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Going beyond transactions: CTO’s role in new age banking

Mukesh Jain July 18, 2017

The banking space right now is excited about cloud, mobility, Robotic Process Automation (RPA), and blockchain. The newer technologies focus predominantly on the front end, and a lot of companies are putting way too much effort in developing their front end interfaces. 

However, a lot of tech leaders are forgetting the fact that these services cannot be provided properly without a strong back end. Therefore, a strong focus is needed on balancing new technology adoption and strengthening the existing infrastructure and core systems. 

This is because core systems have to be more resilient in their ability to service business needs. Also, in case of failures, the core systems need to have the ability to recover quickly.

Focus not just on transactions, but on user experience as well

There’s great scope, in integrating the front end work with the internal processes of the organization using RPA. This ensures that the solution is contextual and the customer experiences immediate resolution.

Without restricting the activities to only transaction-based, focus on analysing customer behaviour, transaction history and other related aspects of the customer while carrying out a transaction. 

Financial institutions ought to incorporate deeper analytics into customer behaviour, and integrating this analysis into the transaction systems.

Unfortunately, what’s happening is that in most places, analytics around customer behaviour runs into a campaign, and the campaign runs independent of the customer interaction with the organization.

So, CTOs have to focus on technologies that enhance the user experience. This ensures that the customer comes back for further interactions, not necessarily confined to banking transactions.

Cloud-first approach in the banking space

Large banks that have their own datacenters have to ensure that they need to at least start adopting technologies that can be used on the cloud.

The mindset ought to revolve around a cloud first approach, even for the management of internal infrastructure. This would ensure that there’s a more effective and efficient utilization of the resources they have. It also ensures that there’s nothing that remains redundant or unutilized. 

For instance, the load on servers at night is low, hence the question: Should they be allowed to remain free, or can they be channelled for independent work. So, the mindset of CTOs should revolve around infrastructure management.

Many banks are now opting for application as a service, and these services may need to interact with the data in the internal datacenters of the organization. Now, if you see today’s technology architecture, it’s nothing but a mesh. You have to interact with multiple systems.

But, if any one of those systems is weak, it is likely to impact the outcome. So, there has to be a huge focus on the ability to interact between systems, and that each system is capable of responding very quickly, and they should be available at all times. 

There is some progress in the adoption of cloud, but not yet in application as a service. The banking industry needs to now focus on how to keep the data in the cloud secure, and in ensuring that no customer data is saved on the cloud.

GST and its impact on the banking space

The GST is being touted as one of the biggest tax reforms in the country’s fiscal history. Now, there would be a short term challenge in being able to make changes in all the systems and integrate with the new framework of return filing.

But once it stabilizes, I doubt if there will be any serious issues. Also, bankers have been trained to reconcile entries historically. At least from a technology point of view, I don’t see it posing as a very big challenge, but for initial teething issues.

Post demonetization: Handling volumes of digital transactions 

Organizations today don’t work on independent applications. Almost all applications are interacting with each other in today’s workspace. Now with the volumes coming in due to the spurt in digital payments, there’s a need to respond very quickly from these applications.

This is the key to managing volumes. So, a complete focus on ensuring a sub-second response from all resultant systems is going to be the most important thing here.

Also, the CTO, in coordination with the developer teams, will have to work with service and micro-service based architecture. This would ensure that you don’t have to work with unnecessarily massive amounts of data. The smaller you make the transaction, the faster you can process it.

There may be a need for looking at some of the newer technologies in terms of bringing them in their development environment. Parallelization is the key to handling multiple transactions.

One step ahead of the cyber thugs

There are two ways to stay ahead in the cybersecurity game. One is to ensure how the traditional way of handling security continues, and the other is to have an ongoing and concurrent review of what is going on.

Now, anything that’s out of the ordinary has to go through an exception-approval route. This is because one has to realize that any area where there might exist a vulnerability, there will be someone to exploit it.

In addition to this, there must be a greater focus on newer technologies, and how can one integrate that in a running environment. 

The impetus is on the IT infrastructure and the application management team to work hand in hand with the information security team, as well as the suppliers of information security.

What’s also needed is a continuous review of configuration of your infrastructure has to be the focus, so that if anything is amiss, it can be corrected immediately.

The author is Group CTO, Reliance Capital. In his current role, Mukesh Jain drives adoption and enhancement of Digital Platforms for customer and employees engagement.

As told to Soumik Ghosh.

Disclaimer: The views expressed in this article are solely those of the contributing author(s) and not of IDG Media and its editor(s).