Riyaz Ladiwala, SEVP and Head, Technology and Operations, Edelweiss Wealth Management

The Indian banking, financial services and insurance (BFSI) sector has made significant advancements in recent years, witnessing an accelerated pace of digital transformation. Enterprises across the sector are leveraging futuristic technologies such as artificial intelligence (AI), machine learning (ML), blockchain, cloud and data analytics to streamline customer services and mitigate business risks. Industry players share their views on how these technologies are reshaping the BFSI space in India, the implementation challenges and the future outlook…

What role is technology playing in the BFSI industry? What are the key solutions adopted by your organisation?

Technology has played a huge role in di­minishing market barriers, establishing payments and identity ecosystems, and le­velling the playing field in the BFSI space. At EWM, there is a process of:

  • Continuous improvement in processes to create efficiencies and gain an edge
  • Creation of a strong infrastructure backbone that is future ready and scalable.
  • Automation of activities using application programming interfaces (APIs) and bots to build scale, manage risk and re­du­ce people dependencies
  • Constant focus on user needs and aspirations to improve client experience through our platforms.

Some of the key pillars of EWM technology have been:

  • Cloud adoption: It has ensured high availability, scalability and resiliency of our business applications.
  • Enterprise API gateway: It has en­abled us to leverage internal and exter­n­al partner ecosystems and accelerate the launch cycle for new products.
  • Intelligent automation: It has facilitated the development of new experiences and rapid delivery of process changes
  • Artificial intelligence (AI): Over 20 models have been deployed to evaluate ri­sks, perform anti-money laundering ch­e­cks and know-your-customer (KYC), identify frauds, etc. in the company, th­e­reby building efficiencies in our business.

How are new-age technologies such as AI, blockchain, RPA, big data and cloud transforming the BFSI space? What are some of the key use cases of these technologies?

The advent of cloud computing coupled with AI/ML has opened the door to real-time analytics, allowing clients to access solutions within a fraction of the time co­mpared to what would otherwise take days to deliver.

Cloud computing has helped reduce the time and cost of new product deployment and allows for the experimentation of new features.

Blockchain is still at a nascent stage in India and outside of cryptocurrencies, there is some experimentation happening, but we are yet to see its adoption at a large scale.

At EWM, we have spent a significant amount of time creating cloud-ready platforms and migrating legacy platforms to the cloud, helping deliver software directly and securely over the internet as a service, resul­ting in considerable cost and time savings. An AI/ML layer has been added to our structured and unstructured data around client and relationship management activity to help understand client behaviour and structure our product offerings, advisory and communications accordingly.

Heavy investments have been made to shift from traditional reporting platforms to user-friendly reporting tools. The availability of our internal reports and analytics on dashboards has ushered in a culture of data-driven decision-making and monitoring of key performance indicators. In addition, EWM has harnessed the fintech ecosystem to improve the client onboarding experience by significantly reducing enrolment time and errors. At an enterprise level, we have also deployed bots to perform tasks more efficiently.

All the above has been achieved with a focus on data security and governance. We continue to invest heavily in upgrading our platform with the latest and state-of-the-art information security tools.

How will the growing adoption of metaverse influence the way banks engage with their customers, deliver services and launch new products in the BFSI sector?

Metaverse is yet at its founding stage and businesses are still getting their hands ar­ou­nd the technology and finding use cases for the same. However, it is promising and over time, we should find ways to use it significantly more effectively to deliver services to clients in an engaging manner.

Banks and financial institutions should realise and identify new advertising opportunities that metaverse has created from digital billboards to partnerships with ce­le­­brities, whose avatars will speak to po­tential customers.

What are the possible impediments and security threats while deploying these technologies? How do you plan to address these?

The next generation of the internet will be both immersive and in 3D.

  • Moderation challenges: No help or su­p­port access exists in most of the me­ta­verses. NFT theft, for example, can lea­ve a user without support.
  • Identity: Metaverse users’ identities can be spoofed, their accounts can get ha­cked and their avatars can be taken over. A common challenge is that the id­entity of the person metaverse users are dealing with is always suspicious.
  • Client vulnerabilities: VR and AR he­ad­sets are heavy-duty machines and are ripe targets for malicious and inadv­er­tent hacks. Location spoofing and device manipulation enable perpetrators to take over users’ identities and cause havoc after entering the metaverse.
  • Law and jurisdiction: Submerging into the metaverse will bring forth the question of legislation and jurisdiction, re­quiring countries to look more into the virtual legal domains. With the gro­wing virtual space accessible for users worldwide, it will be essential to identify whi­ch jurisdiction will be applicable to en­sure the virtual space is safe and se­cu­re for its users.
  • Data accuracy: Location, merchandise quality, reviews, user information and third-party trusted data are anchored ar­ound accuracy. However, ensuring accuracy can be difficult. Submerging into th­ese technologies will require to evolve security methods at par with the ever-so-ex­panding space of the technology.
  • Privacy: No metaverse regulations exist and the need for data collection for a truly personalised immersive ex­perience requires privacy invasion. Un­like the Ge­neral Data Protection Regu­lation and other regulations, whi­ch ha­ve re­gio­nal sovereignty requirements, virtual experiences have no borders, and therefore, ensuring privacy is at the mercy of the platform owner and the property owners.
  • Access point compromise: The entry into the VR metaverse is typically thro­ugh a headset. Any compromise of the headset endpoint could result in a complete takeover of that user’s avatar.
  • Spying: Avatars can change appearance, which means that meetings, personal ch­ats and other interactions are subject to spying and intrusion without the aff­ected parties’ knowledge.
  • Data integrity: AR involves overlaying third-party data, so any compromise in the integrity of data could present a ma­jor challenge. If a location app that has be­en overlaid onto a headset uses fla­wed location data, it could result in incorrect directions given to the user.

What will be the future technology trends re­shaping the BFSI industry?

Financial uncertainty fuelled by the pandemic will shape investments, businesses and consumers for years to come. The fall­out has meant acceleration on some fr­onts with an increased focus on fintech and digitalisation as well as the rethinking of conventional systems to better address mo­un­ting social and environmental impe­ratives. At EWM, we are betting on blo­ck­­chain, me­­taverse (coupled with 5G) and enhan­ced AI/ML capabilities (coupled with data and cloud compute), which will shape this industry.