Dennis Gada, senior vice president and head of Financial Services, North America, for Infosys, spoke with Global Finance about digital transformation in financial services—including treasury—in the midst of the Covid-19 crisis.
Global Finance: Is the pandemic accelerating digital transformation in financial services?
Dennis Gada: We are seeing digital adoption proceeding at a very rapid pace. In response to government stimulus programs in various parts of the world, banks have had to find new, more-nimble ways of working, with faster decision-making. With the Paycheck Protection Program [PPP] in the US, banks have had to deliver services within a few weeks that would normally take them months.
GF: Does that hold for corporate treasury?
Gada: Yes, it is because corporate finance organizations today expect a customer experience similar to what they get from e-commerce. Treasury providers are developing new self-service platforms for their clients. So, just as you can go on Amazon and browse, you can now go to one of these self-service treasury portals and explore. For example, you can find products or services to help you penetrate a new country.
We’re also seeing a lot of digitization of the process for onboarding new clients. If it currently takes 30 to 45 days to onboard a new client in treasury, firms are now asking, How can automation help us bring that down to just a few days?
GF: How is the need for digital transformation particularly urgent in finance?
Gada: Payments is one area ripe for transformation. There is a need for faster, real-time payments: especially in today’s environment, where most transactions have moved online. Even in stores, clients want to have contactless payments. Another area is the lending value chain, including mortgages. That area is seeing a massive digitization, including use of AI in underwriting.
We just announced a strategic partnership with Vanguard to advance the digital transformation of their defined contribution recordkeeping business. We also recently forged a digital transformation partnership to help accelerate Old National Bank’s growth and provide improved services for clients and the larger community.
GF: Has the crisis spurred financial firms to use of AI and machine learning more ?
Gada: Absolutely. Lenders can use AI algorithms, for example, to identify the right client to be contacted at the right time, in the right way, e.g., whether by a call or an email. We recently helped banks in the PPP program to automate their underwriting process, using AI tools to read through the supporting documents for loans below a certain threshold, for example.
GF: Will AI-driven automation impact the “head count” within financial companies?
Gada: Automating these often-tedious processes frees up people to perform more-valuable activities, like doing more research, improving customer service or engaging more with customers to sell products and services.
GF: What’s the most common misperception about fintechs?
Gada: One misperception is that the fintechs are going to come in and disrupt all traditional financial firms. That’s not correct. Fintechs have a lot of great ideas, but they don’t have the scale or distribution large institutions have. Where fintechs partnered with other financial institutions, they have been able to deliver a lot more value, as in the mortgage industry and the digital payments sector.
GF: Globally, what regions are leading in digital transformation ?
Gada: From a payments perspective, Asia is leading. With regard to automation, AI, the cloud and new technologies to modernize platforms, North America is quite advanced. In some respects, like the harmonization of processes across different countries and regions, Europe is a leader because of SEPA [the Single Euro Payments Area] and other initiatives. Different regions have different strengths.
GF: Will these regional differences increase or decrease in the post-Covid world?
Gada: The pandemic situation will force all companies to reinvent themselves, and at a faster pace. Those parts of the world that need to catch up will adopt the best global standards. There will be some technological leapfrogging, and the regions will eventually reach similar levels of transformation.