Home BFSI RegTech has emerged as a clear game changer: Jaya Vaidhyanathan, CEO, BCT Digital

RegTech has emerged as a clear game changer: Jaya Vaidhyanathan, CEO, BCT Digital


In the last few years, Regtech has emerged as a clear game changer, where cutting-edge technologies are used to manage risk while ensuring compliance to ever changing industry regulations, says Jaya Vaidhyanathan, CEO, BCT Digital in an interaction with CIO AXIS. BCT Digital is the FinTech division of Chennai headquartered Bahwan CyberTek .

CIO AXIS: How did BCT Digital pioneer its distinctive offerings for the BFSI sector and which problems do they solve?

Jaya Vaidhyanathan: BCT Digital set off the ground as a fintech organization with a purpose. At the time of its inception, the global fintech market was booming, and emerging technologies like big data, AI/ML, and analytics were transforming BFSI holistically. In the meantime, India’s banking sector was under the strain of trillions of rupees in non-performing assets.

BCT Digital was envisioned to effectively manage risk in today’s complex financial landscape. Towards this, we started to explore and plug the gaps that were causing massive losses for Indian lenders due to bad asset quality. As the first step, we released a survey to assess the readiness of financial institutions to manage credit risk. Following this, we launched the first-ever “Early Warning System” for the financial services industry. Today, our vast product portfolio, marketed under the brand name rt360, comprehensively addresses risks for financial and non-financial enterprises including model risk, operational risk, technology risk, enterprise risk, etc. With 10X growth over the last three years, currently, we are leading the marketplace through innovative products that address adjacencies in the global financial services space.

CIO AXIS: Considering the current NPA crisis, how can technology like AI/ML and analytics be effectively used to tackle it?

Jaya Vaidhyanathan: BCT Digital’s growing product portfolio relies on disruptive technologies, like AI/ML, and predictive analytics, to enable banks and financial institutions to maintain optimal credit health. With the best mix of domain expertise and state of the art technology, BCT Digital enables financial institutions to track and monitor the creditworthiness of borrowers and prospects and forewarns lenders of possibilities of an asset going bad, and quite early in the credit cycle. For example:

  • Technologies like text mining, OCR, and fuzzy logic are instrumental in extracting valuable information from massive volumes of unstructured data.
  • AI/ML and analytics serve the purpose of utilizing this data and making accurate inferences from seemingly disparate data points that help to monitor and predict risks.
  • Using these technologies, banks get timely alerts on incipient stress or frauds, and get quantified estimates of the probability of default, thus sustaining the health of the account.

CIO AXIS: How is the prominence of fintech rising in the current scenario?

Jaya Vaidhyanathan: In a broad sense, Fintech is greatly helping the financial industry, especially lending, become more formal. For large banks, this means better structure to the lending process which can help them grow at a steady pace and at lower cost with scale efficiencies coming into play through use of technology. For mid-sized banks and smaller lenders like NBFCs, this means unprecedented opportunities to digitally reach existing and new customers, something which was difficult in the past as the sheer physical infrastructure of larger lenders (branches, staff etc) was a deterrent preventing the smaller players from directly competing with the big ones. For customers, this means that there is greater convenience and transparency as a borrower in terms of repayment options, behavior based preferential pricing, etc. On the other hand, for those at the other end of the spectrum, Fintech is enabling financial inclusion, giving them cost effective access to credit through data driven credit appraisal mechanisms that are getting automated to a great extent.

CIO AXIS: Cryptocurrency regulations: Thoughts on the recent announcement in the budget and what is the way forward?

Jaya Vaidhyanathan: India’s finance minister’s announcement on cryptocurrency has not resolved all of the ambiguity around it. One of the biggest questions is whether the proposed 30% tax on the transfer of virtual assets and crypto transactions implies that the government has formally recognised cryptocurrency as a valid market. The announcement of the launch of RBI’s own digital rupee on 1 April 2022 further fueled such speculations. But while many have inferred these announcements to mean that the government is pro-cryptocurrency, the RBI, until very recently, did not share this sentiment. The RBI still openly maintains that cryptocurrency cannot be considered a legitimate asset, even if it cannot be outrightly outlawed.

CIO AXIS: What are the key trends to anticipate in the financial technology space?

Jaya Vaidhyanathan: The financial services industry is constantly evolving, and along with it the regulations and rules that govern the industry too are changing. In the last few years, Regtech has emerged as a clear gamechanger, where cutting-edge technologies are used to manage risk while ensuring compliance to ever changing industry regulations.

As managing customer expectations gains importance in BFSI, hyper-personalization will become a key competitive tool to improve user experience and win their loyalty. New developments around Open API, cloud, security, and microservices-enabled product architectures will become critical to enable a cohesive and agile delivery strategy. Digital transformation that transcends organizational hierarchy will be a key enabler in implementing key banking use cases in the days to come.


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