Jaya Vaidhyanathan Of BCT Digital On The Future of Money and Banking
An Interview With David Liu
Dream big: The key to innovation is to stop thinking incrementally. The world of finance is having its heyday. It’s at the forefront of disruptive innovation after years of being on the backseat as a mere enabler. Now is the time to seize the market. Go for it.
The way we bank has changed dramatically over the last decade. It was not too long ago when you had to wait in line in a bank to deposit money. Today things are totally different. You can do your banking without ever walking into a bank. In addition, the whole concept of money has changed. In the recent past, money usually meant bills and coins. But today, the concept of money has expanded to include digital currency and NFTs. What other innovations should we expect to see in banking in the short and medium term?
To address this, we are talking to leaders in the banking, finance, and fintech worlds, to discuss the future of banking and money over the next few years. As a part of this series, I had the pleasure of interviewing Jaya Vaidhyanathan, CEO, BCT Digital.
Jaya Vaidhyanathan, a Global speaker, Entrepreneur, Thought Leader & an expert on Financial Services and Technology, is currently the CEO of BCT Digital, an award-winning global fintech company specializing in risk & regulatory solutions for international banking and financial services markets. At BCT Digital, Jaya spearheads the ‘Make Local, Go Global’ product innovation to tackle national issues such as NPA and Risk management in the Financial Services sector. Her portfolio includes driving product strategy, product innovation, Digital Transformation, Risk Management, M&A, technology delivery, and execution. Jaya has extensive experience in the BFSI/FinTech sector across US, UK, South Africa and India, both with large corporates such as Accenture, the Wall Street and building start-ups. She serves as the Independent Director on the Board of UTI Asset Management Company and Indigrid.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started in this industry?
I was fortunate to have had a global upbringing and a keen interest in Math. After an engineering degree, I pursued higher studies in management at Cornell, and earned a CFA charter as well. My career began at New York, and I had a successful run at some of the foremost Wall Street firms, specializing in mergers and acquisitions.
From Wall Street to Management consulting to deep tech, I continued to learn and the logical conclusion was to become an entrepreneur and apply my learning to the financial services and tech industry.
Can you share the most interesting story that happened to you since you began your career?
One of the most interesting stories would be the time I worked with a Big Tech firm, where I led the efforts to close a massive multi-million-dollar outsourcing deal. Valued at US$780 million, the deal was history-making at the time, and it created a lot of media buzz. To me, this achievement is more of a personal one, as it created opportunities for more than 6,000 of India’s young engineers. The social impact, to me, was a reward in itself.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
My favorite life lesson quote “The day you stop learning is the day you stop living”. I strive to learn something new every day and apply it to my daily life. I believe that this life lesson underpins my life as an entrepreneur where innovation is key. Ideating and taking it to market needs different set of skills and therefore, you need to have breadth which again calls for continuous learning.
Ok wonderful. Let’s now shift to the main focus of our interview. Can you tell our readers about the most interesting projects you are working on now?
ESG related product suites are something we are extensively working on now and a whole range of products for the post pandemic world. That includes AI and predictive analytics-based products for quantification of Covid related business and recovery prediction patterns. Clean tech related work in addition to fintech and embedded finance are some key new interesting projects.
How do you think this might change the world?
It is important to note that these areas mentioned above are not just passing fads, but trends that are directly demonstrating financial impact on organisations. For instance, regulators are now insisting on ESG disclosures, which are also being watched closely by capital markets, with institutional investors incorporating ESG among investment criteria. Embedded finance, wherein financial transactions merge with real world scenarios such as store purchases, is a very interesting space too, with emphasis on Big data. The equation for companies is no more transactional, but to capture the mindshare of the customer by fulfilling all of his/her needs in one place, which includes facilitation of payments for the goods/services being sold.
What most excites you about the banking or payments industry as it is today? Can you explain what you mean?
Two things — scale and collaboration:
- Scale: Gone are the days when scaling up in terms of market share meant building massive teams and office infrastructure across geographies. Whatsapp had all of 19 employees when it was acquired by Facebook — by when it was already a global leader. Digital technology today makes it possible for a determined startup to challenge industry leaders provided it has an innovative idea and the ability to execute it at scale. This is what drives us to launching innovative products every year.
- Collaboration: The first two decades of the millennium saw collaboration among economies at a regional level — the formation of the Eurozone, followed by a common payment infrastructure (SEPA); common utility networks spanning the CIS region; treaties for open trade in ASEAN, and so on. This decade is seeing this being taken to the next level, with global collaboration in financial matters — notable examples being sharing of information on tax havens and financial crime among countries, and expansion of India’s Rupay payment network to many countries across the globe. This kind of collaboration expands the pie for financial institutions and Fintech providers, instead of making it a zero-sum-game, with — banks and Fintech make more money from satisfied customers and with greater operational efficiency while customers get convenient service at low cost and with greater transparency.
What most concerns you about the banking or payments industry as it is today? What would you suggest needs to be done to address that?
Central banks across the world, led by the US Fed have been printing money merrily, and this is the single biggest concern for the banking industry today. Monetary policies have resulted in severe mispricing of assets across the world, with overheated equity markets pulling the gullible into taking higher than acceptable risks, for example. On the other hand, interest rates at historically low levels even in the face of high and non-transitory inflation have disincentivised savers from putting their money in the banks, and simultaneously given perverse incentives to sub-prime borrowers to pile up on debt through government sponsored schemes as well as new age Fintech apps including peer-to-peer lending in addition to conventional loans. For financial institutions, the correct course of action is to rely on objective and fast changing parameters based on technology, to rationally assess risk in credit and investment decisions rather than relying on conventional data such as credit ratings which have led to questionable decisions in previous financial crises.
How would you articulate how the concept of money has changed in recent times? Is it really a change? How is it still the same? Can you explain what you mean?
The concept of money has changed in two ways. Firstly, in terms of asset allocation. Today, financial investments have become more diverse, with money moving from the traditional FDs to equity, debt, and so on, in pursuit of better pay-offs. Not just this, non-financial investments are becoming financialised. Real estate investments can now be done through REITs traded on the stock exchanges, and gold investments can now be done in gold bonds and ETFs. As far as investment avenues are concerned, choices are abundant.
The second way money has changed is in transaction patterns. Cash is becoming more and more obsolete, and while experts predicted plastic money to replace cash, we now have mobile money (UPI) replacing both! This is a welcome change, as it is secure and convenient for customers while reducing currency costs for the central bank.
However, the concept of money remains fundamentally unchanged. Money, whether in wads of notes or in electronic form, still remains the preserve of the Central Bank. Even if digital currencies take over, they are likely to be CBDCs, rather than private cryptocurrencies allowing the RBI to govern and control its use.
Based on your vantage point as an insider in the finance industry, what innovations should we expect to see in banking in the short and medium term?
Free market principles for data availability: Today we have technology managing financial transactions to the point that there is little or no human interaction. But it also means that all data on transactions and customers are stored electronically, and available for big data analysis. This has given rise to a new market of data on customers, and we now have vendors specialising in it.
Banks and fintech can leverage this valuable data (like, credit bureau data) through API connectivity for data-driven decisions — all for a fee. This means even an upstart can pull customers away from established financial institutions if it has a better “pulse” of the market, just by using precise variables that influence a decision. This is important because financial institutions must now work on the assumption that even their nearest competition has access to the same data as they do. Hence, they need to rigorously focus on improving the level of personalization in products and overall customer experience.
How has the pandemic changed the way banks interact and engage with their customers?
The pandemic has only accelerated the already prevailing trend of increasing digital transactions and this is expected to continue. But while customer impact has been minimal, working remotely with fragmented systems and connectivity issues have had an adverse effect on the employees of financial institutions. Now many of these institutions are bringing in policy changes to ensure business continuity in the case of remote work. Remote work is a good trend, as it is expected to bring broad-based growth across the country, instead of a skewed growth pattern focusing on metros.
In your particular experience, how has the pandemic changed the way you interact with, and engage your customers?
Firstly, video calls and screen-sharing have replaced face-to-face meetings. While not without initial hiccups, customer communication has become more streamlined over the last two years. Delivery of software over VPN connections has also been perfected by our team, thereby enabling faster and cost-effective deployments, bug fixes and incremental rollout
In my work in the telecom space, I’m very interested in the importance of user experience. How much of your interactions have moved to digital such as chatbots, encrypted messaging apps, phone, or video calls? How has this shift impacted the user and customer experience? What challenges do these apps present when used as a customer engagement tool?
We have moved to the world of digital and are a core part of it. At BCT Digital, we are open to onboarding newer, globally accepted technologies that are secure and proven to increase the quality of stakeholder engagement. Our primary mediums of communication remain over the phone, collaborative video tools, email and secure messaging platforms. I am also a strong believer of the fact that digital apps exist to supplement your interactions, provided you already have enough social equity to begin with. For example, if I am connecting with a customer for the first time, I prefer that it be an in-person, face-to-face meeting that helps to foster mutual trust and instill confidence. I also feel that many of today’s interactive UX-focused products and applications, like chatbots, if not managed systematically, have the tendency to alienate your frontline staff from customers, and adversely impact the quality of customer interactions.
Fantastic. Here is the main question of our interview. What are your “5 Things You Need To Create A Highly Successful Career In The Modern Finance, Banking and Fintech industries?
- Dream big: The key to innovation is to stop thinking incrementally. The world of finance is having its heyday. It’s at the forefront of disruptive innovation after years of being on the backseat as a mere enabler. Now is the time to seize the market. Go for it.
- Expand your horizons: In today’s world, the rate of technology obsolescence is really high. Learn new technologies every day and seek out the ones that could accelerate your innovations into a viable product.
- Be comfortable being uncomfortable: Get out of your comfort zone. That is the only way you can keep up the required levels of continuous learning and assimilation.
- Be resilient: Things will not always go your way. But there are hidden opportunities everywhere, waiting to be discovered. Sharpen your spear when the chips are down.
- Garner support: Throw your hands up for help, and learn to delegate where needed. Build your own support group. Empathy is the key to winning and so is being original.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
Many of us live in a privileged society. If each of us can invest in an underprivileged child’s growth, it could lead to a marked difference in the overall economic upliftment of our country. My advice is to educate and support at least one child that is not born to you. You can see the difference it makes to your life — not to mention the hundreds of lives you impact through that child!
How can our readers further follow your work online?
You can follow me on LinkedIn, read more about my ideas and thoughts in the publications that feature my work, or you can visit the blog section on www.bctdigital.in, where I pen my thoughts on the latest that’s impacting our field of work.
Thank you so much for the time you spent doing this interview. This was very inspirational, and we wish you continued success.