Do we need Human being to provide loan to a customer in a Bank/FI?

There is a lot of buzz around Artificial Intelligence, Machine learning, Big Data, Algorithm these days in mainstream media, thanks to popular tech companies like Google, Facebook etc. Speculations are doing the rounds on which professions would cease to exist in future due to this technology shift. The discussion ranges from impact on Education (teacher-less school) to Journalism (robot-generated reports) to English literature (robot generates poem!). How about the banking/lending industry and its associated workforce? Would we get into a situation in future where we just need a basic minimum workforce to operate a bank/financial institution instead of the current large manpower? Or are we already into it?

Most of the financial institution's (FI) biggest challenge any day is to have betterprofitability and an efficient system. The major negative contributor against both of them is its large workforce and the inherent inefficiencies that grow over the years. The operating expenditure of salary cost starts eating into the profitability. The work queue reduces the efficiency. We try to solve these problems by adding more people into it or by doing a new role definition for existing people or trying to tweak around the process to have lower manpower in doing the repetitive jobs. Is this going to continue or is there a new way of doing things getting built around the corner?
If we look at the modus operandi of an FI in an over simplistic way, the basic purpose of an FI is to 1) Generate funds at X% rate from market or bank or some source, 2) Lend the money to customers at Y% rate and 3) Collect back the money from the customers. If we focus only on #2, the proposition is - can we reduce human intervention as much as possible or are we at optimum already?
1) Marketing - getting hold of a probable customer: In mature markets, we are already seeing efforts in moving from traditional marketing to digital marketing. We are in a situation where the first interaction of a customer with an FI is happening over digital mode, be it in Social media or at Loan aggregator pages. It's not through the earlier traditional models. If an FI focuses only on urban customers, in all probability they have already gone down with the traditional Marketing budget and man power. 
2) Sales - making the deal and collecting data about the customer: The primary job of a Sales rep is to convince a customer with the rates and offering and making him agree to a particular scheme from the FI.
Sales Executive used to fill up long hard-copy forms for collecting the relevant details of the customer. These used to be eye-balled by Operations officers at back-office who would generate a digital footprint of the data in the Core system via data entry. This model is changing. Sales team is generating the data himself via Mobile based CAS solutions. In many occasions, even the customer himself is finding the FI, sharing his information himself.
The Loan aggregator sites are playing the intermediary role in showing the offering from various FI online. Customer is generating his own data footprint in the system there. In some scenarios, the customer may still call up a Sales guy who can come to the home / workplace of the customer and fill up all the relevant details on his behalf in the Sales rep's Mobile solution. In either way, the data entry profession (Operations) at back-office is fast coming at risk.
3) Credit Analyst - finding credit worthiness of the customer: Whenever a new customer comes for a loan to an FI, the standard operating procedure has been to search for him/her in the FI Internal database for possible frauds / delinquency earlier and also to search in external credit bureaus. Based on the search result, the Credit Analyst would take a call whether the customer is worth a loan or not.
These search triggers to Credit Bureaus are already automated as most of them provide API/Web services to call their services real time. The results are available in XML (machine readable format). If we want to automate the decisioning also, its just a matter of putting the CA brain into a rule engine.This may sound simplistic. But possibly this is the biggest block so far in going for a human-interaction-less banking. 
The decision quality would depend on two factors - availability of data and a robust rule definition. This is set to improve in coming days with more availability of data. Many 3rd party sites provide a huge data source about potential customers already and based on customer consent, FI core system can fetch results about a particular customer from there. The rule engine may need to learn itself while it gets trained with more and more data every day.
Instead of depending on a static algorithm/pattern, machine learning approach can be used to learn and improve on the data everyday for a better search and also predicting whether this customer would default in future or not. India still lags on this front due to unavailability of good data. There are instances of similar operation in mature markets already. 
Parting thoughts:
Are we already in a position where we can go for a human-interaction-less FI? The algorithms are getting built and computer scientists are raring to go to solve this. But the implementation would depend on the data availability mostly. Will it happen in near future? This has already started happening in some markets. Traditional Financial Institutions may not like to jump into this mode immediately, but alternate banking models are already taking foray into this models. It's possibly a matter of time when you would see the customer acquisition process in banks/Financial institutions being run completely by Algorithms and a few Data Scientists! 

This article was first published in Linkedin:

Periscope, Meerkat or Google Hangout - who wins the Live Streaming race?

A new battleline has been drawn on the Mobile Social arena - that of Mobile streaming. New players have jumped into it. Google already had an app in this area. Where does this Live streaming lead to? A quick take on Mobile Live Streaming and the players.

What is this Mobile Live streaming all about?
This is a natural continuation of the current Social Apps. The existing SM biggies were mostly text driven to start with (FB, Twitter, G+). Then the platforms moved towards photos (Instagram, Snapchat). Typing an event (live-tweet) used to be quite a cool concept till some time back. But as you can imagine and might have experienced, it takes a lot of effort (to type, take snaps etc) to do a live-tweet event. Also it doesn't give an experience quite close to the live event. Those who have followed any event via live-tweet may appreciate this. So what is the next alternative? Stream it live!

Meerkat vs. Periscope
Meerkat is considered to be first off the mark in this Mobile Live streaming stuff. They started with Twitter integration, but had to take a different strategy, after apparently Twitter decided to acquire and launch Periscope (Meerkat's version of the story is here on Techcrunch). If you want a deep lowdown on how to use either of them, you can have a look at this post [15th April, 2015] which shows steps screen by screen on both the platforms. And if you are looking for a comparison of the two platforms, you can check this page from Overall, the differences are quite less with the basic concepts remaining same - the differences are at UX like allowing to save a broadcast for future or showing a leaderboard etc. 

Was there any app available for Live Stream earlier?
Yes. Google Hangout was the leader in that segment. Over time, it has added whole lot of features in its App. But the catch is - Google has put more effort on its web version, compared to the mobile version. A possible reason (just my guess) can be - Google kept Skype in mind as its primary competition and built Hangout around that. While Hangout has grown beyond that possible initial brief, it remains primarily focused as a chatting / discussion forum app, instead of a live streaming app. Technically there is not much challenge in using hangout as a live stream app, but somehow the branding has not been done that way. The mental association of Hangout is still with a group chat due to its branding strategy. For example, you might not have seen much of Google Hangout being used to livecast a cricket match (or baseball match for that matter), though there doesn't seem to be any reason on why it can't be used that way either. Also Google has stabilized the product to a large extent over the years. Having said that, we wonder whether Google failed to market its product, again. Or did Google miss the bus to associate its product with this new segment of market? 

Mobile platform affinity
Periscope has chosen to stick to iPhone platform as its choice so far, while Meerkat has moved fast to come out with its Android version in early May. That puts some obvious pressure on Periscope to come out with the Android version. On the other hand, Google has released its Hangout on iPhone platform also (apart from its obvious choice of Android).

Business Model
So far, Live streaming has been free, like all other SM platforms. While Twitter might have spent millions to buy Periscope, the revenue generation model may become contextual ad in future. Recently in the Mayweather vs. Pacquiao bout, apparently Periscope had more viewers than HBO as tv viewers were holding their mobile device infront of the TV and streaming them live on Periscope. Is that illegal and infringing copyright? Well, that's another debate. Most of the new technologies have run-in with the existing laws and rules, but the point here is - would the Live streaming app get into a model where it replaces television by providing live footage from important events? Not sure. Frankly the revenue generation model is still not clear to me.

Who would win this race of Live Streaming?
That's the obvious question that may come to anyone's mind. Lets check the variables.
1) App features: Periscope seems to be having better of it right now. But the feature difference is quite thin. Any one of this three can beat the other two on feature richness in a matter of 3 months if their product managers buckle up tight.

2) Platform connectivity: While both Periscope and Meerkat started with Twitter and Hangout obviously with Google+, it would require to naturally connect to multiple platforms, sply Facebook to make them more popular. Can Google do that?

3) Backend support: Video streaming would require a lot of bandwidth and server readiness. Google, having spent some time on Hangout, is far better placed on this. The experience on Meerkat Android in India is quite bad so far, which may be due to non-availability of nearby servers (my guess). Google would win this part of the competition all the way if they really want to compete in this market with its millions of servers spread over the world.

Some of the tech journos have already decided that there can be only one winner in this space. But so far, the experience doesn't say so. You have so many platforms in SM space (FB, G+, Twitter and so on). In Messenger space also, you have quite a few (Whatsapp, Viber, Hike etc). Why can't there be many platforms in this space in that case? 

The Live streaming space is hotting up and is going to be of immense interest soon. Don't get surprised if you suddenly see Google waking up and making Hangout a little more jazzy to compete with Meerkat and Periscopes. Or for that matter, who knows if Facebook wants to get into this space either. Watch this space for more fun. Till then, good bye and happy streaming.

6 Steps towards embracing Cloud

"Cloud computing" has been in vogue for quite sometime now. However for many, it's still a buzzword, including IT managers who might not have got a chance to work on Cloud yet. In a recent Google Hangout by +Digital CRM , we discussed briefly about Cloud computing - the what, why, how part of it. This blog summarizes the discussion. You can watch the full video here.

1) What is Cloud?
If you search for the definition of "Cloud computing" in Google, it throws back this long sentence: "the practice of using a network of remote servers hosted on the Internet to store, manage, and process data, rather than a local server or a personal computer.To decipher this simple statement, let us point out the basics of Cloud computing.
  • It's about On-demand IT Infrastructure. The stress is on the word - on-demand. It's like a tap. You are charged for the time the tap is open. Well, almost like that.
  • It's delivered over Internet. 
  • The payment model is based on Opex, instead of Capex. Thus you pay as you consume the services instead of paying upfront for a large data centre.
  • And last but not the least - this whole cloud computing concept rides on the economy of scale. The cloud vendors have setup huge infrastructure of data centres all over the world, and they have put that on rent. The cost benefit comes from utilization of this economy of scale.

2) Are you using Cloud?
While all of us talk about Cloud as a tech thing, knowingly and unknowingly it has already seeped into our daily life. If you are using Dropbox, you are consuming the services of one of the biggest Cloud Infrastructure vendor. If you are using Apple Playstore, you are using the other big guy's services. Similarly utilities like Netflix, Google Drive and games like Real Racing 3 rides on Cloud. So as an end user, in all probability, you are already on cloud, even if you are not aware of it.

3) Is Cloud Mainstream yet?
Cloud is in the tech press for a while now and there it's no more a buzzword, but slowly getting into the mainstream flow. To check that, we looked at the famous Hype cycle of Gartner, which they publish every year to show the current technology landscape. Interestingly, Cloud computing was judged as part of "Point of Inflated Expectations" in 2009. And in 2014, it has crossed that stage and has reached "Trough of disillusionment". While we don't agree to this observation from industry, even if we go by Gartner's admission, Cloud computing is now standing close to the stage of "Slope of Enlightment". And I guess this should happen by 2015 itself. That's quite a change. Over a time period of 6-7 years, Cloud has come from another hype to becoming mainstream.

4) Cloud and the Service Models
While any Cloud computing discussion invariably talks about the technology part of it, it has aso delivered an altogether new business model to the industry - the service model. Cloud has given birth to majorly three areas - a) Infrastructure as a Service (IaaS), b) Platform as a Service (PaaS) and c) Software as a Service (SaaS)
  • IaaS - this is the most common one and is considered almost synonymously with Cloud in general. Amazon Web Services (AWS), Microsoft Azure and Google Compute Engine are the Leaders in this segment. If you are only looking for a server quickly, then IaaS is the go-to method.
  • PaaS - This may not be the most popular one amongst the three. However this has the potential of becoming the game changer. Vendors like Oracle might like to provide their Database license on the cloud, instead of renting only the server or renting a full-fledged ERP system. Similarly Google has a proposition here as an App Engine and Microsoft also has some offering in this space.
  • SaaS - This is the solution for many startups or MSMEs in non-tech sector. If you are looking for a quick and dirty software but don't want to invest time and money into building a huge solution, you might like to go for Software as a service. has used this model extensively to sell their offering. Similarly Google Apps is challenging Microsoft Office business by offering the entire Office suite on Cloud as a service.

5) Why should you move to Cloud?
This is possibly the most relevant question once you understand what cloud is all about. The most important revert to this question is - Cloud computing increases the speed of execution of the business. The server provisioning time comes down from months to hours. The long wait time goes out of the window just like that. It also gives the business a lot of cost savings as the IT infrastructure is NOT required to be built and run for the maximum load capacity. Whenever a load is predicted, the infrastructure can be scaled up in no time. In fact some of the vendors offers auto-scaling, where depending on the CPU load, new servers would get spawned on-the-go. This move of reducing cost and increasing speed of execution leads to a culture of innovation where new ideas can be tried quickly in a much shorter time.

6) Before you jump into Cloud...
If you are somewhat convinced that Cloud may benefit you as a business, the first thing that you need to do is - define the Cloud strategy for your organization. Every organization is different and the need and security requirements differ. Based on that the organization needs to decide which types of applications and which environments can go on cloud. For example, a Financial organization might decide to start with the UAT/Dev environments of the business applications and Production environments of the non-critical applications on cloud. Based on that decision, a clear Cost-benefit analysis (CBA) needs to be derived. Typically a 5 year horizon can be taken to do this CBA to compare Cloud vs. On-premise infrastructure. Security is a key factor in moving to Cloud. Most of the big Cloud vendors provide enough ways to manage security. It's upto the right sort of implementation, on which the enterprise security stands rather than the platform capability. As part of this, the organization also needs to check compliance with the local authorities, especially where customer data is involved. With all of this in place, it's important that the organization trains the staff with the right skills before embarking on the Cloud journey.

As part of my current job, I have worked on deploying certain business applications on Amazon Web Services. For any further details or any other relevant queries, please feel free to get in touch at my email id (

Happy journey to the Cloud world!

Did you search for the deck? It's available on Slideshare:

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