Technology to Reshape the Financial Services Ecosystem in India

Having completed his M.Tech in Industrial Engineering & Operational Research from IIT Bombay, Krishna has been associated with Broadridge for over 22 years now and has played a significant role in the company’s success story so far. Siliconindia recently got an opportunity to interact with Krishna Kankipati, Senior VP - Technology, Broadridge India, wherein he shared his insights on the current financial services ecosystem in India and technology’s impact on it. Below are the excerpts from the exclusive interview

What are your thoughts on the current fintech landscape in India?

The fintech ecosystem in India has undergone a serious metamorphosis in recent times. With the government putting in a lot of efforts to encourage digital transactions, the rate of innovation that is currently happening in the fintech space in India is at an all-time high. The last few years have witnessed a huge number of startups coming-up in this space and offering a broad spectrum of services across different verticals such as digital payments, wealth management, lending, insurance and many others. This is in turn enabling the entire fintech ecosystem to grow at an unprecedented rate. Despite such encouraging factor, the industry is also facing a few challenges in terms of the uncertainties with regards to government regulations and data security concerns among customers. To address these barriers, RBI has been actively involved in making its policies and procedures more business-friendly and customer-friendly. This way, the RBI is fostering fintech innovation, while simultaneously addressing the data security concerns of the customers.

Explain with use cases some of the latest technologies that are redefining the financial services ecosystem.

Among the myriad of cutting-edge technologies that are currently disrupting the financial services space, Artificial Intelligence and Machine Learning occupy a prominent role in terms of both their adoption as well as the host of benefits they offer. By leveraging these two technologies, BFSIs are now able to enhance their customer experience significantly. AI & ML enable financial institutions to offer personalized recommendations to users based on their demographics and age groups. Another area where AI and ML are assisting customers immensely is in alerting customers on any fraudulent/suspicious activity. Also, Generative AI has enhanced the capabilities of AI and is now being extensively used in offering customer support and query management via chatbots – that too in the language of their choice using NLP techniques.

On the other hand, blockchain technology is expected to reshape the entire financial services ecosystem in ways that were unimaginable a few years ago. By maintaining transparency, security, and traceability in every transaction, Blockchain is not only enabling BFSIs to enhance their customer trust levels, but also prevent any financial frauds. Also, Robotic Process Automation (RPA) has enabled companies to identify less critical and less risky areas, automate them and cut-down manual intervention to a bare minimum, thus resulting in enhanced process efficiency. Furthermore, open banking and API initiatives are assisting BFSIs to collaborate with each other and create an interconnected system. The perfect example of this is the process of checking the creditworthiness of a person before granting him any loans or offering credit cards. Although adoption of AR/VR technologies is still under R&D phase in the fintech space, they are expected to enhance customer satisfaction and expectation levels to a great extent by enabling them to have a virtual outlook of various financial services before taking a decision.

What are some of the ways in which BFSIs can combine automation and human intervention to maintain the efficiency of their services?

In today’s modern day business landscape, it is very much necessary for an organization to find the perfect balance between automating their processes while also maintaining a human touch in functions that are deemed critical and need manual intervention due to the emotional aspect that also needs to be taken into consideration. For this, organizations can automate processes that are less critical in nature and redirect the freed-up manpower and resources towards focusing on other high value operations where more risks are involved and need constant human supervision.

What role do the government and other policymakers play in improving the fintech ecosystem in the country?

There have been constant and focused efforts from our government encouraging digital transformation across India. Upcoming startups in the fintech space are also requesting the government to relax the licensing laws and policies in the country so that they bring-in more innovations quickly to serve customers in a better way. However, it is important for the government to maintain the right balance between fulfilling the expectations of customers and fintech startups while formulating new policies and regulatory frameworks. To further improve fintech innovation in the country, the government can also offer tax benefits to new fintech startups and also make their business registration quicker and simpler. Lastly, tightening the laws surrounding any financial frauds or data privacy infringements is another key move towards improving the financial services space and encouraging consumers to start using digital payments today.

How do you expect the fintech industry to evolve in the days to come?

With over 200 million UPI transactions happening each day in India, the adoption of digital payments among consumers is at an all-time high today. Given the massive population India is home to and various ambitious projects that our government has planned in terms of financial inclusion across the country, there are massive avenues of growth opportunities for fintechs in the country today. However, it is paramount for BFSIs to leverage cutting-edge technologies effectively to successfully cater to customers of diverse age groups. As a result, we will witness massive investments from the BFSIs in terms of technology adoption, especially the ones that help in automation and optimization of existing functions.