February | 2021
Abstract
Banking and Financial Institutions (BFSIs) have been at the forefront of digital transformation initiatives with data at the epicenter of banking innovation, in an attempt to fuel performance and improve customer experiences. Competition from a variety of segments including fintech startups, alternate credit companies, retail giants and internet behemoths, complemented by globalization are accelerating digitization at banks. Ever evolving and tightening regulatory restrictions are further fueling this transformation which has been propelled to the next level with the pandemic.
This paper studies the impact of next-gen technologies and digitization including IoT, Cloud, and 5G on productivity and modernization of operations at banks and financial institutions. It further delves into how these technologies can be leveraged to offer solutions that enable banking in the new normal.
Reimagining banking in the new normal
Even as banks in the last decade have been embracing digitalization and moving to a client service model that requires minimal contact with their customers, COVID-19 has brought with it huge challenges to the BFSI sector, triggering changes in both customer behavior and banking operations in the long run. Consider this: consumer usage of digital banking surged with 68% of Indian consumers using online or mobile banking to conduct financial transactions. 48% of respondents expect to use contactless payments instead of cash or card in the post-COVID worldi. The new normal is forcing BFSIs to implement digitization beyond the customer-facing layer, and develop an integrated architecture encompassing all aspects of banking.
Financial organizations are focusing on priorities in four key areas in order to overcome the challenges brought on by COVID-19:
Optimizing processes to meet evolved customer expectations: While digital banking has been on the rise globally, a country like India is still driven heavily by physical transactions at the bank. BFSIs need to quickly implement technology-enabled processes to adapt to the new normal to deliver customer satisfaction across branches and retail outlets. Customers have become increasingly health conscious and COVID-aware, and are looking for ways to transact while prioritizing their health and safety. Banks need to leverage technology, AI, machine learning, data, and human resources to innovate and digitize the delivery of products and services providing for seamless, contactless experiences.
Connectivity: While some largescale BFSIs have started leveraging the cloud, others still need to ensure connectivity across all their operations and transactions for a seamless experience in the new normal. The pandemic has led to an increase in online banking activity, nudging financial organizations to embrace digitization and a hybrid multi-cloud model to enable an array of services including payment gateways, online fund transfers and transactions, digital wallets and more, all aimed at driving a unified customer experience. This connectivity needs to be extended on the ground to banking experiences, identifying, aiding, and mapping the customer journey within the bank through kiosks, facial recognition systems, thermal scanners, digitized ledgers and more for a safe banking experience.
Security: As banks embrace technology at speed and scale, ensuring data security is another key concern. The dependence on digital banking in recent times and the ensuing tech upgrades on premises have left the industry vulnerable to security threats, heightening the need for tighter security, both for physical devices and data.
Regulatory compliance: For BFSIs operating across boundaries, ensuring compliance to evolving regulatory requirements is another huge concern. Regulators increasingly want to make sure that boards are engaged, and capital and liquidity standards are maintained per norms, and effective risk management practices are in place even as BFSIs pull out all the stops to ensure uninterrupted customer service and deal with wildly fluctuating and unprecedented economic and market conditions.
Riding the digitization wave for positive customer experiences
As BFSIs embrace large-scale technology upgradation and digitization in an attempt to limp back to normalcy, IoT - along with 5G and the cloud - is transforming the way banks are operating post COVID. Seamless customer experiences and transactions while ensuring employee safety and maintaining productivity, renewing operating models to support customers, leveraging technology to minimize operational disruption to processes and mitigating risk will be key. Banks are buying out legacy assets and shared services carve-outs and entering into long-term integrated technologies and managed services support engagements that will further their digital transformation strategy.
IoT is bringing the banking world closer than ever before, offering clients a completely connected and integrated experience by servicing all their financial needs across devices including tablets and mobiles. Enabling digitized transactions and pay-from-anywhere models, every IoT-enabled device has the ability to become a Point of Sale (POS) device. Banking transactions and queries can now be carried out from the comfort of the customer’s home or within the safety of the bank with the increased use of connected devices including voice activated and facial recognition software that require minimal touch. IoT also enables device tracking and spend analysis on-the-fly, offering better protection from cyber-fraud. The growth in 5G adoption will further increase productivity levels with connected devices and help optimize the digital banking experience.
Cloud is the core technology at the forefront of digital transformation in BFSIs. It provides an infrastructure fabric for other technologies such as mobile, automation, artificial intelligence, social computing, Internet of Things (IoT), analytics, and blockchain, to name a few. Cloud technologies such as virtualization, Infrastructure-as-a-Service (IaaS), and Platform-as-a-Service (PaaS) can help banks improve cash flow by moving from a Capital Expenditure (CapEx) to an Operational Expenditure (OpEx) model. Risk Profiling Systems, Early Warning Systems using Predictive Analytics, Non-Performing Assets (NPAs) monitoring are applications which can be built on a cloud technology infrastructure. The banking industry has been an early adopter of cloud and these new technologies will drive domain transformation in the future.
Leveraging transformative technology solutions
Even as the banking industry adapts to work-from-home, it will require an active workspace for routine business operations with employees present to service customers. How then can banks ensure people safety and well-being in the new normal?
Wipro’s ‘Health COV-ER’ solution leverages the power of IoT, cloud and analytics, helping BFSIs manage their employees returning to work with a system driven, thoroughly designed process aimed at ensuring workplace safety and compliance. Health COV-ER is truly comprehensive with a hassle-free work employee schedule and attendance management, health assessments, and integrated contact tracing solutions. This is a SaaS product designed to help BFSIs fortify and strengthen their business, while ensuring customer and employee safety on-premises.
The ‘Health COV-ER’ solution features applications for seamless management of all people at the bank including employees, contractors and vendors, and customers by supporting visit/ work scheduling and detailed health assessment and monitoring. The solution helps banks resume branch operations easily in the new normal with integrated mobile communications, easy-to-fill digital forms and social distancing mechanisms that can be tracked with the latest technology. Some of the salient Health COV-ER features that drive workplace transformation and productivity include:
Smart workplace solutions for employees: These include an integrated, interlinked set of solutions designed for workplace safety. Features comprise detailed health assessment of employees and self-declaration via the app for COVID testing and other critical ailments, QR code generation based on the health declaration form, and staggered time-based entry with automatic notification. Other features include a touchless attendance system integrated with an active global directory, online seat booking for employees with a track on occupancy ratios, energy management, dashboard reporting, and secure admin approvals.
Customer solutions: These include thermal scanning for temperature entrance before approval of entry, video analytics and BLE-based social distance alerts, crowd sensing and heat map generation, facemask detection and social distance violation detection measures to maintain customer safety and health while at the branch. The app supports touchless customer onboarding. Alarms are auto-generated on violation of any of the pre-set norms and thresholds.
Real-time data on customer footfall at the branch can be leveraged for multiple business cases to help drive superior customer experiences. Customers who are in the queue or waiting to be served can also leverage the app to check on nearby branches with lesser wait times. The data also helps management analyze the volume of business against the number of customers.
Virtual Queue Management and Reservations for customers, and in a pandemic situation, the use of touchless and a more hygienic way of communication with BFSI employees.
Reservations in the form of pre-booking of available slots 24 hours prior to arrival at the location, where customers can plan their journey way ahead of time.
Integration with government apps and data bodies: Data on COVID infected customers or employees who are restricted access to the campus will be further integrated with government health / COVID monitoring data, including apps such as Aarogya Setu of India. This will help facilitate contact tracing efforts to identify COVID positive cases and control the probable spread of infection, thereby complying with government norms and regulations per specific geographies and adhering to local laws while protecting personal information of individuals.
Data center maintenance: Given the volume of sensitive information banks process, data centers are sacred and core to the successful working of banks. The Health COV-ER solution helps monitor data centers effectively and maintain workplace hygiene and safety.
These new-normal solutions in the current pandemic scenarios could benefit from:
Remote device management and asset management: Mobile and remote devices have been around for a while now and have become an inseparable part of our lives. There was a time when desktops were considered primary IT assets and were managed. However, today, mobile devices have overpowered desktops. This means they also need to be managed and maintained as they fall under IT asset management. The solution offering includes provisions for remote monitoring and maintenance of devices and bank assets securing the organization from physical asset thefts and data loss.
Few questions that need attention, considering the excessive use of remote devices in organizations nowadays:
Here are some core functions of remote device management:
Seizing the moment to go the extra mile to serve individuals with integrity and sensitivity
Technology and skill upgradation – imperative to the new normal
Providing restricted banking hours, flexibility, security, and safety while ensuring availability of omni-channel customer service and banking transactions is the way forward through COVID-19 and beyond.
BFSIs will have to adapt in more ways than one, with the use of technology and skill upgradations to thrive in the new normal and build a resilient operating model, as blockchain, AI, and open banking become more popular. The focus must be equally on employee re-skilling and up-skilling as it is on technology upgradation. Digitization must enable new value creation for customers, delivering on expectations across the value chain. Digital transformation will enable agility, security, and enhanced productivity for BFSIs if harnessed well and right, paving the way for a new decade of banking experiences.
The overall business landscape has essentially been redefined, as the COVID-19 pandemic is likely to considerably fast-track the shift to digital. Customer behavior and desired communications are radically changing, and while customers continue to progress digitally, simultaneous digital transformation will continue rapidly.
In addition, as a catalyst, COVID-19 also presents a unique chance to gear up and take stock of digitalization with the help of technology interventions such as IoT, ICT, AI, AR-VR. They can also build or create value in the emerging ecosystem.
References
Vaishali Deshmukh
Managing Consultant
Wipro
Vaishali has 15+ years of experience as a trusted advisor. She is responsible for global consulting for IoT and the Smart Cities portfolio cutting across verticals. Vaishali also has experience in design thinking, business strategy, opportunity assessment, financial modelling, and business case development. You can reach Vaishali at vaishali.deshmukh@wipro.com
Deb Kumar Mondal
Enterprise Architect.
Deb Kumar comes with 15 years’ experience providing full stack solutions on multiple technologies and Domain. He has vast experience in technology strategy, building Enterprise-level architecture, and cloud migration.
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