How India’s Tata Capital is expanding its digital footprint

For many people, there is a big difference between how loans and money worked in the last decade and how they work now. From credit assessments to loan approvals and management, the trinity of automation, digitisation and democratisation of financial services is manifesting in a strong way.

According to a Boston Consulting Group report, the digital lending space will turn into a $1tn opportunity in the next five years, thanks to financial services platforms that cater to underserved individuals and small and medium-sized enterprises.

Mani Mulki, the CIO of Tata Capital, is at the centre of it all, leading digital transformation efforts at the financial services arm of Tata Group, one of India’s largest conglomerates. He is already using voice assistants, WhatsApp messaging and bots to reduce friction and amplify experience for customers.

In an interview with Computer Weekly, Mulki talks up Tata Capital’s digital transformation strategy and why he thinks artificial intelligence (AI) and open banking are just around the corner.

What is your digital transformation strategy? Has it changed drastically after the pandemic? What IT initiatives can you give us a peek into?

Mulki: Our digital strategy has always focused on the customer whether he or she is being served directly or through our field force, distributors, or distributor-managed agents. Over the past two years, our digital engagements have increased significantly. We have also migrated a lot of branch walk-ins and voice calls to self-service on our portal itself. We have also kept abreast of the customer’s current preference of channels and experience.

Can you share any specific examples of that?

Mulki: Sure, our instant servicing through WhatsApp lets customers make service requests regarding statements, overdue payments and loan applications. This has been very well received by customers and we’ve had over 100,000 service requests within four months of its launch. We are also tapping virtual assistants like Amazon Alexa and Google Assistant to deliver our services. This was a first for a non-banking financial company in India.

Our TIA chatbot is another good example that serves customers across various platforms. Before the launch of TIA on WhatsApp, our customers were served through our website and mobile apps for Android and iOS devices. With TIA on WhatsApp, we have further differentiated its offerings and enhanced its ability to service customers instantly.

Do you intend to build on this momentum?

Mulki: Absolutely. We will continue to focus on making the engagement with our customers more seamless and frictionless through aggressive and widespread adoption of digital technology. Besides increasing its share of revenue, going digital has also helped us to significantly reduce the turnaround time in addressing customer requests and queries.

Why is technology so crucial to the industry you operate in? Any examples of how it has created strengths and unique selling points for the company?

Mulki: Being in financial services, aggressive and widespread adoption of technology and digital will be the key to differentiate ourselves. Technology is a crucial component in reimagining customer journeys, simplifying processes and creating new platforms and channels for customers to engage. It is imperative to always have the customer at the centre of any technology and digital strategy. Over the last couple of years, we have launched a plethora of apps and digitised many service components to ensure that the experience of the customer is seamless and frictionless. The result has been fabulous.

Can you elaborate on some areas?

Mulki: Today, for personal loans, for example, 20-25% of the business is sourced through digital channels and for some lines of business it’s nearly 100%. More than 60% of services requested by customers are served digitally.

What is the role of technology in the company’s new brand campaign, “Count on us”?

Mulki: The essence of “Count on us” is to deliver on promises that the customer will be always delighted with the experience he or she has with Tata Capital. Over the last couple of years, our digital footprint has expanded rapidly and helped us to reach and connect with a younger set of customers who are best served digitally. Tata Capital’s consumer insights, over a period of time, revealed that “delivering on promises” is one of the most significant attributes one looks for while choosing a financial partner. Moreover, the brand has enhanced its presence in digital and social media and has a growing connect with a younger set of customers.

Do you think blockchain, decentralisation, open banking, and the arrival of big tech giants in the fray, would change the financial industry in a big way and soon enough? How are you getting ready for the disruptions in progress?

Mulki: There’s no doubt that the advent of blockchain, AI and open banking has the potential to dramatically disrupt the financial industry.  Many of the strategic objectives in a financial institution cannot be achieved without a strong and robust digital and technology framework. However, I strongly believe that it is not technology, but adoption of technology that will differentiate an organisation.

People often read and treat “digital transformation” as a single term. They are in fact two distinct terms. Digital or technology means putting in place the necessary technology framework be it AI, blockchain, application programming interfaces (APIs)or bots to enable an organisation to change its business models, improve operational efficiency and enhance customer service. Transformation is all about doing it and herein lies the difficult part.

How so?

Mulki: It essentially means questioning the status-quo and dramatically changing business behaviour and processes which just cannot happen unless the top management has truly bought into the transformation exercise. Any disruptive change, especially one enabled by technology, must be owned and driven in a top-down manner.

At Tata Capital, digital transformation is a key thrust that’s reviewed and pushed regularly by the group managing director and CEO, and is also monitored by the board. Success is measured purely by business outcomes rather than a technology going live.

Can you tell us more about your recent strides with the Moneyfy app?

Mulki: Moneyfy is a digital wealth management platform that has opened opportunities for acquiring the youth segment who are technology-savvy and comfortable with transacting online, with an objective to enter the mass affluent wealth segment. It aims to be a comprehensive platform for financial planning, investments, insurance and loans, and helps us to be differentiated in the market. 

The platform will on-board users digitally and enable them to invest in funds across products. It will also enable users to plan their financial goals and track their decisions. The platform will also enable them to apply for loan products. We will perform the KYC (know-your-customer) checks by obtaining appropriate consent from the customer and on-board the customer.

Do you see technology playing a stronger role in the new terrain of digital lending and financial technology (fintech) innovation? How can an enterprise tackle the challenges of AI-advisors, bad practices, transparency and tech-heterogeneity? What advancements catch your eye in this space?

Mulki: Technology is not just playing a stronger role but a very crucial role in the space of digital lending. The expectation of a customer today is all about speed, convenience and seamless experiences. And this can only be achieved with the help of a well thought-out digital strategy and execution – whether it is through intuitive apps to help a customer complete his or her transactional journey or conversational interfaces like chatbots, AI-powered voice-bots or in providing an omni-channel experience irrespective of the channel the customer chooses to engage in. 

With so many heterogeneous systems, a digital journey will have myriad touch points and interfaces (both internal and external). It is therefore imperative to have a robust and intelligent backbone that will direct and control the flow of data among various systems.

The use of technology in credit assessment algorithms is also helping non-banking financial firms to significantly optimise their business processes and improve customer experience. These firms are also investing heavily in analytics and AI to, for example, segment target customers and provide differential, and customised services. Finally, rapid adoption of robotics will help financial institutions to automate repetitive business tasks and reduce the cost of doing business.