Albeit being a heavily regulated industry with several technologies in payment, credit scoring, and emerging fintech enablers, the Indian Finance Industry still has its own set of risks. While payment technology has matured, other areas like Open API Network, and Alternative Credit Scoring Tech, are still in the neo-natal or experimental stage. Technologies are industry agnostics and one needs to find their applicability to their industry, through businesses/use cases. With technologies like RPA, Hyper Automation, Artificial Intelligence, and Machine Learning being applicable across industries, payment technologies have aided centralized digital collections along with evaluating hyperlocal ecosystem partners for physical collections to contain the cost. “With online, offline, and online influenced offline revenue streams, where online has been the one with the best ROI, we envision to acquire most the of the customers online and fuel our digital revenue growth by evaluating reg techs and KYC services”, says Rajendra Bisht, Vice President – Technology and Digital, Bajaj Finance Ltd. – Auto Finance (BFL-AF).
At BFL-AF, customers’ success is considered as their own. Molding their products, credit policies, repayment methods according to their customer’s needs, BFL-AF offers attractive schemes for their 2-wheeler customers along with creating a livelihood at the bottom of the pyramid. Taking 3 wheelers as an SME business and supporting them with the same interest as a 2-wheeler business, Rajendra states, “Our 3-wheeler customers are mostly from lower strata of the society & running a 3-wheeler is an integral part of their life since it supports in earning their daily bread & butter. During the COVID19 lockdo wn period, the livelihood of our customers wasbadly impacted, pushing us to launch many innovative schemes to continue supporting their livelihood like the ahat Scheme, rescheduling of loans, giving moratorium to customers, PFC option, and increasing the LTV in the cargo section, to make this segment more affordable for our customers”.
With the latest technologies, BLF-AF ensures that its customers receive their services at their doorstep, helping them to get back up on their feet as soon as possible. They have also created a large network of payment points and partnered with mobile wallets and banks, to help their customers pay as they earn; although the finance option is under the EMI model, the customers are given the option of paying them as they earn.
A journey that happened by chance, Rajendra fell in love with the financial industry post his education in the 1990s, when he started his career. He says, “The financial sector provides wings to the dreams of a common man, businessman, industrialist alike. We touch the lives ofeveryone from a commoner to a VIP. So, in a sense, we help people to uplift their lives and fulfill their dreams,indirectly helping society as a whole”. Having recently joined the Bajaj Family, Rajendra had always wanted to associated with the name, since like most other Indians, his father’s first 2-wheeler was also from the house of Bajaj, which he cherishes riding till today. So, when he came across the opportunity, Rajendra took it and has been enjoying the satisfying and rewarding journey so far.
Coping with COVID-19
With the lockdown steeply impacting most of the organization’s KPIs on sourcing and collection, the financial services industry was impacted greatly by the current pandemic. Rajendra had read the early signs of the lockdown from the market and was prepared for it. He comments, “Work from home was never a strategy for us but even before lockdown we had embarked on a mobile-first journey (BYOD) allowing most of our employees on the field to work from their handheld devices and for the remaining majority the necessary infrastructure was already in place”.
Assessing the impact and figuring the demands of the employees, adequate technology was enabled to ensure continuity of work. The entire organization of Bajaj Finance is operating and communicating on Microsoft platforms, along with using online collaboration tools across their network. Once the lockdown was official, cost-cutting measures kicked in, where the marketing budgets, special projects budgets, expansion budgets were either cut or temporarily put on hold. Organisation-wise restructuring and the reskilling drive began, with a major focus on collections and restructuring, that required thorough planning for these initiatives across business functions. Once the ‘Unlock’ was announced, the bike segment in the market spiked, courtesy to the phobia of using public transport. “In terms of mobility and value, motorcycles provide the most bang for the buck, which we are hoping to benefit from due to its increased demand because of COVID19”, adds Rajendra.
Embracing Digital Disruption
Digital is imperative now and the term digital transformation has become outdated. With the decreasing cost of smartphones and network services resulting in the commoditization of the mobile market, it is not just a prerogative of certain classes anymore. With the rural folks’ internet consuming habits becoming as similar as the urban folks, the digital cohort groups are on a rise and there will come a time when future generations would be highly tech-savvy and tech-dependent. A digital branch can replace hundreds of physical branches improving the RoI. With a vision of offering a seamless self-service real-time digital onboarding platform and making lending safer, BFL-AF has classified its digital initiatives under 3 categories – creating new technology-enabled business models/ digital business models, customer experience management, and operational excellence.
Embarking a journey on completely transforming their lending processes, BFL-AF is in talks to pilot AI/ML-powered SaaS-based models with high availability, scalable and seamless experience on different platforms to their end-users including their channel partners, which is currently under the development stage. A relatively clean sector internally, the environmental burden of energy, water, and paper used in the financial institutions is less when compared to many other industries. However, the size of this sector overall is large enough to make the environmental impact significant. Also, Financial institutions are aware that their client’s mismanagement of environmental risks may affect their own business.
Financial institutions have been taking into account social and environmental impacts on overall sustainability. It is an ongoing process and with last-mile transactions moving away from plastic cards to payment wallets, focus on paperless operations (unless restricted by regulatory or legal reasons), and initiatives as eMandate, e-stamping, e-agreement, Video KYC to list a few and initiatives that reduce employee travel, both financial institutions and the environment get benefited. Since the financial sector deals with financial information of customers and corporate, it becomes a leading target for cyber-attacks. With the banks and financial institutes being the place where the money is, attacking banks offers multiple avenues for profit to cybercriminals through extortion, theft, and fraud, while nation-states and hacktivists also target the financial sector for political and ideological leverage.
From the corporate and customer interest point of view, it is imperative to have a solid cybersecurity strategy implemented, sustained, and continually improved. Cyber threats are ever-changing and emerging every day, hence a continual plan to identify, assess, treat, and periodically monitor cyber risks is needed to reduce an organization’s risk exposure to such threats. “Despite industry sector, size and geography of business, every organization is recommended to have a Cyber Security strategy, backed by the governance of senior executives of an organization. Key areas to look for, but not limited to, are Infrastructure, Application, Network, Cloud, IoT, etc. A continual assessment approach will assist in knowing and addressing Cyber Risks across these areas. Governance plays a key role, needless to mention”, opines Rajendra.
Widening their Horizons
Helping the customers identify early warning signs, financial literacy has also helped the lenders aid them in deriving a solution to come out of the crisis. Given the diverse demographics of the customers, while the sales agents are there on the field to guide the customers, the multi-lingual call centres that guide the customers throughout the process of inquiry, on-boarding, and service, etc. Rajendra adds, “Our digital channels, i.e., websites, mobile site, and mobile app, also has sufficient information available about our financial services and offerings. Many organizations have also implemented conversational bots on their platforms that can help in educating the customers in their language”. He continues to state that the global markets are highly uneven and financial institutions, at large, have been shutting down branches in significant numbers, and this s true for other industries as well; for example, the phrase ‘the retail apocalypse’ or ‘death of retail’ has been in use for a long time.The cost of managing a physical branch is way higher than the cost of managing a digital branch and hence digital-only financial institutions would always get an edge.
Unlike the 1980s, branches today are primarily used more for customer acquisition in upper-tier cities and their dependency on transactions and service management has significantly reduced. Processing digital order fulfilment that is different from branch-based fulfilment and new processes that support the digital products and services, there would be an increased focus on automation through STPs, RPA, rule engines, and then complex decision making through Machine learning. These new fulfilment chains will also require new building blocks such as eKYC, eAgreement, eMandate, etc as already highlighted which is an area that can use some regulatory relaxation post through risk evaluation. “Payment banking has and will continue undergoing a huge transformation under planned initiatives by NPCI. Next, as per the analyst community, data is the new oil. Financial institutions would be fighting data wars”, concludes Rajendra.
AWARDS AND RECOGNITION
• Innovative CIO Awards 2020 by CIOAxis
• Best Technology Implementation of the year 2020 award by UBS Forums
• BFSI Digital Innovation Award 2020 in Enterprise Security by Express Computers
• IDC Insights Award for Operational Excellence
• Conferred with ‘Business Transformation Award 2020’