Tag: data analytics

Bankers back to college to learn data analytics, BFSI News, ET BFSI

Banking & Finance

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– By Nidhi Chugh and Ishwari Chavan

The COVID-19 pandemic has pushed lenders to digitise their banking services, which has resulted in a rise in demand for employees to have a data science skill set.

Currently, 2.5 billion users across the world use banking services digitally, and 53% of the global population will opt for digital banking by 2026, a study by UK-based research firm Juniper Research had said.

Data driven banking – bankers are reskilling themselves

When Dinesh Khara took over as the chairman of State Bank of India a year ago, he said, his focus will be on analytics.

The demand for data science and data analytics professionals is possibly going to double, more than 2,00,000 as mentioned officially, mostly because of the emergence of neobanks, said Robin Bhowmik, chief business officer of Manipal Global Academy of BFSI, in an interaction with ETBFSI.

Manipal Global, started in 2008, offers various programmes to reskill banking employees, or train budding ones.

On an average, Manipal Global has trained one out of five bankers in the country, with over 2,50,000 bankers opting for various courses, Bhowmik said.

A total 15,000-20,000 bankers are trained every year by the academy.

This month, the academy launched its school of data science, where they will teach data engineering, data handling, impact analysis, python courses, in partnership with Axis Bank.

“The whole area of impact analysis within a banking setup is very fundamental to any data science field. We are also training them in a lot of simulations using tools like Python for example, which is one of the more popular open source tools, essentially used in this area,” Bhowmik said.

Apart from partnership with Axis Bank, Bhowmik said that he is in talks with another bank to further expand the course’s reach. The name of the bank was not mentioned during the interview.

Manipal Global also offers short term courses, remote courses, and other full-time courses, such as courses on FinTech.

Bankers back to college to learn data analytics
Surging demand for data science courses – what’s on the table

Prior to the official launch of the data science school, Bhowmik said that the course has already gathered interest from 500 candidates, and there is an application backlog of around 6,000 students.

“The intention is to have a batch of about 35 to 40 every alternate month. So Axis bank alone, I think wants about 120 people through this channel by March,” Bhowmik said.

After completion of the course, the candidate will be evaluated and hired by Axis Bank.

“The bank’s digital strategy is heavily focused towards adopting various data and analytics programs. Hyper personalisation is one such program – data science will be one of the key enablers, starting to identify different customer persona, anticipate their needs and recommend accordingly,” Balaji N, president and head of the Business Intelligence Unit at Axis Bank, said via email responses to ETBFSI.

How will candidates use these skills

After the course, the employee will be able to deploy business intelligence as a function, use data analytics in KYC processes, help in data hygiene – building databases for customer behaviour and customer segmentation.

“Other than simplification of customer journeys on our platform, we are also focusing on building future-ready capabilities, such as integrating alternate unconventional data for risk-moderated business expansion and greater usage of cloud for data engineering and data science workload,” Balaji said.

India’s “youth bulge” is expected to benefit sectors across the board, and even more so for BFSI with the rising importance of data in digital payments.

India’s “youth bulge” is expected to benefit sectors across the board, and even more so for BFSI with the rising importance of data in digital payments.



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Chief Economic Advisor K V Subramanian, BFSI News, ET BFSI

Banking & Finance

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Exhorting the Indian BFSI sector to make a mark globally, Chief Economic Advisor K V Subramanian has said India should have at least six banks in the global top 100.

“It is a matter of mindset now, the mindset has to be one where we are not happy with just being lions at home and lambs abroad, we have to be lions globally as well, Krishnamurthy Subramanian said, delivering the keynote address at ETBFSI Summit.

Stating that India has to become a big player in the BFSI space in the next decade, he said the sector must seek inspiration from IT, pharma & sports.

BFSI sector needs to have that hunger which will also help the Indian economy, Subramanian said, adding, “Five Chinese banks are in the top 100 global, Swedish banks, American banks. There is no reason why our banks cannot be in the top 20 either.”

Ruing that India has only one bank in the global top 100 — SBI at 55th position, he said for the size of the economy, India should have at least six banks in the global top 100, some in the top 10 or the top 20.

Drawing an analogy with cricket, he said the Indian BFSI sector appears like the Indian cricket team of the 1990s which could boast a lot of victories at home but had nothing noteworthy outside the shores, globally.

The sector has to aspire to become like a cricket team under Sourav Ganguly, Mahindra Singh Dhoni or Virat Kohli where they’re achieving global recognition.

“The BFSI sector has to start mattering globally, their aspirations need to be scaled up. Aspiration has to be set, given the aspiration that India has set for the economy itself.”

Fixing problems

The CEA said India’s BFSI sector has a quality and quantity problem which needs to be fixed, especially when the Prime Minister has outlined Rs 100 lakh crore infrastructure building apart from the National Infrastructure Pipeline.

“Infrastructure will actually require the BFSI sector to be able to participate and thereby learn how to do high-quality lending without suffering the problem of non-performing assets, crony lending, evergreening of loans, gold plating of loans, all the kind of problems that we have witnessed in the Indian financial sector over the last decade,” he said.

He said the country has large corporates and large borrowers who end up borrowing but not repaying, and yet many times banks actually end up giving credit to the defaulters as well.

Observing that on the credit side India is far behind, he said, “The ratio of credit to private credit to GDP at about 58% is one-third of the global average of, close to 170 per cent.”

He said the BFSI sector should avoid the phenomenon of accelerating credit, and braking when bad loans mount, if credit expansion has to happen in a sustained manner to push economic growth.

“It is very important for credit expansion to happen at a consistent pace without the usual accelerator brake phenomenon that has been the characteristic of the Indian financial sector ever since liberalisation where, when the economy starts doing well, credit expands significantly oftentimes in the process. The credit underwriting norms are relaxed, and as a result, the seeds for a crisis are sown during good times,” he said.

Leveraging tech, data analytics

Underscoring the importance of technology and data analytics, Subramanian said banks and financial institutions which were very efficiently leveraging data and analytics had much lower bad loans, and their balance sheet expansion did not come under pressure. “Those banks were also able to grow consistently, and thereby contribute to the economy. That is the objective that the Indian BFSI sector must have,” he said.

The CEA said a lot of the private sector banks have used data and analytics for retail lending, but the usage of the same is very low for large ticket lending and SME lending. “The Indian BFSI sector should hire far more engineer MBAs to bring this technology driven in banking,” he said.

“In BFSI sector leaders need to be those that are technologically very well drained not only to be able to come up with models for retail lending, but also models for large-ticket corporate lending,” Subramanian said.



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Deutsche Bank to hire over 3,000 techies this year

Banking & Finance

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Deutsche Bank will hire over 3,000 techies this year to strengthen its technology centres in India, Russia, Romania and the US.

The bank would hire over 1,000 people in India including 300 engineering graduates of various disciplines from 30 different campuses of NITs and IITs. These freshers are expected to come on board in July.

Also read: Deutsche Bank to lend ₹600 crore to NCDC

The bank has recently streamlined its global technology development landscape (which contained over 20 big, small and fragmented tech talent groups in over 60 countries) to ramp up focus through key tech locations such as Pune, Bengaluru, Moscow, St. Petersburg, Bucharest and Cary.

The company said it was consolidating teams where focused development of technology was going to come from, in the future.

As part of Deutsche Bank’s €13-billion digital transformation journey between 2019 and 2022, the bank is currently in the process of replacing its legacy IT systems with modern processes.

Dilipkumar Khandelwal, Global Chief Information Officer for Corporate Functions and Global Head of Technology Centres at Deutsche Bank told BusinessLine, “Retiring duplicated and outdated applications is estimated to deliver over €150 million of annual cost savings globally for Deutsche Bank by the end of 2022.”’

“Modernisation will mean we increasingly develop standard applications that can be used across the bank, not just in one business. We are also working to harmonise our data into a ‘single source of truth’ across the bank,” he said.

Deutsche Bank is also replacing its global pricing engine for emerging market currencies in London with one in Singapore, drawn by surging trading in Asia and the increasing importance of the Chinese yuan.

“Setting up a new and more powerful global pricing engine in the city-state will help the bank save vital fractions of seconds from the time it takes to execute orders in the region,” Khandelwal added.

The bank was looking at creating new business models leveraging artificial intelligence, data analytics, and more, with tech partner, Google.

“For example, new lending products will support “pay-per-use” models as an alternative to purchasing assets outright (asset-as-a-service),” he elaborated.

According to Khandelwal, digital transformation has enabled banks to leapfrog technology progress by investing and integrating modern solutions such as cloud and automation. This infrastructure also supported intelligent use of the data available within the bank to create better insights and decision-making.

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Credit Suisse to hire 1,000 techies in India

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This is part of its vision to establish India as a centre for technology innovation across the bank globally. The hires will comprise developers and engineers who have capabilities in emerging technologies such as cybersecurity, data analytics, cloud, API development, Machine Learning and Artificial Intelligence that are anchored in Agile and DevOps delivery methods, to support the bank’s digital aspirations.

This is a continuation of Credit Suisse’s India growth strategy that has seen the bank hire 2,000 IT employees in the last three years. Credit Suisse’s goal is to leverage the large pool of skilled technology talent available in India, to further enhance its in-house core capabilities. India now accounts for nearly 25 per cent of the bank’s global IT staff, the largest footprint of any Credit Suisse location globally.

Also read: Credit Suisse offers ₹7.5-cr additional aid to Concern India Foundation, GiveIndia

John Burns, Head – India IT and Senior Franchise Officer, Pune, said: “This year’s hiring plan highlights our continued commitment to India, particularly to Maharashtra, and supports Credit Suisse’s vision to establish our operations here as a global technological hub. To support the growth of our IT presence in India, we believe empowering our employees to lead global delivery and drive innovative solutions enhances value-creation and productivity for the bank globally.”

Prashant Bhatnagar, Global Head of Experienced Recruiting for Technology, said: “As we continue to build our footprint in India, we want to attract the best IT talent to join our vibrant community of professionals. We provide our employees with a dynamic environment that fosters skills development and knowledge-sharing, and we provide opportunities for engineers and developers to be at the forefront of technology and innovation.”

Over the years, Credit Suisse India IT has successfully delivered new technology capability to the bank while maintaining a strong focus on system stability and security while maximising operational efficiency. The hiring ambitions for 2021 will play a critical role in delivering the bank to its clients, ensuring a digitisation-ready architecture, a robust platform, adoption of IT best practices and technologies, and an empowered engineering workforce.

Also read: Credit Suisse says it faces a ‘significant loss’

John Burns added: “The pandemic has accelerated the use of digital solutions across many areas. We have effectively employed collaboration tools to enable seamless external and internal communication to support teamwork and effective delivery.”

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RBI to banks: Ensure authority, stature, independence, resources to internal audit function

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The Reserve Bank of India (RBI) has asked banks to ensure that the internal audit function has sufficient authority, stature, independence and resources within the bank to enable internal auditors to carry out their assignments with objectivity. It also emphasised that this function cannot be outsourced.

These directives are aimed at strengthening governance arrangements in banks under the Risk-Based Internal Audit (RBIA) Framework.

The central bank said the Head of Internal Audit (HIA) should be a senior executive of the bank with the ability to exercise independent judgement.

Also read: Audit firms told to delve deep into management explanations

The HIA as well as the internal audit function should have the authority to communicate with any staff member and have access to all records or files that are necessary to carry out the entrusted responsibilities.

RBI underscored that requisite professional competence, knowledge and experience of each internal auditor is essential for the effectiveness of banks’ internal audit functions.

The desired areas of knowledge and experience may include banking operations, accounting, information technology, data analytics and forensic investigation, among others.

The HIA will directly report to either the Audit Committee of the Board (ACB) / MD & CEO or Whole Time Director (WTD).

“Should the Board of Directors decide to allow the MD & CEO or a WTD to be the ‘reporting authority’ of the HIA, then the ‘reviewing authority’ shall be with the ACB and the ‘accepting authority’ shall be with the Board in matters of performance appraisal of the HIA,” the RBI said in a circular.

Besides, in such cases, the ACB should meet the HIA at least once in a quarter, without the presence of the senior management, including the MD & CEO/WTD.

As per the circular, the HIA will not have any reporting relationship with the business verticals of the bank and will not be given any business targets.

In foreign banks operating in India as branches, the HIA will report to the internal audit function in the controlling office / head office.

Except for the entities where the internal audit function is a specialised function and managed by career internal auditors, the Board should prescribe a minimum period of service for staff in the Internal Audit function and HIA should be appointed for a reasonably long period, preferably for a minimum of three years.

“The Board may also examine the feasibility of prescribing at least one stint of service in the internal audit function for those staff possessing specialised knowledge useful for the audit function, but who are posted in other departments, so as to have adequate skills for the staff in the Internal Audit function,” RBI said.

Also read: RBI to mandate risk-based internal audit for large UCBs, NBFCs

The central bank observed that the independence and objectivity of the internal audit function could be undermined if the remuneration of internal audit staff is linked to the financial performance of the business lines for which they exercise audit responsibilities.

Thus, the remuneration policies should be structured in a way that it avoids creating conflict of interest and compromising audit’s independence and objectivity.

No outsourcing

While the internal audit function should not be outsourced, RBI said where required, experts, including former employees, could be hired on contractual basis subject to the ACB being assured that such expertise does not exist within the audit function of the bank.

“Any conflict of interest in such matters shall be recognised and effectively addressed. Ownership of audit reports in all cases shall rest with regular functionaries of the internal audit function,” the circular said.

RBI has encouraged banks to adopt the International Internal Audit standards, such as those issued by the Basel Committee on Banking Supervision (BCBS) and the Institute of Internal Auditors (IIA).

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U GRO Capital sees disbursements at pre-Covid-19 level

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Small business lending fintech platform U GRO Capital has seen its disbursements reach pre-Covid-19 levels but believes that credit demand is still muted.

“We disbursed about ₹120 crore in February and we are now at a little bit more than that,” said Shachindra Nath, Executive Chairman and Managing Director, U GRO Capital, but noted that the credit demand is largely for sustaining existing businesses.

“Borrowers are not thinking about growth too much,” he said in an interaction with BusinessLine.

Also read: U GRO Capital reports Q1 net profit at ₹3.72 crore

U GRO Capital on Wednesday also announced that it has filed an application with the Indian Patent Office for its distinctive methods and systems for modelling scorecards.

“This has allowed the company to penetrate in a highly unstructured segment, which is driven by physical processes,” it said in a statement, adding that it tackles the unavailability of appropriate MSME database, by utilising its unique classification technique leveraging the proprietary knowledge base and strength of statistical models.

Using this model, it aims to target 2.5 lakh small businesses and extend loans on the basis of data analytics amounting to over ₹30,000 crore in the next four financial years.

The company has made disbursals of ₹1,700 crore in the form of secured and unsecured loans till date.

Also read: U GRO Capital appoints Global Value Creation Partners to drive biz growth

The distinctive underwriting model generates credit score cards customised to suit the peculiarities and nuances of varied business enterprises, it said, adding that this is done by analysing the historical loan delinquency patterns and cash flow within each selected business segment.

The proprietary statistical scorecards for assessment at various stages have been developed in consultations with CRIF and Crisil market experts.

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