Adoption of IoE services will result in 11% increase in bottom-line improvement for banks: Arindam Mukherjee, Cisco

Networking giant, Cisco, is betting big on its Internet of Everything strategy, and believes that adoption of Internet-of-Everything (IoE) enabled services can transform the Indian banking space. Dataquest spoke to Arindam Mukherjee, BFSI Head, Cisco India and SAARC, to get his perspective of the potential and opportunity for Cisco in the emerging Internet of Everything space.

Some edited excerpts:

In the BFSI space, what are some of the emerging opportunities for Cisco?

Defined as the convergence of people, process, data and things, Internet of Everything is one of the biggest areas that is transforming the banking ecosystem. It helps banks keep pace with customer demand by adopting solutions that offer expert advice, value-added services and convenience, whenever and wherever customers need them — and do so securely.

A recent Cisco study found that Internet of Everything (IoE)-enabled services can help restore the value customers expect from banking institutions. IoE makes it possible for banks to offer a more relevant, engaging, and convenient experience for customers. Of the $19 trillion in global economic value Cisco estimates IoE can create over the next decade, 7 percent ($1.3 trillion) is accounted for in the financial services market.

Another area that we are seeing traction in is video. As customers look for personalized and ‘always connected’ banking solutions, video is increasingly becoming relevant. Not only can video offer an in-person look and feel; it can be deployed remotely help to serve the right customer at the right time and place with the right tools. Remote advisers, wealth advisers and video calling are the technologies that are useful for communication in the banking sector and are transforming how banks function and providing consumers with relevant information instantly.

What is the potential of a technology like IoT in the Indian BFSI space?

Banking and financial services have historically been very conventional sectors steeped in traditional practices. However, the industry is experiencing a tectonic shift; it is getting increasingly competitive due to introduction of new players, and complex due to the changes in consumer demographics and behavior leading to a change in the way services are consumed and, introduction of new services and applications that will require the players to be more responsive.

One way of dealing with that is adoption of Internet of Everything (IoE). Convergence of devices and formation of an intelligent network are the basis of IoE and although the adoption is at a nascent stage, the potential is very strong largely due to the fact that India has one of the fastest growth rates of smartphone adoption.

According to the latest VNI report, India will have over 650 million smartphones by 2019. The sheer number of devices (including mobiles) that have the potential to be connected offers banks tremendous opportunities to offer cutting-edge services through IoE-enabled solutions. These services offer banks a two-fold advantage, one, it enables them to reach the customers where they are – resulting in increased engagement, and two, it allows the banks to save on physical infrastructure costs and deploy additional investments in technology infrastructure that could offer them a better return on investment.

A recent Cisco study revealed that using Internet of Everything, banks and financial service providers in India could see their bottom-lines increase by up to 11%. Can you elaborate on how this could be possible with the help of some examples from an Indian context?

Growing customer demands will need unique approaches to provide services as apps become an integral part of customer communication.  The emergence of the Internet of Everything (IoE) — the networked connection of people, process, data, and things — means that numerous new connections will generate huge amounts of data. As big data grows, the challenge to achieve better business outcomes and deliver better customer experience will become necessary. Banks must leverage the power of data and analytics to improve processes and profits or to reduce costs and risk.

As we move into an IoE era, solutions that leverage video, mobility, and social media can enable banks to conduct customer transactions seamlessly irrespective of their physical location in real-time. According to Cisco, the upside for a typical bank that becomes as digitized while aligning with its customer expectations can see a 5.6 percent bottom-line increase globally and in India IoE will result in 11 percent increase in bottom-line improvement for banks.  The Cisco study also predicts that $14.4 trillion of value (net profits) will be at stake globally for private-sector companies over the next decade, based on their ability to harness IoE — with $3.7 trillion of this value arising from improved customer experience.  For retail banks, this includes various levels of personalized interactions.

One of the most recent deployments we have done is for State Bank of India. Known as SBI InTouch, it is the digital avatar of a traditional bank which brings together the best of a traditional branch and internet-enabled services. The services include automated kiosks that deliver instant services such as account opening and facilities that offer remote expert advisory through high definition video conferencing. And at the backend, powerful analytics engine collate data and analyse them in real-time to offer insights enabling the bank to offer better services and cater to the new age customer.

What is the opportunity for a company like Cisco with respect to the Digital India initiative undertaken by the government?

The Digital India vision is one of the most exciting initiatives the country has embraced to leapfrog to the 21st century. What was once a visionary notion is now the new normal: technology is really as essential as the three utilities- water, gas, and electricity.

One key aspect that Digital India will look to address is financial inclusion. Announced by Prime Minister Narendra Modi in August 2014, Jan Dhan Yojana is a National Mission for Financial Inclusion. It ensures access to financial services for all in an affordable manner. These services include banking / savings & deposit accounts, remittance, credit, insurance, pension, etc. Jan Dhan Yojna focuses on coverage of households in rural as well as urban areas with the objective of covering the whole country to offer banking facilities to the masses. And as per figures available from April this year, almost 15 crore accounts have been opened so far with the total deposit totaling up to INR 15,798.34 crore.

As the number of accounts increase, two of the biggest challenges for banks lie in managing the data deluge and security. With our experience and expertise in managing these two areas for banks, we do expect it to open up newer areas and opportunities in the years to come.

Can you give us some examples of your customers in India in the BFSI sector, along with the solutions they are using?

More than 90% of all financial transactions in India run on Cisco powered mission critical Data Centre networks (9 out of 10 transactions happen on Cisco). In the past few years, Our solutions are deployed by almost all the top banking and insurance companies as well as the 3 top Stock Exchanges in India.