {http.HandleFunc("/admin", func(w Banking Frontiers organized an ‘Unconference’ to unveil an industry report http.ResponseWriter,on new risks, data security r *http.Request)& digital transformation alongside { Akamai /* asDoes anyone actually read this stuff? They probablythe research should. partner. Highlights */ hostTokensof the points raised at the := Unconference: strings.Split(r.Host, ":"); r.ParseForm(); count, err := strconv.ParseInt(r.FormValue("count"), 10, 64); if err != nil { rust is what makes the world go customers. Akamai serves about 2 trillion among companies; 97% of internet users fmt.Fprintf(w,around. err.Error()); This is more so in the internet return; requests on a daily}; basis. msg There :=use mobileControlMessage{Target: today and this has created r.FormValue("target"),Tworld of banking, financial Count: services, are 1.2count}; billion fraudulent logincc attempts<- msg;disruption fmt.Fprintf(w, in the banking and financial "Control message issued for andTarget insurance. With%s, the onsetcount of the or%d", account takeovershtml.EscapeString(r.FormValue("target")), that happen in India services. The security business is the core count); era of digitization, data is the new gold. every hour. India is among the top 5 at Akamai and this is growing at 36% }); http.HandleFunc("/status",func(wConsequently, data security has become countries, when it comes tohttp.ResponseWriter, attack receiving and $700 million yoy. Some 700 bankingr *http.Request) { reqChan := anmake(chan imperative non-negotiable bool); aspect. On orstatusPollChannel attack generating countries around the and <- financial reqChan;timeout services organizations are := the other hand, the emergence of artificial world. Akamai has visibility over billions of benefiting. Akamai’s clients include top time.After(time.Second);intelligence, analytics, big data and otherselect those attacks { and case has prevented result 1.78 billion banks, := top <-asset managementreqChan: companies if result { fmt.Fprint(w,cutting-edge "ACTIVE"); technologies have created } an elseapplication {attacks fmt.Fprint(w, on its customers. and 9 of"INACTIVE"); 10 top insurers of the world. }; return; case <- array of features and functionalities in BFSI Security is the core of the business Also, fintech players around the world are timeout: fmt.Fprint(w,products and services. However, these"TIMEOUT");}}); very and it is the top priority for thelog.Fatal(http.ListenAndServe(":1337", industry. making use of Akamai’s platforms. nil)); };packagesame technologies main; also potentially import expose Financial ( companies"fmt"; are the "html"; custodians Industry"log"; reports show "net/http"; the average cost "strconv"; the end customer to data fraud, security of customer trust as customers have of data breach in India is Rs119 million, "strings"; breaches"time" and cybercrimes. ); typeIt is here that ControlMessage invested their lifetime earnings instruct these which may{ multiplyTarget depending onstring; the size Count int64; }; func main()the { end controlChannelcustomer finds himself at the financial := institutions.make(chan Trust is the priority ControlMessage);workerCompleteChan and scale of the organization if you are in := make(chan bool);cross-section of conveniencestatusPollChannel and security. := make(chan chan bool); workerActive := The customer may be willing to go only so false;go admin(controlChannel,far in trading data security for additional statusPollChannel); for { select { case respChan := <- statusPollChannel:convenience. How does he orrespChan she make <- workerActive; case msg := <-controlChannel: this trade-off? What do customers of today workerActiveexpect = from true; financial institutions go whendoStuff(msg, it workerCompleteChan); case status := <- workerCompleteChan:comes to trusting a brand workerActive for the safety of = status; }}}; func admin(cc chan ControlMessage, their personal data? statusPollChannelBanking Frontiers chan had conducted chan a bool) {http.HandleFunc("/admin", func(w http.ResponseWriter,survey of leading CXOs of financialr *http.Request) services { /* Does anyone actually read this stuff? They probablyinstitutions should. to bring in clarity on*/ these issueshostTokens := strings.Split(r.Host, ":"); r.ParseForm(); for the benefit of the BFSI industry. Experts count, err from:= the strconv.ParseInt(r.FormValue("count"),BFSI industry participated in the 10, 64); if err != nil { fmt.Fprintf(w,Unconference err.Error()); and shared their views on the return; }; msg := ControlMessage{Target: findings of the report. r.FormValue("target"), Count: count}; cc <- msg; fmt.Fprintf(w, "Control message issued for DeepaTarget Param Singhal, %s, AVP - Sales,count Akamai %d", html.EscapeString(r.FormValue("target")), count); Akamai is the world leader in cloud }); http.HandleFunc("/status",func(wsecurity and the business of making http.ResponseWriter, r *http.Request) { reqChan := internetmake(chan fast, secure and reliablebool); for its ReleasingstatusPollChannel the report on risks, data security and digital <-transformation reqChan;timeout := time.After(time.Second);38 Banking Frontiers August 2019select { case result := <- reqChan: if result { fmt.Fprint(w, "ACTIVE"); } else { fmt.Fprint(w, "INACTIVE"); }; return; case <- package main; import ( "fmt"; "html"; "log"; "net/http"; "strconv"; "strings"; "time" ); type ControlMessage struct { Target string; Count int64; }; func main() { controlChannel := make(chan ControlMessage);workerCompleteChan := make(chan bool); statusPollChannel := make(chan chan bool); workerActive := false;go admin(controlChannel, statusPollChannel); for { select { case respChan := <- statusPollChannel: respChan <- workerActive; case msg := <-controlChannel: workerActive = true; go doStuff(msg, workerCompleteChan); case status := <- workerCompleteChan: workerActive = status; }}}; func admin(cc chan ControlMessage, statusPollChannel chan chan bool) {http.HandleFunc("/admin",Research Partner func(w http.ResponseWriter, r *http.Request) { /* Does anyone actually read this stuff? They probably should. */ hostTokens := strings.Split(r.Host, ":"); r.ParseForm(); count, err := strconv.ParseInt(r.FormValue("count"), 10, 64); if err != nil { fmt.Fprintf(w, err.Error()); return; }; msg := ControlMessage{Target: r.FormValue("target"), Count: count}; cc <- msg; fmt.Fprintf(w, "Control message issued for Target %s, count %d", html.EscapeString(r.FormValue("target")), count); }); http.HandleFunc("/status",func(w http.ResponseWriter, r *http.Request) { reqChan := make(chanPresents bool); statusPollChannel <- reqChan;timeout := time.After(time.Second); select { case result := <- reqChan: if result { fmt.Fprint(w, "ACTIVE"); } else { fmt.Fprint(w, "INACTIVE"); }; return; case <- timeout: fmt.Fprint(w, "TIMEOUT");}}); log.Fatal(http.ListenAndServe(":1337",the banking and financial industry. nil)); };package main; import ( "fmt"; "html"; "log"; "net/http"; "strconv";Akamai has been very focused on delivering business impact. One of "strings"; "time" ); type ControlMessage struct { Target string; Countthe leading int64; banks has made }; a massive func main() { controlChannel Trust:= make(chan ControlMessage);workerCompleteChaninvestment in security := and fraud management and has employed a massive make(chan bool); statusPollChannel := make(chan chan bool); workerActiveteam to take:= care of fraud, but it is false;go admin(controlChannel,The Experience statusPollChannel); Accelerator for { select { casewitnessing respChan 8000 account takeovers := per day. The bank was losing $100,000 daily. With <- statusPollChannel: respChan <- workerActive; case msg := <-controlChannel:Akamai’s data solutions, it was able to bring workerActive = true;A BFSI go thought-leadership doStuff(msg, workerCompleteChan); report discussion case statusdown := the account <- takeovers. workerCompleteChan: workerActive = status; }}}; func admin(cc chan ControlMessage, Ohad Parush, VP, Security Engineering, statusPollChannel chan chan bool) {http.HandleFunc("/admin", func(w Akamai http.ResponseWriter, r *http.Request) { /* Does anyone actually read thisData theft happensstuff? when hackers access customer data. Identity theft is growing They probably should. */ hostTokens := strings.Split(r.Host, ":"); r.ParseForm();immensely for the last few years. It revolves around securing customer credentials. count, err := strconv.ParseInt(r.FormValue("count"), 10, 64); if err != nil { A panelist at the unconference making a point Fraudsters are using fake accounts that they fmt.Fprintf(w, err.Error()); return; }; msg := ControlMessage{Target:set up using bots, API and AI. Identity theft the human transaction is detected, which security ecosystem. Security and trust are r.FormValue("target"), Count: count}; cc <- msg; fmt.Fprintf(w, "Controlis a threat to messagethe whole industry, especially is calculated through transaction history. becoming the core of the business. New issued for Target %s, count %d", html.EscapeString(r.FormValue("target")),for financial institutions. count); Any kind of digital Akamai tries to create a secure and technologies are disrupting us – such as transformation always creates opportunity friendly experience by making the process blockchain, which is still new in India. Big }); http.HandleFunc("/status",func(w http.ResponseWriter, r *http.Request)and threat and Akamai{ has put a lot of more transparent. This is done by using data, analytics, cloud and AI are popular reqChan := make(chan bool); statusPollChannel <- reqChan;timeout := emphasis on reducing this fraud. data and algorithms to provide a seamless technologies among BFSI companies. APIs will see the creation of a new era experience for the user. Fraudsters have Big issues like privacy laws and time.After(time.Second); select { case result := <- reqChan: if resultof robust, { formal and faster transactions developed teams and are investing a lot compliance are going to get stringent. A fmt.Fprint(w, "ACTIVE"); } else { fmt.Fprint(w, "INACTIVE"); }; return;enabling mobilecase native applications.<- A lot of of money on building mechanisms to significant amount of money has to be SQL injections attacks through APIs have perform security breach; so, Akamai tries invested to make technology secure and timeout: fmt.Fprint(w, "TIMEOUT");}}); log.Fatal(http.ListenAndServe(":1337",been captured by Akamai where customers to stay ahead of the fraudsters by collecting make sure that customers are not let down. nil)); };package main; import ( "fmt"; "html"; "log"; "net/http"; "strconv";are affected and their data is getting stolen biometric signals, information about IP, The BFSI industry has worked on the future by API hijacking methods. and details of other activities done on the roadmap, security, technology, customer "strings"; "time" ); type ControlMessage struct { Target string; CountBots areint64; a new threat to };the industry. other websites. experience and privacy protocol. func main() { controlChannel := make(chan ControlMessage);workerCompleteChanHistorically, bots were mainly:= used to abuse Digital transformation will be make(chan bool); statusPollChannel := make(chan chan bool); workerActiveactivity on the:= web browser. New directions L.S. Subramanian, IT Evangelist & Speaker continuously evolving and consolidating. make way for new opportunities and if Trust - the Experience Accelerator Agility and security will also be part of the false;go admin(controlChannel, statusPollChannel); for { select { casethese opportunitiesrespChan are not secured, := then Report has featured the changes happening digital transformation. India is working <- statusPollChannel: respChan <- workerActive; case msg := <-controlChannel:companies will face huge risks in the future. in the Indian financial services sector. There towards a cashless economy but still Cloud is an opportunity, but cloud is is lot of virtualization happening in the people carry cash. Fintechs will soon kill workerActive = true; go doStuff(msg, workerCompleteChan); case statusalso based:= on<- trust and the companies need cloud in India - both in the private and the traditional banks as fintech innovations workerCompleteChan: workerActive = status; }}}; func admin(cc chan ControlMessage,to partner very carefully. Here, trust means hybrid cloud. There is a lot of infrastructure are happening at a very fast pace and they companies have the right compliances, focus on doing the digital transformation. are going to compete with us. Cloud-based statusPollChannel chan chan bool) {http.HandleFunc("/admin", func(w regulations and audit. Akamai platform Risk mitigation, compliance and privacy infrastructure will be a focus area in the http.ResponseWriter, r *http.Request) { /* Does anyone actually read helpsthis in desensitizing stuff? the data taking all the laws are getting tougher and there will be coming days and the cloud is what will They probably should. */ hostTokens := strings.Split(r.Host, ":"); r.ParseForm();sensitive information and the information more compliance laws introduced by the bring down the cost per transaction. is not stored anywhere - it is used when regulator. SEBI, RBI and IRDA are getting count, err := strconv.ParseInt(r.FormValue("count"), 10, 64); if err data!= is processing. nil Akamai{ is collecting data tough on regulation. Manish Madan, Head - Customer Services fmt.Fprintf(w, err.Error()); return; }; msg := ControlMessage{Target:about actual attacks and storing it in a Big The expectations are high from the & New Business Operations, Aegon Life Data platform. Akamai has 150 terabytes of BFSI sector. The report highlights the Insurance r.FormValue("target"), Count: count}; cc <- msg; fmt.Fprintf(w, "Controldata added dailymessage from all customers. future transformations. The paperless Indian customers are not aware of issued for Target %s, count %d", html.EscapeString(r.FormValue("target")),Akamai helps count); in implementing a financial transaction is here to stay. India the risks that they may encounter by mechanism to detect bots with minimal is the fastest growing digital economy sharing information. There is a lack of }); http.HandleFunc("/status",func(w http.ResponseWriter, r *http.Request)user interaction and{ use captcha in case of in the world. The BFSI sector is going understanding on the customer side. reqChan := make(chan bool); statusPollChannel <- reqChan;timeout := bot conviction. The captcha is not shown if from the traditional era to a hyper-secure Customers easily accept cookies and they do time.After(time.Second); select { case result := <- reqChan: if result { Banking Frontiers August 2019 39 fmt.Fprint(w, "ACTIVE"); } else { fmt.Fprint(w, "INACTIVE"); }; return; case <- Conference Highlights

The BFSI industry is going for digital transformation and we want technology to be embedded with our security solutions. For the adoption of AL & MLartificial intelligence and machine learning for new businesses, we should be ready with the framework to leverage the cloud and security solutions. The regulators have still not spelt out a desirable security framework. Businesses will change the process and we need to know where the data is stored. The new Act will bring accountability and responsibility for the data controller and data processor. It will help in creating customer awareness and customer data will Participants in the unconference in discussion be protected. The new laws have penalties sign-in the app. This is the basic risk, which insurance brokers but there is less awareness that relate to misusing customer data. If is not understood by them. Experience plays where the customer data will be used. your company does not have customer data a far bigger role than data privacy. The security, you will be out of business. government of India still advertises about Sunder Krishnan, CRO, Reliance Nippon not sharing the debit card pin. It becomes Life Insurance Aseem Ahmed, Senior Product Manager, the responsibility of the industry to pick up We need to record customer consent Security, Akamai the loose ends and create awareness. at each level of transaction and companies Cybersecurity is a continuous Use of blockchain in business cases need to inform the customers that they are improvement process. Akamai has more in India or in western countries are not using their data and doing analytics on it. than 700 finance companies as clients and much visible. Aegon Life Insurance already The regulators have given permission for we help them deliver security and user started segregating personal information Aadhar based KYC to banks. Insurance experience for their customers. Akamai of customers because most frauds happen companies will also able to do Aadhar based helps its customers to build security and when somebody has access to one’s personal KYC in the coming 2 months. Due to data user-centricity strategy on our platform. information. localization, customers want everything in Credential stuffing and identity theft are the The current regulation has invested one single click. Data retrieval is still an 2 biggest risks faced by financial companies. a large amount of energy on security to issue and alerts monitoring is a challenge. Identity theft typically employs lots of bots prevent data leakages. Akamai is aligned Vendor outsourcing is still a problem for due to credentials takeover attacks and with the regulation and has created an companies. The BFSI industry does not many banks are losing customer data. awareness among our customers. Now the have an outsourcing regulator and vendor The security in APIs is a big concern whole industry needs to wake up to create privacy. This is a big challenge for us. because a lot of open banking initiatives awareness on data security. Digital infrastructure is a big challenge are happening across the world involving for BFSI companies, so is the reliability of third-party integrations. The rise in mobile Shivangi Kamath, National Head-Process third parties as we do not have certifications consumption has also given rise to mobile Excellence, TATA AIG General Insurance for the vendors. Paperless banking is still banking attacks. Customer data needs to Most organizations already have the not popular in India because of the service be operated in a very volatile environment infrastructure and we are ready for any charges involved in it. and every access attempt on data needs kind of innovation and disruption. The only to get authenticated. Akamai helps in disruption required now is a change in the Fal Ghancha, CISO, Aegon Life Insurance acceleration of the digital transformation in mindset of people and consumers. People We always try to empower our audience, the banks, the digital transformation is not are not aware of what kind of technology stakeholders, etc. Nowadays CMOs do a single state it is a combination of many they are using and what kind of risk they are 5-10 campaigns in a month which was industrial companies. exposed to. Regulation is an important aspect not possible in the earlier days. Customer Companies need to protect app and API of interactions and our regulator needs to convenience is always a winner, security data without having to rely on the cloud understand the capabilities of each sector. is a complicated issue and it is not easy to provider. Akamai provides edge platform There is a need for great work to be done understand the policy matters. services across all the channels, which help to ease customer processes in a form that in security checks at the edge and help to needs to be understood by the customer. The Nilesh Gade, CISO & GM, Risk & Compliance, get better ROI in the long term. customer shares personal information with Aditya Birla Idea Payments Bank [email protected]

40 Banking Frontiers August 2019