New Delhi: In the rapidly evolving landscape of the financial sector, a confluence of transformative technologies is reshaping the way institutions operate and serve their clients. From the advent of artificial intelligence (AI) and automation to the disruptive potential of blockchain and fintech, coupled with the ever-growing importance of cybersecurity and the emergence of low code/no code (LCNC) platforms, the industry is experiencing a profound shift. Moreover, advancements in quantum computing, data science, and cloud technologies are revolutionizing traditional processes, while industry alliances are forging new pathways for collaboration and innovation.

Experts assert that these technologies hold immense potential to enhance efficiency, foster innovation, fortify risk management protocols, and streamline decision-making processes within financial institutions. Key trends such as digital transformation, central bank digital currency (CBDC) adoption, cybersecurity challenges, LCNC platform integration, and the future of payment systems are under scrutiny, as organizations seek strategies to maintain a competitive edge amidst this dynamic landscape. In this regard Mansi Gupta, ObserveNow interacted with Sudin Baraokar, AI & Digital Transformation, Advisor and Expert.

Here are a few excerpts from the interview:

As a top-ranked technologist in AI and automation, how do you envision these technologies shaping the future of the financial sector, particularly in terms of efficiency and innovation?

AI can help in building next-generation Credit and Risk Models. AI can also help transform Open Banking and Open API ecosystems that enable continuous collaboration between Banks, NBFCs, MFIs, Fintechs and Digital Payment companies. Already RPA (Robotic Process Automation) is being used for eKYC and Onboarding. IPA (Intelligent Processing Automation) can now be used for Video KYC and Automated Audits

What are the key trends in digital transformation that you see impacting the financial industry in the coming years, and how can organizations stay ahead in this rapidly evolving landscape?

Digital Transformation will be used for increased Monetisation, improved Customer and Digital experience. AI is the key ingredient here to help in pushing in my view “Automated, Autonomic, Audited worlds”. Digital Transformation will help in reducing the Technical Debt and Total Cost of Ownership and modernising Enterprise Applications and Legacy Infrastructure

Given your expertise in blockchain and fintech, how do you foresee the adoption of blockchain technology in the financial sector, and what role will fintech play in reshaping traditional financial services?

Blockchain Innovations in the form of CBDC (Central Bank Digital Currency) will further accelerate the adoption of Blockchain in India. Use cases across Digital Lending, Direct Digital Financial inclusion, Global Trade Finance are some of the use cases that can be implemented

With the increasing reliance on digital technologies, what cybersecurity challenges do you anticipate for the financial sector, and how can organizations effectively address these challenges?

One of the Largest Global Bank in the world gets hits daily with over 45 Billion cyber attacks. This threat will only grow as Hackers and Fraudsters keep finding Application and Infrastructure Security Loopholes. One of the best way to Tackle these multi vector threats is to leverage CSPM – Cloud Security Posture Management Platforms

Low Code/No Code (LCNC) Platforms  are gaining popularity. How do you see these platforms impacting the development and deployment of financial applications, and what benefits do they bring to the industry?

LCNC is the new Agile Digital Transformation. Both Enterprise Progressive Web Apps and Mobile Apps can be developed in a few weeks compared to the months it takes for roll out. LCNC perfectly aligns and integrates well with emerging tech across AI, MLOps, Data Science, Automation

Quantum computing holds great promise. How might it revolutionize risk management and complex financial calculations, and what challenges need to be overcome for its widespread adoption in the financial sector?

Quantum Computing can be used to help predict which Bank Application and Channel can be hacked or breached and reduce the reaction and response time it takes for remediation. It also holds promise in HFT – High Frequency Trading and High Performance Computing (HPC). As we wait for QC Chips and Hardware we can use Quantum Orchestration Software to get Inferencing results.

In the context of data science and machine learning, how can financial institutions harness the power of data analytics to gain valuable insights and enhance decision-making processes?

At SBI in 2017 as Head of Innovation I have benchmarked our Core Banking Systems at 24K TPS, 1.5 Billion Transactions in a day to cover over 500 million Customers and 700 Million Accounts. Can we do best in class AI and Data Science based Inferencing in real time and understand how to serve a billion citizens and customers better. Yes, we can and usher in next generation deep tech in Core Banking and Digital Banking

With your experience in cloud technologies, what considerations should financial organizations keep in mind when migrating their applications to open-stack cloud environments, and how does this impact scalability and flexibility?

 We will remain in a Multi Cloud, Private Cloud, Public and Hybrid IT Cloud environments. Majority of AI/ML Workloads can be processed using GPU and HPC on cloud. Cloud and API interoperability remain a key decision criteria while selecting Hyperscaler Platforms. One of the innovations that can be used is Cloudbursting that helps in on demand scale up On-prem and Hybrid IT workloads to Cloud

You have a background in building industry alliances. How crucial are these collaborations in fostering innovation within the financial sector, and can you provide examples of successful industry consortiums you have been involved in?

Previously in 2017 as Head of Innovation in SBI, I had established the Bankchain Alliance with 40+ Banks and Technology Partners to help evaluate, test and implement Blockchain and Emerging Tech for BFSI use cases across Trust as a Service, Automated Audits, Payments and improved Governance, Risk and Compliance. Collaboration is key for Blockchain success. 

Considering your expertise in payments, what trends do you foresee shaping the future of payment systems, and how can financial institutions prepare for these changes?

BNPL 2.0 (Buy Now Pay Later) can be programmed for Open Payments and Open Lending that can usher in next-generation “Embedded Finance” ecosystems that can have Industries partnering with Banks and Fintechs for greater monetization at a lower cost of capital. This can be implemented through Digital Banking Super Apps