Con­fer­ence Re­port 3

Banking Frontiers - - Housing Hihglights -

Mon­ish Shah, Part­ner, Fi­nan­cial Ser­vices, Deloitte Con­sult­ing: In­dian econ­omy has in­vested heav­ily in cre­at­ing the pay­ments in­fra­struc­ture. Fi­nan­cial pen­e­tra­tion is low in In­dia, while In­di­ans are be­com­ing in­cur­ably wealthy, from a his­tor­i­cal per­spec­tive. We have reached at such a place in the eco­nomic cy­cle where con­sump­tion is more. A lot of in­no­va­tion is hap­pen­ing in the BFSI in­dus­try and pay­ments is one area that is in the fore­front. The pay­ments in­dus­try is bound to ex­pand and is poised to reach the tril­lion-dol­lar level. Dif­fer­ent cus­tomer jour­neys and propo­si­tions com­ing up, this will lead to a dif­fer­en­tia­tive eco­nomic ecosys­tem. The coun­try has a solid back­bone of tech­nol­ogy and tra­di­tional fi­nan­cial ser­vices.

It is ex­pected that one-third of all pay­ments will be through the dig­i­tal mode soon and as such pay­ments is in the fore­front of the in­no­va­tion sce­nario. In the days to come pay­ments will be­come more in­no­va­tive as there will be card to cloud pay­ments, any time

Speak­ers from the BFSI sec­tor share their in­sights about the next level of pay­ments in In­dia:

any­where PoS pay­ments, pay as you mes­sage and API-based pay­ments. We have al­ways had a cash-driven econ­omy and it will take gen­er­a­tions to change this. Most of the pay­ments com­pa­nies have gone for mul­ti­ple part­ner­ships. Cash back is the im­por­tant char­ac­ter­is­tic for a pay­ment com­pany. Cus­tomers can mon­e­tize loy­alty by us­ing a pay­ment plat­form. Pay­ments banks have tie-ups with uni­ver­sal banks, NBFCs, fin­techs, and oil com­pa­nies.

Sum­nesh Joshi, As­sis­tant Direc­tor Gen­eral, Unique Iden­ti­fi­ca­tion Author­ity of In­dia: There is lot of po­ten­tial in the pay­ments in­dus­try. JAM, or Jand­han, Aad­har and Mo­bile, are the key driv­ers of the econ­omy and these are con­tribut­ing for the ben­e­fit of the end- cus­tomers. The govern­ment is work­ing on Bharat­net to con­nect the vil­lages. BFSI in­sti­tu­tions should give im­por­tance to cus­tomer data se­cu­rity and should have strong fraud man­age­ment sys­tem.

Ra­jeev Arora, Direc­tor - Tech­nol­ogy & Cen­tral Op­er­a­tions,

FINO Paytech: In fu­ture, mo­bile pay­ments will overtake card-based pay­ments. Blockchain is be­ing used to pack­age the trans­ac­tion se­curely. The wal­lets have lim­ited self-life; there is lim­ited fu­ture for wal­lets in In­dia. BFSI com­pa­nies are in­vest­ing huge amount of money on cus­tomer ser­vice. For pay­ments com­pa­nies, cus­tomer in­sights play an im­por­tant role, it helps to un­der­stand the pay­ments pat­tern of the cus­tomers. In ru­ral In­dia, there is lack of cash in banks and in ATMs, so peo­ple in these ar­eas have to de­pend on dig­i­tal for the money trans­ac­tions. Dig­i­tal based trans­ac­tions have be­come a ne­ces­sity in the ru­ral ar­eas.

Kalpesh Mehta, Part­ner, Deloitte Hask­ins & Sells, In­dia: API has in­creased the use of pay­ment plat­forms in In­dia. Pay­ments data helps in un­der­stand­ing the spend­ing pat­tern of the cus­tomer. Com­pa­nies in­vest huge amounts of money in an­a­lyz­ing the cus­tomers, it helps them to of­fer right prod­uct to the cus­tomers. In In­dia, only 40% peo­ple know English. Hindi, English, Marathi, Tel­ugu, Tamil and Gu­jarati are the top 5 lan­guages that peo­ple in the coun­try use.

Shiv Ku­mar Bhasin, CTO, State Bank of In­dia: Dif­fer­ent types of pay­ments should be han­dled by a cen­tral­ized ar­chi­tec­ture. There are fo­cal points linked to the core bank­ing sys­tem. Re­li­able data, ar­chi­tec­ture and au­dit trail are the 3 func­tions in pro­cess­ing pay­ments. Ev­ery pay­ment trans­ac­tion should ide­ally be in real time. Banks should be ver­ti­cally and hor­i­zon­tally scal­able.

Anu­pam Bagchi, Head, Credit Cards, Pay­ments & Un­se­cured Lend­ing, Stan­dard Char­tered Bank: In the year 2000, HDFC Bank started dig­i­tal trans­ac­tions. To­day, API layer is the new pay­ments hub. We re­cently added API layer in our bank­ing sys­tem, which han­dles se­cu­rity; it also helps to get the in­for­ma­tion about a per­son and the or­ga­ni­za­tion to which the bank is con­nect­ing.

Deepak Kun­hikan­nan, Re­gional Direc­tor-In­dia Mar­kets, Pe­gasys­tems: Core sys­tems should do core autho­riza­tion. For busi­ness per­spec­tive, it is im­por­tant how you drive the busi­ness. For API busi­ness per­spec­tive, we need to think what it will de­liver as value. If you look at high level, there are 3 to 4 as­pects. To a large ex­tent, we get it like we fo­cus on task. We al­ways talk about chan­nels and not about jour­neys. We al­ways go for de­cen­tral­ized ap­proach. Com­pa­nies can take au­to­ma­tion to the next level with the help of tech­nolo­gies like AI, MI and ro­botic au­to­ma­tion.

KV Dipu, Pres­i­dent-Op­er­a­tions, Ba­jaj Al­lianz: We have to keep in mind the 4 im­por­tant as­pects of pay­ments - how to lever­age the daily push no­ti­fi­ca­tions, cus­tomer se­cu­rity, cus­tomer cen­tric­ity and use of lever­ag­ing AI, MI to mon­i­tor frauds and con­trol them.

Me­hul Mistry, Sr Direc­tor-Pay­ments & Dig­i­tal Ini­tia­tives, IDFC Bank: We have com­part­ments like bank branches, ATM, etc for tra­di­tional pay­ments. Dig­i­tal bank­ing pro­vides omni chan­nel ex­pe­ri­ence for the cus­tomers. We use UPI to pro­vide fric­tion­less pay­ments to all other part­ner com­pa­nies.

Mayur Dwivedi, Pres­i­dent & Head- Cor­po­rate Strat­egy, Yes Bank: Trust, trans­parency and se­cu­rity are the key fea­tures of the blockchain tech­nol­ogy. There are few ar­eas in which blockchain tech­nol­ogy has taken the lead­ing space and while in other ar­eas there is proof of con­cept, reg­u­la­tion is also evolv­ing around these ar­eas. We have im­ple­mented blockchain from the ven­dor fi­nance per­spec­tive. Sup­ply chain ven­dor fi­nance so­lu­tion for net­work­ing col­lab­o­ra­tion is the main area and many banks are ap­proach­ing us to cre­ate a com­mon plat­form. Trust is the key fac­tor which blockchain es­tab­lishes. There are other non-con­ven­tional ar­eas where blockchain tech­nol­ogy can be use­ful. Blockchain bonds can be some­thing, where one can see the uti­liza­tion of funds. We can use blockchain where there is tem­po­rary net­work of trans­ac­tions. Reg­u­la­tions need to evolve, and the fu­ture is go­ing to be fa­cial recog­ni­tion and voice-based trans­ac­tions and solutions.

Prasanna Lo­har, Head Tech­nol­ogy-In­no­va­tion Ar­chi­tec­ture, DCB Bank: Blockchain tech­nol­ogy is di­vided into 3 parts 1.0, 2.0 and 3.0. All the ma­ture sys­tems of blockchain are part of blockchain 1.0. For ex­am­ple, bit­coin and cryp­tocur­rency. En­ter­prise kind of use cases like trade fi­nance and cross broader pay­ment, com­plete in­sur­ance, smart con­tract are all part of blockchain 2.0 and all the re­main­ing ar­eas are part of 3.0. Blockchain is one area where banks will start col­lab­o­rat­ing. The cur­rent era is col­lab­o­ra­tive era and the fu­ture era will be au­to­matic era.

Ad­vo­cate Puneet Bhasin, Cy­ber Crime Lawyer & Blockchain ex­pert: For smart con­tracts, you need to amend the pro­posal. It is pre­sumed that acceptance is right at the be­gin­ning, so the en­tire con­tract needs to change. Blockchain needs to be

sup­ported by other laws. The cy­ber act came into ex­is­tence in 2008. There are special cy­ber courts, but we have only one court to look af­ter data breaches and it is in Mumbai.

Suresh Shan­mugam, Head-In­no­va­tion & Fu­ture Tech­nol­ogy, Mahin­dra Fi­nance: Ru­ral cus­tomer is very much aware about bio­met­ric tech­nol­ogy and voice-based trans­ac­tions have ma­tured in ru­ral ar­eas. Us­ing a mul­tilin­gual chat­bot, we are cap­tur­ing cus­tomer data. We mainly use blockchain for Mahin­dra Sup­pli­ers.

Sameer Singh Jaini, Dig­i­tal Strate­gist & FounderThe Dig­i­tal Fifth: To­day, most of our of­fice work hap­pens on What­sApp, in spite of hav­ing many other plat­forms. The so­cial mes­sage kind of plat­form is go­ing to be used heav­ily and so­cial me­dia and mes­sen­ger sys­tems will con­tinue to pros­per. What­sApp for busi­ness is al­ready out. Google is go­ing to come up with a strong prepo­si­tion for the smaller and medium busi­nesses.

Deep Agrawal, SVP Dig­i­tal Pay­ments & Mo­bil­ity, YES Bank: We are us­ing the ser­vices of Hike Mes­sen­ger and Mi­crosoft Kaizala. We have also started us­ing What­sApp and other chat plat­forms. API-based pay­ments and API based trans­ac­tions are very easy to in­te­grate now.

An­drew Toolan, Head Fi­nan­cial & Pro­fes­sional Ser­vices, MI­DAS: In Manch­ester, the ac­tiv­i­ties of ad­ver­tis­ing and me­dia com­pa­nies re­volve around how to im­prove the cus­tomer jour­ney. So­cial me­dia plat­forms will be go­ing to im­prove the cus­tomer ex­pe­ri­ence. There are sev­eral banks in Manch­ester, which are set­ting up in­no­va­tion hubs and look­ing to part­ner with fin­techs and others to de­liver value-added ser­vices.

Mithilesh Singh, Direc­tor & Head - Tech­nol­ogy Au­dit, IDFC Bank: We are new in the BFSI in­dus­try and we started our dig­i­tal jour­ney ap­prox­i­mately 3 years ago. There are sev­eral in­no­va­tive things hap­pen­ing the pay­ments realm and the govern­ment ef­forts, es­pe­cially the ini­tia­tives of NPCI have pro­moted the cre­ation of a dig­i­tal econ­omy in the coun­try. Gov­er­nance and se­cu­rity are the ar­eas where BFSI com­pa­nies need to fo­cus on. We have in­tro­duced ‘banker on call ser­vice’ to pro­vide con­ve­nience to our cus­tomers. We are also pi­o­neer in the in­tro­duc­tion of mi­cro ATMs in ru­ral In­dia, which have be­come highly suc­cess­ful.

Makesh Chan­dramo­han, CISO, Aditya Birla Group : We have adopted a com­plete risk -based ap­proach. There is a lay­ered ap­proach to see how risk is cal­cu­lated.

Ki­ran Maraju, DGM, Cy­ber Se­cu­rity, State Bank of In­dia: We need to adopt an ap­proach in which we can con­trol in­fra­struc­ture, iden­tify prod­ucts. Se­cu­rity should be a fac­tor for the whole life­cy­cle. Data lo­cal­iza­tion, mul­ti­ple com­po­nents re­quired should be kept con­fi­den­tial and should be within the con­trol of the or­ga­ni­za­tion.

Abhijit Shah, CTO, DCB Bank: In the last 5-6 years, things have changed dras­ti­cally in the bank­ing in­dus­try. Ef­fec­tive mon­i­tor­ing is be­com­ing very im­por­tant. The cus­tomer per­spec­tive plat­form is driv­ing the in­dus­try. In­ter­na­tional norms are com­ing to In­dia due to glob­al­iza­tion. It is im­por­tant to process data lo­cally as there are se­cu­rity solutions avail­able. Key man­age­ment sup­port is also avail­able.

Panel dis­cus­sion in progress at Paynext 2018Au­gust 2018

One of the panel dis­cus­sion ses­sions in progress

Pan­elists shar­ing new in­sighsravi@glo­cal­in­fo­

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