Taking A “Business First, Technology Next” Approach to Risk Management

Technology is evolving and bringing changes to which businesses must adapt. This has not only transformed the role of IT within the organization, but has also helped senior management in engaging the workforce in a scalable way improves the workplace. In an exclusive interaction with CXOToday, Jaya Vaidhyanathan, President, Bahwan CyberTek, an expert in the BFSI segment, who has led technology organizations and major transformations for some of the world’s largest enterprises, discusses the various technology trends and challenges in the industry, the changing role of CIO and his organization’s key technology priorities in the coming months. Excerpts.

CXOToday: Can you tell us about some of the biggest milestones in your career journey?

Jaya Vaidhyanathan: I started my career as an investment banker in New York after completing a management program from Cornell University. I specialized in the area of mergers & acquisitions across multiple verticals. I then joined HCL for large deals & setting up their management consulting practice. At HCL, winning the largest single-vendor outsourcing deals of $780 Million, I would say is one of the biggest milestones achieved. We went there as underdogs, and yet, we questioned the very premise of the opportunity, and we changed the traditional approach to large deals with this one. The rest is history, and when we won the deal, it received all the media attention at that time and was covered both in television and print media.

I joined Accenture as their managing partner for consulting and financial services business focussing on Fortune 100 clients. I continued my pursuit of large deals, also, as my passion was to bring more opportunities for the next generation engineers to work within India. This was the next big milestone when we expanded the practice from a mere 6000 associates to 20000 associates. I set up the GTIN for their outsourcing management consulting business and served as the executive sponsor of their diversity council.

I moved to Standard Chartered Bank (SCB) as their head of global technology & Strategy transformation. This involved a large team of 20000+ across Wholesale Banking, Consumer Banking, Core banking and group functions in the areas of Technology & Business Operations.

I believed that I gained an all-round experience, I wanted to put all of this into something more meaningful for myself and for society at large. While I was contemplating a couple of options, Bahwan Cybertek provided the opportunity to be an “intrapreneur” and bring in a start-up disruption within the company. I joined BCT as their President, with a focus on new ideas and given that BFSI was my core domain, I started their FinTech risk management company –“rt360” (erstwhile Asymmetrix). The whole idea of the start-up was to focus on one of the most burning issues in the country – non-performing assets. Today, we serve the top banks in India, and we have successfully built an entire range of risk management solutions that are specifically made in India and made for the Indian market. Of course, it can be customized for the global market too.

CXOToday: What are the key tech trends in your industry?

Jaya Vaidhyanathan: From a trends perspective, we had information or data available from various research organizations – we knew that the FinTech market was growing, the role of data and analytics was dramatically changing everything a bank is doing today, and artificial intelligence, machine learning et all is set to have a phenomenal & unprecedented impact on how customers experience financial services. However, we stayed focused on what we started out – a FinTech on risk management, and we conducted our own primary research to understand the burning issues with respect to non-performing assets and overall risk management for banks. We drew 6 top priorities:

• To build solutions for managing credit risk, liquidity risk, model risk operational risk
• To implement a new ‘early warning system” for identifying incipient stress in loans
• To automate an end-to-end monitoring process for enhanced compliance as most banks said there are significant opportunities to automate their monitoring process
• To leverage artificial intelligence (AI), machine learning, blockchain technologies to enable access to unbiased intelligence
• To focus on risk arising from inadequate or failed procedures, systems or policies and digitize operations
• To enable data-driven decision making through predictive models for risk monitoring and business planning. Banks are therefore increasingly looking for a structured approach towards model management and risk control

This clearly informed us that we are on the right track, and we are about to change the risk and regulatory scene in India. The outlook for the FinTech industry thus looks good due to the combination of tailwinds namely greater access to technology at a lower cost, availability of engineering talent, favourable regulatory environment and finally, newer business cases where FinTech can significantly transform, due to increasing levels of digitization in banking.

The Government of India along with regulators such as SEBI and RBI are aggressively supporting the ambition of the Indian economy to become a cashless digital economy and emerge as a strong FinTech ecosystem via both funding and promotional initiatives.

India is gaining ground on the growth of the FinTech ecosystem with a fair supply of proficient and inexpensive talent, the potential to capture a large portion of the unbanked population and a steady inflow of funds. Analytics, data science and big data industry in India is currently estimated to be over $ 3 billion annually in revenues, growing at over 20%. Analytics, data science and big data industry in India is expected to grow seven times in the next seven years. It is estimated to become a 20-billion-dollar industry in India by 2025.

CXOToday: Do you see a foreseeable change in the CIO role in the next 2-3 years and beyond? What are those changes?

Jaya Vaidhyanathan: Absolutely. Technology is fast moving from being treated as a support function, to something that’s core to business strategy. A shift in the job descriptions of CIOs/CTOs is visible, with KRAs now including business parameters like customer footprint and the number of products per employee. As recent as a decade back, the CIO was more involved in IT procurement and technical support for internal uses, with new IT solutions being pushed more by respective business teams.

CXOToday: What kind of technologies is your organizations exploring at present or intend to do in the future?

Jaya Vaidhyanathan: We take a “business first, technology next” approach to risk management. This way our clients can be assured that our solution is clearly aligned to their business goals. We provide point solutions that specifically address their current pain points and scale to build integrated risk management solutions for the long term. We understand the risk business, we understand the complexity and therefore, we are in a formidable position to build an effective ROI for each and every rupee spent on risk management based on several implementations we have delivered for prominent banks across the globe. Secondly, while the risk management space has some players who build products and others who implement them as partners, we assure delivery certainty as we are the OEM as well as the implementation team. Further, our lightweight solutions, built by bankers, address the exact issues faced by banks without adding huge overheads in terms of infrastructure requirements or engagement with external consultants.

rt360, a Bahwan CyberTek Company, is a FinTech specializing in risk management solutions for banks and financial institutions and spans across credit risk, operational risk, liquidity risk, model risk, and other risks.  The vision is to help banks focus on what is important for its business i.e. customer experience, growth, and profitability, while we take care of their risk and compliance management. The entire product suite on risks under the erstwhile Asymmetrix umbrella will now be under rt360.

CXOToday: What are some of the biggest challenges you faced in the BFSI industry and organization?

Jaya Vaidhyanathan: It is an obvious fact that as end customers we have experienced the ease of banking across all their services. Banks have been one of the earliest to adopt technologies and move quickly to where their customers are; however, increasing exposures of non-performing assets has jolted the country; the volume has shaken the trust in the banking system, and the government with its digital India initiative is trying to get money back into banks.  This brings in the stronger need for data analytics, and a digital process to monitor, track and identify incipient stress. At this moment, other challenges include availability of clean banking data in machine-readable format, something we can emulate from the US banking industry; intelligence and text mining capabilities in local languages in India, which can give valuable insights into rural banking and financial inclusion; and of course, regulation on data privacy, which is still nascent in the country.

CXOToday: What’s your digital agenda? Do you find the right talent to meet your organization’s digital needs?

Jaya Vaidhyanathan: My digital agenda is linked to our corporate goals of delivering superior customer experiences. A successful digital journey is one where the data assimilated delivers superior and measurable insights that translate into customer benefits on the pillars of driving revenues up and costs down while keeping the controls in place. At the higher end of the digital talent spectrum, there is a war for talent, for example, Artificial intelligence. Globally there is a serious war for talent on AI with the pool being extremely shallow. Then there is the process of “acqui-hiring”, wherein AI start-ups are gobbled up for AI talents at upwards of $1 Million per employee. I would strongly recommend that our engineering institutions invest in the AI pools now to manage the dearth in AI talent needed for our industries.

CXOToday: Do you think the CIO has finally secured a place in the boardroom? In what ways?

Jaya Vaidhyanathan: With digital transformation being a key focal point for business, CIO’s are increasingly finding a space in a boardroom. Companies do lose a significant amount of money when technology cannot keep pace with consumer demand. However, to make a sustained impact in the boardroom CIO’s must focus on strategic impact rather than technology driven presentation styles – for example, delivery business insights that are derived from real-time data. The alignment of technology with broad corporate goals is essential for a sustained board room impact.

CXOToday: What are your tips for future technology leaders?

Jaya Vaidhyanathan: Technology is impressive in its ability to deliver corporate business goals, so keep the big picture in mind always

• Develop core competency in a domain and keep abreast of all technological advancements and possibilities
• Keep the innovative spirit up – Dream big and get out of your comfort zone consistently
• Cultivate good management skills, work ethics and be a team player.
• Your problem-solving skills are going to keep you at the top – so don’t let go of your analytical side.