Aruna Rao, Senior Executive Vice-President and Group Chief Technology Officer, Kotak Mahindra Bank Limited

Enterprises in the banking, financial services and insurance (BFSI) industry have been early adopters of information and communication technology (ICT) solutions, which have enabled them to digitise their operations and make them more efficient. The government’s demonetisation move has provided a further impetus to the digitisation initiatives. However, since enterprises in the BFSI space deal with confidential consumer data, ensuring data security while using ICT solutions is of paramount importance. IT heads of leading BFSI enterprises discuss their IT strategies, technology trends, the impact of demonetisation on everyday operations and the level of cybersecurity readiness in the industry…

What are the key IT and telecom solutions dep­loyed by your organisation? How have these helped in improving business performance?

Since all banking functions are automated, a large number of IT solutions are adopted by banks. Internet protocol (IP)-based technology is a key telecom solution used by banks for their contact centres. This is a common technology that is used across the entire Kotak Group. It routes calls across multiple contact centres and has the capability to reroute calls or traffic to alternative centres in case of heavy traffic. The IP-based technology is integrated with a state-of-the-art CRM platform to provide better customer services and an analytics platform to offer customised inputs to each user.

What has been the impact of demonetisation and the push towards a cashless economy on your IT needs?

The government has taken several initiatives to promote the use of digital solutions in the country. To this end, many initiatives have been taken to provide digital payment options to customers. These include the infrastructure set-up by the Unique Identification Authority of India for Aadhaar cards and Aadhaar-based authentication, the framework for immediate payment service and unified payments interface, Aadhaar-enabled payment systems, and the launch of the Bharat QR code.

After demonetisation, many regulatory changes have been made for financial services organisations to leverage the opp­ortunities provided by the digital ecosystem. We at Kotak have leveraged this opp­ortunity by offering the Kotak 811 – India’s first downloadable bank account based on Aadhaar authentication. An account can be opened using our mobile application and does not require any signatures.

What is the scope of big data analytics, cloud and internet of things (IoT) in the BFSI industry? What are your plans for deploying these technologies? 

The scope of these technologies is wide enough to revolutionise IT departments in the BFSI sector. At Kotak, we are actively leveraging big data analytics and cloud technologies. We are also considering the deployment of IoT technology to ensure adherence to security and privacy norms.

What are the key challenges faced while implementing new technologies?

Emerging technologies like chatbots, big data and machine learning have the potential to transform customer experience. However, the key challenge is to recruit new staff and reskill existing employees in line with new technologies. Mean­while, because of the direct integration of technologies with external systems and cloud implementation, the governance mechanism of these technologies also needs to be reviewed.

“There is a high level of awareness on cybersecurity in the BFSI sector.” Aruna Rao

What are your views on the cybersecurity readiness amongst BFSI companies in India? How do you ensure the security of your customers’ data?

There is a high level of awareness on cybersecurity in the BFSI sector. Acc­ording to the Reserve Bank of India’s recent guidelines regarding a cybersecurity policy, all banks should review their systems, set up appropriate response centres and ensure compliance with the guidelines. Over the years, several technologies have emerged for monitoring and detecting potential security breaches. These technologies include advanced persistent threat prevention, fraud risk management systems and data leakage prevention. These are currently being used by the BFSI sector. However, with the increase in the sophistication of cybercrime, there is a constant need to stay vigilant. To this end, cybersecurity forums provide opportunities to security professionals to connect and share information on the issue.

Going forward, what are the key IT and telecom trends that the BFSI industry is likely to witness?

The industry has witnessed the emergence of new technologies like robotics, internet of things (IoT), machine learning, AI and big data in recent times. Going forward, the trend will be to combine these technologies to transform customer experience. Some of these trends would be:

  • Massive amount of data generated from IT systems and IOT will be used by analytic systems and algorithms to provide autonomous business models.
  • Use of security systems for monitoring rather than blocking digital interactions.
  • Use of service-oriented architecture for applications and software defined networking will become an essential foundation for adopting new technologies.
  • Evolution of computing hardware architecture such as field programmable gate array to enable rapid computing.
  • Evolution of open standards to allow the exchange of data between IoT and connected systems for facilitating rapid integration.