Digital, IoT Empowering Banking Industry

by Sohini Bagchi    Dec 20, 2017

vinod

With the BFSI sector going through a transition in adopting the latest technologies and focusing on technological innovation, internet banking has emerged as the biggest focus area in the ‘Digital Transformation’ agenda of banks. Today, India’s banking, financial services and insurance landscape is witnessing deployment of technology-intensive solutions to increase revenue, enhance customer experience, optimize cost structure and manage enterprise risk. However, there is a wide variation in the technology, compliance issues and implementation capabilities across different players in this landscape. an interaction with CXOToday, Vinod Ganesan, Director - Sales at Hitachi Vantara explains how technology enablers like cloud, IoT and virtualization are empowering the BFSI sector to digitally transform into successful enterprise.  

CXOToday: How are disruptive technologies like IoT impacting today’s banking innovation?

Vinod Ganesan: The financial services industry has seen drastic technology-led changes since the past few years. Over the course of what is becoming today’s digital era, banks have begun to understand the growing significance of the ‘intelligence of things’ that is required to accelerate their digital transformation. Today there is no second thought on why IoT is critical for a bank to service its customers.  Banks these days are ready to invest billions to remain relevant to customers and be competitive in the marketplace. In fact, according to a recent Gartner report, the transition of the Indian banking sector towards a cashless society is creating many opportunities for technology investments, especially in the digital payments infrastructure.

When you talk about the impact that technologies like IoT have on the banking sector, it is quite widespread. The migration to mobile banking, accelerated adoption of digital payments, biometric identification techniques for identity management, contactless payments, virtual assistants and creation of more personalised customer experiences are helping banks to stay ahead of the curve. Customer shifts in behaviour and adoption of more digital solutions are driving banks to evolve their digital strategy to incorporate the concepts of IoT into the ‘bank of things’ (BoT). Currently we work with 44 of the top 50 banks, and that covers all types of scales of businesses. We work with the regulators, banks and trading authorities, and in doing so, we are becoming more and more focused on banking innovation.

With exciting developments in cloud, mobility, social media and analytics, the banking sector definitely has the opportunity to innovate and leverage their impact to propel themselves as a leading industry of the new economic order.

CXOToday: The industry is seeing a rising importance of business and technology enablers like virtualization, convergence and cloud. How do you see these emerging technologies impact the BFSI sector?

Vinod Ganesan: Today, the top two initiatives that have taken priority for organisations to create a competitive advantage in the market, are big data and cloud technologies. With the speed at which we are moving towards complete digitisation, both in the workplace and personally –an organization’s ability to get full value from all data available is crucial. Our mission is to help organizations across various industries harness absolute value from their data, including big data and Internet of Things (IoT), operate more efficiently, explore new revenue streams, deliver excellent service and minimize risk.

With customer expectations constantly shifting, the BFSI sector is seeing a change in regulatory requirements, millennial demographics and new FinTech startups that are converging and making digital transformation a priority.Even traditionally slow-moving financial institutions are incorporating technology into their systems.

Virtualization has become a common abstraction layer in modern datacenters, enabling resource owners to manage complex infrastructure independently of their applications. By adopting technologies like virtualization and cloud computing, banks and financial services can benefit from it by creating a flexible and agile business model, cutting infrastructure costs and transforming business processes to grow in new sectors without the time and cost burdens involved when establishing a physical presence. Flagship programs such as Digital India, Startup India, and Make in India, coupled with smart cities initiatives, are paving way for India to be on a path towards innovation-led transformation.

CXOToday: How is digital transformation empowering organisations across verticals, especially BFSI to drive valuable insights for their business today?

Vinod Ganesan: Digital transformation is all about using technology to enable efficiency, differentiation and innovation. While digital transformation changes everything, including the way that we do business, it doesn’t come easy – especially for mature businesses that haven’t ‘grown up’ digital, or were born in the cloud. These days, successful digital transformation is entirely dependent upon taking a strategic approach to the enterprise data.

India’s banking, financial services and insurance landscape is witnessing deployment of technology-intensive solutions. Financial and banking organizations were some of the early adopters of big data, including Hadoop, as it provided a clear advantage to cost containment and faster processing time for large data sets. However, there is a wide variation in the technology, implementation capabilities and compliance issues across different players in this landscape. To compete in a consumer-empowered economy, it is increasingly clear that banks and brokerage firms must leverage their information assets to gain a comprehensive understanding of the market, their customers, products, competition, and other channels. Financial services institutions are regularly exploring innovative ways to extract value from their data to support critical business initiatives. However, most companies today have multiple data silos stored within their systems, that need to use a platform-approach to be eliminated. Digital transformation starts with bringing those disparate data sets – whether structured, unstructured or machine-generated – into a single data strategy.

CXOToday: How is Hitachi Vantara helping customers deliver relevant business outcomes through adoption of the company’s technology innovations?

Vinod Ganesan: Time to market has always been a factor for enterprises who are typically trying to do most of the executions by themselves, mainly through integration. With customers prioritizing experiences over products, banks need to take a proactive approach to optimize customer interactions. Our solutions are empowering a lot of customers to realize business outcomes quickly.

Take the example of our recent project we executed with HDFC bank, the second largest private bank in India. One of the main roadblocks that they were facing involved strain on the bank’s storage infrastructure with the increasing demands of its daily transactional loads. With the existing system, document and data retrieval from an off-site location were becoming both time-consuming and expensive. To solve the issue, we deployed a multi-purpose distributed object-based storage system to support large-scale repositories of unstructured data. The new solution was enabled with a variety of security features that took care of data governance and protection and could be determined or specified by the administrator. This deployment has resulted in immediate process improvements and efficiencies in all aspects of HDFC’s banking operations that were tied to loan processing and management.  

We’ve also worked closely with Alior Bank, one of the most innovative financial institutions in the Polish market. In order to accommodate such dynamic development and its new automated services, which are required by customers to be available 24/7, Alior Bank needed to modernize its previous storage infrastructure. To solve the complex problem, we implemented 4 Hitachi Unified Storage VM (HUS VM) systems: 2 in each of the centers. Most of the storage system environment was managed via Hitachi Command Suite which managed access to all of the necessary information, including reports or resource utilization views, in a single interface. This entire implementation resulted in high data availability, security, storage system reliability and uncompromising performance for critical applications that allowed for a seamless experience for Alior Bank.

CXOToday: How does Hitachi’s rich OT and IT expertise help uncover patterns with powerful analytics and machine learning?

Vinod Ganesan: The journey into the unpredictable has already begun. As exciting as the domain of machine learning, predictive analytics, neural networks and deep learning are, there are certain challenges that come with it. Everything from large volumes of data, specific algorithm requirements, analytics, customer demographics and usage information. Our capabilities and our social innovation mission are built on over 107 years in operational technology (OT) and 50+ years in IT. To address this opportune market, we are continuously working towards harnessing business, human and machine data across OT and IT environments to build comprehensive and data-driven solutions. This in turn provides both our customers and partners with the provisions of being able to manage, store, govern, blend, analyse, and visualize data. With new emerging technologies, IoT, the integration of OT, information from the sensors and machines, IT provides a huge opportunity for us because we have developed our expertise in both areas of IT and OT.

The recent launch of Hitachi’s Lumada IoT platform uses artificial intelligence, advanced analytics and asset virtualization – called asset avatars – to illuminate data and drive better outcomes for businesses. With extensive resources in people, capital, patents and partners, Hitachi is already providing IoT solutions for cities, industries and businesses, and helping to pioneer the future.

CXOToday: What is Hitachi Vantara’s company and business roadmap like for 2018?

Vinod Ganesan: Our growth journey over the last year has been good. With Hitachi Vantara coming to existence this September, we have enhanced our abilities as a firm by integrating expertise and leveraging the ‘Power of one Hitachi’. Moving on from solely providing solutions around data management and data infrastructure, we are now additionally focused on providing data integration and business analytics through Pentaho, and leveraging IoT services provided by Hitachi Insight Group. We see that the need to follow data from its creation to its consumption stage is critical, simply because data is the new currency that drives digital transformation.

Our priorities for the next year are very clearly going to be focused on enhancing the acceleration of our software and services.If you look at the execution of the Hitachi Vantara story, the use cases are proliferating at a rapid pace.We have already started to deliver these solutions in the Indian market 6 to 12 months back, and the results have started to show. Prior to 2017, we had 50% of software and services, and today, that figure has jumped up to 62%. Another priority for us will be to understand how we can co-create solutions with our digital integration partners, and enhance their existing portfolio to go to new markets or create their own solutions. Given our differentiation, we aim to be a leader in the IoT market.