As 1.4 billion people and their businesses limp back to normalcy in 2021, the big question on everyone’s mind is, where will we make money and what will get us there? I have been intently following, documenting and weighing in on the impact the pandemic has had on various industries in India. Enough has been written in the past 6-8 months on this topic, but I was more interested on knowing the real impact on the financial services sector in India. Dozens of CEOs and CFOs I spoke with told me that they have embarked on, what can be defined as, journey toward a future-enterprise. Much to my surprise, these financial services institutions are seeing a profusion of new capabilities that allow them to respond to the situation better and nudge them closer to business recovery.
Just as late as 2018 and 2019, the Indian financial services industry was marred and inhibited with various regulations around data ownership, data privacy and data sharing. The pandemic changed all of that dramatically.
Data sovereignty (where data resides) was the first of the draconian rules to be scrapped, replaced instead with global standards such as PDPA and GDPR. Next came the magical phrase Opt-In; if the banking/insurance customer understood her/his data privacy rights and opted in to be served better, the institution that managed the primary data had the right to collaborate with various (related) third parties, always acting in the interest of the customer. This created an ecosystem that the Indian consumer – stuck at home – has never experienced before!
Let me give you an example of what that ecosystem does for the average Indian (here the acronym DP stands for data point/s); Say you needed to upgrade your PC/laptop and Wi-Fi so that you can work from home more effectively. You log into Google or Lazada to search for laptops and Wi-Fi (DP1). Google/Lazada consumes (and publishes) thousands of 3rd party APIs. Based on their 3rd party agreements, their algorithms prioritized a certain brand (DP2). When you click, or even mouse over that shortlisted laptop + Wi-Fi, the UI triggers multiple workflows: 1 with a bank to use their credit card (DP3) the other with a potential insurer (DP4) one with the telecom provider (DP5) and even the logistics company (DP6). All of them collaborate seamlessly so that they can have a share of the `80,000 to `100,000 you are about to spend on the new laptop and Wi-Fi. All this happened, in real time, unseen and unnoticed to the consumers eyes, all because she/he opted in to share their data.
Now, whilst all this data magic is happening at the consumer level, the ecosystem players of banks, insurers, telecoms, etc. are beginning to better understand the important of cloud, hybrid (and scalable) infrastructure and pay-per-use solutions. In this new, post-pandemic India, I don’t believe anyone would go down the older route – which included firstly identifying the physical infra hardware, provision that and the storage in the physical data center, then short-list the best of breed software, and finally go to their systems integrator, who can deliver all of this in 4-6 months! Most institutions want to either respond in days or hours, and the only way to achieve this is-cloud. Yes, RBI and the regulators were earlier skeptical, but not anymore. In fact, most regulators are now approving and even promoting cloud-based initiatives.
All in all, financial services institutions in India, who are digitalizing their processes, leveraging the agility and elasticity of cloud and successfully unlocking and monetizing their data, are the ones who are not only coming out of the recession first, but coming out stronger!