CxO of the Week: Khizar Momin, CTO, Indian School Finance Company

Khizar Momin leads the transformation by stitching together the complex financial ecosystem of schools, end-consumers, partners, fintech and employees at ISFC. He has more than two decades of hands-on experience in creating and developing IT infrastructures invaluable for the digital lender. He has led many digital and technology transformations, built enterprise-class IT systems, modernized the technology infrastructure, and helped organizations implement security standards like PCI DSS. Khizar has implemented ITeS systems across diverse industries including NBFCs, Credit Cards, Auto manufacturing, and IT services. Previously, he held leadership positions across American Express, Bajaj Auto, Bajaj Finserv, and Cox & Kings Financial Service alongside others, wherein Khizar created and implemented digital strategies and technology roadmaps with finesse.

“Digital Transformations, technology consolidations, greenfield IT set-ups and Business Process reengineering has been the key roles during my stint with organizations. I had the opportunity to work on very aspirational projects of companies across industries like Credit cards, BFSI, Automotive and holding companies. Fastest project deliveries, standardization of processes and measurable business outcomes against IT investments are some of the successes. I believe in working smartly, coupled with hard work. I have always kept working on one piece at a time and milestones reached naturally,” states Khizar Momin, CTO, ISFC.

Read his interaction with CiOL, on the fintech industry on the ongoing series CxO of the Week.

How has Covid-19 accelerated the transition to digital for the traditional financial industry? What will be the new normal in the industry?

The theme of Digital always has been paperless, touchless, Do IT Yourself or self-help. COVID19 has mandated the restrictions of physical interactions. Due to this forced synergy, the financial industry has no alternatives other than Digital. The regulators and governments have been consistently introducing and encouraging the Digital form of interactions. Technological capabilities like India stack, payment gateways, bureau, E-NACH and other ancillaries have been around for a long time and fairly matured.

The recent introduction of video KYC added to the scheme of things to completely digitize the customer journeys. For traditional paper-heavy business-like Mortgages, there have been enormous third-party integrations available that can make the process paper-light and cost-effective.

While all of the Digital was available for the financial industry, the industry has been struggling to break the chains of traditional thinking and coming to terms with new Digital reality. Organizations had intentions, but the adoption was very slow. Often, the business process did not re-align to leverage the new Digital. Thus, companies replicated the old paper-based ways resulted in the retention of physical interactions with customers, even without compelling reasons.

Due to COVID-19, the entire industry pushed the adoption of Digital. With no choice, everyone in the industry has started re-inventing the processes and reorganized everything around Digital. With the uncertainty of going back to normalcy and pressure to build a sustainable organization, Digital will become the new normal for the industry. A tremendous amount of work is being done on Digital in the last 12-18 months, many success stories are likely to emerge out of it.

What, as per you, are the five important things that Fintech should be looking at today?

FinTech companies have been at the centre of discussions when it comes to Digital. Many companies looked up to the FinTech companies to do the prototypes before adopting technology. Post COVID-19, businesses are increasingly pushing forward the idea of digitisation. This means FinTech will have to go beyond leveraging the latest technologies and trends. The FinTech’s should re-look at the way of working and re-invent themselves. A few areas may be of importance;

Strengthening Financial Skills

Often, Fintechs’ doesn’t match the Credit-underwriting, collections and operational skills like that of the traditional lenders. Inadequacy of such skills will force FinTech to use the traditional processes and they may not be able to create any differentiation.

Integration of intelligent fraud controls

With the widespread use of Digital and fewer physical interactions, integrated and responsive fraud control mechanisms (Early warning systems, real-time alerts and decisions) will be an aspect to focus on.

Complex financial products

FinTech should cater to traditional paper-heavy and complex products like mortgages. The engagement should go much beyond the retention of customers’ throughout the lifecycle. This is one of the pain areas in the industry and Fintechs need to solve it.

Speed and Co-creation

Many FinTechs are building capabilities for their needs and many end up replicating similar capabilities. Co-creating can help in bringing the speed of addressing complex market needs.

Rural reach & use of vernacular

A large segment of customers are under-schooled and not very well connected. Thus, banking with them is often left out of the ecosystem. Lack of bureau or banking data makes it difficult for institutions to connect them to mainstream financial services. There is a huge potential and FinTech should focus to stitch them together into mainstream banking and finance thru innovative methods.

How can small financial players overcome the challenges faced while adopting technology into their business?

This has always been the topic of discussion and there always have been ways. One primary challenge put up by small financial players is the cost. Open-source technologies, cloud solutions, low code platforms and third-party integrations are the solutions. A cost-effective development partner complimented with the business skills of the small financial players can overcome the challenge. Cost effective-technology partners will lack the business skills. Thus, a small financial player must fill the gaps, or they will end up onboarding Tier-I players. The latter may not have Techno-Functional expertise and also may not be viable for small players.

One more challenge faced is the CBA for technology use. Usually, companies assign this task to an internal resource. But the outcome may look very different when a company hires a professional to do the job. A smaller financial player needs a leaner manpower structure and leveraging the right technology in the right areas can solve the challenge.

How will work-from-home lead to a paradigm shift in the IT industry?

IT industry always had the option of work from home. Many BPOs, development and research centres are offshore and in distant-working mode. IT teams usually are also well equipped and adequately skilled to work from home. Further, smaller teams like solutioning, designing and architects will need different set-up and frequent interactions. Communication and collaboration tools have been rapidly improving. With the adequate controls over systems, tracking and monitoring of the performance of staff and assured deliveries which IT teams were able to make during the pandemic, the work-from-home has the potential to become the de-facto norm for the IT Industry.

The work from home decision hinges on the leaders of the organizations. Many non-IT organizations have the opportunity to recalibrate the resource based on traditional and WFH needs. A very few companies have actively thought-through and created policies around it. But many are on the verge of missing it and may drag the workforce into the old ways of working.