Being digital and data-driven is imperative, Arundhati Bhattacharya, CEO of Salesforce India and former chairperson of State Bank of India, said at the Global Fintech Fest on Thursday. “Data is very empowering because it gives you lot more insights and as it gives you more insight, it ensure that you have better risk management, it opens up more market segments for you, it tells you how to get more done with less effort, which of the leads are genuine and that are just noise,” she said. “It gives you power to do more with less,” she continued. If companies do not adapt to it, it will hurt them, Bhattacharya said.

‘OCEN is a game changer’

Bhattacharya called Nandan Nilekani-led Open Credit-Enablement Network (OCEN), a system of micro-lending that he had announced on Wednesday, a “game changer”. She also revealed that she had given her inputs to the creation of OCEN, which “connects the giver and the taker in a very efficient way to the benefit of both”. “Access is the game changer,” she said.

Bhattacharya also revealed that the bank has 120 million genuine accounts with ₹38,000 crore deposits in SBI. The average balance in these accounts is ₹2,449. People have become eligible for an overdraft of ₹21 lakh. This means that even to people who are considered savers, “we have the ability to lend them up to ₹21 lakh,” she said.

“Now that you can identify individuals on the basis of their Aadhaar database,” it becomes easier “to ensure that there is compliance, there is disclipline” in terms of paying back loans. People also know that if they default on one loan, it will make much harder for them to get any other loan since they know that they will be “reported to some credit bureau,” she said. “Earlier, it was very difficult to track down people if they changed their name or addresses, but now because of the Aadhaar number, despite pushback against it, we know A is A, not matter what they say,” Bhattacharya said.

‘Banks will have to innovate to stay relevant in the age of UPI’

“Banks will have to determine what they will look like,” Bhattacharya said in response to ET Now’s Nayantara Rai’s question about relevance of banks if everything could be done via UPI. “They could be asset light and distribution heavy, or they could lead with liabilities and be asset light as well,” she said.

“Not all banks will be similar” because they will focus on niche areas. She said that brick-and-mortar banks will still be there because people associate trusted banks with a physical building that can be seen, but their importance will reduce. Even as people do most of their banking from home, physical banks will still need to be there so that customers can come in for face-to-face interactions for certain issues, she said.

Every company, including banks and other legacy institutions, needs to have space for innovation. In case of banks and other legacy institutions, this is very difficult since credit is not given to failure which is an essential part of innovating. “Brick and mortar banks will also evolve. There is space for everybody,” Bhattacharya said.

Bhattacharya talked about the ₹200 crore fund that she set up at SBI to partner with fintech companies that had interests adjacent to SBI’s. “This was given to a separate team with a separate budget because had I put it together, alongside of everything, it sometimes loses focus, and sometimes, because there are failures, people are unwilling to take those large bets,” she said.

‘Fintech companies, banks need each other’

“Young fintech is very agile and is able use cutting edge technology, but in banking, there is a pre-requisite of trust. Young companies don’t have that trust because they are too young. … The ideal situation is that these two get in a partnership,” Bhattacharya said.

“There is a limit to the balance sheet of the fintech companies and they need the support of an established insitutition. Banks also need to stop trying to reinvent the wheel and rely on companies that have already experimented with new products,” she said.

‘Customers are usually the weakest link in ensuring cybersecurity’

“The chain is only as strong as the weakest link” and the customer is usually that weakest link, Bhattacharya said. “It is the gullibility of the customer that is taken advantage of time and time again.”

“Even on the internet, there are traps laid everywhere,” she said. Until and unless the customer decides not to share certain details about themselves, the loop cannot be closed, she said. “It is also incumbent on the part of the customer to not be deluded into thinking that they are safe.”

Other remarks

  • On what clients want: Post COVID-19, all of Salesforce’s clients want two things — omni-channel and access from anywhere — for customers, employees, suppliers and vendors, Bhattacharya said.
  • On impact of COVID-19 on the workplace and assumptions about employee productivity: “Workplaces will not disappear completely, but it will shrink and become more flexible,” she said. She said that in 2015, when she had sought to establish a work-from-home platform, especially for women whose have to give up on their careers, she had faced significant pushback from both male and female colleagues because people believed that people can be productive only in an office environment. The COVID-19 pandemic has completely upended that assumption. “If a customer request is sent at 2 am, employees are getting up at night to address it — even though they are not expected to. Productivity has gone up and our turn around times have become better,” she said. “We have to get past the peculiar concept that you have to stay for as long as the boss is in office”, especially in legacy institutions, she said. Similarly, people have to move past the assumption that seniors have to peer over their juniors’ shoulders to get them to be productive; the pandemic has shown otherwise. Rai pointed out that perhaps the acid test lay in future when distractions such as movie theatres, shopping malls, travelling are feasible again.
  • Salesforce employees will have the option to work from home until the end of the year, even if offices open up before that.