Banking's 30-Year Problem, Unpacked with Vanamali R Sridharan

August 19, 2025

Despite modern digital interfaces, banking products are stuck in a 30-year time warp. We sat down with Vanamali R Sridharan, a 30-year veteran of tech leadership and CTO of Five-Star Business Finance Limited, to unpack what’s holding the industry back and what the future could look like.

In a sharp and insightful conversation, we covered key topics, including:

The fundamental difference between Layer 0 and Layer 1 banks.
Why the industry is still struggling to build a truly personal relationship with customers, and what a Gen Z bank would look like today.
The startling future where trust, not money, is the biggest risk for banks.
Why embedded banking often fails due to painfully long, 14-month integrations.
How banks are missing obvious customer retention signals.

Sridharan's powerful insights are a necessary wake-up call for the entire industry. As he puts it, "Even after decades in banking… I’m still not sure how to manage my own money."

Ready to challenge the status quo?

Transcript:

Nitin Sharma (00:02.478)

So thank you so much, Vana, for joining the2040 Banker. The 2040 Banker is a podcast primarily around bankers. And what wedo here is we talk about how we have evolved in the last couple of decades inthe banking industry. And at the same time, we also want to understand what canwe expect by 2040? How would the banking look like? And how should we betterprepare for that? I'm delighted to have you here today.

Vanamali (00:02.593)

So thank you so much, Vana, for joining the2040 Bacal.

The 2040 Banker is a podcast primarilyaround bankers and what we do here is we talk about that how we have evolved inthe last couple of decades in the banking industry. And at the same time, wealso want to understand that what can we expect by 2040? How would the bankinglook like and how should we better prepare for that? I'm delighted to have youhere today. for the audience, actually, when we first started talking, so I wasgoing through

Nitin Sharma (00:32.464)

But for the audience, actually, when I veryfirst started talking, Vana, so I was going through your LinkedIn profile, andI could see a very diverse experience across technology, banking, acrossseveral geographies, actually. For the audience, I'll just put down some of thekeywords, and then I'll let you do more justice to your introduction. But...

Vanamali (00:38.18)

or LinkedIn profile and I could see a verydiverse experience across technology, banking, across several geographiesactually. For the audience, I'll just put down some of the keywords and thenI'll let you do more justice to your introduction. so Vana basically brings inabout 30 plus years experience in large companies like TCS, Stanchart Bank,Accenture.

Nitin Sharma (00:57.356)

So, Vanah basically brings in about 30 plusyears experience in large companies like TCS, Stanchart Bank, Accenture, andthen he led a lot of executive positions at banks like Rack Bank.

Vanamali (01:07.986)

And then he led a lot of executivepositions at banks like Rack Bank, Equita Small Finance Bank, Suryodaya SmallFinance Bank and currently he is with Five Star Business Finance. And so I'vehad the pleasure of talking with him and understand how he sees from his lenshow banking has moved and how it would to move further by 2040. So just to getstarted,

Nitin Sharma (01:13.678)

Equita, small finance bank, Suryoday smallfinance bank and currently he is with five-star business finance. And so I'vehad the pleasure of talking with him and understand how he sees from his lenshow banking has moved and how it would to move further by 2040. So just to getstarted, why don't we talk a bit about the banking and your

Vanamali (01:37.912)

Why don't you talk a bit about banking andyour career progression? And I also want to ask you first, when you weregrowing up, when you were in education, did you ever think that you would reachthis stage in banking specifically? you thinking anything to do in banking? Andhow did all of this actually come up for you?

Nitin Sharma (01:42.456)

career progression. And I also want to askyou, when you were growing up, when you were in education, did you ever thinkthat you would reach this stage in banking specifically? Were you thinkinganything to do in banking? And how did all of this actually come up for you?

Vanamali (02:07.778)

conversation even prior to this. obviously,some of it might sound repetitive as well, but yeah. So, just to sort of talkabout my journey, the way I look at myself is probably more I describe myselfas an explorer.

because over the last 34 years I have sortof embraced many diverse roles without any prior experience and without beingfully prepared in many cases as well. Moved across countries, organizations,functions and industries mostly into the unknown.

with probably just the curiosity and theconfidence that I would learn along the way and learn quickly. I think that'sthe way I would describe myself. So I started my career in sales and marketingactually in software and then in financial services. After which I spent asignificant part of my career in standard charted bank in the Middle East. Iwas based in Dubai for many years where I did a variety of roles actually.That's when I really learned banking, especially consumer banking acrossproduct management, channel management, operations and then eventually ended

up in technology as a functional expert.So, that kind of led me to you some additional tech challenges because I movedback to India with Standard Chartered itself and was part of a team that builta core banking platform completely from scratch.

which was a huge huge project and then Iwas involved in implementing it in about 15 different countries. By the waytoday it runs in more than 40 countries across the group so it still isworking. And then Dubai called me back so I went back to take up a CIO role fora local bank which was a completely different experience again.

Vanamali (03:46.299)

and then relocated back to India and in thelast 10 years I've been involved in technology leadership roles in setting uptwo small finance banks, setting up technology for two small finance banks,Equitas and Surya as you mentioned and I'm currently working with an NBFC doingsomething similar. So if I have to describe my career I would say you know thebest way to describe it is the why not moments you know I mean every timesomething challenging comes up the question I ask myself is why not.

And that's kind of defined my career andyou know sort of almost always ready for the next you know next unchartedjourney. So, to answer the second part of your question when I was growing upor when even when I started my career I had absolutely no clue where I wouldend and I would probably describe my career best as a series of accidents youknow sort of surprising and positive accidents which has led me to where I amyeah that's the way I would see it.

Nitin Sharma (04:46.924)

Great, great. And so when you mentionedthat it has also been around why not in a lot of careers or a lot of choicesthat you had, would you like to mention maybe a few incidents where youactually thought about it? Why not just do this? And compared to maybe justgoing with the flow, how you were progressing with OneGeography and the kind ofother large organizations that you were actually working with.

Vanamali (04:47.123)

Great, great. And so when you mentionedthat it has also been around, not, in a lot of careers, a lot of choices thatyou had. Would you like to mention maybe

a few incidents where you actually thoughtabout it, why not just do this and compared to maybe just going with the flow,how you were progressing with OneGeography and the kind of other largeorganizations that you were actually working with, where did the concept of whynot actually come there? So, it's a very interesting conversation because I wasin Accenture many, many years ago based out of India and I was running adelivery for a

Nitin Sharma (05:14.936)

the way did the concept of why not actuallycome there.

Vanamali (05:31.184)

large US bank, you know, and I was sort ofdoing something really big and, know, tip to get promoted and, you know, thingswere going very well and out of the blue, I had this call from an ex-colleagueof mine from Rack Bank saying, you know, hey, there's an opening for a CIO,would you be interested? And my first response was I said no, I said, you know,I don't think I want to move back now because I had just come back to Indiaabout three years prior to that.

So I said, no, not interested. And we hungup, actually. We sort of ended the conversation there. And then he called meback again a few days later. And he said, listen, I know you're not interested,but the leadership of the bank is in Mumbai. So why don't you just travelthere, have a conversation, and consider the role. You talk to them, and thenmake a decision.

And at that point obviously the why notquestion kicked in and I said why not meet them and then you know as thingsturned out I decided to move back. So completely unexpected because I had justabout finished I think probably less than a year at Accenture. I probablyserved about 9 to 10 months and had absolutely no intention of moving.

And you know it just sort of happened as asheer accident and then you know I went and the next thing I knew is I wasdoing a CIO role in a local bank in Dubai. that is a sort of a classic exampleof you know the surprises that life sometimes throws at you.

Nitin Sharma (07:06.368)

Agreed, agreed, understood now. And Vanas,when we were speaking earlier, you had mentioned, and I really want to startthe podcast on this question now, because you were mentioning that...

Vanamali (07:06.813)

answer now and when we were speakingearlier you had mentioned and I really want to start the podcast on thisquestion now because you were mentioning that

Nitin Sharma (07:21.346)

there are several aspects of the bankingthat have actually not changed in the last couple of decades. So I want totouch base on that first. Why do you think so that a lot of things in bankinghave not changed? So we can first talk about that, perspective on that. Andsecond, if a lot has not changed, what actually has changed in your perspectivein banking?

Vanamali (07:21.553)

Nitin Sharma (07:48.727)

Okay.

Vanamali (07:51.439)

be talking primarily from a consumerbanking lens, because I've spent most of my life in consumer bank in thebanking industry. So, if I look back at the last 20 years or so, the biggestchange that I would say would be the way banking services have been deliveredto the end customer. Essentially, we've seen the proliferation of digitalchannels, mobile telephony and smartphones and so on. So, the physical side ofbanking has almost gone away. And then on top of it, if you add the UPI in anIndia context, it's become incredibly easy for customers to carry out financialtransactions at various touch points. So, the delivery of banking services andproducts, think has changed significantly in the last 20 years. In fact, my ownpersonal experience, I can't even remember when was the last time I visited abank branch. I don't think I've gone to one in the last, for sure the last fiveto seven years. I can't even remember. And reality is these days, my walletdoesn't have more than 50 rupees cash at any point in time. In fact, sometimesI don't have any cash at all. So, that way banking has changed dramatically inthe last 20 years.

Nitin Sharma (09:00.16)

Yeah.

Vanamali (09:05.838)

You know, customer convenience has gone upexponentially is my view. So that's what has changed. So when I look at whathas not changed, and again, this is my view as a consumer banker. When I lookat the suite of products that are being offered today and I compare it with 20years back.

I'd like to think that not too much haschanged. It's still the same savings accounts, loans, cards. It's the samething. So as a retail customer, the product set that I have access to isprobably quite similar or not radically different from what it used to be acouple of decades back. It's probably wrapped in a much sleeker app now, butotherwise, I don't think it's changed too much.

Nitin Sharma (09:35.736)

Yeah.

Vanamali (09:54.076)

The other area that I would like to sort ofcall out which I would have hoped for radical change would be customer service.I mean with the way technology is today I would have expected banks to have youknow a more holistic view of the customer, more personalized service, moreproactive service but I still see banks are struggling a little bit with that.

So that's really my take. mean, I thinkpart of it, like we discussed earlier, is probably attributable to the waybanks have, you how they view customers and how they've organized themselves,you know, more in a product-centric, you know, organization as compared tobeing customer-centric. So right now, I feel that, you know, from a productoffering and service perspective, it's more reacting to customer needs asopposed to anticipating them. I think that's the way banks are operating today,which is what I'd love to see change.

change that. Got it.

Nitin Sharma (10:50.924)

And you mentioned about the banks, so itlooks like two choices when we talk about banks, it's being eitherproduct-centric or being customer-centric. And you mentioned that maybe banksare more towards being on the product-centric. But why do you think that is thecase? Is there kind of a trade-off that the banks have actually, they have togo through or they just have to make a choice between one against the other?

Vanamali (10:51.035)

And you mentioned about the banks, so itlooks like two choices when we talk about banks, it's being either productcentric or being customer centric. And you mentioned that maybe banks are moretowards being on the product centric. But why do you think that that is thecase? Is there kind of a trade off that the banks have actually, they have togo through or they just have to make a choice between one against the other?

of course the way historically how bankshave evolved as well. think banks at least in the time when I used to be a partof the consumer bank you many years ago with Standard Chartered when I was partof the business was highly product centric organizations and I'm not sure bankshave evolved radically since then you know and there are benefits to it as wellyou know product centric organization gives you easy scale cheaper to massproduce products you know you can use a cookie cutter approach and sort of

roll it out rapidly, speed is anotheradvantage. Whereas the customer centricity, know building that takes more time,there's obviously a cost involved.

but it creates more of a loyalty as wellfrom the customer. So, I think there are pros and cons to both organizations,but frankly as a customer when I look at myself as a banking customer, Icouldn't be bothered what the organization of the bank is. You know, I wouldexpect the bank to have a holistic and 360 degree view of my banking needswhatever the internal organization.

But I think at this stage, it's more afunction of legacy and perhaps to an extent, know, the way banks have evolvedand are organized, which is really the trade off. So, you know, it's sort of atrade off between, I'd say efficiency versus perhaps intimacy, you know, theproduct centric organization is definitely more efficient, but you get greaterempathy and intimacy in a customer centric organization. That's the way I wouldsee it, Nitin. Got it. Understood.

Nitin Sharma (12:51.48)

got it understood but when it comes to

Vanamali (12:53.476)

But when it comes to

Nitin Sharma (12:57.55)

Let's say standardized products and this iswhat we have been doing in the last 20 30 years that we create standardizedproducts and then we give it to our channels whether it is branches Salesagents or whatever and we ask them to sell that product. Of course, I think itbrings in efficiency But at the same time the other thread is that the customeractually is asking for very specialized Offerings now and that we have seenespecially in the last five years what we have been seeing is customer wants toconsume financial

Vanamali (12:57.69)

Let's say standardized products and this iswhat we have been doing in the last 20-30 years that we create standardizedproducts and then we give it to our channels whether it is branches Salesagents or whatever and we ask them to sell that product. Of course, I think itbrings in efficiency But at same time the other thread is that customeractually is asking for very specialized Offerings now and that we have seenespecially in the last five years what we have been seeing is customer wants toconsume financial

Nitin Sharma (13:27.554)

services wherever they are and at the sametime something which is very particularly created for them. And so then what isthe way forward for a bank? And you mentioned that it's more to do withefficiency versus maybe customization but eventually if the customer is movingtowards that direction then how should the banks actually move forward andwhere are banks currently in that overall journey?

Vanamali (13:27.596)

services wherever they are and at the sametime something which is very particularly created for them. And so then what isthe way forward for a bank and you mentioned that it's more to do withefficiency versus maybe customization but eventually if the customer is movingtowards that direction then how should the banks actually move forward andwhere are banks currently in that overall journey?

would be that banks are just about takingbaby steps. I think they have a long way to go in terms of understandingbehavior of customer and the life stage of the customer to be able topersonalize products. That's my opinion and I'll give you an example. Eventoday I'm sure you've experienced it as well. Even today we get calls trying tosell us personal loans and credit cards from well-established banks who arealso probably heavily invested in technology. So it's not that they don't haveaccess to the data to understand the customer better. still get those calls youknow where they're trying to sell you a personal loan or a credit card. So, Ithink banks are still trying to push standardized products like I mentionedearlier with the cookie cutter approach even though the technology isavailable.

So I think there's significant investmentto be made in terms of understanding the needs of the customer for, you know,to prevent these cold calls. And I think also, you know, organize themselves ina way which is focused more on meeting the demands of an end customer acrossthe board, you know, a 360 degree view and, you know, sort of managing therequirements of the customer as opposed to just trying to push standardizedproducts. So that will be my view. So it is a trade-off at this point in time.in terms of you know like I mentioned earlier and banks are I think trying tomake those steps but still quite some distance to go would be my assessment andthen.

Nitin Sharma (15:23.278)

So the problem that I've understood is thatbanks, like efficiency, of course, and they have standardized their products.But on the other hand, customers are looking for very personalized offerings.Then is the answer having more layers in between the banks? Because banks staystandardized, customers want personalized. Do we bring in more layers like non-

Vanamali (15:23.427)

So the problem that I've understood is thatbanks, like efficiency of course, and they have standardized their products.But on the other hand, customers are looking for very personalized offerings.Then is the answer having more layers in between the banks? Because banks staystandardized, customers want personalized, do we bring in more layers likenon-banking financing companies in between, or maybe smaller banks who arefocused on highly specific

Nitin Sharma (15:47.702)

financing companies in between or maybesmaller banks who are focused on highly specific segments of customers and canactually create a wrapper on top of the existing products that we have. So thisis one discussion I want to have and in continuation with that if you can alsoshare your views on it since you have actually worked in large banks as well assmall finance bank that's why I want to touch base on this point that if suchsegmentation is happening

Vanamali (15:53.403)

segments of customers and can actuallycreate a wrapper on top of the existing products that we have. this is onediscussion I want to have and in continuation with that if you can also shareyour views on it since you have actually worked in large banks as well as smallfinance bank that's why I want to touch base on this point that if suchsegmentation is happening at several layers between banks, small finance banksand all then how are we seeing

Nitin Sharma (16:17.756)

at several layers between banks, smallfinance banks and all. Then how are we seeing the customer priority, businesspriority and economics different between a universal bank or let's say an MNCbank compared to a small finance bank which is currently working in India. Howdo you see this?

Vanamali (16:23.178)

seeing the customer priority, businesspriority and economics different between a universal bank or let's say an MNCbank compared to a small finance bank which is currently working in India. Howdo you see this? So what I'll do is I'll probably take the first part of thequestion, Nitin, that you raised about, you know, do we need layers in betweenor how do we address that issue? I mean, I'm probably oversimplifying it alittle bit, but I would think that

today given the amount of data that bankshave on customers, it is probably a question of reorganizing themselves and youknow having the right sort of investing in the right technology to support youknow a customer centric view and being able to.

provide a completely holistic support andservice and product offerings to the customer. So I think that's one area whereI don't know what's the extent to which investments have been made in thatarea. I don't believe that banks have solved that yet and made the rightinvestments or made the right moves in that direction. So that's one thing thatI feel quite strongly about.

Coming back to the second part of yourquestion about you know sort of the economics and priorities and customersegments let us say between a small finance bank and universal bank. I willsort of throw a little bit of light given my experience. So, the way I see it auniversal bank is almost like a supermarket you know it serves everyone fromstudents to retirees, but primarily focus on probably the mass, mass affluentand the H &I segments in many cases and the focus is on scale.

because that is where you know the profitsare. A small finance bank is a slightly different model you know so on theasset side they target the unbanked and the underbanked you know primarily therural the tier 3 to 5 towns etc. so your typical you know small milk vendorshopkeepers they are the target for lending okay.

Vanamali (18:30.039)

But on the other side, on the liabilityside, they still target mass and mass affluent segments, you know, and in somecases even H &Is with attractive interest rates. So, it what I like to callthe Robin Hood model, you you borrow from the affluent and lend to the unbankedand the underbanked and make the risk math work, you know, I think they managethe risk very effectively and the margins. So, that is one thing that smallfinance banks do very well.

So, for instance you know just to give youan example a small finance bank would be sourcing let us say an FD from a highnet worth customer in Mumbai at 7 percent and lending to a vegetable vendor inlet us say Tamil Nadu at 18 percent managing the risk and the volumes and thespread you know this would be a typical small finance bank model.

So, in terms of diversity of customers thesmall finance bank customers are you know the customer base is quite diverse.So, it could be a rural self-employed borrower to you know an urban affluentsalaried individual on the liability side. that is really the difference. Andagain from a priorities standpoint that you mentioned.

Nitin Sharma (19:18.263)

Okay.

Vanamali (19:38.485)

Obviously, universal banks target is growthin all their chosen segments, geographies, know, customer base and so on. So,that is a pretty obvious one. But small finance banks have a slightly trickyproblem. They also have to prioritize new age technology because you have tocater to your mass affluent depositors and liabilities customers.

At the same time you have to pushtechnology adoption within the unbanked and the underbanked segments to enablelow cost service delivery to that segment. So, it is a little bit of a tightrope that they will have to walk you know they find the right balance to beable to cater to both. So, that is largely I would say the difference between asmall finance bank and a universal bank.

Nitin Sharma (20:19.456)

Understood. This was very helpful, Vana.And since we are seeing generally the theme that is appearing is...

Vanamali (20:19.646)

Understood. This was very helpful, Vana.since we are seeing generally the theme that is appearing is...

Nitin Sharma (20:29.282)

Customers are very diverse. If you look atseveral type of customer cohorts, there are a lot of trends that are emergingon the customer side. There are banks which are now servicing different kind ofcustomers and then there are different sized banks which are now coming aslayers in between the customer and the existing large banks. I actually want tounderstand which is the model that you personally are most bullish on.

Vanamali (20:29.451)

Nitin Sharma (20:58.35)

And just to understand that what I'll askyou is, let's say if you want to start a new business in the banking world andyou have three options. One is you pick a customer segment of a specificgeography or whatever and then you become that layer one bank.

Vanamali (20:59.484)

What I'll ask you is, if you want to starta new business in the banking world and you have three options, one is you picka customer segment of a specific geography or whatever and then you become thatlayer one bank for that customer which is sitting in front of an existing largebank. That's option one. Your other option is you are working with this or youwant to work with a layer zero bank which is the large bank.

Nitin Sharma (21:17.294)

for that customer which is sitting in frontof an existing large bank. That's option one. Your other option is you areworking with this or you want to work with a layer zero bank which is the largebank and you create new products for a very specialized set of customers. Orthe third option is you actually take that layer zero bank.

Vanamali (21:29.256)

bank and you create new products for a veryspecialized set of customers or the third option is you actually take thatlayer zero bank and you create a technology to actually improve a very widebase of customers and improve their experience. So, which is the model that youbelieve is you would be the most bullish on? I mean, so given that, you know,we will steer clear of capital and budgets.

Nitin Sharma (21:39.95)

and you create a technology to actuallyimprove a very wide base of customers and improve their experience. So which isthe model that you believe is you would be the most bullish on?

Vanamali (21:59.159)

at this point in time for this discussion.I would probably say I'd like to start my own bank with the targeted dataspecific segment. That will be my take. And probably I'll give you a little bitof my thoughts around it. So, I would pick a customer segment which would bethe current Gen Z population, the 21 to 35 age group primarily in the mass andthe mass affluent space, Pan India of course.

And I'd like to focus on the generationthat's starting work now, you people who are maybe, you know, in the 21 to 25kind of, you know, band, because the upside on customer lifetime value ismassive. You know, I think, you know, given once you hook them in, then, youknow, the upside could be huge. I remember reading sometime back that in India,we're talking about that segment alone, you know, having about what 350 millionpeople are thereabouts. So, it's a fairly significant number.

Nitin Sharma (22:32.897)

Okay?

Vanamali (23:02.109)

So, that would be the segment that I wouldfocus on Nitin. And if you want, I mean, I have some ideas and products as wellwhich I could share if you think that might be of value. No, definitely. whatwe can actually talk about is...

Nitin Sharma (23:10.104)

Got it. Understood.

Nitin Sharma (23:17.698)

No, definitely, so what we can actuallytalk about is, let's say, so you mentioned that your choice would be toactually build a bank, which is targeted to a very specific audience, and theaudience that you mentioned that you like specifically is the Gen Z, which is alarge base, and then pick a specific geography. Why don't we just...

Vanamali (23:20.989)

Let's say, so you mentioned that yourchoice would be to actually build a bank. Yeah. Which is targeted to a veryspecific audience. And the audience that you mentioned that you likespecifically is the Gen Z, which is a large base and then pick a specificgeography. Why don't we just...

Nitin Sharma (23:39.01)

convert that into a story. right now, let'ssay if you just have to index five minutes, if you have to talk about buildinga bank from scratch. So customer segment you already talked about, but let's,since you're touching base on the products as well, why not just talk aboutwhat could be the possible product that you will sell to them and how would youactually launch the bank?

Vanamali (23:39.188)

convert that into a story. Right now, let'ssay if you just have to index five minutes, if you have to talk about buildinga bank from scratch. Customer segment you've already talked about, but let's,since you're touching base on the products as well, why not just talk aboutwhat could be the possible product that you'll sell to them and how would youactually launch the bank?

So, I would, from a product standpoint, Iwould look at primarily savings instruments, which could be a combination ofbank accounts, SIPs, investment linked accounts, insurance linked savingsplans, etc. Essentially, one of the challenges that I see with not just the GenZ generation here, but also with many other segments is

Nitin Sharma (24:08.855)

Okay?

Vanamali (24:26.952)

There is a lack of awareness on financialdiscipline and savings and long term wealth creation and so on. I think thereis generally a certain level of ignorance. And I must say that even afterhaving worked in a bank for many, many years, even sometimes I am not fullysort of conversant with what I need to do in terms of managing my investments.Of course, the flip side to it is I've been told that bankers are the worstpeople to manage their own money. that's a different.

That's a different conversation altogether.But I think there is a general lack of awareness. And I see people in thisgeneration not knowing what to do in terms of being able to create long-termwealth for themselves as they start their career or in their early stages intheir career. I would say focus on products which will enable them to do thatand at the same time I would say also offer it in a way which they canunderstand and then that means we are talking about significant gamification interms of trying to offer it to them, offering it on digital channels more thananything else and making it gamified so that they understand how or educatingthem on banking and the banking products so that they understand how they canmanage their money better than what they probably are currently doing. So thatis the way I would see it primarily from a savings point of view. mean,obviously, the money is in the asset product, so you will need a company ofasset products as well but I would say focus more on the know the micro loansyou know salary advances enable lifestyle related you know lending in terms oflike a home purchase or so on you know those are the kind of things that thatcan be promoted in that segment of course credit cards has become almost mandatorythese days so that so but essentially look at how they can be made more awareof you know how they can manage their money better that's that's the way Iwould create from a product stand perspective.

Got it. Understood. And you talked about that.

Nitin Sharma (26:31.929)

God.

And you talked about that whatever thosecustomer base basically needs so you'll be present in those particular lifeevents for them. It basically means you're talking about getting into theoverall life cycle banking of a particular customer. But if we talk about thatin terms of the capabilities that are typically required for a bank and you cantalk maybe both from the perspective of team, business, mindset at the sametime the technology capabilities

Vanamali (26:35.315)

whatever those customer base basicallyneeds. So you'll be present in those particular life events for them. Itbasically means you're talking about getting into the overall life cyclebanking of a particular customer. But if we talk about that, in terms of thecapabilities that are typically required for a bank, and you can talk maybeboth from the perspective of team, business, mindset, the same time, thetechnology capabilities that are typically required, what do you think are thetypical

Nitin Sharma (27:02.372)

that are typically required. What do youthink are the typical capabilities a bank need to get into this kind of abanking which is more targeted towards the life cycle events of a customerrather than just selling out through the traditional channels that they havebeen doing so far.

Vanamali (27:05.261)

capabilities a bank need to get into thiskind of a banking which is more targeted towards the life cycle events of acustomer rather than just selling out through the traditional channels thatthey have been doing so far. So I would say that what I mean by that isactually more what I call life stage banking, where you understand what stageof life the customer is in and personalized products and services based onthat.

Nitin Sharma (27:29.518)

Okay.

Vanamali (27:34.834)

For example, I'll just give you a simpleexample. A 25-year-old salary individual, the segment that we were talkingabout earlier, will have completely different banking needs compared to, let'ssay, me, for instance, who's perhaps closer to retirement. So my priority willbe to protect my savings and maybe look at annuity plans and investment planswhich will help me post-retirement and so on. Whereas a 25-year-old will havecompletely different needs.

Today I think banks position the sameproduct to both, is really a challenge. And that is a bit surprising as wellbecause if you look at the amount of data that banks have today, they aresitting on a gold mine of data in terms of demographics, spending patterns,transactional data, family information. I do think banks leverage the dataenough to use it meaningfully for personalization of products. And I will giveyou a simple example. My salary account is with bank A which is not my, know,sort of my primary savings account. So, I have a primary savings account withbank B. And every month as soon as the salary comes in, in fact the same day,you know, it gets swept out to my primary savings account from bank A to bankB. And so far, I have not received a single call from let's say bank A tounderstand saying why you moving the money, what can we do to retain it. Itjust doesn't happen. So, I saying those are the kind of opportunities that Ifeel banks are missing out on. And I talking more as a customer as compared toa banker. I saying it just doesn't happen.

Nitin Sharma (28:55.638)

Yeah. Yeah.

Vanamali (29:09.776)

So, one banks will have to look at is tocreate you know what I call life stage banking experience you know forcustomers. And I would say I would see two critical factors that banks have tolook at Nathan know, leverage your data to the maximum and you know, sort ofleverage emerging technologies like AI and so on, AI ML to create morepersonalized offers. I think that is a huge opportunity. And again, I wastalking to somebody in our peer group the other day and you know, we weretalking about.

A use case for instance again, you you lookat let's say you've got school fees going every month as a debit from youraccount. Imagine a bank looking at it and then let's say giving you a long-termsavings plan for college admissions for instance, you know. I'm saying theseare simple use cases but the opportunity is massive. So, I'd say the mostimportant thing is to leverage the available data and use AI and ML to createpersonalized offers. But the second point I think which is even more importantin my opinion is to seek customers as individuals, not as consumers of aproduct. So I think today many banks look at them as a consumer of a product asopposed to an individual who has their own banking requirements. I think thatis something that banks will have to look at and that in my opinion would alsorequire a little bit of a cultural shift in banks. So that's the way I see it.Understood. And one of the examples that you took Bank A and Bank B was thathypothetical example or is that a real?

Nitin Sharma (30:34.21)

And one of the example that you took bank Aand bank B was that hypothetical example or is that a case in your case? Okay.

Vanamali (30:40.11)

No, no, it is a real experience in my caseand obviously I am not going to name Bank A and Bank B but it has happened tome, Nitin, absolutely. Okay, understood. And so you talked about that therewould be a cultural shift that actually be required.

Nitin Sharma (30:47.502)

Okay.

Nitin Sharma (30:52.722)

Okay, understood. And so you talked aboutthat there would be a cultural shift that actually be required to actuallyreach there. So while there is a lot of opportunity, but so far we have notreached to that particular stage where we can actually cultivate those things.But in terms of cultural shift, what do you think? mean, what exactly, can youelaborate a bit on that? What kind of cultural shift is required?

Vanamali (30:59.024)

to actually reach there. So while there isa lot of opportunity, but so far we have not reached to that particular stagewhere we can actually cultivate those things. But in terms of cultural shift,what do you think? mean, what exactly, can you elaborate a bit on that? Whatkind of cultural shift is required? I think the DNA has to be more customercentric than what it is today. Ultimately, recognizing the customer as anindividual.

Nitin Sharma (31:24.407)

Okay.

Vanamali (31:27.299)

and seeing what will be fit for purposefrom a product and service standpoint and offering that. And it's not, I can'timagine that it will be difficult to do that with the available technologytoday. I mean, if you look at the art of the possible, there's plenty thattechnology can do today. So I think it just requires a mindset change to seecustomers as customers.

Nitin Sharma (31:39.405)

Yeah.

Vanamali (31:50.668)

Organize yourself as a bank to be able tocater to that requirement. See a lot of times with the larger banks and I'vebeen in a couple of large banks myself, you tend to get very siloed in your ownfunction with the result that you probably don't look at the breadth of thecustomer for instance. I think those are the kind of cultural shifts that banksneed to make in terms of viewing customers as customers. I think that's asignificant thing that I would see that banks have to do.

Nitin Sharma (32:22.798)

When we say that let's say as a bank so farwe have not used the data that is available with us and due to which we don'tunderstand our customers.

Vanamali (32:22.84)

Understood. So when we say that, let's say,as a bank, so far we have not used the data that is available with us, and dueto which we don't understand our customers really well.

Nitin Sharma (32:36.938)

really well. But let's take a scenariowhere, let's say there is a bank which is actually able to do this and they areunderstanding their customer really well as well. But when it comes to which isthat particular customer segment which would give them a higher lifetime valueover a longer period. then that's when typically banks start categorizing theircustomers into layers and

Vanamali (32:38.202)

But let's take a scenario where, let's saythere is a bank which is actually able to do this and they are understandingtheir customer really well as well. But when it comes to which is thatparticular customer segment, which would give them a higher lifetime value overa longer period. So then that's when typically banks start categorizing theircustomers into layers. And what we also seen is a lot of times the bottom ofthe pyramid layer is always left out.

Nitin Sharma (33:02.018)

What we also seen is a lot of times thebottom of the pyramid layer is always left out. So they will always targetlet's say on tier 1 cities and within tier 1 only the top segment. They'll keepselling to the same base, the same set of credit cards again and again. Ratherthan going for the bottom of the pyramid where there could be an opportunitybut because of the

Vanamali (33:08.165)

always target let's say on tier one citiesand within tier one only at the top segment they'll keep selling to the samebase the same set of credit cards again and again rather than going for thebottom of the pyramid where there could be an opportunity but because of thebandwidth that they have today they don't want to look at that base becausethey don't they cannot service that large amount of base today but do you thinkthere is there is some shift that technology can actually bring in to address theseset of customers

Nitin Sharma (33:24.034)

they have today, they don't want to look atthat base because they cannot service that large amount of base today. But doyou think there is some shift that technology can actually bring in to addressthese set of customers which are at the bottom of the pyramid with the bank?

Vanamali (33:38.065)

which are at the bottom of the pyramid withthe bank. absolutely. the way I see it, Nithin, see today what technology hasbeen able to do is it has been able to significantly drive down the cost ofdelivering service to customers.

Nitin Sharma (33:56.407)

Okay.

Vanamali (33:56.496)

I think that is something that we've seentoday with all the digitalization that's happening. So frankly deliveringefficient service to let's say the bottom of the pyramid which is primarilywhat I call the unbanked and the underbanked is not so difficult and you knowthere is a if I may just elaborate on that a little bit.

Nitin Sharma (34:01.41)

Yeah. Yeah.

Vanamali (34:20.719)

There is a misconception that this segmentis not digitally savvy and hence they do not adopt to technology that banks areoffering and so on. So they do expect digital penetration to be quite low inthis segment. But I am not sure I would agree with that assessment and again Iwill relate it to a personal experience of mine. So I was travelling down southby road into what I call slightly deep interior Tamil Nadu.

And we wanted to buy some fruit. And as Imentioned earlier, I don't carry enough cash in my wallet ever. So we want tobuy fruit. And that guy had a UPI QR code through which I could make a payment.And this you're talking about rural Tamil Nadu where it's still prevalent. Sowhat I'm saying is they do adopt to technology.

And this is the same segment that uses letus say WhatsApp, Instagram, Facebook, you know they do their phone rechargesthrough Paytm. So, I do not quite subscribe to the fact that you know thissegment is not tech savvy and you know sort of my take on that is if a farmerin a rural area is doing Instagram reels but is unable to carry out bankingtransactions then that's not a user issue, that's a bank problem.

So, you know I keep hearing this quite alot or I used to hear it in some of my previous organizations where people sayyou know this segment is not digitally savvy, you know they need more usertraining and engagement on the platform and so on. And my favorite response isyou know I say these are the same customers who use Facebook and Instagram andI do not think Meta has done any user training workshops for them to befamiliar with it. You know so, it is a question of the way technology is

Nitin Sharma (36:02.19)

Yeah.

Vanamali (36:16.984)

position to them and I see three thingswhich are vital if you want to position technology to this segment, Nitin. Oneis it has to be intuitive, second it has to be very simple and the third is ithas to be in the local language. So, I think as long as these criteria are keptin mind, I think adoption could explode. So, to come back to the startingpoint.

Nitin Sharma (36:31.533)

Yeah.

Vanamali (36:40.238)

It is still possible to positiontechnologically, sort of, should I say relevant offers and products andservices to the segment through digital channels. If it's built right and ifit's sort of, if the user experience is sort of built right, that's the way Iwould see it. Got it. And you also believe that it could still make economicsense for a bank.

Nitin Sharma (36:58.371)

you

Got it. And you also believe that it couldstill make economic sense for a bank to service a large varied set of customerswithout maybe taking losses on the investments that they'll do to cater to thatparticular audience. Yeah.

Vanamali (37:07.383)

to service a large varied set of customerswithout maybe taking losses on the investments that they will to cater to thatparticular audience. No, absolutely because there are again there are twopoints that strike me in response to what you mentioned. One is if you look atthe small finance bank model, their entire asset customers are in this segment.

Okay and they are profitable, veryprofitable and even if you factor you know the credit losses that might occurand all that despite all that they are quite profitable. that is one know oneangle to it.

The other is if you, this is also thesegment where you could, the scalability upside is huge. You could really scaleup massively. So as long as you make the right investments in technology whichwill give you the cost benefit and the scalability, there is no reason why youcan't cater to this segment. Understood. So Vana, seems like that the theme ofour podcast today is coming out to be more verticalized.

Nitin Sharma (37:58.467)

Yeah.

Nitin Sharma (38:09.058)

Understood. So when it seems like that thetheme of our podcast today is coming out to be more verticalized or customerspecific financial services. Now it could be, let's say a layer zero bankimplementing it or a layer one bank defining that particular customer segment.And I want to hear a bit that as a layer one or layer zero bank, if...

Vanamali (38:17.581)

or customer specific financial services.Now it could be, let's say, a layer zero bank implementing it, or a layer onebank defining that particular customer segment. And I want to hear a bit thatas a layer one or layer zero bank, if somebody is a CTO of such banks, howwould my architecture actually look like?

Nitin Sharma (38:36.844)

Somebody is a CTO of such banks. How wouldmy architecture actually look like?

Because for layer one bank, it might stillbe simpler because you are specifically catering to a single kind of a customersegment. And I know this is the audience that I want to optimize my technologyinfrastructure for. But when it comes to, let's say a layer zero bank, isintegrating with or which is actually distributing their services to a largeset of customer segments, how do they manage or what is the right way for themto manage this kind of a customer segmentation?

Vanamali (38:43.232)

Because for layer 1 bank it might still besimpler because you are specifically catering to a single kind of a customersegment and I know this is the audience that I want to optimize my technologyinfrastructure for. But when it comes to let's say a layer 0 bank which isintegrating with or which is actually distributing their services to a largeset of customer segments, how do they manage or what is the right way for themto manage this kind of a customer segmentation?

on that Nitin I'm not sure. Yeah I'm sayinglet's say the layer zero is a very large bank which has standardized productsbuilt for them has done really good at a mass level selling out their products.

Nitin Sharma (39:14.19)

Yes, saying, let's say the Layer 0 is avery large bank which has standardized products built for them, has done reallygood at a mass level selling out their products.

So in simple terms, let's they are justselling consumer personal loan, plain vanilla consumer loans. On the otherhand, a layer one bank is something which maybe works very closely with thelayer zero bank, but caters to a very specific target audience. Like youmentioned, you would want to build a bank for Gen Z. So let's say there is alayer one bank which is only catering to that Gen Z audience, but layer zeroand layer one are also collaborating with each other in terms of

Vanamali (39:29.62)

So in simple terms, let's say they are justselling consumer personal loan, plain vanilla consumer loans. On the otherhand, a layer one bank is something which maybe works very closely with thelayer zero bank, but caters to a very specific target audience. Like youmentioned, you would want to build a bank for Gen Z. So let's say there is alayer one bank which is only catering to that Gen Z audience. But layer zeroand layer one are also collaborating with each other in terms of

Nitin Sharma (39:59.396)

the end to reach out to that Gen Zaudience. So that is the kind of ecosystem I'm talking about. So in this kindof a system, how would a layer one bank CTO architect their technology stackand how would a layer zero CTO would actually architect their technology stack?

Vanamali (39:59.553)

the end to reach out to that Gen Zaudience. So that is the kind of ecosystem I talking about. So in this kind ofa system, how would a layer 1 bank CTO architect their technology stack and howwould a layer 0 CTO would actually architect their technology stack?

indicators to a specific segment and isvery very targeted and in this case let us assume for a minute that they caterto the Gen Z and you so it is very digitally savvy and so on. What will berequired for a CTO from a Tech Arc perspective is broadly two three principlesthat I think you need to adhere to.

It has to be open in terms of the abilityto integrate with platforms, let's say with the layer zero bank platforms andso on and so forth. So, very highly API driven is something that I would see asone of the principles.

Ux and Ui and Cx basically in terms ofmaking sure that the digital channels provide a very simple intuitive and youknow very smooth user experience for the segment that you are catering to.think that will be very important.

And one of the challenges I've seen again,this is my own experience, you know on digital channels is that typically whenyou design these kind of digital experiences for customers, they are also Youknow what I call high velocity change platforms, you know the amount of changethat goes through these platforms is massive So what you will need is a youknow, almost like I'd say a low code no code platform you know, which can caterto this requirement and handle change easily and have you know the

Vanamali (41:52.845)

the usual DevOps structure in place and allthat to manage rapid application development and deployment. So, that would bewhat I would see from a layer one bank.

Layer 0 bank is probably a little biteasier. mean, given that it's a large bank, fair to assume that budgetaryconstraints don't exist. So I think you will have to invest in the whole nineyards in terms of a very strong transaction processing layer in terms of yourcore platforms, your loan management platforms, and so on. But again, a veryevolved API layer or an API gateway which can integrate with your

third your layer one banks and multiplefintech partners which will help you. So you have to it's a combination ofhaving the rigor of a large bank but at the same time having the nimbleness andknow and adaptability that you need to build in which is not easy in a largebank I can tell you that but that is something that will be required you knowto be able to integrate with layer one banks and fintechs and so on.

Nitin Sharma (42:34.274)

Yeah. Right.

Vanamali (42:55.741)

understood. So what I understood is thelayer one bank you're saying it's more about customer experience and theagility to quickly change around a particular customer segment. Correct. Andthe layer zero bank is more around giving a great API or a great developerexperience so that the layer one banks can actually quickly integrate into thelayer zero. Yes. Yeah, that's how which I would also call us more aroundembedded banking, which a lot of banks are actually taking that particularroute. Correct. But when it comes to embedded, see lately they have

Nitin Sharma (42:55.758)

episode.

So what I understood is the layer one bankyou're saying it's more about customer experience and the agility to quicklychange around a particular customer segment. And the layer zero bank is morearound giving a great API or a great developer experience so that the layer onebanks can actually quickly integrate into the layer zero banks. So this is how,which I would also call as more around embedded banking, which a lot of banksare actually taking that particular route. But when it comes to embedded, seelately there have been a lot of

Vanamali (43:25.654)

been a lot of good success stories butthere have been some failures also that we have seen in the embedded banking.In your view how do you see this market embedded banking and what do you thinkis the right set of bank who should actually adopt this kind of a banking forthem? See I think banks will require a slightly different mindset

Nitin Sharma (43:26.304)

success stories but there have been somefailures also that we have seen in the embedded banking. In your view how doyou see this this market embedded banking and what do you think is the rightset of bank who should actually adopt this kind of a banking for them?

Vanamali (43:49.352)

to be able to embrace the embedded financeor embedded banking model. And the reason why I say that is because you'requite heavily reliant on fintechs to be able to take this forward. I think it'sa very different model. And I think banks will have to get out of their legacymindset. You cannot read embedded finance as another distribution channel. It'sa completely new business model.

Nitin Sharma (44:00.355)

Yeah.

Vanamali (44:14.666)

So, it will require a change in mindset inthe bank and I have seen banks which let us say for instance force fintechpartners to follow their process and workflows which could be quite archaic aswell. you will need a certain level of nimbleness and adaptability to be ableto make embedded finance a success. So, that is one key element I see. Theother is also the tech stack. See today one of the biggest challenges that Ihave seen in the large banks that I have been a part of is the legacy, you youhave so much of technology legacy, tech debt that it is not easy to just go andintegrate you know into a FinTech, it is never that simple and it requires asignificant tech effort. In fact, I remember reading maybe more than a yearback I was reading an article which said that the average time that it takesfor a bank to carry out a FinTech integration I believe is 14 months. So, I amsaying at 14 months you cannot you just cannot run embedded finance in thatmanner. So, so these are some of the challenges that banks have to overcome tomake embedded finance success and of course the other important aspect is.

Nitin Sharma (45:18.574)

That's true, actually.

Vanamali (45:28.83)

to manage partnership challenges. Seebanks, and I'm having been a typical banker myself, I always love to havecontrol over what I'm doing. So banks want to keep control over their fintechpartners and so on and are culturally not usually in the same wavelength. Sothat also requires a mindset shift for banks to sort of take to embeddedfinance. And the last challenge that I see, which again,

Nitin Sharma (45:31.768)

Yeah.

Vanamali (45:56.058)

I am not sure I really have a solution buttypically know banks for the right reasons think compliance first and they haveto obviously it is the lifeblood of the bank but that actually brings incertain bottlenecks for partnerships you know and create cultural differenceswhich can actually scuttle a lot of the fintech initiative. So that issomething that I guess you know banks will have to find the right balance youknow to make sure you are compliant but at the same time being agile enough tosort of adopt.

the FinTech integrations. Yeah. Yeah. Now,I can very well relate to this one. So, couple of years back when we actuallystarted ReFo.

Nitin Sharma (46:28.94)

Yeah, no I can very well relate to thisone. So a couple of years back when we actually started ReFo, I was on thefintech side. So I was trying to integrate with banks. It took us easily abouta year bare minimum to actually integrate with one of the bank. And if it isvery aggressive then...

Vanamali (46:35.496)

I was on the fintech side, so was trying tointegrate with banks. It took us easily about a year bare minimum to actuallyintegrate with one of the bank. So were you below the 14-month average or not?We were, yes. Luckily, somehow we were below that. But I've seen projects goingon for at least one and a half years easily.

Nitin Sharma (46:49.454)

We were, yes, luckily, somehow we werebelow that. But I've seen projects going on for at least one and a half yearseasily to establish that integration. that was the reason we actually wanted tochange that. And we thought, OK, let's build something for that and go towardsthe bank side and build a stack so that banks can do it faster. And that's thejourney that we are on. Yeah. Yeah.

Vanamali (46:59.996)

establish that integration. That was thereason we actually wanted to change that and we thought, okay, let's buildsomething for that and go towards the bank side and build a stack so that bankscan do it faster. That's the journey that we are on. No, I'll share aninteresting point here, Nitin. And sorry, I didn't mean to cut you here. No,But, I mean, I don't want to, this is not a bashing session of the large banks,but one of the larger banks that I worked in, the lead time from

Nitin Sharma (47:18.956)

No,

Vanamali (47:30.744)

a sign off from the user to the deploymentof a change was probably six to seven weeks. I mean, I'm saying after thechange is delivered, tested, to deploy takes seven weeks. So I'm saying, inthat kind of an environment, if you're trying to build an integration with theFinTech and let's say six to eight week kind of project, obviously it requiresa massive overhaul of the way you operate. Correct. That's true.

Nitin Sharma (47:54.125)

through.

That's the reality as of today. think ifsomething changes in the next five years, we'll see how that change comes in.So what I'm noticing, again, going on the podcast theme, today we largelytalked about how the customer segmentation is happening, how the financialservices are getting delivered. It has to be more customized experience for,let's say, smaller banks. For the larger banks, it has to be more embedded APIreadiness. But what about branches?

Vanamali (47:55.187)

That's a reality as of today. think ifsomething changes in the next five years, we'll see how that change comes in.Absolutely. So what I'm noticing again, going on the podcast theme,

Today we largely talked about how thecustomer segmentation is happening, how the financial services are gettingdelivered, it has to be more customized experience for let's say smaller banks,for the larger banks it has to be more embedded API readiness. But what aboutbranches? What do you think, how would a branch actually look like in 2040?Okay, know, so tricky one to gaze into a crystal ball and predict because thereis still so much that can change between now and 2040.

Nitin Sharma (48:25.014)

what do you think how would a branchactually look like in 2040?

Nitin Sharma (48:35.086)

Yeah.

Vanamali (48:38.666)

But at least based on if I were tovisualize technology as it's available today and sort of extrapolate that on to2040 then broadly I would say I still think that the branch will exist to startwith because I think there have been in the past existential questions aboutbranches.

Nitin Sharma (48:39.608)

Correct.

Nitin Sharma (48:55.117)

Yeah.

Vanamali (48:59.08)

And honestly, I remember the first timeback in must have been 2002 or 2003 when I launched internet banking for thebank that I used to work with, people were saying that in the next 10 yearsbranches will go away. That was the prediction. Obviously, it's not happenedand branches continue to exist. So my assessment or view is that in 2040branches will exist in a different shape and form. So rather than a deliverychannel, I think it will be more seen as what I call a trust center, to sort ofshore up the trust of a brand. So it will be more a branding slash buildingtrust kind of channel for banks. And I'll admit it, having spent many years intechnology myself, I would still be hesitant today to, let's say, have mybanking with a completely digital bank.

Nitin Sharma (49:32.354)

Yeah.

Okay.

you

Vanamali (49:52.998)

I would still have a little bit ofreservation to do that. So, I think branches will exist more as trust centers,know, is the way I see it in the future. So, what will the branch look like? Ofcourse, I'm visualizing it to be completely digital with probably a lot of,let's say, augmented reality, virtual reality kind of setup to enablepersonalized...you know, product and service delivery to the customer. I'd liketo think teller counters will probably disappear. I think it will become alittle bit like the typewriters of today. We don't see them anywhere. So Ithink the same thing will happen to teller counters is my reading. And a lot ofthe customer authentication, for instance, will be through biometrics, know,maybe what do you call it, palm vein.

scanning, facial recognition, voice, all ofthose aspects in terms of the way customers authenticated. I think the style,I'm hoping will be more like a lounge slash coffee shop kind of style setup,where it makes it a more enjoyable experience to visit a bank branch as opposedto today where it's a chore. I I dread going into a bank branch today. that'sthe way I'm visualizing a 2040 branch, Nitin.

Nitin Sharma (51:08.504)

Yeah. Yeah. True.

Nitin Sharma (51:18.702)

Vanamali (51:18.919)

So you are saying that it should be moretowards efficient branches, more like the trust centers for the bank and a moreenjoyable experience rather than just going there and standing in queues.That's what you wish for. Absolutely. And the one other thing I might just add,keeping the environment in view is I'd probably expect branches to be net zeroby the time, where they run completely on renewable energy. so that's sort ofthe social angle to it where they're totally paperless powered by renewable energy.That's something I'd love to see in a 2040 branch. Makes sense. And one ofthings we were talking about large banks, there is one correlation and onestudy that we had done in the past and I shared the infographic with you justbefore.

Nitin Sharma (51:54.574)

Make sense. And one of the things we weretalking about large banks, there is one correlation and

one study that we had done in the past andI shared the infographic with you just before the podcast. And for ouraudience, we'll just put it on the screen so that they can refer to it. So I'llshare what we observed. We did some crunching on the numbers, how small banksand large banks vary in terms of efficiencies. But so far we have not gone downin terms of the why aspect of it. And this is something I would want tounderstand from you. What do you think

Vanamali (52:06.116)

podcast and for our audience will just putit on the screen so that they can refer to it. So I'll share what we observed.We did some crunching on the numbers, how small banks and large banks vary interms of efficiencies, but so far we've not gone down in terms of the whyaspect of it and this is something I would want to understand from you. What doyou think? There are variations. I'll just refer to my notes that infographichere. Sure. So

Nitin Sharma (52:31.152)

I'll just refer to my notes thatinfographic here. So from our observation what we could see was as the bankasset under management increases, so as the banks become larger in size, largerbanks were more efficient than the smaller banks, which means they weregenerating more profit per employee. And the second observation that we saw,

Vanamali (52:36.22)

From our observation, we could see was asthe bank asset under management increases, so as the banks become larger insize, larger banks were more efficient than the smaller banks, which means theywere generating more profit per employee. And the second observation that wesaw, that as the banks were becoming larger, their operational efficiency, solet's say there are 10 banks in a country, we primarily did it for...

Nitin Sharma (52:55.438)

that as the banks were becoming larger,their operational efficiencies, so let's say there are 10 banks in a country,we primarily did it for India, but for India as the banks were becoming larger,their operational efficiencies were converging. So there was not a lot ofdifference that we could actually see between the banks.

Vanamali (53:05.912)

but for India as the banks are becominglarger their operational efficiencies were converging so there was not a lot ofdifference that we could actually see between the banks so in terms ofefficiency their differentiation was actually diminishing in that sense andlastly the third interesting inference we could see was public banks comparedto private banks even if they were small or mid-size from day one even whenthey were small

Nitin Sharma (53:15.212)

So in terms of efficiency, theirdifferentiation was actually diminishing in that sense. And lastly, the thirdinteresting inference we could see was public banks compared to private banks,even if they were small or mid-sized, from day one, even when they weresmaller, they were much more efficient than the private banks. But wheneventually all became big, then they were at par with the private.

Vanamali (53:35.815)

smaller, they were much more efficient thanthe private banks. But when eventually all became big, then they were at parwith the private banks.

Nitin Sharma (53:44.622)

So this is one trend that we saw and westarted seeing that as you become more larger you are kind of gettingcommoditized in terms of the efficiencies that you can actually generate. Lessdifferentiation, very standardized and this is what I think this is probablywhat a layer zero bank that we have been talking about looks like.

Vanamali (53:45.977)

So this is one trend that we saw and westarted seeing that as you become more larger, you are kind of gettingcommoditized in terms of the efficiencies that you can actually generate. Lessdifferentiation, very standardized. And this is what I think, this is probablywhat a layer zero bank that we have been talking about. That's right, yeah.

Nitin Sharma (54:07.31)

Yeah, but what do you think, what is thewhy element in this? So that's the reason we wanted to ask an expert like youthat what could possibly explain this infographic.

Vanamali (54:07.513)

Yeah, but what think there is a, what isthe why element in this? So that's the reason we wanted to ask an expert likeyou that what could possibly explain this? Okay, so I mean, I would profess tobe an expert on this, Nitin, but definitely I'll sort of give my two cents ofwisdom. See the efficiency ratio becoming better with larger asset sized banks.

I think that is something that I am notsurprised with, to be honest with you. And the reason why I say that is because

For most banks there is a significantinvestment that is required in technology and operations, not just from acustomer service point of view but also from a compliance and regulatorystandpoint as well. So it is quite a significant investment and as the AUMscales up or the size of the bank scales up, the customer base grows and thebank starts to realize the value of these investments because you are notmaking what I call incremental investments in the same proportion.

But the initial investment is definitelysignificant. as which is why in the highest segment or the highest tier ofassets you find that you know the efficiency is definitely higher. think thatis something that I am able to relate to and I not surprised to see thatgraphic.

And that is probably the reason why I alsosee a convergence between the efficiency ratios of public and private sectorbanks. think they realize the value, both realize the value of theirinvestments and hence they able to become more efficient as they scale up. Butone thing that I must admit, I'm not in a position to sort of explain and notable to understand is...

Vanamali (55:50.626)

this difference in efficiency ratiosbetween public and private sector banks at the lower end, where the publicsector banks are more efficient is not something that I am able to, frankly Iam not able to find an explanation for it at this point in time, Nathan. Maybeit might require a little bit more data and probably might require a separatepodcast for that I guess.

Nitin Sharma (56:11.15)

you

Nitin Sharma (56:14.754)

Great, great, good to hear yourperspective, Vana, on this. so, since we're talking about large banks, smallbanks, I also want to understand a bit. I want you to wear your CTO hat rightnow and...

Vanamali (56:14.788)

Great, great, good to hear yourperspective, on this. And so since we are talking about large banks, smallbanks, I also want to understand a bit. I want you to wear your CTO hat rightnow and

Nitin Sharma (56:33.238)

Let's talk about a scenario where, let'ssay, you are in a boardroom in the year 2035, and you are having a discussionwith your board, along with your CEO. What do you think is the biggest riskthat you would be debating at that point in time? And what are some of therisks that we are not debating today that would be more pertinent at that pointin time for us?

Vanamali (56:33.377)

Let's talk about a scenario where, let'ssay, you are in a boardroom in the year 2035, and you're having a discussionwith your board along with your CEO. What do you think is the biggest risk?

that you would be debating at that point intime and what are some of the risks that we are not debating today that wouldbe more pertinent at that point in time for us? Again, it is a little bit likegazing into a crystal ball. So, because between now and 2035 the landscapecould change so much that the risks could be completely different. But again,looking at the way technology is evolving and you the way I see some of theserisks spanning out, I think it is safe to assume that AI would be very deeplyembedded into technology within banks by then. I think that's a fair assumptionto make. And a lot of the authentication of customers would be through digitalmeans, biometrics, and so on and so forth. So I think compromise of digitalidentities of the customer is probably something that I see as a big challenge.I think that's a risk that CTOs and CEOs have to be prepared for and sort ofmanaging that piece of information security in the new world I'd say would be abig concern. And I mean just to give you an example, so can you imagine let'ssay a deep fake which impersonates the customer's identity, you know, or let'ssay a quantum computing setup which can crack today's encryption in minutes. Ithese are some of the risks that we have for the next generation banking. Imean, in fact, I'm just visualizing, let's say a deep fake, which clones acustomer's voice to authorize, let's say a million dollar transaction while,know, a quantum computer probably cracks the encryption in real time. I mean,these are actual risks that CEOs and CTOs have to prepare for, I think, by2035.

And the reality is banks, many banks areprobably still patching yesterday's vulnerabilities right now. So I'm saying itwill require a completely different mindset shift and the challenges would bevery very different as I see it. So and the biggest risk that a CEO, so if Iwas a CEO of bank in 2035, the biggest risk I'd be concerned about is loss oftrust, you know when something like this happens. You know I mean how do youfuture-proof trust?

Nitin Sharma (58:48.046)

Okay. Yeah.

Vanamali (58:51.267)

So that's something that I'd be quiteconcerned about. In fact, I dare say, if I were to extrapolate this a littlebit, in 2035, I think a run on a bank probably won't be on deposits, it'll beon trust because that's what you lose if you have all these AI-based fraudsthat happen. So I think banks will need to look at AI-native fraud detection,identity fakes. kind of the things that I think banks will have to gear up forby 2035 that is the way I see it.

Nitin Sharma (59:28.782)

Understood, So now I want to shift a bit onthe personal side and also more on the human element of a banker. And I want tostart by asking you maybe if you can share from your searcher diverse and richexperience if you could share one example where.

Vanamali (59:28.8)

Understood, So now I want to shift a bit onthe personal side and also more on the human element of a banker. And I want tostart by asking you maybe if you can share from your search at diverse and richexperience if you could share one example where

Nitin Sharma (59:54.518)

you were very proud of one of theachievement that you could actually accomplish. And one, if you can alsomention maybe one example where you did not get the results as they wereexpected and how, maybe how all of that turned out to be in future and in hindsight,how do you see that?

Vanamali (59:54.625)

you were very proud of one of theachievement that you could actually accomplish. And one, if you can alsomention maybe one example there, you did not get the results as they wereexpected. And how...

maybe how all of that turned out to be infuture and in hindsight, how do you see that? Yeah, I could do that, Nitin. Ican think of a story for each of these cases, know, which is a bit old, but Idid, it did give me significant learnings as well. So,

So one of the sort of the high moments orsuccesses if you can call it that was a project that I was running where I wasimplementing a co-banking platform in one of my previous banks in a country inAsia. So at that time I was doing a lot of project implementation kind of rolesand I had direct accountability for delivery of this project. So it was my neckon the block for the project.

And this was like a kind of like a testcase that the group was doing, you know, to see if they could take it intoother countries. So, in a way, the success of the rest of the program dependedon the success of this implementation. So, there was massive pressure, youknow. And it was quite a complex program of work because the implementation washappening in country in a country in Southeast Asia. We were runningdevelopment out of Chennai.

and the infrastructure was being housed inHong Kong and some of the support was coming out from Malaysia. So, it was atruly multi-country setup, multi-country touch point. So, there were culturalsensitivities to deal with as well. And when I started the project, it actuallylooked quite daunting and I had massive doubts about whether I will be able toexecute a project of this scale and magnitude and it wasn't made any better by

Vanamali (01:01:53.153)

You know, the many layers above me, know,there were a lot of naysayers above me who sort of convinced me that, you know,I won't be able to execute it. You know, they constantly kept saying, no, itcan't happen. You can't deliver it and so on, you know. And then I got itdelivered within time and within budget, you know. So, that was one of the mostsatisfying moments, you know, to defy the odds and sort of, you know, provethat you're capable of delivering it. But if I look at the learnings,

from there. So, the biggest learning I hadwas about myself. And what I took away from there was, sometimes weunderestimate our own resilience and toughness. the learning was to haveconfidence and faith and faith in your own ability. think that is somethingthat I learnt about myself. So, it was more a self-discovery kind of aspect.And at the same time, I realised that...

self-doubt and fear of failure, they'reusually seen as weaknesses and sort of negative elements. But I also think itcan be exploited to achieve success. When you start confronting your fears anddoubts, you start moving forward. And I had to confront my fears and myself-doubts, and people constantly sort of nagging me to say that I can'tdeliver. I had to confront it and sort of overcome that. So sometimes you haveto face it head on to be able to make it a success.

So that was one learning from the project.The other, there is another key lesson that I took away and I have applied itto a lot of the projects that have run subsequently. When you start largetransformation programs, it looks daunting, it looks really scary at times. Sothe trick I realized is to break it down into small steps and sometimes focusonly on the next step. So I sort of equated to.

mountaineering, mean your focus is on theend goal is the summit but you sort of focus only on the next step and then thenext step and so on, you take baby steps. So while it's important to have thisbig picture and sort of have that in mind, sometimes it's very useful to justhave very narrow minded focus only on the next step and then get it one step ata time.

Vanamali (01:04:09.856)

So that's a major learning that I had andeven today when I take on large transformation projects that I oversee, usuallythere are a lot of times when I tell my team, please tell me what are the keydeliverables let's say over the next two months. The project could be 18 monthslong. But I say let's focus on the next two months and get that right. Becauseif you get that right in two month chunks, then chances are you will get yourprogram right. these are some of the learnings from what I call sort of a success,so to speak.

I will also talk about one of the lowpoints or one of the what I call a failure as well and again this was one of myprevious banks where we were implementing a loan origination and managementplatform. The project started off well and it sort of seemed to be on the righttrajectory but over time we found that momentum was reducing and we keptgetting caught up in scope creeps and changes in requirements and the projectjust kept getting delayed and in my reviews I would

I was always told that these are issueswhich are getting resolved, we will implement soon, it will happen over thenext few months and so on. And I also sort of took my eye off the ball due tocertain other priorities and I think I was also a little bit hesitant to sortof look at the issues. So, eventually the project had to be scrapped becausethere was no end to the changes in scope and requirements and it was nowherenear going live, so we had to scrap the project.

And the key takeaway for me from that wasto be able to confront bad news and tackle issues head on. Because my learningfrom that and with the benefit of hindsight when I look at it today, I findthat maybe I was the ostrich in the sand. I sort of put my head in the sand andsaid, I hope that the issues will go away. But it doesn't. So my learning is tohave those unpleasant conversations, have the bad news up front, tackle theissues head on.

So, I think that is a key learning that Iwould take away and be prepared for unpleasant news and find ways to deal withit. So, that is one of the key learnings that I have. So, when I look at boththese experiences, it actually boils down to confronting hard truths. So, oneis where you face your self doubt and overcome it and the other is where I ranaway from reality and sort of paid the price for it. So, these are probably thetwo key incidents where I took away significant learning.

Nitin Sharma (01:06:35.79)

Thank you so much, Vana, for sharing these.Because see, at times people think that maybe leaders are immune to somethinglike self-doubt. But that's not always the case. Whenever you take somethingvery large, if it looks like something which is impossible to do, there isalways self-doubt that is there. But that is what keeps people running. asyou're sharing this, I think a lot of people would actually understand this,that it's not something that anybody's immune to it.

Vanamali (01:06:35.888)

As you sharing this, think a lot of peoplewould actually understand this that it's not something that anybody is immuneto it. You have to just go ahead with it and find your strengths around thatitself. Yeah, think you have to... was very helpful. Absolutely. think whatI've realized is you have to face your doubts to overcome them. They won't goaway on their own. So that was one of my key learnings. Correct. Absolutely.And so on the similar lines...

Nitin Sharma (01:07:05.794)

to just go ahead with it and find yourstrengths around that itself. That way it was very very helpful.

Nitin Sharma (01:07:18.616)

Yeah.

Nitin Sharma (01:07:22.84)

Correct, absolutely. And so on the similarlines, there are some cases where we have also seen that a lot of bankers

Vanamali (01:07:27.646)

So there are some cases where we have alsoseen that a lot of bankers

Nitin Sharma (01:07:37.358)

Since this is one of the most importantindustry, because there is money movement involved, people's life are relatedto this particular industry, I've always seen that a lot of bankers areoverworked. There is always lack of bandwidth with people. And then youmentioned that if there is any kind of large project that is going on, people,at times they burn out. So what is your...

Vanamali (01:07:37.5)

Since this is one of the most importantindustry, because there is money movement involved, people's life are relatedto this particular industry, I've always seen that a lot of bankers areoverworked. There's always lack of bandwidth with people. And then youmentioned that if there is any kind of large project that is going on, people,hard times, they burn out.

So what is your suggestion to bankers whobelieve that they burning out?

Nitin Sharma (01:08:04.523)

Suggestion to bankers who believe that theyare burning out and they feeling very stressed out with their work right now.Any suggestions for them?

Vanamali (01:08:10.322)

and they are feeling very stressed out withtheir work right now. Any suggestions for them?

Nitin Sharma (01:08:23.746)

Yeah.

Nitin Sharma (01:08:32.334)

Mm.

Nitin Sharma (01:08:37.955)

Yes.

Vanamali (01:08:40.256)

technology for a bank, in my opinion it oneof the most high stress jobs that you can be in because the system outage forinstance could mean massive financial loss, you it is not just that customerscannot access their money, it could actually mean a financial loss becausethere is a settlement risk and if there is a security breach it could meanreputational risk, stock price could come down, I there are various things thatyou know that could happen.

Nitin Sharma (01:08:48.142)

Yeah.

Correct.

Vanamali (01:09:05.006)

on systems which are related to banking.and I've sort of been through it myself many times in my career. But like Isaid, I'm not, I don't think I'm qualified to advise people, but I'll probablygive my perspective and my experience, you know, which perhaps could benefitpeople. To me, the starting point is, for what has worked for me is, you know,I've recognized that work is only one part of your life. There is more to lifethan just work.

And my favorite quote there, I don'tremember who said it, you know, is, no one on their deathbed ever thought that,you know, they had spent, wished that they had spent more time in office. You Idon't think that. So, you have to recognize that work is just a part of yourlife. There's more to life beyond work. Find the right work-life balance. Andfocus on, you know, sort of the physical and mental well-being. And so, thephysical well-being, I'd break it down to four simple pillars.

Nitin Sharma (01:09:57.518)

Hmm.

Vanamali (01:10:02.532)

It's your diet, exercise, sleep andhydration. If you can take care of all these four things then at least I ammindful of all of these four elements. So I find that it works for me. Andthere is the huge mental health aspect to it as well. And again, I don't wantto profess to be a guru, but live with the here and the now is something thathas worked for me. Don't worry too much about the past or the future.

And I'm personally a big fan of this Germanphilosopher called Eckhard Tolle. He's written this book called The Power ofNow. It's a very famous book. And which advocates living in the present andbeing present at all times. Which helps you manage difficult situations quitewell as well. I for me it's been life changing in terms of the way I deal withstress, pressure, toxicity, uncertainty, all of these things. It helps mequite.

quite significantly in terms of the way Imanage it. So I'm a big fan of that. I also have a lot of other interestsoutside of work. I'm very passionate about sport, watch a lot of sport. I'm abig Formula One fan. So when there's an F1 race going on, there's nothing elsethat happens for me in my life. and watch a lot of other sport as well. And Iread quite a lot. So that kind of helps me.

evolve as a person, know, so that issomething that has helped me quite a bit. And of course, the family ecosystemand bond that we have is quite strong. So, that helps you navigate difficulttimes and manage stress. So, these are things that have helped mesignificantly. And the, mean, if I may add to it, one other thing that I findworks to my strength is, you know, I don't take myself too seriously at work.

I have the ability to laugh at myself, lookat the lighter side of things because in my view we spend a very significantpart of our life at office. So you should have fun when you are at work. So Iam always very conscious of keeping things light, looking at the funny side ofthings and I don't take myself too seriously at all. So that's definitely quitehelpful. And make time for the things that matter beyond work.

Vanamali (01:12:22.278)

So, I in fact get quite amused when peoplesay, you know, I'm so busy at work that I don't have time to attend to mypersonal things and I'm sort of smiling to myself and saying, it's just aquestion of priorities. So, yeah, not a guru, but these are some of the thingsthat have helped me.

Nitin Sharma (01:12:40.334)

No, I understand, I think whatever you justshared, I believe it would certainly help people because at times when we areunder stress or we are feeling burned out, you need to reminded of all of thesethings again and again. And hearing this from the leaders, how leaders aremanaging it, this is something which rest of the team also needs to learn rightfrom the start.

Vanamali (01:12:40.495)

I understand, I think whatever you justshared, I believe it would certainly help people because at times when we areunder stress or we are feeling burned out

you need to be reminded of all of thesethings again and again. hearing this from the leaders, how leaders are managingit, this is something which rest of the team also needs to learn right from thestart. Because, I can actually tell you from my own experience that the levelof stress, and you already said, having a CTO hat for a bank or for financialservices, it's very difficult. Even in my previous roles,

Nitin Sharma (01:13:06.296)

Because, I can actually tell you from myown experience that the level of stress, and you rightly said, having a CTO hatfor a bank or for financial services, it's very difficult. Even in my previousroles, when I was playing the role of a CTO for a FinTech, where we were doingbillions of dollars of movement on a daily basis.

Vanamali (01:13:21.628)

when I was playing the role of a CTO for aFinTech where we were doing billions of dollars of movement on a daily basis,what kept me awake at night was about the platform security and stability. Thathow do we make it more secure? How do we make it more redundant and all? Andthat stress is real. And that stress is multi-fold compared to any other kindof vertical if you are working in. Compared to financial services.

Nitin Sharma (01:13:31.746)

What kept me awake at night was about theplatform security and stability. That how do we make it more secure? How do wemake it more redundant and all?

That stress is real and that stress ismulti-fold compared to any other kind of vertical if you are working in,compared to financial services. But hearing your thoughts, actually this issomething which I hope most of the listeners can actually relate to it and tryto adopt some of these things. It happens with everyone, but there's a setframework. There are a few frameworks that somebody can follow and just try tofeel relaxed around that.

Vanamali (01:13:51.548)

But hearing your thoughts, this issomething which I hope most of the listeners can actually relate to it and tryto adopt some of these things. It happens with everyone, but there is a setframework. There are a few frameworks that somebody can follow and just try tofeel relaxed around that. So one more thing I actually want to understand,again on the personal side of it.

Nitin Sharma (01:14:13.166)

So one more thing I actually want tounderstand, again on the personal side of it, since you have been the CTO ofseveral prominent banks now, if somebody wants to become a CTO and they're,let's say, just getting started with their career, or it's been four or fiveyears, they got into the career, what is the path to actually becoming a CTOfor a bank?

Vanamali (01:14:21.487)

Since you have been the CTO of severalprominent banks now, if somebody wants to become a CTO and they let's say, justgetting started with their career or it's been four or five years, they gotinto the career, what is the path to actually becoming a CTO for a bank? Well,to start with, probably don't do any of the things that I did because mine wasjust a series of accidents. But jokes apart,

I don't know if there is a set template toit Nitin but I would say I would urge someone to sort of cultivate two threekey sort of traits that are important or depth in some of these areas. One isof course understanding the banking business very well because today I don'tthink you can sort of separate technology from banking so it's very importantfor CTOs to understand the banking business.

Nitin Sharma (01:14:52.76)

Yeah.

Nitin Sharma (01:14:56.686)

Hmm.

Vanamali (01:15:20.122)

I think gone are the days where technologywas seen as a business enabler. Today it's actually a business driver and it'ssort of the bedrock on which innovation, product and service delivery ishappening in banking. So, cultivate banking business depth is something that Iwould strongly urge CTOs to look at or prospective CTOs to look at. Have asolid understanding of emerging technologies because I think the CTO wouldprobably be in the best position to

Nitin Sharma (01:15:25.164)

Yeah.

Vanamali (01:15:48.438)

understand how emerging technologies can beleveraged to create business opportunities within a bank. So I think that's thesecond aspect. And the third which in my opinion is very important is what Icall transformation leadership. You what is the leadership that you can providefor transformation programs because

I think technology increasingly there lotof work around transformation that happens. So transformation leadership isvery different from let's say what I call leadership required in a BAU scenariowhere you keep the lights on. So I think that is something which I see as veryimportant from a CTO perspective. So I'd say cultivate these three traits,fundamentally keep your eyes and ears open, soak up.

all that you can like a sponge, sort ofequip yourself with the knowledge. And if you're smart in applying it andcultivate these leadership skills, then I guess the world is your oyster. Butthe way I'm seeing the CTO's role evolving is probably moving increasingly fromkeeping the lights on to probably reinventing the light bulb. That's how therole is changing. So some of these skills will.

probably help people gear themselves up fora CTO role. Understood. And Vana, can you just double click on thetransformational leadership that you mentioned? What does that actually mean?See, I think it's about having to provide leadership on how you managetechnology transformation because

Nitin Sharma (01:17:12.45)

And Vana, can you just double click on thetransformational leadership that you mentioned? What does that actually mean?

Vanamali (01:17:28.289)

A technology transformation program has ahuge impact organization wide and in this day and age where technologypermeates right across all aspects of banking. The CTO's ability to provideleadership across various functions not just within technology but also to workwith the businesses and you know and the all the other functions to embed thistransformation across the bank requires significant leadership which means youneed to be able to

Nitin Sharma (01:17:38.082)

Yeah.

Vanamali (01:17:56.345)

understand what is the impact that thetransformation will have across these various areas, position it right acrossthe various businesses and functions and support the respective leaders inmaking sure that the transformation gets embedded. So, that is what I mean bythe transformational leadership Nathan. So, essentially it all about how do youmake sure that whatever technology transformation you are driving truly getsembedded across the organization and delivers value that it is supposed to.

the bank. So that's the way I see it.Understood. Got it. And so this is about, say, if somebody wants to become aCTO. But there is also a trend where a lot of bankers these days are beingsought by a lot of fintechs.

Nitin Sharma (01:18:32.654)

And so this is about, let's say, ifsomebody wants to become a CTO. But there is also a trend where a lot ofbankers these days are being sought by a lot of fintechs, right? So fintechsrequire skills around banking, around money movement, at the same time, theywant to understand how banks think, so they are hiring a lot of bankers.

Vanamali (01:18:47.564)

True. Right, so fintechs require skillsaround banking, around money movement at the same time. They want to understandhow banks think, so they are hiring a lot of bankers. So let's consider ascenario where there is somebody who is, let's say, somebody who is 45 years ofage currently working in a large bank, and they have an opportunity to move toa fintech.

Nitin Sharma (01:18:59.126)

So let's consider a scenario where there issomebody who is, let's say, somebody who is 45 years of age currently workingin a large bank, and they have an opportunity to move to a fintech. And thiskind of thing is happening more, I think, frequently these days.

Vanamali (01:19:13.848)

and this kind of thing is happening morefrequently these days. What is your perception on this? Who are the kind ofpeople who should actually do this? Moving from a bank to a fintech and who arethe people who should just stay away from such an opportunity?

Nitin Sharma (01:19:19.608)

What is your perception on this? What doyou think, who are the kind of people who should actually do this, moving froma bank to a fintech, and who are the people who should just stay away from suchan opportunity?

Vanamali (01:19:31.742)

I mean to start with I've always been anadvocate of challenging yourself in new environments because that's how mycareer has evolved. So my first response will always be say yes to a move ifit's going to challenge you. It's not so much about age, it's more aboutattitude and I don't think it can be generic advice, not a one size fits allbut I mean it obviously depends on the individual but I think there are a fewthings that you have to prepare yourself for if you moving from a bank to afintech.

I think the first thing that you have toget used to would be the pace of the fintech. It could be quite different froma bank. Obviously, a fintech will be more fast-paced. You need to adapt to thepace of work. That is something that I see which you need to get used to. Butthe flip side to it is you can also see the impact of the work that you aredoing almost immediately as compared to a bank. In a bank, it could takemonths, sometimes even years for you to see the impact of a largetransformational program.

Nitin Sharma (01:20:21.639)

Yeah. All right.

Vanamali (01:20:28.385)

Whereas in a fintech you could probably seeit in even weeks. You could see the impact of the work that you're doing, know,translate even within weeks. There are a few other things that I would saywhich require a mindset change if you're moving to a fintech. And one would beyou have to get used to working with people who are used to working with andfor people who are significantly younger than you.

Nitin Sharma (01:20:37.704)

Yeah.

Vanamali (01:20:52.599)

Because a lot of the fintech leadership isyoung, Gen Z, Gen XY, whatever, they'll all be younger than, let's say, the45-year-old banker who wants to move. So, I think a key element will be theability to leave your ego behind when you join the fintech. I think that'ssomething which is a very important trait. Another difference that I see isalso, things will be fluid in a fintech. It will evolve, there'll be a certainlevel of uncertainty.

Nitin Sharma (01:20:53.513)

Yeah.

Nitin Sharma (01:21:07.719)

Hmm, yeah.

Nitin Sharma (01:21:18.684)

Hmm.

Vanamali (01:21:21.496)

So those who are comfortable and I haveseen many bankers who are very comfortable with established processes,structures, hierarchy, set of routines, I do think they will be the rightcandidate for a move. You should be able to step outside your comfort zone anddeal with the uncertainty. So I would say if you are sort of happy to stepoutside your comfort zone move, else stay. That will be my take.

It's funny you asked this because we werehaving a conversation in one of our groups a couple of months back about thisbanking to fintech moves for seasoned bankers. And I'm going to borrow a quotethat I heard from somebody in terms of what it takes to thrive in a fintech ifyou've been a banker. And so I'll borrow this quote from this person whom Iknow who said that, learn like an intern, but you still advise like a sage.

Nitin Sharma (01:22:00.776)

Yeah.

Vanamali (01:22:17.687)

So, if you do both at the same time thenthe Fintech switch is good for you. So, that is the way I would see it.

Nitin Sharma (01:22:19.113)

What?

Nitin Sharma (01:22:24.476)

Yeah, yeah, yeah, makes sense. And on theother side, what do you think, how the banks are actually planning their orgstructure? again, talking about the year 2040, planning that far, what kind ofleadership is currently required for any bank to stay a leader in 2035 or 2040?What kind of org structure is changing on the bank side?

Vanamali (01:22:26.295)

Yeah, yeah, makes sense. And Vana, on theother side, what do you think, how the banks are actually planning their orgstructure? So again, talking about the year 2040, planning that far, what kindof leadership is currently required for any bank to stay a leader in 2035 or2040? What kind of org structure is changing on the bank side? So I would say,Nitin, that

Again, lot can happen between now and 2040,but some of the things which hold good today will also hold good, I think in2040. So the basic tenets of leadership will still stay. You will have to be agood leader of people and you need to know your domain. there is a certainlevel of integrity that you need to maintain as a leader. So these are thingsthat are absolutely non-negotiable and those will still stay. And I see a lotof leaders...

you know, even today who are very strong interms of their business acumen, great leaders of people can rally people aroundthem, inspire them to deliver. All those treats will still be required in 2040.One significant change that I see as a difference, I think leaders will have toneed, and especially banking leaders will need to have the ability tounderstand technology a lot better than what they do today.

And I see a lot of leaders, banking leaderswhom I have worked with in the past or even in the last many years who say thatthey don't understand technology and they say it sometimes with pride. I'veheard people say, I don't understand technology, it's for the CTO to sort itout. So I think that has to change because technology is so integral to bankingthat when you're sitting in 2040, as a CEO, you can't say that I don'tunderstand technology, you can't feign technology ignorance.

Nitin Sharma (01:24:17.489)

Yeah, correct.

Vanamali (01:24:18.838)

and it is going to be sort of omnipotentand omnipresent if it's not already. So, one of the key things that a CEO needsto look at is the ability to harness the available technology, harness thepower of technology to be able to leverage it for business benefit. And thiscan happen only if you understand technology. I you don't need to know coding.

But a conceptual understanding oftechnology is absolutely required when you look at this. So that's one keytrait that I see that leaders will need to cultivate, Nitin. The other thingthat I see also which leaders will need to look at is the ability to manage,let's say, a gen-alpha workforce. Because these are the kind of people who willbe hitting the job markets in 2040. So it's very important to.

Nitin Sharma (01:24:42.099)

Correct.

Nitin Sharma (01:24:47.849)

better.

Nitin Sharma (01:25:00.777)

Hmm.

Vanamali (01:25:05.909)

understand their aspirations, know, andcreate an organizational culture that will work for them, which for, so thatthe Genalfa can make a career in banking. So that's something that leaders willneed to cultivate. So I'd say, you when I look at it and this is, you know,been my aspiration as well in terms of the way I want banks to function. Canyou create an organization which has the compliance rigor of a conventionalbank?

But has the vibrancy and work culture of aFinTech, you know, can we get the best of both worlds together? I think it'sprobably something that CEOs will have to look at in the future. Yeah. Makessense. Makes sense. And Varna, since you talked about that, the CEOs need to bemore tech savvy. At the same time, you were talking earlier about that the CTOsneed to keep an eye on.

Nitin Sharma (01:25:41.341)

Yeah.

Nitin Sharma (01:25:45.255)

Makes sense, makes sense. And Varna, sinceyou talked about that, yeah, the CEOs need to be more tech savvy. At the sametime, you were talking earlier about that the CTOs need to keep an eye on.

what's new or what cutting edge intechnology. I also want to touch base on one of the most recent subjects that'sgetting very popular. It's around stable coins. So stable coins as we know, Ithink from the perspective of India, there is no way currently to actually offramp your crypto to fiat currency that's not allowed by RBI.

Vanamali (01:25:57.267)

what's new or what cutting edge intechnology. I also want to touch base on one of the most recent subjects thatthat's getting very popular. It's around stable coins. So stable coins as weknow, I think from perspective of India, is it's actually off ramp your cryptoto fiat currency that's not allowed by RBI.

Nitin Sharma (01:26:23.293)

So in a way, India is kind of feeling someof the sectors of Indian population is feeling left out from what all ishappening around the world in US or in Europe around stable coins. But how doyou see this as an evolution? Are there any opportunities? And is India'scautious approach the right approach? And how banks should now be looking atstable coins as an opportunity?

Vanamali (01:26:23.465)

So in a way, India is kind of feeling someof the sectors of Indian population is feeling left out from what all ishappening around the world in US or in Europe around stable coins. But how doyou see this as an evolution? Are there any opportunities and is India'scautious approach the right approach? And how banks should now be looking atstable coins as an opportunity?

expert on cryptos and stable coins but fromwhat?

little I have observed and read I will justshare my two sense of wisdom on this method. See I think one thing is one thingwe have seen is there has been a significant growth globally in know in stablecoins. So I am hearing of global players like Visa, Mastercard who are to useit for cross border payments with instant settlements and so on. So and it cansignificantly mitigate the cross border or simplify the cross border paymentmechanism and mitigate the volatility that

Nitin Sharma (01:27:09.469)

Yeah. Yeah.

Nitin Sharma (01:27:19.038)

Yeah.

Vanamali (01:27:26.614)

generally associated with cryptos. Soobviously, you that's a big benefit that we see. And I remember reading sometime back that the stablecoin settlement could actually cut paperwork for MSMEsby up to about 70%. So, if we harness it right, then I think there is a massiveopportunity that we are talking about, you know, almost like it could become,let's say, the UPI of global trade, you know, that's the way I see it. So, thatis the opportunity that is there.

Nitin Sharma (01:27:54.184)

Yeah.

Vanamali (01:27:56.244)

It will I think in the next let us saydecade or so I am expecting it to permeate into mainstream financial servicesit will obviously take more time and as you rightly put it the regulators aretaking a very guarded view on this. So, my take is the regulators have toprobably take a slightly more balanced view because banning it will only meanan increased black market you know and that which is not necessarily desirable.

So, I think regulators have to think aboutwhere do stable coins fit in, you know in the ecosystem because many regulatorsare launching their own digital currency like RBI's CBDC which has beenrecently launched. So, it will what stable coins will require is probably Iwould say a well laid out set of guardrails where there is an opportunity tomake it coexist with the digital currencies and you know sort of still usestable coins to enhance cross border trade.

If that is done then I think it couldpotentially be a game changer. So I am at least from my understanding the way Iam looking at it I would say CBDC is for domestic use and stable coins forglobal trade with almost like a UPI equivalent sort of rail on which both cancoexist and payments can happen.

view of the world, state of Nirvana that wecan get to. Got it. Thanks, thanks Vana for sharing your views on these.

Nitin Sharma (01:29:24.393)

Got it. Thanks, thanks, Vana, for sharingyour views on these. So Vana, that's all. think we already crossed the timethat we had booked for the podcast recording, but it was a great session. Justsummarize, I think, what all I'm taking away from the podcast. We talked aboutcustomer segmentation, customer segmentation at the bottom of the pyramid.

Vanamali (01:29:29.757)

So one of that's all I think we alreadycrossed the time that we had booked for the podcast recording, but it was agreat session. Just summarize, think what all I'm taking away from the podcast.We talked about customer segmentation, customer segmentation at the bottom ofthe pyramid.

Nitin Sharma (01:29:51.261)

How do we manage, how can banks actuallymanage their data in a better fashion? We also talked about how the leadershipshould evolve for the banks, for fintechs, and more on the personal side, howto better manage the banking related, or how to better balance betweenprofessional and your personal life if you are in banking. And generally,

Vanamali (01:29:51.318)

or how to better balance betweenprofessional and your personal life if you are in banking. And generally,between the large banks and the smaller segmented focused banks, how thetechnology architectures would actually have been evolving and would continueto evolve. And then we touched base on the futuristic elements that are nowtaking place. There is some activity happening on that. So a lot of takeawaysfor...

Nitin Sharma (01:30:20.167)

between the large banks and the smallersegmented focused banks, how the technology architectures would actually havebeen evolving and would continue to evolve. And then we touched base on some ofthe futuristic elements that are now taking place. There is some activityhappening on that. So a lot of takeaways for me, Vana, personally, and I hope.

Vanamali (01:30:38.834)

me, Vana personally and I hope anybody whowould listen to this podcast, they would also get all the wisdom that you hadshared with us today. So thank you so much Vana for taking out time and doingthis with us. And like you said, we'll see, I think if we can get more timefrom you or any of the future versions of the podcast, maybe part two of this,where we go deeper into some of the aspects. I mean, I must say, first of all,I must thank you, Nitin, for having me here. It's been an absolute pleasure.

Nitin Sharma (01:30:40.603)

anybody who would listen to this podcast,they would also get all the wisdom that you had shared with us today. So thankyou so much, Vana, for taking out time and doing this with us. And like yousaid, we'll see, I think, if we can get more time from you for any of thefuture versions of the podcast, maybe part two of this, where we go deeper intosome of the aspects.

Vanamali (01:31:08.861)

to be here because I think it's also givenme time to reflect on some of these aspects. don't think I have thought as muchabout some of these elements in the past as I've done in the last sort of fewdays leading up to this podcast based on the discussions that we had. So it'skind of helped me structure my own thoughts and you know and I hope it's usefulto those who are listening to it and you know I've just been able to share youknow my experiences and my opinions more than anything else you know like.

Like I said, I am far from an expert or aguru but you know after having worked 34 years obviously there some experiencesthat one can share and I just hope it's beneficial to the audience as well. Butthank you Nitin for having me over. It's been an absolute pleasure. You're mostwelcome, Bana. Thank you. Thanks.

Nitin Sharma (01:31:48.177)

absolutely.

Nitin Sharma (01:31:55.017)

You're most welcome, Vana. Thank you.

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