India enjoys the biggest benefit of unbanked market, which has started opening up with financial inclusion journey. With rise of NPCI, retail payment became accessible and affordable for the entire banking system. The government and the RBI’s favorable policies toward digitization have given a further boost. On other hand, customers got variety of products which were easy to use, secure and affordable. Penetration of internet and smartphones further fueled into the usage of mobile banking. With introduction of UPI, complete banking experience is radically changed. In this week's Finapolis Conversation, Kumar Shankar Roy gets a comprehensive view of digital payment ecosystem in India from Bharat Panchal, who joined FIS as Chief Risk Officer- India, Middle-East & Africa in October 2019. In this role, he drives compliance and risk strategies for these geographies at FIS, which provides payment processing and banking software, services and outsourcing of the associated technology. Before joining FIS Global, Panchal served in NPCI for eight years. He had previously worked at Kotak Mahindra Bank and Citi Technology Services. Read on to know more.
You have massive experience in digital payments and settlement systems in India. How are you going to leverage this for FIS?
Having strong presence worldwide in banking and payments areas, FIS has very strong footprints in India as well. My experience will contribute to give higher confidence among our valued customers with better risk management, higher predictability in fraud related issues and stronger support for regulatory compliance.
FIS deals with huge payment, transaction volumes on behalf of clients. How are you managing these risks in India?
Risks in digital world are completely unique and to some extent unheard of. Therefore, it's not a convention way to handle. While security of each transaction is most important, availability of system is equally crucial for real time payment processing. Other hand, regulatory requirements also brings new dimension in overall risk management. Therefore, a detailed risk management framework is implemented to ensure that we provide safe, secure and seamless customer experience.
India remains the global leader in real-time payments usage with 10-fold increase in value and eight-fold increase in transaction volumes driven through its national system over the last year. What is driving this massive usage?
I think India had biggest benefit of unbanked market which has started opening up with financial inclusion journey. With rise of NPCI, retail payment became accessible and affordable for entire banking system. Post 2014 government and RBI’s favorable policies toward digitization have given a major boost. On other hand, customers got variety of products which were easy to use, secure and affordable. Penetration of internet and smartphones further fueled into the usage of mobile banking. With introduction of UPI, complete banking experience is radically changed. I believe, India is the only country which has so many products with so much of sophistication in the payment area.
Data privacy has become an important thing globally, and also in India. How are you dealing with data privacy concerns with respect to India?
Data privacy is now become one of the prime concerns for regulator, for institution and more importantly for customers who are the real owner of the data. Data localisation has become reality and everyone has no option but to comply with. We are also fully compliant to data localisation. However, it would be more challenging and complex once proposed data privacy bill comes to a reality. As data sovereignty becoming more and more important concern, highest level of compliance would be a the only way and for which we are already working.
Cyber frauds, data theft and fraud prevention are real dangers affecting thousands in India. What can be done to prevent them?
Unlike other risks, cyber security risk is very dynamic as every day new challenges are being surfaced and unfortunately there is no remedy available instantly for many of the cyber threats. However, defense in depth with layered security approach is more suitable considering current cyber security landscape. Right technology with right skillset can help to provide higher confidence on security. There is a need to monitor financial transactions on real time basis for which we have the best solution. However, technology alone cannot help as customer’s alertness is the key to prevent many frauds. Therefore, digital literacy is the most important.
What are initiatives towards financial innovation taken by FIS in India?
In India, we are in amidst of a digital transformation where the unbanked now have bank accounts and merchants who earlier shied away from accepting digital payments have found convenient and affordable ways to transact digitally. We are running several financial innovation initiatives globally, of which India is one of the key markets. We are investing heavily in our modern banking platform, our cloud-native core banking platform designed with API-first functionality gives the control to our clients.
Our Bengaluru-based Financial Inclusion Lab is researching solutions to make banking and payments more intuitive and accessible for the under banked. The other areas being researched currently includes gamifying financial literacy to promote savings and prevent digital frauds as well as using emerging technologies to radically improve the consumer experience. Given the increased risk of frauds, the financial crime strategy must be aligned with the business strategy and integrated into everything the firm does. Our product Memento empowers client to adopt a proactive approach to crime prevention so that one can stay ahead of the criminals and outsmart the enemy. Memento has dedicated world-wide delivery teams, seasoned professionals based out of India, Italy and USA with years of experience delivering solutions and value to customers, and disseminating threat information and best practices to all customers to deliver measurable value throughout the life cycle.