IT training the banking and finance post TruePDF january february 2019

A Bimonthly Magazine on BFSI SectorASIA AND THE MIDDLE EAST’S LEADING PORTAL ON BANKING AND FINANCE SECTOR bfsi.eletsonline.com JANUARY-FEBRUARY 2019 | VOLUME 05 | ISSUE 01 | US $20 | `2

A Bimonthly Magazine on BFSI Sector

ASIA AND THE MIDDLE EAST’S LEADING PORTAL ON BANKING AND FINANCE SECTOR

bfsi.eletsonline.com

JANUARY-FEBRUARY 2019 | VOLUME 05 | ISSUE 01 | US $20 | `200

Dr Saibal Paul

Associate Director Sa-Dhan

Pinak Chakraborty

Senior Vice President of Technology Digibank, DBS

Mehjabeen Taj Aalam

Head of Information Technology

at Muthoot Homefin (India) Limited

Benjamin Henshall

Country Manager India

& Director of Sales, Financial

Services APAC, Red Hat

Articles Cover Story

Protect your business and mitigate security risks

ARTICLE

INDUSTRY SPEAKS

Real-time Analysis & Decisioning

Sabyasachi Goswami

SVP-Head Sales & Strategy, Perfios

20 Open Banking: A Strategic Approach to Win Digital Consumer

Factors Driving Tech-Revolution

in India’s BFSI Sector

28 Inclusive Growth in North-East India: The Way Forward

Through Alternative Channels of Microfinance

Dr Saibal Paul

Associate Director, Sa-Dhan

Mehjabeen Taj Aalam

Head of Information Technology at Muthoot Homefin

Abhijit Ray

Co-founder and Managing Director, Unitus Capital

EVENT NAME PLACE MONTH

EGOV / INNOVATION / ENERGY / WASTE

ELETS SPECIAL INITIATIVE

MANUFACTURING / RETAIL

TECHNOLOGY / BFSI

HEALTH

EDUCATION

10 th Higher Education & Human Resource Conclave New Delhi 15 March 2019

EDITOR-IN-CHIEF

Dr Ravi Gupta

EDITORIAL TEAM - DELHI/NCR

Senior Assistant Editors: Souvik Goswami, Sandeep Datta

Assistant Editors: Priyanka Sharma, Gopi Krishna Arora,

Mukul Kumar Mishra

Senior Correspondents: Akash Tomer, Rashi Aditi Ghosh

Correspondent: Ritika Srivastava

MUMBAI BUREAU

Senior Assistant Editor: Kartik Sharma

Senior Correspondents: Harshal Yashwant Desai, Rakesh Kumar Roy

Assistant Editor: Hemangini S Rajput

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Our Publications and Initiatives

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Technology Paving Way for Pro-Consumer BFSI Sector

To remain aligned with the rising significance of technology, the Banking and Finance

sector in India is making a lot of investment in the IT and digital advertising.

The Indian Banking, Financial Services and Insurance (BFSI) sector spent $9.1 billion in IT

in 2018, which is an 11.7 percent increase (Year-on Year), a leading research firm stated

in a report.

According to a report by Internet and Mobile Association of India (a non-profit body),

the BFSI sector spent Rs 2,022 crore on digital advertising (46 percent of its total

advertisement budget).

The statistics show how there is a symbiotic relationship between IT and BFSI in India

While these numbers would match up to the Gross Domestic Product of a few African

nations, what they prove is that the growth of the Indian IT market is still predominantly

driven by the BFSI agenda.

Similarly, for large banks, insurance companies or other fintech and financial services

players, IT is perhaps the most critical catalyst to grow, both on their corporate enterprise

and consumer front.

This camaraderie between BFSI and IT has been prevalent from the early days of tech

adoption in India: Banks have always shown the way We can trace the evolution as

BFSI-Tech 1.0 (Internet adoption); BFSI-BFSI-Tech 2.0 (migration to data centers); BFSI—BFSI-Tech 3.0 (the

SMAC- Social, Mobile, Analytics and Cloud, amalgamation with security, mobility, analytics

and cloud defining banking agenda We are presently in BFSI-Tech 4.0 phase — technologies

like blockchain, contact-less payments using NFC mechanisms, AI and gameplay are driving

this phase of digital transformation.

The magazine’s latest cover story “Factors Driving Tech-Revolution in India’s BFSI Sector”

tries to outline and examine precisely these technologies and how they are helping BFSI

adopt a more customer-friendly look.

This digital transformation is not by choice but borne out of necessity to stay more

relevant in a pro-consumer society and world.

The issue also carries a special feature “Has BFSI Reached Cloud Nine?” that captures

the nuances and dynamics of cloud deployment in banks and insurance companies More

importantly, there is an attempt to explore whether migration to cloud really enhances

the transformation especially from the secure, agile and scalable perspective.

Our magazine’s latest issue also features interviews with Pavan K Gupta, CEO, Muthoot

Housing Finance Company and Abhijit Ray, Co-founder and Managing Director, Unitus

Capital and interesting industry insights by Mehjabeen Taj Aalam, Head—IT, Muthoot

Homefin, Pinak Chakraborty, SVP Technology, Digibank, DBS and Benjamin Henshall,

Country Manager, India & Director of Sales, Financial Services APAC, Red Hat.

We have also brought out a report of the 5th NBFC100 Tech Summit Mumbai, highlighting

the future of Non-Banking Financial Companies (NBFCs) in today’s challenging times The

Summit touched upon challenges and future roadmaps of NBFCs, Payments Banks, Small

Finance Banks, Microfinance Institutions (MFIs), Housing Finance Institutions and many more.

Continuing our legacy of creating knowledge-sharing platforms for the BFSI sector, we

are organising the 3rd Elets BFSI Leadership Summit in Mumbai The summit aims to

congregate CXOs and technology experts from across BFSI domain.

We hope our collection of articles, interviews, reports and special stories will prove

thought provoking and evoke invaluable feedback of our esteemed readers.

Dr Ravi Gupta

Editor-in-Chief The Banking & Finance Post Magazine and Founder Publisher and CEO, Elets Technomedia Pvt Ltd

COVER

STORY

Technology is reinventing everything around us The world is now entering an era of ‘Digital Darwinism’, a stage where various technologies are emerging faster than the adaptability speed of organisations Amidst this transformation, the banking and financial sector is also aligning itself with the emergence of digital forces, leading

to creation of new ways interpreting data and the means to do so

cost-effectively, writes Rashi Aditi Ghosh of Elets News Network (ENN).

FACTORS DRIVING

Tech-Revolution in India’s BFSI Sector

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COVER STORY

EVOLUTION OF TECHNOLOGY IN

THE BFSI SECTOR

In the late 1990s, implementation of

information technology helped some

private sector lenders across the country

in unveiling non-branch banking services

Initially, internet banking was presumed

to be an insecure option for a transaction

by the users However, the particular

mode of banking witnessed a whopping

growth in the 2000s due to the initiatives

taken by the government The Reserve

Bank of India (RBI) in a bid to popularise

it The cost of online transactions was

also dropped significantly The mode that

earlier received negative reviews from

the users, enhanced level of customer

satisfaction gradually, by ensuring the

benefits of banking anytime anywhere

It helped the users in performing all the

important banking formalities without

even visiting the bank branch

Ankur Gupta, Principal Secretary,

Department of Electronics &

Information Technology and

Elections, Government of Haryana

says, “Technology has indeed

transformed banking but I still feel

that there are a lot of areas requiring

intervention when it comes to offering

convenient options for consumers Today,

if you want to lodge a theft complaint

or want to put up a service request,

you will be made to call the customer

care service The customer care service

rather than helping you out with your

problem will keep you waiting for a long

time, transferring your call from one

department to other It is important to

offer better and hassle-free customer

service options to the consumers much

prior to implementing world-class

technologies.”

In the last few decades, the banking sector

in India realised the rising significance of

digital technologies and the urgent need

to embrace the same for streamlining

their services The sector is making

considerable investments in a bid to

sector is now extended to a lot of new segments apart from the financial genre

as information technology is opening

up new vistas for the industry From urban to rural, banked to underbanked, BFSI industry is offering a bouquet of services that suit the requirements of all the consumers.”

WHAT IS FINTECH?

FinTech, an abbreviated term used to describe technology that proposes improvement in the delivery and usage

of financial services It is utilised to help companies in a better management of financial operations, processes and lives

by utilising specialised software and algorithms that are used on computers and, increasingly, smartphones In the 21st century, FinTech was initially applied to resolve the back-end systems

of established financial institutions.Since then fintech has been expanded

to ensure financial literacy as well as streamlining the wealth management, lending and borrowing, retail banking, fundraising, money transfers/payments, investment management and more.The role and the significance of FinTech have now escalated to a greater extent in India and its landscape in the country can now be clasified into three broad categories: payments, financial products and services, and other general-purpose

create digital infrastructure so that it can offer better solutions pertaining to mobile banking, e-wallets and virtual cards, etc To name a few, Digital-only/

Virtual Banking, Biometric Technology, Artificial Intelligence, Blockchain Technology, Bitcoin and Robotics are key innovations in the digital banking segment

LR Ramchandran, CGM, Financial Inclusion & Banking Technology, NABARD says, “Banking is not an

easy operation; it is a very complex activity Digital transactions might look an easy activity but it involves

a lot of touch points as far as cyber security measures are concerned The sector has undergone a massive change

Banking activities that earlier needed human intervention, are now handled

by machines When technology was introduced in banking and operations started witnessing paradigm shift, the Reserve Bank of India (RBI) took several transformative measures to reinvent the entire banking industry and took it to the digital platform, at the same time ensuring safety and security.”

Padma Jaiswal, Secretary, Department of Information Technology, Government of Puducherry said, “The complete

Banking, Financial Services and Insurance (BFSI) sector has undergone massive changes due to technology The

COVER

STORY

technologies

According to B Raj Kumar, Deputy

Chief Executive, Indian Banks’

Association says, “Earlier we used

to define eras into BC and AD but in

recent times we now perceive it as BT

(Before Technology) and AD (After

Technology) I represent the BT era and

I am privileged to witness this entire

transformation in banking in alignment

with technology in India Today, we

cannot imagine a human being without

a smart phone This change is huge and

I am thankful that I could witness both

the eras Technology has now given you

the power of convenience It also helps

you in controlling the number of frauds

associated with your cards and bank

accounts You can choose to maintain

low balance in your particular card and

then transfer the required amount to it

through mobile banking whenever you

us today They are namely Core Banking Solutions, Immediate Payment Service, and Aadhaar

CORE BANKING SOLUTIONS

Core Banking Solution (CBS) is one of the most important and nodal systematic change that completely transformed the way we see banking transactions today

Core banking was recommended in the

1984 Rangarajan Committee report on bank computerisation An expression of interest pertaining to CBS was invited in July 2000, and the actual implementation started in August 2003 when the first branch of the State Bank of India (SBI) was put on TCS’ BαNCS core banking solution

It is a process where all information regarding the transactions and accounts, and the business of the bank are hosted via single centralised data base

IMMEDIATE PAYMENT SERVICE (IMPS)

Launched in 2010, the Immediate Payment Service or the IMPS was developed by National Payments Corporation of India (NPCI) The system facilitates immediate fund transfer from one account to another Prior to the launch of IMPS, fund transfers were scheduled as per the bank operation hours, settlement hours, national holidays, etc This innovation, after its implementation, is helping customers

to transfer funds anytime immediately

In the last few decades, the banking sector

in India realised the rising significance of digital technologies and the urgent need

to embrace the same for streamlining their

billion, as per NASSCOM

The number of public sector bank branches

in India with CBS implementation increased from 79.4 percent in March 2009 to 90 percent

in March 2010

IMPS is the fastest growing immediate payment system in the world The daily transaction volume of IMPS grew from about two million per day in 2017 to approximately 2.8 million per day in 2018

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COVER STORY

Unified Payments Interface (UPI) is one

of the products based on this particular

infrastructure

According to Rajagopal Devara, Principal

Secretary, Department of Finance

(Reforms), Government of Maharashtra,

“ Innovation in terms of technology is

taking us back to the olden times Earlier,

thumb impression was the only source

of authentication and today also we rely

on thumb impression for the final layer

of verification While a lot of things are

getting obsolete, technology is reinventing

a lot by transforming the older ones into a

new advanced version Smartphones, for

example, have replaced several devices such

as watches, music players etc.”

AADHAAR

Aadhaar, the national identity project

to bring all citizens under a single

identification system, was envisioned as

the foundation of numerous services by

the government As a part of the project,

detailed information about individuals

were collected, such as biometric details,

residential details, banking data, etc

The aim was to interconnect all services

availed by the individual through a common factor: Aadhaar In the banking and financial services space, Aadhaar is being used in multiple ways to promote financial inclusion and reduce the frictions in transacting

Bipin Ramesh Khot, Assistant Director General, UIDAI, Government

of India says, “Maintaining data privacy

in the digital world is very difficult For ensuring data security and in a bid to eliminate bogus identities, the concept of Aadhaar was brought into life For getting

an Aadhaar card, a person is asked to submit several details from date of birth, finger prints, Irish details and lot more The Unique Identification Authority of India (UIDAI) has kept a mandate for so many verifications just to ensure that a person’s duplicate or bogus data does not enter the system.”

In the past few decades, there have been some wide-ranging changes that have altered the very design of the banking system A segment of experts opine these technological changes are making the banking business model obsolete Many experts believe that the tech-driven revolution is indeed a significant step for the entire BFSI industry but it definitely has its own disadvantages as well It

is therefore, important to analyse the fitment of the technology implemented and put the security measures in place prior to its usage 

Launched in 2010, the Immediate Payment Service or the IMPS was developed by National Payments Corporation of

India (NPCI)

More than 89 percent of the total population had been issued the biometric identifier Aadhaar as of mid-February 2018

ANDHRA PRADESH – THE SUNRISE STATE

The sunrise State of Andhra Pradesh is one of the fastest growing

States in India with GSDP of 7% in 2013-14 to 11.2% in 2017-18

The State is seen as the gateway for the growing markets and

promising opportunities, opening its doors for investments

in various sectors Besides rolling the red carpet to big ticket

companies, the State is also encouraging Small and Medium

Enterprises (SMEs) by giving them attractive incentives A thrust

to the IT sector is being given in Amaravati, Visakhapatnam,

Anantapur, Tirupati and Godavari districts

AP VISION 2029

Vision 2029 charts out an ambitious path for Andhra Pradesh to be amongst the top three States in India by

2022 and a developed State measured in terms of citizen life satisfaction and Happiness Index

by 2029 Come 2050, the Sunrise State of Andhra Pradesh aims to

be among one of the most prominent investment destinations in

the world

KEY MILESTONES

The government has taken it on a priority basis to develop the

IT sector in the State, so given the much-needed boom to the IT

jobs market The State has witnessed creation of 40,109 jobs in IT

sector since 2014 and is expected to add another 72,278 jobs in

near future

FOCUSED APPROACH IN VISAKHAPATNAM

Visakhapatnam has been

attracting huge investment

proposals because of its

connectivity, infrastructure

and cosmopolitan city

status In a significant

development, Google X

has also agreed to establish

its first development

center outside America

in Visakhapatnam The

approach road for a world-class IT township is under development

at Kapulapada where the government has earmarked 400 acres for

a new layout

DEFINING FACTORS

Under the Government of India’s BPO Promotion Scheme, the city has bagged highest number of seats in first phase The second phase allotment is under process The current incentive structure, talent availability and infrastructure facilities will go a long way in attracting more investments to the city

ANDHRA PRADESH:

DESTINATION FOR BANKING AND FINANCE

The Government of Andhra Pradesh (GoAP) has a motto of

“Visible Governance, Invisible Government” In line with this, Andhra Pradesh has always been at the forefront of deploying innovative and new advanced technologies in governance In fact, we are the first fully digital government in the country, and with innovative initiatives such as Real Time Governance Society (RTGS), we have reinforced our leadership position in digital transformation of governments Further, GoAP has aligned its focus on creating a pro-development environment that stimulates growth across sectors and achieves common goals within stipulated timelines

The Sunrise State is emerging as India’s first blockchain Hub; aiming to transform Visakhapatnam as a world class Fintech ecosystem bringing government, academia, corporates, investors and entrepreneurs together

On the policy front, the State has created a robust policy framework to promote IT/ITeS and Electronics sectors, including Consolidated IT Policy, Electronics Policy, DTP Policy, GIC Policy, IIT Policy, Cybersecurity policy, Innovation and Startup policy, AI Cloud Hub Policy, and Animation Visual Effects and Gaming Policy

ANDHRA PRADESH

THE SUNRISE STATE

KEY MILESTONES

DEFINING FACTORS

13

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These policies, along with our country’s leading practices in Ease of

Doing Business, where we have been ranked #1 for two consecutive

years in 2016 and 2017, have enabled Government of Andhra

Pradesh to attract investments from marquee names in Fintech such

as Conduent, HDFC, Franklin Templeton Investments, Paytm,

Cardlytics, Paytm, ICICI, Broadridge, Mastercard Mahindra

Finance, Black Cactus Global Technologies, Conduent

Visa has also collaborated with GoAP to develop Visakhapatnam

into India’s first ‘Less Cash’ City GoAP’s digital initiatives

combined with strong policy frameworks have also facilitated

consistent double-digit growth rates for the State In 2016-2017,

the State has witnessed economic growth of 11.61%, compared

to 10.95% in 2015-16, while the per capita income has increased

from $1,517 to $1,990 during the same period

To ensure sustainable accelerated growth, GoAP is focused on

creating a conducive business environment to attract investments

from companies and wants to ensure that the local population can

derive maximum benefits from the influx of such investments

The Government of Andhra Pradesh (GoAP) has identified

Fintech Valley Vizag as a high priority impact project for the State,

with the potential to create tremendous growth and employment

opportunities

The Fintech Valley, a Government of Andhra Pradesh initiative, in

Vizag is a self-sustainable global Fintech ecosystem where global

financial services companies, government and academia come

together in this valley to build capacity, infrastructure, market

access, connectivity, funding channels, and incentive mechanisms

to achieve unmatched business goals and successes

Further, GoAP understands the need of creating a critical mass

of talent pool to support the fintech and banking ecosystem,

in making Andhra Pradesh a Knowledge Economy focused on

advanced technologies

GoAP has set up the Andhra Pradesh Information Technology

Academy (APITA) and Andhra Pradesh State Skill Development

Corporation (APSSDC) to address and bridge gaps in skillset

among graduates and develop an industry-ready talent force

Further, the State established the International Institute of Digital

Technologies (IIDT) to train and equip students in advanced

digital technologies such as blockchain, machine learning, robotic

process automation and analytics

To provide the right mentorship to advanced technology start-ups,

a global fintech core group has been set up with industry experts

to provide guidance and interact with start-ups to mentor them in

building sustainable start-ups and, in turn, build a robust start-up

ecosystem for the State

GoAP also has created the largest repository of use cases (for banks, regulators or government) in the world This market access

is nothing but the use cases that many financial companies have put forward for startups in Fintech Valley Vizag

The State of Andhra Pradesh has an already existing 50 million connected user base market, providing a readily available market base for the start-ups GoAP aims to create a platform to connect start-ups with this user base

The Government of Andhra Pradesh is supporting banking and financial institutions for setting up operations or for expansion of business by providing the following incentives:

 Regulatory support and incentives

 Access to local and global investors

 Leverage learning from mentors

 Access to professional services providers (e.g tax, recruitment)

 Access to talent pool

 Access to corporate partners

 Access to physical and technical infrastructure

At the recently held Vizag Fintech Festival, GoAp has signed MoUs with CII, HDFC, Deloitte, Whub, SOSA from Israel, Wadhwani Foundation, Udhyam Association, FinTech Association

of Hong Kong, UK-based Chartered Institute for Securities and Investment (CISI) to galvanise fintech corporates and start-ups, provide the necessary resources, and, in turn, help in nurturing and promoting Indian Fintechs/Insurtechs by developing a launchpad environment and support system that will enable them to thrive and flourish

The Government of Andhra Pradesh aims to develop Vizag as a Fintech innovation valley with the intent of making Visakhapatnam the Fintech epicenter of the world The Government of Andhra Pradesh is going all out to create the best ecosystem for Fintech development in the city and providing incentives to entrepreneurs

in the field GoAP is focused on being the best in class in terms

of implementation of blockchain and other advanced financial technologies to

attract financial institutions and banks to invest and make the State of Andhra Pradesh as their business destination

IT LANDSCAPE IN THE STATE

The city, which registered a turnover

of approximately Rs 2,600 cr, during

the financial year 2017-18 is further

pushing to increase the turnover

to Rs 3,500 cr at the end of

2018-19 Visakhapatnam has prominent

IT players such as Wipro, Tech

Mahindra, HSBC, Concentrix,

IBM and Cyient The city boasts

of providing 12,000 jobs in the IT

and IT enabled service sector and is

estimated to add more than 20,000

jobs within a year The city has

experienced BPO talent pool serving

F&A, Healthcare, Telecom Industry,

HRO in voice and non-voice

processes

IT RELATED POLICIES

IT policy is based on key four pillars namely, Human Capital,

Infrastructure, Incentives and above all, a system of Good

Governance The policy envisages abundant investment

opportunities for the industry, employment generation and

enhancing productivity and competitiveness

ICT IDEAS

and have a trusted customer base of more than 50 million people Perfios provides a varied range of solutions which covers the 360-degree aspect of financial underwriting by providing Bank, Financial, Tax and GST Statement Analysis.

Being a technology driven company, Perfios has developed an extensible data platform that handles both structured and unstructured data – extracting, curating, analysing and providing vertical solutions in the area of real-time credit decisioning and Personal Finance management (PFM), leveraging some

of the latest Machine Learning and AI techniques and algorithms

Perfios Insights solution, a B2B solution

is a real-time aggregation and analytics tool for Financial Institutions, Banks, NBFCs and new age FinTech lenders to automate and digitise the entire process of customer onboarding (Underwriting)

It provides an edge over the manual system of FIs and some intangible benefits to the internal & external stakeholders by

 Cutting down the TAT for processing

an application (loans, insurance, etc.)  Lowering costs

 Providing higher accuracy  Enhancing the user experience thus resulting in increased customer acquisition

 Facilitating Strategic Goals  Providing better utilisation of resources

Perfios Software Solutions

(www.perfios.com) is the

leading Product-Technology

company in the FinTech

space enabling Financial

Institutions in real-time decisioning,

analysis and credit underwriting

Headquartered at Bangalore, Perfios

endeavors to create a substantial impact

in the fintech ecosystem and thus brings

to the fore, an expansive product suite for

financial and banking services

Perfios has grown to serve 200+

Financial Institutions which include

almost all the Large Banks, Progressive

Non-Banking Financial Companies,

FinTechs, Insurance Companies,

Alternate Lending agencies, AMCs, etc

Real-time Analysis & Decisioning

Perfios Software Solutions

(L to R): Aditya Prasad, Chief Evangelist; Debashish Chakraborty, Co-founder & CTO; Ramgopal Subramani, COO; Sabyasachi Goswami, SVP-Head

Sales & Strategy; V R Govindarajan, Co-founder & CEO

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It helps Financial Institutions get

in-depth analysis of data in real-time and

thus aids them in well-informed decision

making The solution also provides some

tangible benefits by

 Providing analysis in real-time,

accurate information on customer’s

financial worthiness

 Eliminating later-stage expensive

verifications

 Verifying the ‘Capacity to Pay’

 Identifying relevant recurring

income/expense transactions

 Providing completely customisable

output report listing out required

information (average balance,

recurring income/expense,

debt-to-income ratio, bounced cheques, bank

charges, overdrafts, late payments,

penalty etc.)

An integral part of the Insights solution

is the analysis of various financial

The synthesised report consists of all

possible ratios and formulae necessary

for calculating the finances of the

prospects This solution also provides

the option of fetching data directly

from the MCA portal and giving out

an analysed report It makes the entire

customer journey seamless and

hassle-free The reports generated by Perfios is

completely customisable

Perfios’ tax statement analyser fetches tax

documents of customers which includes

Form 26AS, ITR V & ITR forms for

employment verification of salaried

and professional customer type &

income verification of all customer types

required as part of credit assessment &

decisioning

Perfios has the capability to build the

final CAM (Credit Assessment Memo)

sheet, by fetching and analyzing data

from the ITR forms which is made

behavioral triggers which can help the lender in assessing the risk associated with it

In addition to providing core analysis of various data such as Bank statements, financial statements and tax statements, Perfios has created a new category

of solutions that triangulate data across various data sources – banking, financials, Income Tax Return, Goods Services and Tax etc and in the process establishing a single source of truth about a borrower and identifying frauds,

if any

In addition to enabling customer on-boarding for lenders, the platform also provides a powerful suite of PFM solutions that enables a variety of deep analytics that can be leveraged by various FIs in getting more insights about their customers that let them offer more relevant recommendations to their customers and in the process increase their revenue

As a category creator and a pioneer in the credit decisioning and PFM space, Perfios is an established leader in its chosen area of focus and is the trusted partner for most Financial Institutions

As a result of constant innovation and creation of a new category of solutions,

we have been recognised by both peer groups and media many times over 

Perfios has grown to serve 200+ Financial Institutions which include almost all the Large Banks, Progressive Non-Banking Financial Companies, FinTechs, Insurance Companies, Alternate Lending agencies, AMCs, etc.

available real-time, thus empowering the banks/financial institutions to make decisions on the fly

Our GSTN solution helps Banks &

Financial Institution to analyse Goods Services and Tax Network (GSTN) data of the Goods Services and Tax (GST) Taxpayer by providing the information as desired by the lender for instant decisioning, approval and disbursement of loans

The FCU checks the authenticity of a bank document to figure out if there has been tampering or if there are any

INDUSTRY PERSPECTIVE

In a bid to provide a home to every Indian by 2022, the Pradhan Mantri Awas Yojana (PMAY) housing for all scheme was launched

by the Government in 2015 This has made affordable housing/

finance the most sought-after business, says Pavan K Gupta, Chief

Executive Officer, Muthoot Housing Finance Company Ltd, in an

interaction with Rakesh Roy of Elets News Network (ENN)

Middle Income Group -1 (MIG) and MIG-2 scheme Affordable housing is defined differently by different people

Some define it on the basis of the size

of the loan or carpet area of house or affordability

How has the Housing for All Mission/ PMAY helped in the growth of the affordable housing sector in India?

The government has a vision to provide housing to every Indian by

2022 Under the Pradhan Mantri Awas Yojana (PMAY), the Centre plans to provide 20 million houses in Urban Area and 30 million houses in the rural areas In order to boost the demand and supply for affordable housing, Government has implemented various initiatives like providing infra status

to affordable housing, reduction of the Goods and Services Tax (GST) from 12 percent to 8 percent for

under construction properties under affordable housing, tax holiday to affordable housing developers for five years, allowing external commercial borrowing for affordable housing, Credit Linked Subsidy Scheme (CLSS) subsidy in urban areas and subsidy support for beneficiary lead construction

Credit linked subsidy is provided to economically weaker section (EWS), low in group (LIG), and Middle Income Group (MIG-1 and MIG-2) beneficiaries Under this scheme, eligible urban households get subsidy

up to maximum of Rs 2.67 lakhs on home loans availed from Banks/HFCs (Housing Finance Companies) etc National Housing Bank (NHB) and Housing and Urban Development Cooperation (HUDCO) are the central nodal agencies to implement the scheme

Affordable Housing is gaining a lot of

significance Would you like to share

the reason behind it?

Today every discussion on housing

starts and ends with affordable housing

In 2015, with a vision to provide a

home to every Indian, the Government

launched “Housing for All by 2022”

scheme This Centre’s initiative brought

the focus of government authorities,

builders, regulators and bank/Housing

Finance Companies (HFCs) to

affordable housing About 95 percent of

the housing shortage in India is in the

low-income segment which comprises

the EWS (Economically Weaker

Section) having annual income up to

Rs three lakhs and LIG (Low Income

Group) having annual income of Rs

3-6 lakhs The housing for all primarily

focuses on the EWS and LIG segments

This scheme also covers people having

annual income between Rs six lakhs

to Rs 18 lakhs which fall under the

INDUSTRY PERSPECTIVE

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National Housing Bank has issued

around 35 new licenses in the last

three years to start Housing Finance

companies (HFCs) Most of these

new HFCs are focusing on funding

affordable housing customers in the

informal sector This has led to the

easy availability of housing finance to

the EWS/LIG segment of customers

All these above factors have led to

spurt in the demand and supply of the

affordable housing

What role does Muthoot Housing

Finance Company Ltd (MHFL) play

in providing housing finance to the

masses, not addressed by the formal

Banking sector?

Muthoot Housing Finance Company

Ltd extends housing loans to salaried

and self-employed customers

with formal and informal income

According to the Ministry of Housing,

Urban Poverty Alleviation, the

Economically Weaker Section (EWS)

and Low Income Group (LIG)

accounted for 95 percent of the total

housing shortage in India Out of

the total working population in this

category, 65 percent in the urban area

and 90 percent in the rural area are

engaged in unorganised or informal

segment These customers do not

the above We customise products as per their clients’ needs We have developed

a robust credit appraisal process It is during personal discussion, the customer needs, income and his repayment capacity is evaluated on the basis of which home loan is given Invariably all our customers are end users

How does technology boost the growth

of affordable housing finance in India?

Technology has helped HFCs/ Banking Financial Companies (NBFC)

Non-to provide fast, efficient, cost effective, customised product and services to customers It helps in increasing the productivity of the manpower, better utilisation of resources and automation of many manual procedures It has helped

in reaching out to larger geographies for business acquisition without setting

up brick and mortar set-up Use of mobile and mobile technology has made onboarding of a customer easy, fast and cost-effective

Technology helps to manage risk through analytics It helps in taking informed credit decisions Collection and recovery process have become far more effective and efficient and significant scale up of business across geographies at cost-effective manner is possible with the help

of technology

What are your future plans for the business growth? How do you think the affordable housing sector will grow

in the next few years?

Muthoot Housing Finance plans to have asset under management of more than,

Rs 3,000 crores by 2021 The affordable housing finance is likely to grow at 35-40 percent in the next few years This growth

is enabled because of Centre’s focus to ensure housing to all by 2022, rapid urbanisation, migration of people from rural to urban areas, development of 100 smart cities, nuclearisation of families and rapid income growth in the EWS/LIG segment.

About 95 percent of the housing shortage in India

is in the low-income segment which comprises the EWS (Economically Weaker Section) having an annual income up to Rs three lakh and LIG (Low Income group) having annual income of Rs 3-6

have a formal income proof and thus do not get home loan from the banks and large HFCs

MHFL is present in nine States and caters primarily to these underserved customers To cater to the informal customers in the affordable housing segment, understanding of the customer business, evaluation of their income basis their cash flows and understanding of local property market

is inevitable At MHFL, we have been able to develop expertise to execute

INDUSTRY SPEAKS

becoming more open to switching financial services providers (even if the provider is not a bank) if they find one that offers them a better experience

By making the right technological investments and adopting more flexible business models, banks have the opportunity to enhance operational efficiency and accelerate innovation in order to improve customer satisfaction and increase revenue

Digital Banking in Asia-Pacific (APAC)

Banks in the Asia Pacific are recognising the advantages of going digital

Reports shared by market intelligence and advisory services firm IDC (International Data Corporation) indicate that about 80 percent of the region will operate on a hybrid cloud architecture by the end of 2018 By doing so, they may be able to lower the total cost of ownership and increase agility

Since cloud provides the ability to quickly provision resources, it allows banks to quickly develop and deploy new apps and services that address changing market and customer demands

Taking it a step further, those banks could also deploy automation tools to both improve operational efficiency and free up staff for revenue-generating tasks such as cross-selling and building relationships with customers

Open Banking is the way forward

Although banks have already started digitally transforming to better compete

in the digital age, they should bear in mind that digital transformation is a journey, not

a destination

As the business environment becomes increasingly volatile and uncertain, banks need to remain nimble and continuously innovate to quickly address the ever-changing consumer and market demands Banks have a duty to constantly refine their applications to keep up with times This is where open banking can help.Open banking is a model in which banking data is shared between two or more unaffiliated parties through Application Programming Interfaces (APIs) It provides opportunities for banks to gain

a 360-degree view of customers that can

be used to help enhance their services and create new revenue streams For instance, banks could use data from insurance companies to provide real-

Introduction:

Rapid innovation across industries has

given rise to changing consumer behavior,

especially in the banking and financial

services sector This has also enabled

non-traditional players like PayTM and

PhonePe to offer financial services in India

In fact, according to recent reports shared

by McKinsey, it is estimated that digital

banking penetration has grown 1.5 to 3

times in emerging Asia since 2014 This

trend indicates the growing need to

establish efficient digital channels for

day-to-day operations

The need for banks to deliver exceptional

customer experiences is now more

important than ever, as customers are

BENJAMIN HENSHALL

Country Manager India and Director Sales,

Financial Services, APAC at Red Hat

Open Banking:

A Strategic Approach to

Win Digital Consumer

INDUSTRY SPEAKS

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time comparisons of insurance plans and

automatically suggest the best deal based

on the customer’s financial capacity/needs

Recognising the benefits of open banking,

some Asian banks are opening access to

their APIs to co-create new and more

customer-focused financial products and

services Such a move will enable banks

to leverage each other’s strength and

accelerate the speed of innovation

To further benefit from open banking,

banks should take a microservice-based

approach to building apps, in which

large apps are broken into smaller,

independently scalable components (also

known as microservices) according to

their functionalities This enables app

developers to make changes to specific

microservices instead of a big piece of

code, reducing the complexity and time it

takes to release app updates

Moreover, microservices can help banks

Macquarie’s Banking and Financial Services Group is one such bank that has benefited from adopting microservices

By using microservices and containers,

it now takes the Australian financial group minutes instead of hours to release software updates and features It is able

to update existing applications quickly without any downtime on the customer end, as well as meet customer demands for new services

Given the rapid pace of change, banks need

to be agile to effectively deal with unknown disruptions that will come their way Open banking is the key to achieving this Elements of open banking such as APIs and microservices can not only help solve the challenges they face today, but also help banks build the right foundation to address future customer and business needs.(Views expressed in this article are a personal opinion

of Benjamin Henshall, Country Manager India and Director Sales, Financial Services, APAC at Red Hat )

Open banking is a model

in which banking data is shared between two or more unaffiliated parties through application programming interfaces

(APIs).

accelerate software development as they can be reused as the foundation of new apps With such a capability, banks will be able to constantly keep up with changing customer demands, which

is crucial in ensuring good customer experience and retaining customer loyalty

where the real problem lies We at Signzy understand the time and cost involved from a banker’s point of view and customer’s experience in the whole process This challenge has given us an opportunity to figure out a more affluent solution which will simultaneously abide all the regulatory requirements The proposed solution is none other than the video based online identity verification method

Why is Online Identity Verification the Ultimate Solution?

Online identity verification often leverages the artificial intelligence and computer vision technology, and views of

a verification expert to deem whether the government-issued ID presented by the customer is legit or not

At Signzy, we developed a solution which performs validity checks via a real-time video session to ensure that the individual holding the ID is the same being showed

in the ID Some of the features are:

 Providing best-in-class face match score by matching the photo Identity with the real-time video session to eliminate the possibility of fraudulent activity

 Detection & elimination of static photographs or pre-recording videos

 Liveliness is checked by matching the audio with the numbers or sentence that are asked to speak by the user

 Use of video forensics to detect if the video has tampered in any way

 Quick implementation of API, SDK, and Webcam for online video KYC

 Faster results as it typically takes only a few minutes to verify (Which can also

- ‘(K)Netra’ which brings human-like intelligence on people & documents and our Machine Learning (ML) based engine

‘Mimasa’ which detects behavioural risk using massive digital data

This innovation has been recognized several times in our journey including awards from Indian Banking regulator- Reserve Bank of India (Jul 16,18), IBM (Aug 16), Thomson Reuters (Nov 16), Forbes (Jan 17) and HDFC Life (Mar 17), Monetary Authority of Singapore (Nov 17) Signzy today works with over

75 clients including the top public, private sector banks as well as large NBFCs 

In December 2018, the Reserve Bank

of India (RBI) mulled over some

new modes of electronic verification

methods pertaining to the financial

institutions of India Video KYC (Know

Your Customer) was one of the most

plausible options among the others

As Aadhaar based biometric customer

verification is out of the picture now,

Signzy, an active working committee

member of the IAMAI (Internet and

Mobile Association of India), has suggested

video KYC (Know Your Customer) as an

alternative solution

We at Signzy understand the power of

Artificial Intelligence (AI) and how it can

be leveraged to solve numerous problems

associated with the financial institutions

of India We are aiming to build a global

digital trust system with three major

components:

 Identify an individual/entity accurately

 Know all the essential background

information of an individual/entity

 Feature to reward or penalize the

individual/entity to build a trust factor

That is our mission, and we voraciously

work to achieve the goal in this dynamic

market

The Cons of Clumsy Old KYC

Verifications

Let’s have a look at some of the factors that

showcase the clumsiness in the current

offline KYC verification method:

 Maintainance of physical files, which

requires time, manpower and space

 The offline process of documents

collection brings the threat of misuse of

documents

 The turn around time (TAT) per file

increases which hampers the customer

experience

 In-person verification requires

customer’s availability which further

delays the onboarding process

These pointers are enough to highlight

The Future of Banking and Insurance Sector: Video KYC

INDUSTRY PERSPECTIVE

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Tejora’s “Client-first” attitude keeps fostering its drive to understand client’s business needs and equip them with the right solution to

reach goals, says Surabhi Shenoy, Managing Director, Tejora Private Limited, in conversation with Elets News Network (ENN).

offer newer and better products at much faster pace The landscape will continue to change rapidly in near future We keep ourselves ahead

of the curve, and continue to work on Turn-key and Digital Transformation initiatives On top of

my mind I recall, path-breaking progress on,

 Re-engineering legacy systems with a Microservices Architecture

 Decoupling monolithic systems for swifter integrations

 Leveraging APIs with an API Manager and API Gateways

 Orchestration of Infra and Development through Dockers and Kubernetes

 Slowly enabling CI-CD through Jenkins and Ansible

 Exploring Apache Spark and Kafka for streaming and processing large volumes of data

 Cloud Support andLift-Shift services

Cloud and Data mining holds a significant position across the industry How do you ensure safety for the services you offer in the segment?

We relate to the challenges towards identity and access management capabilities designed to strengthen compliance management and reduce risk in today’s cloud environment

Stop threats

Protect organisation from cloud threats such as malware and ransomware while we set tools to detect unusual data movement and malicious user activity to averse an active and passive threat

What new innovations are you planning for 2019?

In the age of robotic assembly lines driverless cars and drones, cutting-edge automation and robotics are scripting a silent revolution in the sector shifting focus from cost reduction through labor arbitrage to driving business value through innovation Challenges to overcome automation drive new age innovation and introduce the right tools that meet regulatory requirements and maintain data privacy remains our 2019 focus.

Give us an overview of your products and

services.

Tejora is a Technology and Consulting

company with a team of 250 skilled

professionals Over 15+ years, we have

delivered 100s of Enterprise-grade innovative

solutions using various cutting edge

technologies Our products mainly cater to

Banking and Trading and Securities verticals

Various technologies and platforms we have

been working with are AWS, Azure, Dockers,

Kubernetes, Jenkins, Java, Net, PHP, Python,

NodeJS, AngularJS, ReactJS, Native and

Hybrid Mobile development

Some of our popular Products are -

Property Finance Appraisal System

This platform helps Banks and Housing

Finance companies to approve Builder

projects and provide Finance to Individual

which includes cases like LAP, Resale etc The

platform helps appraise the property and helps

in decision making of exposure and sanction

limits Post loan approval, it helps in tracking

project progress, and disbursement

Quick Pay

A revolutionary Value Added Service platform

enabling banks and financial institutions to

acquire Small and Medium-Ssized Enterprises

(SMEs) This platform helps Bank’s merchants

(SMEs) generate, track and setup invoices

for multi-channel payment collection with

additional support on E-Tendering system

Implemented at Axis Bank, IndusInd, Yes Bank

Chatbot

Enabling intelligent dialogue between your

customers and systems to facilitate smarter,

higher-value purchase and service interactions

Allocations and Collectable App

The solution allows automated assignments

and tracking of all delinquent cases using

an engine to both internal and to external

agencies for smoother collection and to get a

real-time update

What new technologies have you

implemented to streamline BFSI services?

BFSI has been adopting technologies to

provide better Customer Experience in every

aspect Technology has been enabling them to

Tejora-Architecting Solutions to Meet Highest Standards in BFSI

SURABHI SHENOY

Managing Director, Tejora Private Limited

TOP MOMENTS OF 2018

The year 2018 had come to an end and it brought

several significant changes across the banking and

finance sector The year saw emergence of several new

non-banking leaders and implementation of vital tech-driven

innovation

Being a leading B2B voice of the Banking, Financial Services

and Insurance (BFSI) sector The Banking & Finance

Post through its print as well as the online version and the

conferences, highlighted several vital topics The Banking &

Finance Post in association with Elets Technomedia organised

five premier conferences across the country and also launched

five special issues of the magazine

The year was also eventful because we released the second

edition of India’s Top 50 NBFCs’ Ranking 2018 and it gained a

lot of popularity amongst our readers

Highlights of Conferences Organised in 2018

In 2018, we organised five conferences across India focusing on

several significant issues pertaining to the Banking, Financial

Services and the Insurance (BFSI) sector Around the year, our

conferences witnessed the participation of over 200 speakers,

more than 80 partners and over 800 delegates

February 2018:

2nd BFSI Cloud & Security Summit, Mumbai

Delving into the role of cloud and the need for security measures, Elets Technomedia organised 2nd BFSI Cloud &

Security Summit in Mumbai, where experts highlighted the need

to offer customer first banking armored with secured systems The summit focused upon some of the most emerging issues pertaining to cyber security and safe banking It highlighted the use of technologies such as cloud computing, Blockchain and Artificial Intelligence in the Banking, Financial Services and Insurance (BFSI) Sector In the summit, experts also talked about the various reforms initiated by the Centre for promoting the usage of digitisation in the banking sector They opined that banking sector institutions are opening up and showing their acceptance towards new technology up-gradations They are now collaborating with external interfaces Rama Vedashree, Chief Executive Officer, Data Security Council of India inaugurated the summit Several other dignitaries namely Brijesh Singh, Secretary and Director General, Directorate General of Information and Public Relation, Government

of Maharashtra ,K Ramachandran, Senior Advisor-Banking Technology, Indian Banks’ Association and Haresh Krishna Kumar N, Country Manager-Vertica, Micro Focus were part

of the inaugural session and deliberated about their expertise pertaining to the banking and financial industry

April 2018:

3rd NBFC100 Tech Summit, New Delhi

Holding a big potential and spark to innovate and remove several roadblocks currently existing in the banking sector, the Non-Banking Financial Companies (NBFCs) should be perceived as future leaders of the BFSI sector, experts opined

at the 3rd NBFC100 Tech Summit held recently in New Delhi Some of the experts stressed on exploring the reasons behind NBFCs’ success at a time when a lot of banks are not

Top Moments of 2018:

NBFCs’ Ranking, Magazines

and Five Conferences

TOP MOMENTS OF 2018

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succeeding Some of them underlined the game-changing

role of technology be it in terms of customer onboarding or

loan approvals where technology has been the key enabler for

NBFCs Prem Narayan, Deputy Director General, Unique

Identification Authority of India (UIDAI), Government of

India, earlier in the day inaugurated the summit organised by

Elets Technomedia and powered by The Banking & Finance

Post, Asia and the Middle East’s premier bimonthly magazine

Several other eminent dignitaries namely Raman Aggarwal,

Chairman, Finance Industry Development Council, Alexis

Bossuyt, Trade and Investment Commissioner, Flanders

Investment and Trade, Embassy of Belgium and Deepak

Kapoor, Co-founder, InfoAxon Technologies, were present on

the occasion Be it the role of NBFCs in redefining the financial

inclusion scenario in India, technology transforming NBFCs,

modifying framework of NBFC or the role of regulatory

bodies etc were included in the list of issues on which various

esteemed dignitaries, who were a part of this congregation,

deliberated Here is a bird’s eye view of the grand extravaganza

held in the national capital in April

June 2018:

4th NBFC100 Tech Summit, Hyderabad

As the Government

is steadily working on ensuring financial inclusion in the country, the BFSI sector has acquired

an unprecedented significance to facilitate it the real way

Innovation and tech-driven banking sector along with big

financial companies are big factors behind this financial

transformation happening at a fast pace

In this light, highlighting the excellence and understanding

the innovations made in the field of Non-Banking Financial

Companies (NBFCs) in South India, Elets Technomedia

organised the 4th NBFC100 Tech Summit in Hyderabad in

June

The mega congregation of experts from across financial

institutions was inaugurated by Ajay Mishra, Special Chief

Secretary, Department of Energy, Government of Telangana

Jayesh Ranjan, Principal Secretary- Information Technology,

Industry & Commerce, Department, Government of Telangana

also attended the summit and shared his valuable insights of

NBFCs Other eminent dignitaries namely Gowra Srinivas, President, Federation of Telangana and Andhra Pradesh Chambers of Commerce & Industry, Dr Ruchi Agarwal, Senior Researcher, Indian School of Business, Dr B Yerram Raju, Adviser and Telangana Industrial Health Clinic Limited, Government of Telangana addressed the inaugural session and shared their views on Hyderabad and its financial landscape

August 2018:

3rd BFSI CTO Summit, Goa

In an endeavour to highlight the rising implementation

of technology across the Banking, Financial Services and Insurance (BFSI) sector, Elets Technomedia organised the 3rd edition of BFSI CTO Summit in Goa this August

The summit was inaugurated by Ankur Gupta, Principal Secretary, Department of Electronics & Information Technology and Elections, Government of Haryana and Rajagopal Devara, Principal Secretary, Department of Finance (Reforms), Government of Maharashtra

Other eminent personalities namely Padma Jaiswal, Secretary, Department of Information Technology, Government of Puducherry, B Raj Kumar, Deputy Chief Executive, Indian Banks’ Association and LR Ramchandran, Chief General Manager (CGM)– Financial Inclusion & Banking Technology, NABARD, also participated in the inaugural session and later shared their insights on reinventing financial services

November 2018:

5th NBFC100 Tech Summit, Mumbai

In November 2018, NBFC100 Tech series travelled to the financial capital of the country Mumbai This conclave focused on the rising significance of NBFCs and the growing implementation of technologies in them

The summit witnessed a massive participation of over 125

TOP MOMENTS OF 2018

NBFCs and

25 partners from across the country

Several eminent dignitaries namely Dr Amitabh Rajan, Chairman, Reserve Bank of India Services Board, Dr Kavita Gupta, Managing Director, SICOM Ltd,

Pavan K Gupta, Chief Executive Officer, Muthoot Housing

Finance Co Ltd, Shashi Kumar Ravulapaty, Group Chief

Technology Officer, Art Fintech and Navin Mehra, Regional

Director, Fortinet were a part of the inaugural session

Magazines

In 2018, we published five magazines focusing on several vital topics pertaining to the banking and financial sector While the September-October Issue focused on India’s Top 50 NBFCs’ Ranking 2018, September-October Issue elaborated the role of Chief Technology Officers

Our May-June Issue was focused on the BFSI landscape of South India and March-April Issue was dedicated to “India’s Inspiring Leaders”, an initiative to highlight the role of trendsetters

January-February Issue focused on emerging technologies such

as cloud computing, Artificial Intelligence and lot more

Web Portal

The appreciation of our stakeholders was not just limited to our conferences and magazines, our portal received a lot of acknowledgment

India’s Top 50 NBFCs’ Ranking 2018 was the most viewed post on 2018 and a lot of our guest columns also remained as the top favourites around the year

Most Viewed Article

India’s Top 50 NBFCs’ Ranking

Total Online Posts in 2018

News: 800+

Articles: 90+

Interviews: 50+

Videos: 100 +

MICROFINANCE PERSPECTIVE

considerably poor population, having the enormous potential for development

Prime Minister -Narendra Modi’s effort

to make North East India more inclusive

is definitely a welcome move However, North East shouldn’t be weighed with the same parameters, like other parts of India

The identity of the population of North East is complex and multi-layered including tribal kinship, financial status, and political affiliation and sometimes cumulated with the status of education In order to promote livelihood and bring people out of poverty, the key stimulus is availability of financial institutions and accessibility

Precipitation of Financial Inclusion through partnership: An example

The Government is diligently working

to include unreached geographies and population under the ambit of financial inclusion, however failing owing to inadequate convergence between different arrays

Let us understand the phenomena through data The two reference sources used are CRISIL Inclusix, 2013 and 2015 along with the Reserve Bank of India’s Basic Statistical Returns First CRISIL Inclusix 2013, which has considered the banking data of 2009 to

The eight States located in India’s

north-east cover an area of 2,62,179

sq km constituting 7.9 percent of

the country’s total geographical

area, but have only 46 million

people, which constitute 3.7 percent of

country’s population According to Planning

Commission’s statistics, Assam has 116.4 lakh

people living below the poverty line, Manipur

12.5 lakhs, Meghalaya 4.9 lakhs, Mizoram 2.3

lakhs, Tripura 6.3 lakhs, Nagaland 4.1 lakhs

and Arunachal Pradesh 3.5 lakhs; significantly,

Tripura and Arunachal Pradesh, have

shown a dip in the poverty scale North East

India characterise with sparsely populated

internationally sensitive, geography with a

North East India, Financial Inclusion: A Dimension

Inclusive Growth in North-East India: The Way Forward Through Alternative

Channels of Microfinance

MICROFINANCE PERSPECTIVE

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2011 where all India score was 40.1 points and

North Eastern Region, 28.5 in 100 point scale

However, while analysing the data of RBI, in

the same span, the CAGR of number of offices

(commercial bank) has seen anincrease; 5.79

percent nationally and 4.30 percent in North

East India

It is showing despite of increase in the

number of offices (commercial banks),

the penetration is significantly low

However, the same CRISIL Inclusix

2015 is showing positive shift in financial

inclusion of India which was 50.1 points,

owing to the presence and penetration of

Microfinance Institutions The CRISIL

Inclusix (2015) score for North East, in

2013, stood at 39.7 compared to 2011,

which was 28.5

The augmentation of North East has been

attributed to the presence of large MFIs in

Tripura and Assam Tripura reached to top 10

for the first time with a CRISIL Inclusix score

of 63.8 and Manipur, however, continued

to be the lowest-ranked State with a score

of 21.6 It is clearly indicating that banking

industry needs to be bridging ally with the

microfinance industry

Microfinance Sector of North: The

front-runner

Let’s bring the insights of the microfinance

industry The next set of data has been

sourced from Sa-Dhan, the sole data

aggregating agency, which includes both

Non-Banking Finance Companies (NBFCs)

and Non-NBFC MFIs (Microfinance

Institutions)

The data is sourced upto 2014-15, as after

that, themicrofinance industry has been seeing

a substantial shift, so there may be chance

of mixing up of data Microfinance Industry

of North East is visibly a front-runner in

the country with CAGR of 93.70 percent in

Gross Loan Portfolio and 34.91 percent client

outreach, can be best ally for banking sector

According to Sa-Dhan Bharat Microfinance

Report 2017, there are at least 21 good MFIs

extending financial products in the different

RBI, through its notification, viz DNBR.CC.PD.No.078/03.10.038/2015-16 has removed the regulation regarding maximum permissible variance in the interest rates for NBFC MFIs, in cases of channelising the government agencies’ loan for specified socio-economic class The North Eastern Development Finance Corporation Ltd (NEDFI) is already working with microfinance industry Government schemes can be channelled through MFIs

Provisioning of term loan to the MFIs will

be the better model as the MFIs can develop their own products as per need of the clients The BC model has its own challenge as it does not build up self-dependant institutions,

it builds up banking sector dependant institutions BCs do not generally consider the need of the people, rather the policies and products of banks hover over the system The new concept of loan co origination model can also be looked at

In order to facilitate the financial inclusion

in North East, the Reserve Bank of India can think of subsets under the stipulated segments

of PSL, specified for North Eastern Region

It will enhance the availability of finance for microfinance sector to cater the unreached people and enterprise development (Views expressed in this article are a personal opinion

of Dr Saibal Paul, Associate Director, Leading Policy, Membership and Strategic Initiatives, Sa-Dhan.)

states of North Eastern India There is a significant growth in clientele over the years, from 14 lakhs in 2012-13 to around

22 lakhs in 2014-15, before consolidation of the microfinance market Small Industries Development Bank of India (SIDBI), North Eastern Development Finance Corporation Ltd (NEDFI), RGVN Microfinance Limited, NABARD and other agencies have always supported the endeavours of the microfinance sector by developing the capacities of the MFIs, providing resources and others However, the appetite of the sector has been always substantially superseding the availability of the resources, especially term loans for the MFIs

Inclusive Finance in North East India:

The Way Forward

For proper financially inclusive growth of the North East Region, there is a need of developing public-private initiative, which

is more than a grant-making and grantee relationship The Ministry of Development

of North Eastern Region needs to beef up the alignment of its associate organisations, NEC, North Eastern Regional Agricultural Marketing Corporation Limited

(NERAMAC), and North Eastern Handicrafts and Handloom Development Corporation (NEHHDC) with the alternative channels Non-Governmental Organisations and MFIs have the last-mile reach to cater the people A separate independent platform can be created for planning and implementation

INDUSTRY SPEAKS

Today, organisations don’t just have to manage anti-viruses and spamwares, now there is mobile security to be looked into, cybersecurity to be handled, variety of access controls to be managed

and assortment of Bring Your Own Devices (BYODs) to be secured With Vulnerability Assessment and Penetration Testing (VAPT) cycles becoming frequent, security dynamics are changing every day Today there is a direct intrinsic value attached to these risks that every organisation tries to ward off with its security initiatives There is no standard benchmarking – each company needs to define its own adequate level of security

A question that often pops up amongst the savvy and non-savvy circle alike is just about how much security is enough?Quite clearly, perfection, as with every other entity, is pretty unachievable when

it comes to Information Technology (IT) security as well You simply cannot protect and prevent everything A lot of vendors work in a reactionary mode – which means security got compromised somewhere after which point the fix for it was included in the next product release So even if you’ve managed to pull

a guard against all known threats, hackers are working equally hard to come up with new ones Such a constant evolving space can get overwhelming at times, making you feel as if you are chasing

a moving target Hence it’s important while putting together your security risk management framework that you ask the

There has been a pioneer rush lately

in the otherwise over cautious

Banking, Financial Services and

Insurance (BFSI) industry, the sector

that in the good old days would have just

waited and watched a certain technology

perform for some years before even

slotting it for a demo Those dynamics

are now changing, and quite frankly they

have been changing for a while now With

the advent of mobile services, and their

growing accessibility and diminishing cost

over last couple of decades, there has been

a major thrust to this digital wave

Financial industry being primarily made

up of data is the most susceptible industry

for digital transformation And the pace

at which these changes have got affected

over the last few decades, coupled with

the launches and advancement of new

technologies in this domain, has been

phenomenal, while also warranting a

need for exercising some caution while

embracing them

Security was always on the agenda, but it is

no longer about meeting the regulatory or

compliance requirements alone or keeping

your auditors happy Security challenges

have now started emanating from a variety

of sources, rising just proportionally

with all your digital channels of business

MEHJABEEN TAJ AALAM

Head of Information Technology at Muthoot Homefin (India) Limited.

Security is Enough?

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