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‘CFOs should keep eye on long-term strategy, adapt to short-term situations’, BFSI News, ET BFSI

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CFOs have to play a major role during the pandemic in their organisations and be ready from the technology and business perspectives.

All eyes are on the P&L projections and the growth expectations from the businesses. With various factors that have come out of the pandemic, I would imagine that CFOs are at the centre with all the strategies that organizations are playing right now, Sudeep Bhatia, Group CFO, Lendingkart, said at the panel discussion CFOs’ View: Building Pandemic-Proof Balance Sheet at ETBFSI Summit.

'CFOs should keep eye on long-term strategy, adapt to short-term situations'

“For CFOs, the major focus has moved more towards a strategist, acting as a catalyst. How you can adapt to every day. Making sure you are ready from a technology and business perspective,” Upma Goel, CFO, Ujjivan Small Finance Bank, said.

'CFOs should keep eye on long-term strategy, adapt to short-term situations'

Adapting to new normal

Niraj Shah, CFO, HDFC Life said in these times, flexibility and agility is something that comes to the fore, and that’s something that a CFO needs to prepare the organization for.

Investing ahead of the time, and being agile, to try and adapt to the changing customer preferences because of the changing environment, he said.

'CFOs should keep eye on long-term strategy, adapt to short-term situations'

The RBI and GOI have taken multiple steps and interventions with every step, and, therefore, all the financial institutions, and all other organizations as well, had to adapt to the situations very fast, Bhatia of Lendingkart said.

Every business will be affected in a different way. Given the situation, and we adjust to that, but just in principle it’s about keeping sights on your long-term strategy, at the same time, adapting, to the short-term situations, Shah said.

Emphasising the need to have a fine balance to make effective use of the liquid cash, Goel of Ujjivan SFB said, “We cannot afford at this point of time not to have the liquidity and wait for the real demand. Demand has started picking up”

The challenges

The Covid pandemic has been the most serious challenge to financial institutions in nearly a century and CFOs need to maintain our distribution and recovery channels open, despite the social distancing advice by the supervisory and compliance function, said G S Agarwal, CFO, Shriram Housing Finance.

'CFOs should keep eye on long-term strategy, adapt to short-term situations'

‘The struggle to manage between these things and keep your balance sheet and P&L intact has been the biggest challenge. Also, to do the compliances remotely sitting remotely without any paperwork, without any physical signatures has been quite challenging, he said.

Customer requests and expectations have grown multifold. “I haven’t seen this kind of customer engagement before even from the existing customer base. This is because they need support from the organization as well,” Bhatia of Lendingkart said.



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Millennial users want Netflix, Amazon experience in broking apps, says brokerage honchos, BFSI News, ET BFSI

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The pandemic has forced the brokerage industry to reassess all the business models and their respective go-to-market strategies, which is leading to either an extreme or a moderate disruption, said Bhawna Agarwal Country Head, India – Strategy & Growth, Enterprise Group, HPE India.

“One common theme across all business adoption or acceleration of digital is that it has become completely pervasive. So, all across the section of clients for us, especially the stock brokers, we’re adopting this fast digital way of interacting as well as investing,” she said at the panel discussion on Brokerages Fighting Disruption Digitally at ETBFSICXO

Rising expectations

Sandeep Bhardwaj, CEO, IIFL Securities feels that after using Netflix or Amazon, people don’t differentiate between a banking application or a broking application. “They feel like a broking apps should be like that. This is where it becomes challenging for any brokerage to bring that experience. UI, UX gives millennial users an experience of their taste,” he said.

Millennial users want Netflix, Amazon experience in broking apps, says brokerage honchos
The whole ecosystem we’re working on for catering to the needs of the new generation needs everything to be faster, quicker, better and simpler, said Jaideep Arora, CEO, Sharekhan.

“Our entire digital platform team has an average age of 26 years, so when they know for whom they are making a product, they end up creating the same scenario for them. So that is what we are trying to do to get that seamless experience,” Bhardwaj of IIFL Securities said.

Millennial users want Netflix, Amazon experience in broking apps, says brokerage honchos
A lot of data is being used to really understand how we give the right advice to the right customer in the best manner possible. So basically there’s a digital innovation happening in the account opening onboarding process, said Arora.

“Mixing behavioural science with the technology to leverage is what the entire solution is all about at the end of the day. How we create a user experience, leveraging AI and ML will define the user lifecycle throughout his life,” said Bhardwaj.

Collaboration with FinTechs

Digital is all about collaboration with FinTechs. Rather than building everything in-house and spending money, it’s all about collaborative work. So it becomes far easier to implement those solutions which are readily available, says Bhardwaj.

Having a very collaborative opensource and working with FinTechs and even smart customers and coming with a lot of solutions can help the whole system, and it will be a win-win across the industry, said Arora of Sharekhan.

Millennial users want Netflix, Amazon experience in broking apps, says brokerage honchos
“In this ecosystem, the learning is that you are not alone, you have to collaborate with FinTechs, you need to have rich API’s, engage with other partners and customers as well. You have to cover all aspects of digital transformation at all levels and really immerse into it, and then you truly grow. This is what our belief is,” he said.



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BFSI CEOs look to unlock business value as pandemic ebbs, BFSI News, ET BFSI

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After almost two harrowing years of the pandemic, bank chief executives are looking ahead for a period of stability and growth with predictions of an uptick in credit demand.

Sanjay Singh, Deputy CEO, BNP Paribas India

Sanjay Singh, Deputy CEO, BNP Paribas India

“All the factors are favouring the capex revival. Low interest rates, lower leverage, efficient ecosystem, and demand uptake. All are indicating that capex will resume in next six months,” Sanjay Singh, Deputy CEO, BNP Paribas India, said at the CEO Panel discussion BFSI Leaders: Unlocking Business Value at ETBFSI Summit.

Singh said his bank’s focus is to embrace the best of traditional banking and a mix of new-age technologies.

Rajeev Yadav, MD & CEO, Fincare Small Finance Bank
Rajeev Yadav, MD & CEO, Fincare Small Finance Bank

Rajeev Yadav, MD & CEO, Fincare Small Finance Bank

Focus on risks

Along with growth and revival, bankers are also focused on risks.

Risk taking in the post pandemic world is a very important factor for all. Retail lending is a safer bet than corporate, said Rajeev Yadav, MD & CEO, Fincare Small Finance Bank. “Being a retail bank, we are taking retail risk. Retail lending is stabilised and fear of incremental lending is no more there,” he said.

Sunil Prabhune, Chief Executive-Rural & Housing Finance and Group Head-Digital, IT & Analytics, L&T Financial Services
Sunil Prabhune, Chief Executive-Rural & Housing Finance and Group Head-Digital, IT & Analytics, L&T Financial Services

Sunil Prabhune, Chief Executive-Rural & Housing Finance and Group Head-Digital, IT & Analytics, L&T Financial Services

Sunil Prabhune, Chief Executive-Rural & Housing Finance and Group Head-Digital, IT & Analytics, L&T Financial Services said that the business metrics have changed and the vaccination of employees is now an integral factor.

“Liquidity is not a problem anymore. We are extra conscious about risks and are focusing on how to retain customer franchise by maintaining the relation without meeting the customer. The strategy is to use data intelligence rather than conventional wisdom or rule of thumb for decision making,” he said.

During the pandemic it’s okay to miss top-line success because survival is the major objective, Yadav of Fincare said. “Shouldn’t worry about any loss of GDP or growth. As compared to 2019 data we are doing better,” he said.

On growth

Bank CEOs see a lot of pent-up demand.

“On an average credit demand is muted but there are pockets where demand is thriving. Use of behavioral analytics, machine learning, tailoring asset strategy etc. has helped us to recover faster, said Prabhune of L&T Financial Services, adding that his company’s disbursement this quarter was 3-3.5 times of the last quarter.

Nitesh Ranjan, ED, Union Bank of India
Nitesh Ranjan, ED, Union Bank of India

Nitesh Ranjan, ED, Union Bank of India

Nitesh Ranjan, ED, Union Bank of India said credit demand is subdued right now but definitely recovering from what is seen in the last six months across the spectrum. “Push from the government will help. The demand is high in Agri, renewable energy, Infra and warehousing,” he said.

“In the new normal world, we look at data and decide business operations. We are a rural bank and our rural business is shaping up better than pre-Covid,” Yadav of Fincare said,

Covid didn’t have any impact on businesses that are part of essential services, i.e. agri, dairy, he said, adding that credit demand is reasonably strong.

Future trends

The focus is on the next 3-5 years, how to better leverage digital and data, how to build capacity to manage people and continuously invest in the right risk architecture, said Ranjan of Union Bank of India.

Can banks build their own super app since they have a large customer base, asked Anand Dalmia, Co-founder, Fisdom. “With a super app, banks can offer more service to customers,” he said.

Prabhune of L&T Financial Services said “Monitoring is not something when it’s going wrong. Our focus is to detect what is something like to happen rather than what has happened. Can we predict if a customer is going to delay his payment for a day?”

Yadav of Fincare wants to focus on basic banking objective which the bank missed due to the pandemic. “We would like to have in-house talent rather than depending on the others,” he said.

Learnings from Covid

Ranjan said the PSU bank merger was a major challenge along with Covid. “Overnight we doubled the size. But we are seeing a much better period than what we have seen. With vaccination, we will be in a better place and business continuity is also improving.”

All of us had plans for 3-5 years. Covid taught us to accelerate the plans to one year.

Dalmia of Fisdom said during the pandemic FinTechs gained a lot due to digital adoptions by banks. We focused on getting more partners onboard. “We have collaborated with 10 banks. Banks have many retail customers, which is beneficial for FinTechs.”



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