Break­through in­no­va­tions trans­form BFSI com­pa­nies

New tech­nolo­gies like aug­mented re­al­ity, chat­bots, blockchain, etc, are ac­cel­er­at­ing the pace of in­no­va­tions in In­dia’s BFSI sec­tor

Banking Frontiers - - News - ravi@glo­cal­in­fo­

Strat­egy king Michael Porter de­fines in­no­va­tion as the cen­tral is­sue in eco­nomic pros­per­ity. Ac­cord­ing to him, in­no­va­tion is the key for eco­nomic pros­per­ity and for the growth of com­pa­nies. The BFSI in­dus­try in In­dia has taken his ad­vice to the heart and is con­tin­u­ally work­ing on in­no­va­tive ideas and en­gag­ing tech­nol­ogy tools in their prod­ucts and ser­vices. As it com­petes with tech gi­ants and star­tups, it seems to have tran­si­tioned from reg­u­lar in­no­va­tion to break­through in­no­va­tion. From be­ing pa­per­less to dig­i­tal au­then­ti­ca­tion of sys­tems to launch of e-branches, the BFSI in­dus­try is sim­pli­fy­ing things and en­rich­ing lives.


In 2015, In­dia was ranked 81st in Global In­no­va­tion In­dex which was im­proved to 66 in 2017, and fur­ther to 60 in 2017. This is pos­i­tive sign, but other coun­tries are ahead of the curve be­cause of higher in­vest­ments in in­no­va­tions, am­ple man­power in re­search and the cul­ture of ex­per­i­men­ta­tion in ed­u­ca­tional in­sti­tu­tions.

The in­no­va­tion drive by banks and in­surance com­pa­nies these days is built on a foun­da­tion of adopt­ing the lat­est tech­nol­ogy, pri­mar­ily aimed at pro­vid­ing bet­ter ser­vices to cus­tomers. Tech­nol­ogy upgra­da­tion also helps to cre­ate USPs as com­pared to com­peti­tors.

Dig­i­tal in­fra­struc­ture and rise in mo­bile con­nec­tiv­ity in the coun­try have of­fered the sec­tor an op­por­tu­nity to reach out to peo­ple in re­mote parts of the coun­try and of­fer them fi­nan­cial and in­surance so­lu­tions. There is a broad ac­cep­tance of dig­i­tal in­no­va­tions by the cus­tomer com­mu­nity. The rapidly chang­ing con­sumer be­hav­ior in turn has re­shaped the in­dus­try over the last 2 years.

Girish Nayak, chief of Op­er­a­tions and Tech­nol­ogy at ICICI Lom­bard Gen­eral In­surance Com­pany, com­pares break­through in­no­va­tions be­tween In­dia and other coun­tries: “Break­through in­no­va­tions in In­dia are more ap­pli­ca­tion fo­cused with the core tech­nol­ogy be­ing de­vel­oped else­where. There are far more core tech in­no­va­tions that are done over­seas. We also see some more unique / novel busi­ness model in­no­va­tions in other coun­tries. How­ever, of late with mo­bile in­ter­net catch­ing on, we are also see­ing sig­nif­i­cant amount of in­no­va­tion in this con­text in the In­dian space. This is specif­i­cally be­cause mo­bile is a unique space in In­dia given its pen­e­tra­tion in the hin­ter­lands and there­fore cus­tomer needs that are unique to In­dia, leading to do­mes­ti­cally driven in­no­va­tion mea­sures.”

Vi­jaya Nene, di­rec­tor - Op­er­a­tions & Ser­vices at PNB MetLife In­dia In­surance, gives in­sights on the use of tech­nol­ogy for in­no­va­tions: “AI is trans­form­ing the in­surance in­dus­try; how­ever, the in­te­gra­tion of the tech­nol­ogy re­mains a chal­lenge. The world has ob­served a sig­nif­i­cant in­crease in AI driven plat­forms as var­i­ous in­surance firms have de­vel­oped their own chat­bots to en­hance ef­fi­ciency and re­duce turn­around time. While cor­po­rates have adopted AI so­lu­tions, PNB MetLife has pi­o­neered the use of VR in the in­surance space. VR has tremen­dous po­ten­tial in a coun­try like In­dia, where con­sumers are re­cep­tive to­wards tech­no­log­i­cal in­no­va­tions.”

Both these com­ments show­case how In­dia is ris­ing the global in­no­va­tion in­dex.


Aad­haar based eKYC pro­vides pa­per­less so­lu­tions to the cus­tomers; it helps banks and in­surance com­pa­nies to un­der­stand the profile of the cus­tomers. eKYC also helps in en­hanc­ing the cus­tomer ex­pe­ri­ence with the sim­pli­fied pro­ce­dures.

With the ob­jec­tive of em­pow­er­ing its agents, ICICI Lom­bard has launched mo­bile app for health in­surance chan­nel part­ners. The app has the func­tion­al­ity of shar­ing in­stant quotes to cus­tomers through email, SMS and What­sApp. Agents can is­sue pa­per­less poli­cies us­ing Aad­haar based KYC and pro­vid­ing dig­i­tal pay­ment modes to their cus­tomers. It also of­fers a highly con­ve­nient 2-click mode for re­new­ing poli­cies. The com­pany has made sig­nif­i­cant in­vest­ments to pro­vide op­tions in the ar­eas of health cards, claims mon­i­tor­ing, up­load­ing claim re­lated doc­u­ments, hospi­tal net­work search, pre­pol­icy med­i­cal check-up sched­ul­ing, etc.

Ko­tak Mahin­dra Bank re­cently launched ‘811’ a full-ser­vice dig­i­tal bank­ing

ecosys­tem on the mo­bile that has been de­signed around the idea of sim­plic­ity, ease of use and ease of on­board­ing cus­tomers. Deepak Sharma, chief dig­i­tal of­fi­cer at Ko­tak Mahin­dra Bank, com­mented on this in­no­va­tion: “811 of­fers a zero-bal­ance sav­ings ac­count with zero charges for all dig­i­tal trans­ac­tions. It also pro­vides on­line bank ac­count open­ing with zero bal­ance us­ing Ko­tak mo­bile bank­ing app; it just re­quires 5 min­utes to open in­stant sav­ings ac­count with Aad­haar card de­tails. It is also bun­dled with a vir­tual debit card for shop­ping on­line and in­store pur­chase us­ing scan and pay.”

The bot­tom line is that Aad­har and eKYC have be­come bedrocks of in­no­va­tion and cus­tomer con­ve­nience that quickly and seam­lessly en­roll cus­tomers for wide va­ri­ety of fi­nan­cial ser­vices and ef­fec­tively give cus­tomers much greater choice.


Blockchain is a dig­i­tized, de­cen­tral­ized, pub­lic ledger of all cryp­tocur­rency trans­ac­tions. Many BFSI in­sti­tu­tions across the globe have adopted this break­through tech­nol­ogy for pro­vid­ing ef­fec­tive ser­vices to their cus­tomers. Ba­jaj Al­lianz Gen­eral In­surance uses blockchain tech­nol­ogy through Travel Ezee, a mo­bile app, cater­ing to over­seas travel pol­icy cus­tomers, where the com­pany proac­tively in­forms cus­tomers about their pay out eli­gi­bil­ity in case of an over­seas flight de­lay.

Travel Ezee uses blockchain tech­nol­ogy to proac­tively dis­burse travel in­surance claims re­lated to flight de­lays even be­fore the claim is re­ported. The com­pany has part­nered with a third-party travel ag­gre­ga­tor to get real time data on flight tim­ings for ev­ery city, ev­ery lo­ca­tion in the world. When there is a flight de­lay, the pas­sen­ger gets an SMS from Ba­jaj Al­lianz stat­ing that he or she is en­ti­tled to claim a cer­tain amount on ac­count of flight de­lay.

Sev­eral banks are do­ing pi­lots on ap­ply­ing blockchain tech­nol­ogy for sim­pli­fy­ing busi­ness ap­pli­ca­tions for trade fi­nance, etc.


Vir­tual as­sis­tant is an out­stand­ing in­no­va­tion in the ser­vice in­dus­try. A vir­tual as­sis­tant is avail­able 24x7 to help cus­tomers. While vir­tual as­sis­tants help com­pa­nies pro­vide on the spot ser­vices to cus­tomers, they also help econ­o­mize man­power re­quire­ments and train­ing.

ICICI Lom­bard’s MyRA (My Re­mote As­sis­tant) has re­placed hu­man agents to re­spond to cus­tomers on their queries and help in get­ting quotes and buy­ing poli­cies. This bot in­creased pro­duc­tiv­ity of the call cen­ter, sales and un­der­writer lev­els and saves cus­tomers time in in­ter­act with the in­surer for their needs.

PNB MetLife has gone one step fur­ther. It has in­tro­duced ‘conVRse’, a first-of-its-kind vir­tual re­al­ity (VR) based cus­tomer ser­vice plat­form. This in­no­va­tive prod­uct is aligned with the com­pany’s vi­sion to fur­ther strengthen its com­mit­ment to de­liver an en­hanced cus­tomer cen­tric ex­pe­ri­ence. The con­cept for conVRse orig­i­nated when the team from In­dia par­tic­i­pated in an in­no­va­tion chal­lenge to ad­dress the co­nun­drum ‘How does PNB MetLife en­hance cus­tomer ex­pe­ri­ence through a mo­bile de­vice?’ The team won the chal­lenge by cre­at­ing a pro­to­type and PNB MetLife de­cided to pilot the project to pro­vide cus­tomers with

out any hu­man in­ter­ven­tion. Cus­tomers sim­ply have to take a photo of the dam­age, get it as­sessed im­me­di­ately and ac­cord­ingly the claim will be paid out within 20 min­utes.

Sourabh Chat­ter­jee, pres­i­dent for Dig­i­tal & Tech­nol­ogy at Ba­jaj Al­lianz Gen­eral In­surance, ex­plains an­other in­no­va­tion: “DriveS­mart is In­dia’s first telem­at­ics based mo­tor in­surance ser­vice of­fer­ing. DriveS­mart as­sists cus­tomers by mon­i­tor­ing and giv­ing real time feed­backs on their driv­ing habits. DriveS­mart is not just a telem­at­ics of­fer­ing, it is an en­tire ecosys­tem re­lated to the car which of­fers safety, se­cu­rity and con­ve­nience to the cus­tomers and as­sists in sav­ing costs. The geo-fenc­ing fea­ture helps cus­tomers to keep a tab on their ve­hi­cle as and when they want.”

These ex­am­ples por­tray the di­ver­sity of in­no­va­tion in the mo­tor in­surance space.


The BFSI sec­tor is one of the early adopters of chat­bot tech­nol­ogy. Ba­jaj Al­lianz has launched BOING chat­bot plat­form for pro­vid­ing ef­fec­tive and quick ser­vice to its cus­tomers. Sourabh Chat­ter­jee re­veals the de­tails about the cus­tomer re­sponse and BOING chat­bot plat­form: “We have built a feed­back mech­a­nism with some of the ini­tia­tives which have been re­ceiv­ing a 65-70% re­sponse. All these in­no­va­tions have been met with cu­rios­ity from our cus­tomers, where we saw ini­tial eu­pho­ria about the in­no­va­tive ser­vice/prod­uct in­tro­duced and later a grad­ual ac­cep­tance. For in­stance, BOING chat­bot plat­form got a mod­er­ate hit ra­tio per month when it was launched; 4 months later, we are do­ing 6X the vol­ume. Cus­tomers want ease of reach, and we as a com­pany want en­gage­ment with cus­tomers; as long as these 2 mu­tual goals are be­ing met, ev­ery in­no­va­tion will be ac­cepted much eas­ily.”

ICICI Lom­bard has re­ceived en­cour­ag­ing re­sponse from its cus­tomers for the tech­no­log­i­cal so­lu­tions. The com­pany has over 1.3 lakh cus­tomers, of whom over 16,000 have ob­tained quotes for their ve­hi­cle in­surance pol­icy. Girish Nayak shares the de­tails about cus­tomer re­sponse re­ceived from the MyRA chat­bot ser­vice: “While we had ini­tially launched the chat­bot only for 2 wheel­ers, we have sub­se­quently in­tro­duced it even for 4-wheeler in­surance poli­cies, given the pos­i­tive cus­tomer feed­back. At the same time, we have in­tro­duced an email based quo­ta­tion for fire in­surance pur­chase. We have al­ready wit­nessed over 1000 poli­cies/ pro­pos­als be­ing gen­er­ated through this au­to­mated email based plat­form. With re­gard to the health app, 75% of the new poli­cies are be­ing is­sued through the app.”

He says as far as In­staSpect is con­cerned, the ini­tial re­sponse has been very en­cour­ag­ing and the com­pany is op­ti­mistic that the fea­ture will be availed by cus­tomers in large num­bers given the con­ve­nience it of­fers in terms of in­ti­mat­ing and get­ting a claim ap­proved in­stan­ta­neously.

To sum­ma­rize, chat­bots seem poised for dra­matic growth in cus­tomer ser­vice.


conVRse has been rolled out across 15 PNB MetLife branches in 10 cities, where ded­i­cated VR ex­pe­ri­ence zones have been set up. Cus­tomers are in­trigued, as well as im­pressed by the ex­pe­ri­ence of the vir­tual en­vi­ron­ment and they spent an av­er­age of 8 min­utes ex­plor­ing its var­i­ous func­tions. ‘Khushi’ ser­vices re­quests rang­ing from non-fi­nan­cial is­sues like nom­i­nee change and ad­dress change to fi­nan­cial re­quests like sur­ren­der and par­tial with­drawal of poli­cies.

Vi­jaya Nene speaks about a Net Pro­moter Score (NPS) study con­ducted by Nielsen: “Over 98% of the 7500+ cus­tomers ser­viced through conVRse voted their ex­pe­ri­ence as su­perla­tive. In ad­di­tion, a study on the ex­pe­ri­ence mea­sured the score as 22. A whop­ping 80% of the cus­tomers who were sur­veyed, had an im­proved per­cep­tion of PNB MetLife after the ex­pe­ri­ence on fac­tors rang­ing from trust, ease of do­ing busi­ness, trans­parency, as well as help­ing them ex­pand pos­si­bil­i­ties in life.”


In­no­va­tion by de­sign can be a chal­leng­ing process and in to­day’s dig­i­tal world and with chang­ing tech­nolo­gies, the chal­lenges have in­creased dras­ti­cally. Dig­i­tal tech­nolo­gies fun­da­men­tally change the cus­tomer ex­pe­ri­ence, the way in­dus­try works and how a com­pany or­ga­nizes the mech­a­nisms for these in­no­va­tions in­ter­nally. One of the most im­por­tant chal­lenge is to fi­nal­ize the cor­rect use cases that will give max­i­mum ben­e­fit both to the com­pany and to the cus­tomers. It is im­por­tant to iden­tify the right tech­ni­cal part­ner that matches with the thought process and pace of the com­pany. Lastly, there is a need for con­tin­u­ous feed­back and tun­ing of the so­lu­tion that cre­ates a wow ex­pe­ri­ence for the cus­tomers.

ICICI Lom­bard has been work­ing with star­tups us­ing com­pletely new plat­forms. In many cases, the use cases are ex­per­i­ments. For larger projects, how­ever, the com­pany prefers a more de­tailed project plan and re­view to avoid fu­ture is­sues. The smaller projects, given that they are op­er­ated as ex­per­i­ments, are put into im­ple­men­ta­tion quickly, re­work­ing things if re­quired and re­launch­ing. This clearly re­quires chang­ing the mind­set of in­ter­nal teams to work in this man­ner.

When it comes to tech­nol­ogy driven projects, it is im­por­tant to en­gage with mul­ti­ple part­ners who of­fer di­verse so­lu­tions to ad­dress a com­mon prob­lem state­ment, given that it is not cer­tain in the be­gin­ning on which so­lu­tion would work for the said project. One faces the sce­nario of mul­ti­ple de­ploy­ment of re­sources that can­not be avoided.

For PNB MetLife, find­ing the right part­ner for its vir­tual re­al­ity foray was a chal­lenge as there are very few tech­nol­ogy part­ners avail­able across the globe who could de­liver the re­quire­ments. “Be­sides, conVRse is a pi­o­neer­ing con­cept with thought lead­er­ship in uti­liz­ing the tech­nol­ogy for cus­tomer ser­vic­ing with no known used case. This cre­ated a chal­lenge in con­cep­tu­al­iz­ing and op­er­a­tional­iz­ing the in­no­va­tion. And as with any dig­i­tal in­no­va­tion, man­ag­ing change and in­creas­ing adop­tion in the ini­tial days was the big­gest chal­lenge”, ex­plains Vi­jaya Nene

Dig­i­tal so­lu­tions are not with­out risk. Deepak Sharma of Ko­tak Mahin­dra Bank says the bank an­a­lyzes the risk ma­trix of cus­tomers’ dig­i­tal trans­ac­tions. “We are fo­cus­ing on ef­fi­cient tech­nol­ogy to pro­vide risk free trans­ac­tions to our cus­tomers,” he adds.


For any in­no­va­tion, one of the most cru­cial aspect is time to mar­ket. So­lu­tion de­liv­er­ies typ­i­cally are made on an ag­ile frame­work where all de­vel­op­ment and op­er­a­tions stake­hold­ers con­trib­ute to de­liver so­lu­tions faster in the in­dus­try. Tech­nol­ogy is chang­ing the lives of peo­ple ev­ery day en­abling in­surance cov­er­age for most ob­jects.

In­no­va­tive cus­tomer touch points are be­ing on­boarded over and above the ex­ist­ing ones to meet new gen­er­a­tion cus­tomer ex­pec­ta­tions. The suc­cess of the in­no­va­tion to­tally de­pends on how re­cep­tive cus­tomers are to­wards change. There­fore, the pace of tech­no­log­i­cal de­vel­op­ment and its ac­cep­tance de­pends on the con­sumer’s re­sponse to­wards these ini­tia­tives. In­no­va­tion in many cases is dis­rup­tive these days and can change pat­terns in which busi­ness op­er­ates across in­dus­tries. Any in­no­va­tion can get ob­so­lete if the in­no­va­tive prod­uct is not im­pro­vised pe­ri­od­i­cally to im­prove the end user ex­pe­ri­ence. Cus­tomer feed­back is al­ways tes­ti­mony to this.

Once an in­no­va­tion is in­tro­duced, it be­comes more of a usual ‘run of the mill’ prod­uct or ser­vice, when other com­pa­nies adopt it and soon it be­comes ob­so­lete if not used or if it be­comes the new norm. In­no­va­tions usu­ally take a few weeks of ges­ta­tion and a few months to start bring­ing in ben­e­fits. Typ­i­cally, cer­tain in­no­va­tions to­day are here to stay for longer or might get re­fined till some­thing bet­ter takes their place. Ac­cord­ing to Sourabh Chat­ter­jee, all the in­no­va­tions launched have a typ­i­cal cy­cle of 6-12 months, where since they are new catch, there is ini­tial eu­pho­ria from the cus­tomers.

Says Vi­jaya Nene: “Prior to in­dulging into the vir­tual re­al­ity space, we col­lated a lot of re­search ma­te­rial to un­der­stand some of the top mover tech­nolo­gies that were be­ing adopted across the globe and were to stay. Meet­ing the needs of cus­tomers through a vir­tual re­al­ity plat­form is a huge step in it­self. The phe­nom­e­nal re­sponse from the cus­tomer ob­served through conVRse only proves that the world is ready for change.”

Girish Nayak re­veals his com­pany’s strat­egy for time-bound work: “We con­tin­u­ously in­no­vate, which en­sures that we of­fer so­lu­tions that are rel­e­vant for our cus­tomers and har­ness the ca­pa­bil­i­ties of the lat­est tech­no­log­i­cal in­no­va­tions. To cite a real-life case, after the launch of our health app, for the first 120 days, we had a new re­lease ev­ery fort­night, based on user feed­back. Adopt­ing the user re­quire­ments in a nim­ble man­ner is the key to ev­ery rapid adop­tion.”


In the mod­ern busi­ness era that we are in to­day, build­ing a dig­i­tal cul­ture has be­come im­por­tance. As the tech­nol­ogy change ac­cel­er­ates ex­po­nen­tially and new dig­i­tal de­vices or plat­forms emerge, it has be­come vi­tal for any type of com­pany to stay up­beat and com­pete in the mar­ket.

Sourabh Chat­ter­jee ex­plains the dif­fer­ence of in­no­va­tion be­tween large and small com­pa­nies: “Most of the com­pa­nies are try­ing in­no­va­tions in some part of their process cy­cle. For larger com­pa­nies, these in­no­va­tions not just beat mar­ket through a bet­ter cost ad­van­tage but also help cre­ate a dis­rup­tive dif­fer­en­ti­a­tion vis-à-vis their com­peti­tors. Smaller com­pa­nies look at point in­no­va­tions while the larger ones try to ad­dress a larger process area or prob­lem state­ment. For smaller com­pa­nies, in­no­va­tion can be an ex­is­ten­tial is­sue; or the core busi­ness model it­self. Ad­dress­ing niche ar­eas re­quires niche so­lu­tions.”


The spokesper­sons all agree that AI will cer­tainly be­come a per­va­sive part of BFSI in­dus­try. It will be­come an es­sen­tial part of pro­vid­ing ex­pert cus­tomer ser­vice and fraud man­age­ment us­ing tech­niques like fa­cial recog­ni­tion, bio­met­rics and pat­tern eval­u­a­tion. Vir­tual Re­al­ity is also be­ing re­searched as a way of pro­vid­ing a more im­mer­sive ex­pe­ri­ence when it comes to fi­nan­cial man­age­ment, with­out hav­ing to go into a branch.

Girish Nayak is of the view that break­through in­no­va­tions in In­dia are rather ap­pli­ca­tion fo­cused than crore tech­nol­ogy fo­cused

Sourabh Chat­ter­jee out­lines the ben­e­fits of DriveS­mart from Ba­jaj Al­liance Gen­eral In­surance, es­pe­cially the feed­back it gives on driv­ing habits of driv­ers

Deepak Sharma high­lights Ko­tak Mahin­dra Bank’s

811 of­fer, which is a ze­r­obal­ance sav­ings ac­count with zero charges for all dig­i­tal trans­ac­tions

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