The 2040 Banker Podcast by Refo | Episode 3 with Rohit Kilam

On a recent episode of "The 2040 Banker" podcast, we spoke with Rohit Kilam about the evolving relationship between banking and insurance. Our discussion covered:

• The evolution of banking and insurance models: Examining the increasing integration of these traditionally separate sectors.
• The emergence of embedded insurance: Discussing its pivotal role in future distribution strategies.
• The transformation of insurance into a data-driven product: Highlighting the enabling role of APIs.
• A comparative analysis of global insurance landscapes: Providing valuable international perspectives.
• The role of digital public infrastructure: Exploring its impact on advancing the insurance sector.
• The potential for regulatory convergence: Considering the future of financial services regulation.
• Navigating technological shifts: Understanding how both industries are preparing for the next decade.

Watch the full episode in the link above.
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Transcript: 
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00:00

Thank you so much Rohit for coming on our podcast. Thispodcast is called The 2040 Banker. And the idea is we typically discuss howbanking has evolved and financial services overall in the last couple ofdecades. And what do we expect? How it would move in the coming decade? And by2040, what shape overall financial services sector will take? So that's thetheme that we would talk today.

00:26

Quickly, for everybody's interest and knowledge, I'll justread out your background. And I know, of course, currently you are with HDFCLive, so that's primarily an insurance company, but we see insurance andbanking being the most related industries, and we'll talk more about that. Andabout your career, you started your career with TCS, then you moved on toWipro, IBM, and after that, there was a financial services stint in lendingwith Aditi Birla.

00:55

From there, you went to CMS and currently you are the CTO ofSGFC Life. So while this is a very broad and very quick introduction, I wouldlove if you can, for the listeners, you can talk a bit about some of the keyhighlights from your career which might be most relevant for today'sdiscussion. Well, thank you, Nitin. Thank you so much for having me here.Serendipity is the word that I normally use when it comes to careers.

01:23

It's been a journey all through. It's a lifelong journey ofexploration when I look at my career back. I started with finance and corefinance, financial services. And then I moved to tech and discovered my passionlied in between tech and finance. And that's how it moved.

01:50

By the grace of God, I've got some beautiful buffet ofprojects, experiences, and programs that I've had to work on. Some veryinteresting, game-changing pieces of work. For example, I was part of...Actually, I was part of IRCTC.

02:11

team when it was getting formed. And this is 2000-2001 whenit was still infancy and we were building IRCTC, the first e-commerce site. Andwe saw an explosion of e-commerce activities at that point of time with thedot-com boom coming up. We actually got M-ticket, that is mobile ticketing,live by 2003-2004.

02:40

But by the time there was an archaic law, British time law,which was there, it had to be changed. By the time mobile ticketing came, itwas 2008, 2009, around that time. So interesting things. I've also had anopportunity to be project director for the Pension Fund Regulatory DevelopmentAuthority.

03:02

We were launching the NPS scheme now, which is in between abit of political turmoil right now. But interesting piece and how we thoughtthrough the product and how we built it at that point of time with NSTL as partof it. So interesting assignments from that standpoint. Been consulting formost of the bank's IT strategy in India and outside India as well.

03:32

And interesting anecdotes around how similar the banking andfinancial sector is in India or outside India as well. The way it is looked atfrom a larger context. After that, then from a career standpoint, we've workedon a lot in digital transformations across.

03:55

And before I got called on to, I got a calling to set updigital lending almost in 2016. We were the first one to do it on cloud. Andthat was a clear, interesting piece, which changed a lot of things. That waseven just UPI was getting built at that time and we didn't have initial. And2016 November was a watershed year in that sense.

04:25

We launched digital lending, UPI was launched anddemonetization happened. And there was a geo moment in data. All these thingshappened at one shot. A lot of turmoil with that. And then we went through theups and downs of the lending industry, building products for checkout financingor for wallets or for various other lending.

04:53

unsecured lending platforms and secured lending platforms aswell. So that's what it was. Before I actually ventured into the other side offinance, which was around cash management, which was core around how thecurrencies moved in the country. So I've been part of the currency incirculation as part of one of my roles as the technology head.

05:23

There's a lot of technology which goes around physicalmovement of currency, right, from a security standpoint and logisticsstandpoint. It's a mammoth operation to move currency around ATMs specifically.The landscape of ATMs in India is one of the largest. And I had the privilegeof launching one of the largest IoT programs specifically.

05:53

for ATMs in India at that time. And then it's been theentire insurance industry that's completely sucked me in. So one challenge toother, the career has moved forward, as I said, and being grateful as well asenergetic to take up challenges one to another to another. Great.

06:16

So I didn't know, actually, you started a career withfinancial services. Which company was that? I was in Fortress FinancialServices. Okay. We were into boutique financing. And this was, at that point oftime, we were doing a lot of work on equity research. That company was stillinto, and a lot of it into infrastructure financing as well. Got it. So one ofthe first projects which got financed on BOT basis, a road project which gotfinanced on BOT basis.

06:45

That was in Tamil Nadu. And we were the advisors for thatand getting involved in how core financing, how infrastructure financing can bemade viable across. In fact, I worked a couple of years only on infrastructurefinancing, specifically public sector as well as private sector, looking at howto make our mass transit systems viable as well.

07:12

Since you thought about it, another interesting story. I waspart of the presentation troop, which made presentation for Mumbai Metro in1999 to the government in Maharashtra. Finally, we are seeing the light of theday after almost 22, 23 years there. But even the link which is...

07:42

active right now, the Ghatkopar Andheri Link, which was donewith the help of GTZ, which is a German aid agency. We were working with themas well at that time. That brings to another interesting anecdote. So I wasworking on a program on advising the government on how useful it is to buildthe flyers across Mumbai. So I've done a lot of infra work for World Bank. So Idon't know if you know around

08:11

25 years, 22, 23 years back, Bombay made a slew of flyovers,like 50 odd flyovers across. Yeah. We were called on to study on them andfigure out, does it? So we did a complete traffic simulation. Yeah. 20 yearstraffic simulation. Yeah. With the flyovers, without the flyovers. Yeah. And weused advanced Satchmo program. I remember that time. It was London TransportProgram.

08:39

I was part of Tata's that time. And we did an environment,traffic, and economic impact assessment. And that point of time, we had veryclearly said that it is going to be detrimental to the city's trafficsituation. That's exactly what you see beyond Andheri. Traffic is a mess rightnow. And as part of the report, we clamped down on the...

09:06

on some specific infrastructures in South Mumbai,specifically around Haji Ali and all those areas which were there. So peoplewho are familiar with Bombay would know there's a place suburb called Andheri.They were planning to build actually a shopping mall under a flyover, whichthey completely clamped down because it was quite an antithesis. So those aresome interesting pieces of...

09:36

of finance because that was economic impact assessment thatwe did. And a lot of technology around it in terms of how do you simulatetraffic 20 years hence. Yeah. So I think you bring me to a very interestingpoint now. So since we started with financial services and banking discussion,but we quickly started talking about infrastructure and all of that.Infrastructure financing is extremely important. Yeah. And the point being, andthis is a question that we typically ask to all of our guests.

10:04

then is financial services the most important industry? Andwe'll see that there is so much hype around. There is a dedicated newspaperthat runs around financial services, policies and all. So is this the mostimportant industry in the world and in India as well? What is your perspective?I don't know if you call it important or not important, but it's the onlyindustry which glues together all the other industries. Yeah. Because...

10:32

Finance is the industry which will glue together. And when Isay glue, there's only one word which comes to my mind, trust. The financialindustry is known to manage trust. I won't say hold trust, but to manage trustbetween various parties, third parties across. That is done through money. Whatis money without trust? Nothing. That's as ancient as when banking is.

11:00

Banking is just trust, nothing else. Yeah. And we typicallyget, and I think it's really good to hear your side or your perspective on thisbecause we hear very unique perspectives around it. But always the common themeis that, and I think you rightly put it, that this is the common industry whichglues everything together. I think that's one of the key messaging that I'mtaking from this discussion today. I also now want to talk about,

11:30

We talk about banking and then there is insurance.Currently, you being in the insurance sector, how do you think the two sectorsare related? How is banking insurance? Can we call them maybe the sisterindustries? Would that be true, actually? No. So I think they're the sameindustry, frankly. The business of money involves protection, investing,lending, and advisory.

11:59

And protection is as important to any banking industry,either to protect assets. And that's where the role of insurance comes in. Soyou have to protect your assets, you have to protect your transactions, youhave to protect your lives. And that's where insurance is all about. And again,going back to the theme of trust, if you are protected...

12:28

the trust increases. And that's how banking and finance arerelated. Protection and trust are very closely related. Got it. And what aboutbank assurance maybe for the benefit of listener and also for me? How does thebank assurance model typically work? HDFC being a leading bank and then youhave your insurance arm as well. How does the synergies come in and whattypically is a bank assurance model? So when you go to a customer, you aregiving him multiple solutions.

12:57

And protection is one of the key solutions that you give toa customer. If you're giving your customer money to expand his business, healso needs to protect those business assets. That's where the bank assurancemodel comes in. You are going as one solution to your customer on protection,on lending or financing, or on advising him how he needs to transact and managehis business interests.

13:27

Well, that's exactly how bank insurance is and it isimportant from a large perspective. Nitty gritties, I think there is in termsof there are two regulators, their products are different, productmanufacturing is. So as we look at it, the insurance product manufacturing isseparate from the banking lending product manufacturing. So that's how theyhave to co-join together in terms of going to the market.

13:55

When you say these are two different in terms of productmanufacturing is different, what exactly, what differences have you seen? Solet me take a layman's example of product development. We are looking at aninsurance product development, which is for protection of, for example, a life.So you will have to build a product to ensure that the life of a specificperson is insured for...

14:23

a 30-year period or a 40-year period. And then after that,you give him options either to create an annuity out of it or to get a lump summoney back out of it or multiple options around it. How do you manage thisentire transaction over a longer 30, 40 years is a separate set of productdevelopment exercise versus you're lending money to him. Same customer for aworking capital loan.

14:53

So there are different parts of the product developmentwhich get invoked in terms of risk, in terms of tenure, in terms of how you areunderwriting your customer. All these are separate parameters. Got it. Allright. So since we were discussing on the topic of bank assurance, I also wantto understand, is it always like banking first, you get a set of customers andthen plug in your insurance products?

15:19

Or have you seen anything like a reverse bank assurancemodel also in the world working out? I've not yet seen reverse bank assurance.I would like to see that. Unfortunately, insurance as a product is a pushproduct. It's not a pull product. So it needs to be pushed to the customer. Andwhen you're pushing a product to the customer, you would rather push it alongwith something. And that's how banking, bank assurance also works.

15:48

Got it. We're really looking forward to creating a pullproduct. And I think creating composite insurance would be a way in thatdirection. Got it. So when you say a push product, for example, if I am buyingan air ticket, along with that, we bundle insurance also along. Yes. So this ismore like a bundled product. This is what you call this push product. You haveto push the customer to.

16:16

Buy the product. He doesn't go and, I need insurance. It'slike, I need money. It's not like, I need insurance now. Got it. No customerwill come to you. A lot of customers will come to you, I need money now. For X,Y, Z reasons. They will just keep coming to you. But no one would come to you,I need...

16:38

Protection now. Yes. Unless he's pushed too. Yeah. You know,his uncle or his cousins will come and tell you, you need to invest in aninsurance. Unfortunately, that's the trend across the world. I would love tosee people buying more protection. Yeah. Specifically because of two, threereasons. One is by...

17:02

We will have the percentage of senior population is going tosignificantly increase over the next six years. Got it. By 2030, across theworld, even in India. We have the youngest population in the world right now.At some point of time, we will have the oldest population mass as well. Yeah.That needs a lot of protection. Correct. People are not thinking about it.Correct.

17:31

like UK, US, have started thinking about it, started taxingtheir younger generations very heavily to create that protection through NHS orthrough similar programs. In India, we do not have that. And that's thechallenge for protection industry and insurance industry in India. Got it. Sotalking about the overall evolution, and let's discuss again what has happenedin the last couple of decades.

17:58

across financial services, be it banking and insurance. Youtouched upon some of the elements like UPI and all, but during your career, wecan talk maybe two to three decades, what you have seen as a key shift in thetechnology, how it changed the financial services sector. So if you can sharesome insights on what were the key trends that you saw and maybe share someincidents also that you might think worth discussing today.

18:28

I remember banking in the 90s. Banking by branch banking.That shift has come drastically as the progress of technology has happened. Welived through the age where the core banking came in. And there was acentralized banking system which was getting implemented across all the banksthat we have seen. We also lived through the system where

18:58

The core banking moved to the internet banking goingforward. And now also going to mobile banking from there onward. So we've seenshift from branch banking to a centralized banking system, to an internetbanking system, and now to mobile banking system. If you ask the largest of thebanks in the country right now where the growth is, they would talk aboutWhatsApp banking.

19:27

That is where it is moving to right now. So from mobilebanking, it's also gone beyond that to WhatsApp banking. WhatsApp as a channelis serving all banking needs across the country. Now that's the evolution thatI have seen from a banking standpoint.

19:49

I don't understand why we should rely so much on SMS andtelecom infrastructure from a banking standpoint. The linkage between telecom,I'm coming to WhatsApp banking specifically now. The way we are thinking ofcreating digital infrastructure, we need to have a unified digitalinfrastructure between telecom and banking right now. It will help us managefrauds.

20:16

It will help us reduce the nuisance of OTPs as we are allaware and also help us create frictionless customer journeys as well. But needsa lot of work in tandem between telecom as well as banking. So can you explaina bit more on that? So when you say a unified interface between let's saybanking and the telecom, right? How exactly would it work?

20:46

Or what are the asks? Telecom has verified customers. Right.So is banking, right? Banking also has. They need to talk at the back endthrough a digital infrastructure. Yeah. That's what I'm talking about. Thatwill solve a lot of problems and also help penetrate banking much deeper intorural areas in the country to create more financial inclusion.

21:13

Got it. Understood. And what do you think? I'm picking upthe cues here specifically from the African experience, where the telecom andthe banking industry have done well. Yeah, whenever it is a story aroundtelecom-led banking, I think Africa is one of the examples that always comesin. Yes, but we need to look at it very differently in the context of Indiahere, specifically from a fraud standpoint.

21:43

Because the fraud has perpetuated in India from a bankingstandpoint or from an insurance standpoint as well with the two siloedapproaches between telecom and this. Yeah. But wouldn't you say all the effortsthat were taken to build certain wallets that actually meant...

22:08

The same purpose only, right? That you basically convertyour mobile phones into financial wallets through which you can do moneymovement, which eventually got replaced by UPI, largely. Right? Yes. So in away, that phone banking has already begun. No, but I wanted to go deeper. Iwanted to go much deeper for financial inclusion, for OTP-less transactions,and fraud-less transactions.

22:35

That is extremely important. Got it. And what are some ofthe key trends that you think would emerge in the coming decade? So especiallymaybe you can talk about insurance or broadly as financial services. And let'ssay for insurance only, if you want to talk, would it be better distribution inthe coming decade from an insurance company's perspective or better acquisitionor creating more personalized products?

23:04

for the customer or a better servicing experience? What doyou think is going to be the key driver for a company like HDFC Life or aninsurance company? I would say all of them first. But let me contextualize theproblem. Let me lay the problem. Problem one is we are underinsured in terms ofpopulation. Number two, the...

23:29

Insurance per person, the density of insurance is very, veryless. So the depth as well as the breadth. That is the problem that we arelooking at from our standpoint. People have not insured themselves completelyto the risks. And the breadth of the population is not insured. So to solvethis, I think what is important is to embed insurance.

23:56

A lot of good work was done with embedding insurance inJandhan accounts. But I think creating better awareness about that is what isneeded. Just giving you one example. So embedded insurance would be the keypiece. Creating embedded insurance products. Got it. Distribution, I thinkgovernment is already working on this and they have solved for and they aretrying to solve for platforms, creating platforms.

24:26

for insurance distribution around it. What all is alsoimportant is how we perceive risk as customers and educating the customers onrisk management part of it. That is also extremely important for in the nextsix years that I see till 2030 specific. 2040 for me is...

24:54

slightly too far stargazing but 2030 i can definitely tellyou these two points got it see educating a particular customer i think it'ssomething which no single insurance company can do alone right so it has to bean industry-led effort there has to be let's say macro environment overallregulatory portion all that would come in but other factors which are in yourcontrol and especially from the perspective of perspective of technology

25:20

And you touched upon the topic of embedding insurance into,let's say, ongoing transactions and products. Why do you think or do you thinkcreating key personalized products and offering them through embedded channel,would that become a key driver beyond other angles, of course, macro, etc.,keeping them aside? Could this become the key driver? And if you as aninsurance company, you have to deliver that in the coming decade.

25:50

What all would you require? So embedded insurance requires avery close-knit ecosystem with other financial products. And that is somethingthat we are driving to across. We are embedding insurance, for example, withlending. That has taken a massive uptake, in fact, over the last few years. Thecredit protect.

26:17

part of the product. That means when you take a lendingproduct, are you insuring the person who is taking lending also or not? That'sa very interesting embedded product in insurance, which has seen a massiveuptake. Just giving you an example there. But I think what is all is importantis

26:41

reaching out to the bottom of the pyramid customers. And howdo you reach out to the bottom of the pyramid customers? By more formalizationof the economy, you're able to have better bank accounts. That's the firstgateway that you need to cross to get into the bottom of the pyramid. And thenthrough that, offering embedded protection plans to all of them.

27:09

For example, crop protection. That's a huge, huge initiativeby government and extremely important. Crop protection is one of the areas froma protection standpoint. Similarly, protecting your near and dear ones,specifically the bread owners in the family. That's the second part of it thatis important. Similar initiatives by government across are something that willbe very useful in...

27:38

in spreading the insurance products across the population inIndia. Understood. So what I'm getting is that you need to plug into severaldifferent distribution channels and make insurance available easily in thosechannels. Yes. That is building the distribution part and being strong there.What about from a pure lens of technology?

28:02

How are you seeing from your priority perspective, what doyou think an insurance company would require if you have to do this? We'retalking about personalized insurance products. We are talking about, let's say,embedding into all different kinds of ecosystems to offer your insuranceproducts. What does that mean for a technology team? Okay, so let me change myhat. So that's a tech hat. And this is something which is bread and butter. Butall insurance companies are data companies.

28:31

Okay. Why? Because you have a customer for 30, 40 years. Youhave to keep the customer data for 30, 40 years going forward. So what isimportant is how the customer is, how is he progressing in his life? You needto keep a complete track. Yeah. I see insurance as a core data product. Okay.Offered through an API. Okay.

28:59

That's what we will see it as in future. The more you seeinsurance as a data product, automatically we will see more personalizedinsurance going forward. And then offered through the API means you would beable to embed it across. So that's what I mean. Data and API are extremelyimportant play in insurance industry. And API doesn't mean...

29:23

just a product right i should be able to offer multipleproducts as well yeah right if i'm offering uh and i i presume this wouldshould happen very soon is if i'm offering a customer health insurance for oneyear i should be able to offer him why don't you ensure your life also with meand i'll keep renewing your health going forward and each of the products wouldcross feed each other from a data standpoint

29:51

which is again more personalization which is obviously morepersonalization if I know his health conditions yeah I can bring down hispremium for life correct or I can take a better risk underwriting for him yeahfor his for his health if I yeah if I know him from a very long time yeah rightso that's that's what I say

30:13

what is important from a data standpoint. We will see a lotof technology coming in, especially med tech area in insurance going forward.We may not need to go for invasive tests in future, unless required, reallyrequired, you're in the high-risk category. We may not need to. A lot ofinsurance companies have started. I'll give you an example. I just did...

30:43

test for my BP, heart rate, et cetera, by just looking atthe camera. And that's how it is. I answered a set of 10 questions. I look atthe camera for two minutes and my basic vitals are there. I'm identified as anon-risk category. My insurance is done. If I'm identified as a high-riskcategory, then probably I'll have to go and visit a

31:13

PathLab and go ahead and do a bit of more invasive testing.But at least I would have eliminated a large percentage of friction in theentire insurance buying journey. So that's how MedTech is going to. More andmore PathLabs are going into people's home than people going to PathLabs. Weare seeing devices and I saw a very interesting device of late.

31:41

briefcase devices which are coming up in which yourtechnician can just walk into any home, do a set of basic tests, starting fromlipid profile to blood test to other tests straight away. And it's just aquestion of 15 minutes. He has a report in front. Yeah. And once he has thereport, you can ensure him from a health and a life standpoint very easily.

32:09

So that technology is also bringing down the friction ofbuying insurance. Yeah. So there is so much, I think, hope around. And what youmentioned, I think, if that technology is already working, where just throughthe camera images, we can actually predict the pressure and all. I know of twolarge insurers. Yeah. Who are using it? Who are using it. Got it. And have thepremiums come down? Instead of, let's say, doing a carpet bombing, have westarted?

32:38

doing more pinpoint underwriting. We've just initiated this.So it will take a few more iterations of model development. So when you arebuilding such a model of underwriting, it will take some more time till wegather more data about the customer and the model gets a bit more intelligent.And then you will see large differences coming in premiums. Got it. So sincewe're talking about data and APIs and all, I also want to touch base on

33:06

What do you think the next one decade, how the acquisitionchannels would actually split? So between, let's say, your agency channels,brokers, API, or digital, what do you think would be a typical split 10 yearsfrom today for an insurance company, let's say? What would be a typicalpercentage split for these acquisitions? Very difficult to predict, but I seethat in future we will have one.

33:34

advisor going to the customer he would do protectioninvesting financing and advisory for for the customer oh is it yeah so he woulddo everything all the products i don't need to talk to an insurance agent thentalk to my relationship banker in the bank and then i have to go and take anadvice advice from someone else and then for my investing go to another app orsomething and invest in a in a

34:03

in a wealth product, all happening through different places.I see that it's happening only on one single interface through one singleperson. Do you think that single interface, would that be a person or wouldthat be digital? It depends on the amount of money you have. Who? Sorry, who?As a customer. As a customer. I thought the bank or the insurance company. No,it depends on the amount of money you have as a customer.

34:31

Will you have it through a bot or will you have it through areal person? Yeah, that makes sense. Or will you have it through a person whois advised through a bot? Yeah. All three models are available. That makessense. And Rohit, one more thing. So the trend that we're discussing for thenext one decade, do you think there will be significant difference betweenIndia and rest of the world? I see that there will be...

35:00

Fundamentally, financial flows are very similar across theworld. It's very, very similar. I touched upon this at the start, but bankingis very similar for an ASEAN country versus a very developed nation versusIndia as well. India has some unique challenges. One, linguistic challenge isthere.

35:30

Number two, Indian challenge is with respect to culturaldifferences. You won't find this cultural diversity except for continents, forexample, Europe. India also has challenges with respect to its physiology interms of there are mountains, there are plains, there is different weathers.All this is because the customer needs.

35:59

And customer preferences changes with this. What I'm drivingat these parameters is how customer needs and preferences change. In a singlecountry, that diversity is the challenge that India has and how it will bedifferent for any other financial market versus US, for example. Which has verysimilar, very, very similar

36:28

cultural, linguistic, you know, differences which are hardlythere in the US. So those are the places why India is a very differentfinancial market. Yeah. It's a very different financial. Fundamentally,obviously, the flow of money, the movement of money, the trust, those pieceswill remain the same. Those pieces will definitely remain the same. And I'mwith you on that particular point because we recently did a...

36:54

research report in terms of comparison of regulatoryevolution between India and US. And we could see that there was so manysimilarities and differences actually. While you are absolutely right in termsof consumer needs, that might be different. But the frameworks which areactually governing them are largely similar in nature.

37:14

Only the terminologies might actually be different betweenthe geographies. I want to hop on the fact that the cultural differencesbetween the Western part of the world and the Eastern part of the world isstark. Western part of the world, and money is about culture. That's where I'mcoming from. Money is absolutely about culture and trust. So Western part ofthe world is very transactional. The Eastern part of the world.

37:43

Japan, China, even India is very relationship oriented.Yeah. So that's the key difference between the two sides of the coin. Samecoin. I agree. But two different sides of the coin. Yeah. So Rohit, beforepeople start blaming me that financial services is a boring topic, we have kepta small rapid fire around for you. And then we'll switch gears, come back tothe more serious topics again.

38:11

But this is a rapid fire round if you're okay with that.Shoot, shoot. Yeah. And there are no, there's a few questions that we havejotted down about close to 10. There are no right or wrong answers, butaudience is free to judge you for your answers completely. Absolutely. As it'spersonal, it's fine. All right. Okay. First question, in your opinion, whatwill disappear first? Paper checks or passwords? Passwords.

38:38

Okay. I thought you'll say paper checks. Everybody isyearning to get away from password. The need to... This password overhang onpeople's brain is becoming too difficult. You're having apps to manage yourpassword. So they have to disappear first. You're saying this is the moststrong need. Yes, this most strong need to remove passwords. I don't know whywe are still with the archaic technology of passwords. Correct. Okay, next one.

39:07

What is a better perk? Free lunch or no legacy code? Nolegacy code, obviously. Free lunch we can swiggy. Okay. Next question. If youcould automate one task in your daily life, what would that be? I want tobe very mindful of all the tasks that I do. I don't want to automate anything.Probably just make my coffee. That would be best, which could be automated.Coffee made and served to you wherever you are. Yes. You need a robot then,right? Yes. I am a believer in mindful action. So I would rather not automateeverything that I want to be. Great. Okay. Next question.

39:55

Would you rather have coffee with a coder from 2005, year2005, or a banker from year 2040? A coder with 2005. I want to learn from hismistakes. Okay. I want to learn from his mistakes and learn how a lot of goodcoders were there. When we used to code in early 90s and early 2000s, we usedto code from scratch. Nobody codes from scratch nowadays. It's exasperatingsometimes.

40:24

Because people are just picking up pieces of code from StackOverflow or ChatGPTs and then, you know, stitching it together. ChatGPT isactually changing the rules now completely. I don't know. People are using lessof their minds and more of ChatGPTs. That's the concern I have. As long as theyuse ChatGPT intelligently and not to become more lazy in their intellectualthought, it's good. Got it. Okay. One technology from the past.

40:53

that you are secretly glad is gone now? Oh, that's adifficult one. But frankly, I used to use a lot of devices earlier, which areall bundled into my mobile phone now. So a digital camera. I used to have oneclunky looking electronic diary where I used to have phone numbers. And then Iused to have...

41:19

Some three, four things were all bundled into a phone. Ithink that's something which I'm glad it has happened. Got it. Between thesetwo, what do you think is more futuristic? A self-driving car or self-approvinginsurance policies? Self-driving car. Risk cannot be self-approved. Got it.Next question. In financial services, what is more challenging?

41:48

Migrating to the cloud or migrating a mindset? Migrating amindset. Ask a technologist. He will always say that. We have a lot of Ludditesacross. People who don't believe in technology. People who are so averse tochange. I'm really surprised. Even technologists themselves are sometimesaverse to change. And it's very dangerous. A changing mind is the healthy mind.Makes sense.

42:17

Okay, next one. Which technology term is most overused infinancial services? Disruption or synergy? Disruption. Oh man, this word I'vebeen hearing from childhood now, I think. Got it. Okay, so if fintech were asport, which sport would it be? Chess or Formula One?

42:39

Formula One, obviously. Okay, what about insurance?Insurance would be more chess-like. Got it. Okay, so with that, we wrap up ourrapid fire round. Thank you. We'll come back to our original set of topics thatwe were discussing. And I think we were talking around digital globally, howthings would move India and the rest of the world. So I'll just come back tothat topic itself. In insurance specifically, what?

43:08

We have seen globally, there are a lot of digitaldistributors that have come up. And I'll just call out some names. So there isLemonade in US now. There is Bowtie that we have seen in Hong Kong, WeShore inChina. So from your perspective, what do you think would be a strategy for aninsurance company going forward? Would it be more like that? Let's partner withthese people and use them as the distribution channel or build your owndistribution?

43:38

sorry, build your own digital distribution yourself? So aspart of a large banking conglomerate, we would rather do that ourselves. But Iwould not limit it to that. You know, from a lot of insurance companies arealso piggy banking on distribution channels like this. And India also has theirown, you didn't mention them, but I think they are also there and doingextremely well.

44:06

And all insurance companies are using those distributionchannels as well, which is helping us. Just that we need to ensure that thedistribution channels reach the bottom of the pyramid in India. We have notbeen able to do that yet. Got it. And so what another trend that we are seeing,again, going back to Lemonade example, we could see that Lemonade calls itselfan insurance app. So if you open their website, it would say the insurance app.

44:36

So the next decade, would it be from a consumer's mindsetperspective? Would it be more around an insurance institution or a company orwould they start preferring more like insurance apps in the coming age?Insurance, specifically life insurance, is a low engagement product. It's verydifficult to engage the customer for a long term because you have a 30-year-oldtenure with a customer or a large decades-long tenure with the customer.

45:06

I think it's more important to be ubiquitous and availablewhenever he needs it as an API, not as an app. And available wherever he needsit or wherever his preferred go-to digital medium is. And I'm again referringto WhatsApp here. I'm referring to his banking.

45:33

digital channel, whichever his preferred banking digitalchannel is, or if it's transaction platform, whichever he is, so you embed inthat transaction platform, whichever there is. So the more and more I'm hearingis around embedded as a trend, I think that we'll be seeing, right? Yes,absolutely. Embedded financial services everywhere, wherever the user isactually interacting. Right.

46:00

Got it. So on that theme, actually, Tesla recently launchedtheir real-time insurance. So you can actually, with the press of a button inthe car, you can get your car insured. And there are a few insurance companieswho have actually partnered there. What do you think? How long it is before Ineed a Tesla first or a similar car, but how long it is before in India we canstart doing that? Or do we even need that? In Bharat, do we even requiresomething like that? Yes, why not?

46:28

We should have that variable insurance as such is anextremely important product. And I should be able to sensitize it and do it fora specific transaction and in real time. What we need is better data for this.What we need is better connectivity in terms of APIs with that. These are twospecific needs. How long will it take?

46:58

to get the data cleansed is the biggest hurdle in my mind toachieving this. But do you think who would lead this? Would it be led by anauto manufacturer like Tesla? Or would it be led by any shorter? It would beled by whosoever has the biggest amount of data. It could be in this case, ifwe have a software-defined vehicle available and can connect that data.

47:26

with an insurance product, it could be the software-definedvehicle in that case. Software-defined vehicle is a very specific concept whichis coming up, which is marriage of an IoT, Internet of Things, along with asoftware application layer on top of it, which will actually generate a wholeset of data. And that data can be definitely used by financial services. Well,that's a great point, actually. Whoever has the data would actually...

47:56

lead the change. And in India, the biggest amount of data iswith the banks. But what about changes like the UPI apps that we have now,right? So they hold a huge amount of data. What type of data does a UPI apphold? It holds only payment data. And the tenure of that data is still recentas compared to a bank. So that's why it'll take some more time for the...

48:25

payment data to be useful. The payment itself has anotheraspect of, you know, there's a lot of P2P payments which are being done inIndia. It is not business-led payment. So that data may not be immediatelyuseful for us going forward from risk underwriting standpoint. Makes sense.Okay, now I want to talk a bit about the DPI.

48:52

All the government efforts that are being undertaken interms of, I think, several objectives that they have, whether it is BIMASUGAMthat has come up or ONDC Financial Services, which has both the insurance aswell as the banking aspects in it. So I have two questions for you on this. Oneis, is financial inclusion the key goal for these DPI initiatives?

49:17

So I'm thinking about a country, let's say, where financialinclusion is not the key goal. Something like a developed country, which mighthave a different priority. Would DPI make sense for those countries? So beyondfinancial inclusion, is there something to it? And second, what do you thinkhow big these initiatives would become in the coming decade? So digital publicinfrastructure is the need of any country across the world.

49:46

Okay. Right. One of the goals of digital publicinfrastructure is formalization of economy, specifically in countries likeIndia where economy is not formal. Money flows in non-formal ways. Yeah. Right.But in formal economies, they have silos. They need to interconnect. That'swhere they need digital public infrastructure. Got it.

50:16

How big this will be is still to be seen. I see onefinancial regulator going forward. And that financial regulator would be ableto bring down the siloed approach that we have across financial services, notin India, but across the world as well. And we will be able to offer thecustomer all his financial needs at one interface. That is extremely important.

50:45

That is extremely important. Technology is there. It can beenabled very easily. So that's a slightly different view that I'm hearingtoday. Because if you look at just RBI as the entity which is governing inIndia, if you look at US as a geography, you would have FDIC, which is oneinstitution. Then you have CFPB. And there are two, three institutions whichcollectively govern the banking system.

51:15

And you're not talking about a scenario where even bankinginsurance and mutual funds, etc. would come under the single umbrella, which weare not seeing in those kind of geographies. Any reason you think there arestill differences between India and US, the way the two are being approached?And in future, would US also think in a similar manner? Would there be a needthere also to converge? Because the financial products are converging.

51:44

My insurance is also in part an investment product. Mylending has insurance built on top of it. So products are converging. Theregulators have to think through all the aspects together. And that's why I saythis. I would not have made a studied comment if I would know the US regulationindustry as much.

52:14

But I think we should definitely look at a cross-sectorfinancial regulator, which is extremely important. Makes sense. And since we'retalking about regulations, there is a recent regulation about Data Privacy Actthat is coming up in India. How is your company and how do you think is theindustry preparing for it? Is there anything special that we...

52:43

we are all doing or is it something that we anyway have beendoing all along as financial institutions? Data privacy has been my pet peevepersonally for me and I think I've been vehemently trying to push it forward.Given a choice, I would be a bit strict in implementing it. It has to happenfrom a consent layer standpoint.

53:11

That means the consent has to be very clearly given by thecustomer. And that is the first step that we are looking at. Second is maskingof private information and need-to-know basis only within the organization. I'mgiving you inside the organization. From an industry standpoint, it isimportant to ensure that the data privacy of my customers are honored.

53:39

I don't want my customer to be known by an X number. That'swhat it is. And the way we are going forward with this is we are almostcreating digital clone models of each customer going forward, which is a verydangerous situation. Your large players, e-commerce players,

54:09

such a vast amount of data that they would have a clonemodel by cohorts of your residential pin code available to them. This pin codeor even this specific residential locality, even granular than that, this is atypical need of that customer. And this is how a digital clone would look like.This is what he will buy. This is when he will buy. This is the previoushistory.

54:38

That's how they would typically do that. Issue with dataprivacy is, one is your personal identifier information. Second is youranonymized data. And that is something, this is where I'm coming to. I thinkdata privacy is something that's been addressed and a lot of people havespoken. But what has not been thought through completely is the...

55:06

anonymized data and how easily anonymized data can bemisused by large platforms, right? By creating digital clones of customers. Idon't want to be my persona to be cloned without my consent. Yeah. The law issilent on that. Yeah. Still. And I read a recent report on

55:33

this aspect only I think the digital twin angle that youspoke about so it was around that for example if I want to stay very private sowhat all typically I would do let's say I start using private browsing in mybrowser I start start using certain kind of settings in my laptop Now,what tech companies have started doing is they've started profiling me on thoseaspects. If this is a person who is using private browsing, has these fiveprivacy settings turned on, then this is a person who is extremely specificabout privacy and security. And then they start profiling me in that manner. Soas a consumer, I'm kind of in a mess in both the situations, whether I want toprotect or if I don't want to protect. I've been using DuckDuckGo from lastfive years as a go-to search engine.

56:22

But still, it's extremely difficult. It's the same phenomenathat you see on your phones. Even if you have not subscribed to the app in thephone, which identifies your phone number and name, still, if somebody hastagged you in, your data is out. Your data is out. For the sheer reason yourISP knows that maybe you use DuckDuckGo, if they know that, or if your laptophas profiled that you use DuckDuckGo, that basically means that you aresomebody who is very extremely cautious about.

56:51

Privacy. That gives away your personality. So I think in adigital world, it's a challenge for, I think, our generation. Privacy is nolonger there, one. Number two, you can't erase anything in internet history.These two are areas which are extremely... We don't know the repercussions ofthis in a digital world. And when I talk about digital culture, I talk aboutthese two things extremely...

57:21

I'm worried about these two things, frankly, for my nextgeneration. For example, we just click photographs of streets and post it onthe digital mediums. Who gave you consent to post a business house or a personwalking on the street? Or even your own child. You're creating a digitalhistory of your child without his consent. So privacy has very differentconnotations.

57:50

From a financial world standpoint, I think as long as wehonor his privacy, his financial transactions privacy, is what we have to focuson currently. I don't know where the other conversations will lead to. The restof the one is difficult. So even if DPDP, once DPDP comes in force as a law,and even if all the financial institutions actually apply, still the...

58:11

the question of digital privacy would remain there since thedata privacy act takes care of the consent layer it takes care of the privacyof your data how it is maintained measured that is done but the deeperquestions are still not answered so coming back to the i think the the questionof trust maybe this could be another business model for hdfc once you have beencertified for trust and for dpdp maybe you launch your own browser

58:41

Would that ever happen? That's quite a guess. I can't guesson that. Because if I can't trust, let's say, large tech companies, and I stilltrust my bank, would I start trusting them for my software needs? Would thatever happen? It could happen. I can't say yes or no to that, but yes, it couldhappen. All right. Okay, so I have last question for you now. We talked a lotabout, I think, how the evolution has happened and what is going to happen,but...

59:11

Today, how is your team structured in terms of technologyteam? What are several components of technology team that exist in HDFC life?And have you seen any change in the last one decade? How the teams haveevolved? Any skill sets that have changed? And do you see any trend changing inthe coming years? Yeah, so there have been quite an upheaval in terms oftechnology team structuring.

59:38

Pre-COVID, post-COVID, multiple technologies which have beenintroduced. All the three reasons. So post-COVID, what I'm looking at is hybridwork culture, which is there. But more and more technology teams are preferringto work in one location, specifically. My favorite line is rockets are notbuilt in remote.

01:00:05

You have to be at the launch station to build the rocket. Soif you're doing some routine maintenance, production support work, you can workout of remote. Or if you are an individual contributor who has a very definedcontribution, scoped out clearly, you build your thing and move out. But youwill never get that sense of ownership of building the complete piece if you'rein remote. So that being said, I think...

01:00:32

The organization that we have are slowly evolving to be inp-pods going forward. And these p-pods are self-sufficient in terms of product,in terms of technology, and also in terms of building the UI UX also inside thesame p-pod. So we have...

01:00:58

a pod for a specific product or a customer or a segment,whichever way we would like to. And we handle it end-to-end for thatrequirement in the pod itself. That's where we are going from a teamstructuring standpoint. Got it. And more and more towards open seating. Openseating. Open seating. Okay. Yeah. That's also...

01:01:25

extremely important you know people get attached to thechairs and so just sit open open conference room open seating that's soimportant it's extremely important can there be a counter to that also becauseI've seen a lot of people actually experimenting with open offices and thenlater they would also say that this is also I think they get distracted bypeople constantly

01:01:51

So, you know, it comes with sense of responsibility. Youhave to adhere to the social norms of open seating. At the same time, it has tohave a balance. There are conversations which need to happen inside a closeddoor room. That needs to happen. You'll have to have that. Doesn't mean openseating, doesn't mean zero rooms. Understood. So great, Rohit. Just lastclosing thought.

01:02:20

uh from you so if you just have to give one piece of adviceand again you can wear your cto hat so if you have to give just one piece ofadvice to the cto and cio of let's say an insurance or a banking company who isbuilding today for the next one decade what would uh what would that be i thinkit's extremely important as a technology leader to have a decadal thought thinkin decades do not think in two years three years right right

01:02:48

And try and see which technologies will... Technologies willchange. Technologies will change every generation. And technology, onegeneration is three years. So they will change in three years. But still yourthought process should be there for one decade. So if you want to do anythingtransformational, you'll have to look at what would happen in one decade. Whatkind of products would be there? And would what you're building right now holdwater?

01:03:17

after one decade or not. So that's a clear ask from astandpoint. Also keep a very close eye on how as a technology leader, itbecomes very easy to focus and close your doors into under the hood technology,right? You'll have to keep a very good eye on business as well in terms ofwhere the business is moving on to, what the trends are to marry yourtechnology along with the business trends which are coming in in the future.

01:03:47

Great advice, Rohit. And I think it ties really well to,since you talked about a long-term vision and a decade-long vision, it tiesreally well to our podcast topic since we wanted to talk about how banking isgoing to evolve by 2040. That's what we are trying to understand from all thepeople that we get on the podcast. I really loved having this discussion withyou. Thank you so much for spending your time and coming here and having thisdiscussion with us. Hope you also, I think, liked the format and...

01:04:16

I think whatever we discussed today. Thank you, Nitin.Pleasure having you talking to me. Thank you so much. Thank you.

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