Today, India is witnessing a tectonic and defining shift in the banking and financial services sector. Digital penetration, government reforms and digital infrastructure initiatives, and new-age financial institutions are making financial services accessible and affordable to all. With 80% of the small businesses and consumers yet to enter the formal banking ecosystem, the industry offers ample opportunities while also posing challenges of changing regulations and increased competition from new-age financial institutions.
Financial services are the backbone of the economy, and India’s ambition to become a $5 trillion economy by 2025 will only be possible if the industry leads the way for credit growth and digital banking services.
Fintellix, a Verisk Financial business, is a well-known company offering products and services to the financial services industry. With over three hundred professionals having financial services domain focus and data management expertise, Fintellix provides various solutions to meet risk management and regulatory reporting requirements of the financial services industry.
The journey of Fintellix began in 2006 as a Bangalore-based start-up with the vision of solving data analytics and regulatory reporting challenges of financial institutions. Over the next 10 years, Fintellix grew to become a reputed provider of data management and regulatory platform, raising venture capital from marquee investors, and was acquired by Verisk in early 2017. Today, Fintellix enjoys the status of the market leader for data management, risk, and regulatory platforms serving the financial services industry.
To explore deeper into the changes in the global financial service segment and Fintellix, The CEO Magazine had an insightful conversation with the guiding force of Fintellix, Shailendra Mruthyunjayappa who is the President of the division. The excerpts from the discussion with him on their business and his views on the Indian banking and financial industry are shared below:
TCM: Tell us a bit about Fintellix?
Shailendra: Fintellix is a leading provider of data management platform, regulatory technology, supervisory technology, risk management, and analytical solutions to the financial services industry.
We are a business of Verisk Analytics, a leading data analytics provider serving customers in insurance, energy and specialized markets, and financial services. We are part of the S&P 500 Index and Nasdaq-500 Index.
As pioneers in our field, we have built a client base of renowned brands in India and around the world. We work with financial institutions and supervisors in India, USA, UK, Middle-East, South-East Asia, Australia and South Africa. In India, we work with some of the most progressive financial institutions, including large private sector banks, foreign banks, and other financial institutions.
TCM: Tell us about yourself and why you believe Fintellix is a preferred solution provider in the ecosystem?
Shailendra: Today, I share my expertise at Verisk Financial in the role of Division President of Fintellix. Having spent over two decades in the industry, I have accumulated diverse geographic experience in banking technology and data management. Before joining Fintellix in 2010, I was part of product development teams at PKTech in India/ Malaysia and Temenos Switzerland, led professional services for Inlaks West-Africa, and managed a consulting start-up in Central Europe. I hold a bachelor’s degree in engineering from Kuvempu University, am a certified Project Management Professional, and have completed my Management Program from IIM Calcutta.
Apart from leading Fintellix, I balance my work and personal life by spending my time travelling, reading, engaging in varied sports, and doing my bit for the society. I would describe myself as a “student of life”. I am a strong believer that the right balance of professional, personal, and social responsibilities brings purpose, passion, and peace in life.
Coming to Fintellix: I believe we are a preferred solution provider because of our focus and solution approach. We have built subject matter expertise in the areas of data analytics, risk management and regulatory reporting as it applies to the banking and financial services industry, and we have productized solutions that help us deliver this expertise in a structured, standardized, and scalable manner.
TCM: Can you describe the different solutions that Fintellix offers to add value to financial institutions?
Shailendra: We at Fintellix are driving change, building best practices, and staying aligned with evolving data management and regulatory needs of the industry. We aspire to be the most preferred solution provider, and want to work with financial institutions and supervisory bodies around the world.
Let me give you a short introduction to our solutions:
- Fintellix Regulatory Reporting Platform: A global regulatory reporting platform, our regulatory reporting platform transforms data into a standardized data schema and enables “codeless” conversion into multiple regulatory formats. The BCBS239 compliant platform is capable of leveraging existing data infrastructure such as EDW and allows in-country teams to manage local regulatory rules, local regulator data validations, regulatory templates, and even data curation/ enrichment, all through a visual user interface. Country-specific pre-packaged solutions, available for several jurisdictions, reduces the implementation effort and standardizes the return preparation as per the standard interpretation of regulations.
- Fintellix Loan Loss Reporting Solution: Our loan loss reporting solution caters to the needs of financial institutions to meet ECL/ALL/CECL/NPL/NPA guidelines. Accepting all loan portfolio-related data into one central repository, and with powerful features and an intuitive interface, the solution delivers automated, accurate, and timely identification and classification of loan losses, and calculation of allowance. Flexibility to maintain multiple versions, a built-in document repository, with end-to-end audit log and pre-packaged reports, makes audit and examination easy at any point in time.
- Fintellix Borrower Assessment and Monitoring: BAM is a comprehensive system to proactively monitor and manage borrower credit risk, using holistic data combining financial institution’s portfolio, and multiple external data sources including company filings, ratings, bureau data, legal, etc to create a customer 360 view. It also generates an alternative risk score that can be used to prioritize and red-flag the riskiest of borrowers, and where possible insights/signals are combined with recommended actions. The solution comes prebuilt with recommended early warning signals, and custom signals can be configured including parameters such as weights, thresholds, etc. The platform also has self-learning machine models to continuously improve the scores and signals.
- Fintellix Data Management Platform: Data platform is a scalable, flexible & configurable platform to manage system & non-system data. The platform is built on SEMI philosophy – single extract, multiple implementations – to improve consistency and reduce redundancy, and is aligned to BCBS239 risk data management principles and industry best practices. It provides the ability to manage the entire data lifecycle, or to bridge data management gaps and integrate into the overall enterprise data flow.
- Fintellix Supervisory Platform: This Fintellix solution is an integrated data collection and management platform for supervisors and industry bodies to collect data from regulated entities/ participants in a controlled and collaborative environment with multi-entity workflows and validations. The highly configurable and flexible platform allows user-interface-driven designing of data collection forms and validations at the collection side that can be published and calendarized for groups of data submitters. On the submission side, the platform allows for data mapping from existing data structures, an API framework for direct integration, and online and offline user access from the web interface.
TCM: How does your company keep aligned with fast-paced technology?
Shailendra: The requirements of financial institutions for data management, risk management and regulatory reporting keep evolving with regulations, changing business models, as well as the advancement of technology.
Our products are continuously updated to ensure we support ongoing compliance as per regulations/ guidelines, and also benefit from advanced technologies. Our solutions work on relational databases, appliances, on the cloud, and on big data; we are also embedding machine learning models that can help continuously improve the insights delivered, and we are using open standards wherever possible.
TCM: How do you keep the team motivated despite the highly competitive talent market?
Shailendra: It is my strong belief that no company, small or large, can succeed over the long run without motivated employees who believe in the vision of the organization, and have clarity of their respective roles. We have adopted global best practices around people management, performance management, learning and development, and leadership development. We foster a culture of openness, collaboration, teamwork, and remain outcome focussed. We try to balance the work demands with team engagement and fun, and are always respectful of individuals need to balance their work and personal lives.
TCM: Who are your main business competitors?
I’ll say we are our own competition. Yes, clients evaluate us against a variety of providers depending on their needs and budget. But we endeavour to keep improving our offerings and innovating in the areas of our expertise. We are focused on identifying gaps and needs in the market and building solutions that can meet those needs and shape the industry.
TCM: Where is the Indian financial services industry headed?
Shailendra: India is at the cusp of a banking revolution and the groundwork has been laid including the regulatory changes in respect to the operation of fintechs and specialised institutions, formalised bankruptcy code, activation of digital infrastructure for payments, national unique identity program that created a secure way to identify and verify customers, government’s financial inclusion push which has resulted in over 80% of the population with bank accounts, and digital tax initiative/ online GST which has brought 10 million small businesses into the formal economy.
I believe, evolving digital expectations of consumers and aspirations of small businesses create enormous opportunities for the financial services industry in areas such as personal finance management, consumer credit, business loans, trade finance, etc. The financial services industry will play a vital role in India’s economic progression.
TCM: Does the transition to digital channels appear as a challenge today?
Shailendra: The paradigm shift of consumers and businesses coming online and adopting digital channels are making the distribution of financial products an easy task. However, with so many underserved consumers and businesses coming into the formal financial services ecosystem, the financial services industry will be challenged in terms of scaling operations, managing credit risk, and dealing with new kinds of risk. For example, financial institutions will need to adopt alternative ways of assessing and monitoring borrower risk for those that have no credit history.
It is only natural that with increased customer expectations, traditional financial institutions are having to reimagine their business and realign their products and services as we compete with neo-financial institutions/ fintech to provide the best customer experience. The industry is also having to deal with regulatory uncertainty, particularly around personal data usage and evolving fintech regulations, and emerging risks inherent in a more digital world, such as cybersecurity and financial crime.
TCM: What’s been the impact of COVID19 on the financial services industry?
Shailendra: Just when the Indian financial institutions were cleaning up their books of bad debt and things were looking brighter, the COVID19 pandemic struck. Indian government and regulators have come to the rescue with loan moratorium, debt restructuring window, easing of bad debt reporting norms, additional liquidity, etc, providing reprieve in the short-term. However, the systemic challenges will start creeping into the financial system in the mid-term, over the next 1-3 years, when businesses will see more stress if the economic recovery is not swift. This is the time for financial institutions to invest in borrower monitoring systems to give themselves a chance to better manage risk-taking preventive/ mitigative steps, and also implement robust bad debt classification, analysis and reporting solution as we can expect regulatory guidelines to keep changing over the mid-term.
TCM: How do you think banking will look in 2025?
Shailendra: In the next five years, we can expect to see the reality of ‘banking in the flow of life’ for consumers and “banking in the flow of business” for enterprises, as there will be seamless integration of financial services in life and business.
We can look forward to an environment where customers will be empowered to access a packaged financial product, bundled with consumption needs/ business operations, delivered in the moment of need, remotely via their smart devices or through localized/ specialized service providers, at competitive prices from a variety of financial services providers, directly from providers and through aggregators, driven by paperless/ digital processes, and offering freedom of portability.
TCM: What are your thoughts on India’s Personal Data Bill?
Shailendra: The Personal Data Protection Bill, as tabled by the Minister of Electronics and Information Technology, is very comprehensive and broadly similar to the principles of the European Union’s General Data Protection Regulation. This will establish data processing principles and grounds for processing personal data. In parallel, regulators and industry bodies are coming together to establish open banking standards with a consent-based architecture that will make it possible for individuals and businesses to allow the flow of personal and financial data between service providers.
This will enable the industry to set up paperless processes, provide better and faster services, and establish portability, and empowers consumers/enterprises to always remain in control of their data at a granular level. But this will also require financial institutions to implement robust processes and platforms, for data management and governance, to stay compliant and fulfil their fiduciary responsibilities.
TCM: What are the core values of Fintellix?
Shailendra: With aspirations to collaborate with the most progressive financial institutions and work on their most strategic objectives, our unshakable commitment is to serve the customers with the highest level of quality, service, and innovation.
The core values that act as the foundation to our business’s success are respect for each individual, integrity, passion, persistence, confidence/humility, excellence, and teamwork. These are successfully applied by focusing on customers and their success, innovating in partnership with customers, exhibiting n+1 thinking, acting with a data analytics mindset, reimagining the market space, continuously improving, and being responsible. We are commitment to conducting our business within a responsible environmental, social, and governance framework.
We also strongly believe in giving back to society. The organization together with employees periodically contributes funds to and engages with social organizations. This year, we contributed towards poor children free education and education for the visually challenged.
TCM: As a successful leader, what would be your advice for young and aspiring entrepreneurs?
Shailendra: India aims to become a $5 trillion economy by 2025 and a significant role in this journey will be played by digital initiatives. The nation has the opportunity to leapfrog the development path and build a digital economy delivering more inclusive, faster, and sustainable growth. The most significant opportunities are in the financial services sector, followed by retail, education & training, agriculture, and healthcare. This calls for entrepreneurs who can bring a fresh perspective, innovative approaches, pick up challenges, fulfil the needs of consumers and enterprises, and work with agility and speed.
So, young and aspiring entrepreneurs, pick a challenge that you are the best equipped to solve and feel passionate about, believe in yourself and stay optimistic, get product validation as quickly as possible, pursue product excellence and customer experience; capital, revenue, profits, and growth will follow.