Mani Mulki, CIO, Tata Capital, shares insights on how the sector is adapting to new technologies.
BFSI has been one of the early adopters of digitalisation. But rapid digitalisation in the sector has resulted in increased competition and might result in customer attrition, says Mani Mulki, CIO, Tata Capital. In this interview with CIO Dialogues, he shares his insights on how new technologies like AI and robotics will change the way the financial sector will perform and what financial institutions should do to deal with the emerging threat scenario, which is getting complex with the adoption of new technologies.
How is the BFSI sector coping with digitalisation? What are the challenges in digitally transforming financial institutions?
Digital/digitalisation is inevitable and is at the core of the BFSI Sector. With products going online and people being able to avail services at the click of a button, the BFSI sector quickly embraced digitalisation. More and more banks and financial institutions, irrespective of their size, are going digital to cater to the ever-evolving customer. Currently, it is a safe estimate that more than 70 to 80 per cent of banks and financial institutions in India have an active digital identity.
Though the BFSI sector in general and NBFCs in particular have been on top of their game when it comes to digitalisation, there are still some hurdles to cross. These challenges are in the nature of an expense with no immediate returns. Due to rapid digitalisation, the market also becomes more competitive as customers can quickly move to another institution that caters to their needs more efficiently. Data privacy and protection of personal data is another issue.
Analytics is a critical aspect of the digital transformation journey. Has the BFSI vertical transitioned from descriptive analytics to predictive analytics? What does it take to move to a real-time analytics framework?
Today, most of the virtual assistants engineered by BFSI institutions work on a descriptive analytics model, wherein answers to the most common user questions are fed into the system and the chatbot/assistant answers accordingly. Putting technology components in place to achieve real time visualization of information is not too difficult. Harmonising data across multiple source systems and achieving a single version of truth is challenging. Secondly, getting business decision makers to make effective use of real-time information and translating it into definitive action calls for changes in existing processes is, again, not an easy task. Ergo, a real-time analytics framework should not just involve the technology components, but also the governance around data quality and management, besides process changes to make the most effective use of real-time information.
AI and robotics are changing the way the BFSI sector functions. How do you see these technologies impacting operations of banking and financial institutions?
With AI and robotics slowly and steadily becoming the backbone of the BFSI sector, these technologies can have a great impact on the overall quality of service. Digitalisation of services results in environment-friendly, cost-effective services that increase overall profit revenue. With the introduction of the chatbots and voicebots, user queries can be answered seamlessly, which increases overall customer satisfaction, thereby helping in penetrating deeper markets. Rapid digitalisation also results in machines doing a lot of mundane and cumbersome work, leaving the human force to delve into more strategic arenas.
What sort of product and process innovations have you brought about in your current role?
We have recently launched a one-of-its kind voicebot called TIA within the Tata Capital mobile app for personal loans. Powered by Artificial Intelligence, TIA is designed to voice-assist the personal loan customer journey, check loan eligibility and aid the customer through the loan approval process in minutes. TIA aims to create a whole new conversational experience for customers using speech recognition technology, natural language understanding and text-to-speech technology. Equipped with intelligent features and options, TIA has the ability to answer customer queries, assist in simplifying the loan process, help customers choose the right offering and avail a loan sanction within the Tata Capital app. TIA brings customers ease and convenience by providing a personalised and seamless experience. Apart from TIA, we have been constantly trying to deploy technology in other functions to ease customer journeys, automate backend process and reduce friction between the company and its customers through digitisation. We have also created an online working capital lending platform with a reduced turnaround time that can sanction loans of up to Rs 2 crore.
The threat landscape is getting more complex. How do you deal with Information Security while embracing new technologies?
Today, there is hardly any data that is not digitised in some form or the other, and securing it is a paramount obligation towards our customers and stakeholders. New forms of threats and vulnerabilities keep surfacing on a daily basis. While any new technology or piece of software introduced within the IT landscape undergoes a rigorous vulnerability assessment, the need for constant reinforcement across people and processes cannot be undermined. Many of the vulnerabilities arise due to the naivety of people and gaps in processes. While the technology reinforcement in the security framework gets augmented, continuously training employees and closing gaps in processes in a critical activity.
