Sign Banking Word Maryland Fast

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to the panel discussion we have a really cutting-edge agenda for our discussion today the agenda is as all of you are aware is around the themes of artificial intelligence robotics blockchain and Internet or Internet of Things and for discussing this topic we have got on the panel with me some people that really in my mind are really really best placed to to reflect on the state of affairs on these on these themes in the industry today and where we are likely to head in the in the future as well so thank you very much gentlemen for joining me on the panel discussion today what I would like to do is for for the audience you know these are these are terms and buzzwords that we read about here about talk about a lot in the media the question really is as as practitioners of financial services as fellow bankers how many of you believe that artificial intelligence robotics blockchain over the next three to five years will fundamentally change the nature of financial services in India so can I have a show of hand on saying people who believe this will dramatically change and five years out as we reflect back banking will look very different from the way it looks today so show of hands Wow we have we have a convert audience so so that's that's a good place to start and with that let me actually open up to the panel and away if I could invite you to make some opening comments on what do you think about these technologies and what's your personal experience been like okay um you know there was an ancient Chinese curse which said that may you live in interesting times you know so I think we are all living in very very interesting times you know something very strange happened on 25 December on a beach in Thailand and there was a little girl who actually figured it out and what she saw was the sea was retreating very fast and she remembered her geography teacher telling her that you know when this kind of stuff happens chances are it's a tsunami and she was little kid and she loaded lots of other people on the beach saying that there's going to be a tidal wave and she managed to just rescue all of them and which is my submission I think we are just seeing a beach in which a lot of water is retreating very fast and what's going to come as a result of all of this and the next three to five years is a huge avalanche yeah and let me just start very briefly with all three I'll briefly touch upon all the three though the first one is blockchain and I think it is almost a hard bringer of the third passing of the web yeah so we had a bad one dotto which was largely brochure wear and all of us in a youth have actually tested out we currently in a web to daughter which is Gmail and Facebook and we are able to exchange photos what's going to happen with three dot o is it's going to become more transparent more decentralized and the single biggest thing that's coming out of it is what is called smart contracts which means that if conditions are necessary the contract will get executed you know and that has huge implications for what's going to happen on land registry what's going to happen on banking contracts what's going to happen on the stock exchange huge yes a blockchain is very very big yeah the second one is Internet of Things Internet of Things what it does is it suddenly changes industries which used to manufacture things into software companies yeah so therefore every company on this planet becomes a software company yeah you used to you know manufacture steel and all that you need ready to worry about was you know did my ERP working time did my email working time did my invoice thing happen or time now suddenly when the steel bars start talking to each other steel bars start talking to each other as where they are what are they composed of which building are they going to be a part of you have you know a Tata Steel or a chorus suddenly become a software company yeah when the medicine that you're taking in starts telling the doctor that I am actually going to be effective because this person's DNA is adjusted for my delivery or I'm encountering germs that I did not think that happened before you know a doctor actually also has to be a software expert yeah so therefore that is what Internet of Things does you know and the last thing which is artificial intelligence and exactly two things it's artificial intelligence coupled with the big data and the two you don't have a love affair with each other what happens is suddenly you start making sense of a whole host of data that's coming in and that sense you know results in insights and from insights you can take very very calibrated action so what you took a lifetime to learn you know seat of parents judgments suddenly becomes available on the fly yeah so what happens is suddenly you experience is that a huge discount yeah so all these three things together blockchain Internet of Things artificial little is a big data actually is building an infrastructure for a very very different world yeah so the sea is retreating and the massive tsunami that's going to come through thanks a lot I think that really sets the stage for what capabilities are really available and a tardis possible today and what they could do I want to turn out to Deepak and the question that I have for you is given all these capabilities what's really pushing banks and financial institutions to adopt some of these technologies what's the business rationale I think the way to look at it is I'll break it into three simple analogies for because we all understand the concept around beat IOT blockchain over yeah so I think conceptual level everyone is equally aware the way I look at blockchain is if you break your entire telco experience blockchain is like your undersea cables which are transmitting whole lot of data from what continent to another one part of the world to another but you don't see that so so there there is a lot that's happening but it's not physical your entire experience of IOT is like you're those towers and cell sites part of it is visible but part of it you don't know what is doing in your life so partially visible part of it is not visible and that entire AI experience is more like the mobile phone that you have in your hand you know what it does to you but still there are certain technologies and component which is hidden so when we look at each of those use cases in terms of banking the way I look at a AI is air is going to get you to interact with a product of brand and experience just like you do with your device but at the same time AI is powering a lot of information that you are leaving behind while communicating to a brand or a product which in turn helps the manufacturers are the banks to know a lot more about you be it in terms of credit risk underwriting lending the behavioral part blockchain of course a lot of it as I said is something which may be behind the scene it's not as much going to be out and open for the end consumer to see unless you properly are initially in the trade or you are you're part of those use cases around say smart contract in KY seas and IOT I think a lot of this IOT is is currently getting spoken about at the concept level how IOT will actually convert into the scaleable use case for the bank is something everybody is trying to figure out so in a nutshell AI is out up and real I think the benefits around AI be it in terms of robotic process automation or looking at AI in terms of conversational banking and chat BOTS there is a value realization that is already happening for banks we are seeing the value coming out through AI implementation while I think blockchain and IOT I would say is something we all agree these are great technology but we are all trying to find viable and scalable use cases around which models can be built sure I hear you Deepak I think what the point that AI and robotics are more here in and then IOT and blockchain are cases that we are use case and application that we are really trying to think about in some sense those are horizon when horizon to kind of technologies is what I hear you saying Shree there you have you have a unique seat in the sense that you have an EM you have a global exposure by being part of Citibank you know what's happening in different parts of the world on this side what use cases applications are you seeing emerge of these technologies yeah but before I answer that question I'm really glad that you asked that opening question for two reasons one just to see the optimism of these technologies and how quickly they come in but more importantly the second part where you said in three to five years I think that is very key because I don't think these are going to happen overnight I don't think these technologies will reach us overnight and I'll tell you a couple of reasons why and maybe take that question from you if you look at just take blockchain as an example blockchain just to make sure that they are all very clear about the definition what it really means is that it's a distributed ledger which records every transaction and stores them in a massive global network without it being altered or tampered so if there is simply put this is what it does now in an industry which is as highly regulated as banking each of those words and that definition raised eyebrows for regulators you are going to store data which is third party you've got a store validate data which is again third party you got to have data transmission which again is needs to be regulated so the entire ecosystem of regulation needs to change to make sure that blockchain becomes more commonplace the second part about blockchain is that it is a network which means that the more we have the more members or more participants in that network the more complex it becomes and therefore for these technologies to start coming into play it needs to start with a very simple use case right where the complexity is a little bit less so that we can evolve regulations begin of all ecosystems around it so just to take an example say if a party a is selling goods to party B currently the mode is that the party a is very keen that he gets the money from party B and he doesn't want to be exposed to that risk of party B defaulting and party B on the other hand thinks that look I need to get the goods from a and unless I get the goods or unless I get the assurance of the goods I'm not gonna be parting with the money so that is the constant that there is and currently it is done by letter of credit and a huge number of documents that go into play it is cumbersome time-consuming it takes a lot of energy and effort frustrations and so on and so forth so in this particular instance you can see that the network is only two participants so cases like this where it's a huge value transaction participant sound if you lend themselves to blockchain so I think this is where it will start to come in to in areas where it is simple to implement that both parties understand and then take it forward right and similarly you can take say for example lease lease could be one and then slowly it will evolve once people are comfortable with these sort of transactions going on to blockchain lease could become lease finance these plans could become lending and then it will percolate down into the market so it'll take a bit of time before these things start to hit us but there is no denying that each of those technologies have some substantial advantages whether it is on the top line side in terms of increasing revenue increasing the number of customers or you take the bottom line of cutting costs and automating processes or even the customer angle of customer instant gratification all those elements these technologies stick but the evolution will take a bit of time and it'll happen through simpler processes which can take these or adapt these technologies to themselves yeah thanks to you the same question where what are the use cases and you are seeing more from the supply side right you are looking as a technology provider where these technologies are being used where do you see a lot of acceptance so starting with the blockchain and if you go to generally say that the available technologies like AI and blockchain and IOT the things that do offer you know it's just like having a Lego block where you can build a car you can make it an aeroplane you can also make it Glide glider but you need to be wary of the fact that you can't write that car and it's important to make sure that you orchestrate processes in such a way that you have won a robust platform on the basis of which you build this so if that robust platform can transform itself into a car and and then so on and so forth it's the right thing to sort of pursue the second point is that this is the first time I have seen in my 24 years of working with the banking industry that we have seen the technologies ahead of the banking itself right it's the very first time I remember writing LPM software and then core banking and then further on its multi-channel banking etc each time the bank was ahead and said that look this is what we want to offer can you put the technology to it and so the technologists went in the backend worked out lose cases the second point at the other point is I've never heard the word use cases used as much now then even when UML was formed because everybody in technology talks about you know this is the business use case and the whole thing is you have such a large technology stack of something that is got huge number of possibilities that you can explore coming to the part of adoption I think some of the core areas that you will see a real adoption of Technology in blockchain is going to arrive when regulations take place on the recognition of kyc across the globe we can't just be happy thing that we've done a trade finance transaction on a blockchain and it's happened this has happened because you've just used the blockchain like a ledger the true purpose of a blockchain is the ability of distributed processing across the channel across the board and being able to say that you know the same example of trade finance and that's the true example of blockchain but we'll this is their existing regulations to adopt identity management of non bankers today the fact is when payment happens it happens because we are saying that so-and-so Bank is endorsing the fact that this is the customer of mine and transferring money to a swift address of who's the other Bank is endorsing that that is their customer but blockchain brings across the possibilities to extend beyond what is called the bank led kyc and that is an important part that will probably hold on to that option of blockchain in a big way but I think there will be gradual steps that banks take to adopt blockchain as a ledger and that's a useful case to have with the fact that it does have the capability to distributed processing the second part on artificial intelligence I do think that's where you will find the maximum usage artificial intelligence can be used a lot in terms of making the operational operations more efficient and those are in the areas of let's say moving in logic to say if there are standardized standard operating procedures SOPs in the bank can you move this in to a repository that says that how you want to align to let us say a credit policy of the bank how we want to align to a customer grievance how we want to align to a pact of so-called gamification of a transaction that our customer wants to have meet account opening process or be it a special type of a transaction a lot of times banks lose business because the employees may not be trained to handle a unique requirement a lot of times banks would lose business on loans because the employee says this is not possible but I think with artificial intelligence the ability to sort of delve into the possibilities of let's say what is the last part of risk that we can take to make this happen that should come up but it's doubt to be done with care so I think this is one time where you will find a lot of technologies within banks and that's where you will see a trend while I am a supplier of technology I do also see the fact that banks will internalize a lot of technology at this point the reason being that there are some things they can't tru t people outside with but where do technology players like us come in play I think for example if you look at the clear case of fraud management now we've been in the business of anti fraud with about 160 banks using our solution and out of these you know extending that into anti-fraud does give us the ability to sort of have a proven ability to determine fraud in particular cases because we have at our disposal the entire data of the bank in terms of transactions kyc etc and then the profiling and then sample profiles on fraud when you look at the other area in terms of customer acceptance you know you can have various points in terms of saying we've done banking on smartphone we've done banking on this in banking on that I think eventually it will result to the fact that can the bank have a only channel in the back end that can render to any of these devices so it doesn't matter if somebody brings see device in CI can trade for my leg oh that's fine your leg OH can speak to my banking so called engine and then I can do API based banking so the trend that will catch on is going to be a pair based banking with the back end being led with a strong capability model that is led by artificial intelligence I think operational efficiency is something that is clearly improve with BOTS etc that will come in where you will have BOTS for determining how much of a loan can you give to a person and things like that so the part of delay sort of discretion that was used by the employees of the bank would probably be something that you can take away when it comes to having making sure that the business is sound is done in a sound wave and the artificial intelligence making sure that you can extend the capabilities of that engine to determine what are the policies of the banker that are ready to trade a product the