What is more important than hiring smart people is raising organizational IQ. This topic was discussed in depth in a panel discussion at NBFC’s Tomorrow conclave organized by Banking Frontiers. Edited excerpts:
Panelists
- Prashant Ahire, Group Head – Technology, IIFL
- Jijy Oommen, CTO, Aavas Financiers
- Gagan Singla, MD – Digital Business, JM Financial
- Suman Saurav, Chief Technology Officer, Arka Fincap
- Mohammed Imran Choudhury, Head – IT, Sammaan Capital
- Subrata Das, Chief Innovation Officer, U GRO Capital
- Dr. Suresh Shan, Former Head – Digital Innovation, Mahindra Finance (Moderator)
Manoj: I request each panelist to make an opening remark about the challenges of raising organizational IQ.
Prashant: This topic is quite elaborate because we are trying to put organization effectiveness and operational excellence through digital transformations and adopting newer technology to make oneself competitive enough to sustain business.
Cricket is a good example. When the IPL started in 2007, BCCI has transformed cricket as a game to the passion of the whole 100 crore Indian population. They adopted new technologies – including from VR, DRS, health management, scanning, etc. They have integrated and they are the first in the world. BCCI adopted weather forecast integrated with a match timing. I want to correlate the same with a now our NBFC, where the life, we generally call as a customer life cycle value.
So, the challenge is that our organization must able to develop and align in a such a way that we will able to generate value for our customer. We started our journey like eKYC, video KYC, and today we are operating in the era of the disbursement which is online with 5-10 minutes.
Imran: At the back end, the entire life cycle where you have to bring the IQ of the organizations, you need lots of training and education. To adopt new technologies, we need to incentivize people to make mistakes and learn from them. We came up with a digital home loan in 2015, probably most concentration was going on the front-end side of the customer experience. However, if you see the RBI regulation for early warning systems, etc, that calls for modernizing the back-end system in such a way that actual benefits of the digitalization go to the customer, and that should be 24×7.
Jijy: This is the decade of technology, innovations, intelligence and super intelligence. In the old regime, your organization’s intelligence was the collective intelligence of the people in the organization. The relevance of people has not changed, it won’ change. Having said that, this intelligence is super amplified with the intelligence of technology and data. This is the right time because we have all collected so much data over a period of time and now the innovation is possible with more intelligence coming in. In the loan life cycle itself, during onboarding, sourcing, underwriting, disbursal, collections, customer service, and all, you can put so much predictive and prescriptive intelligence in the ecosystem to raise efficiency for the organization as well as for better experience for customers.
Subrata: I think building org IQ, or collectively increasing our strength towards this direction, means that we are taking many initiatives which are very different from how we did things in the past. There are many challenges here. For example, we take initiatives, but we do not see any returns in the short term. We build infrastructure systems, but we have to incubate. This means that a lot of people who are not necessarily tech persons or data-driven people, but are very strong business people, and they’re adopting things which are new to them. And sometimes there are doubts as our tendency is to look at any change with a certain amount of apprehension. The journey of building org IQ is getting to a stage where our decisions are made by logical frameworks and not by judgments, and they’re made in a scalable way. This is the journey that we are in, and there are those challenges and fears.
Gagan: Some people are very intelligent but they are not intelligent in short term, they take time. Some people are on the spot intelligent. So, IQ is of multiple types. So, in team building to raise organizational IQ, you not only get the best IQ people, says from IITs, but since there are various kinds of IQs, we have built teams where somebody is faster, somebody is slower, somebody solves complex problems, somebody solves simpler problems faster, some people do more innovative problems, some do intricate architecture, etc. So, one thing I’ve seen is that you need to look at IQ from multiple perspectives. Even though in theory there is one IQ quotient, but in real life it is different.
The other thing is that whenever there is a customer who is not happy with you, your team solves their problem, and try to make them happy, but I don’t know how many of us really take the customer input and change our product. So, one of the things that we have imbibed in my company, is that a lot of my product pipeline in the app is built through customer’s inputs only. Customer’s inputs increase organizational IQ significantly. This is one thing that we miss.
All of us want to delight customers, but very few people, try to actually adopt customer input because we have good architects and good product people. Many people want to keep the customer happy, but don’t necessarily want to take inputs from customers. Customer inputs has improved our product significantly, and a lot of my product pipeline for next 6 months is based on customer’s inputs, which I think builds organizational IQ significantly by adding customer in a real collaboration and a real co-creation. It is indeed very tough to do. It took me years to accept that I have to build my product pipeline with customer’s input. It almost hurts the ego, but eventually it helps.
Suman: For me, it’s is how to take the collective intelligence of everyone and put it into a way where it can be disseminated to all stakeholders. The way you can build organizational IQ is to document so that even if a person leaves the organization, you have built a knowledge base which can be utilized every time. One thing that tech has been doing for years now is to have analytic system and data warehouse, and then you disseminate data across organization. This is a top-down approach.
Suresh: How are you simplifying IT to raise org IQ?
Imran: I believe that you have to create a digital factory. That is very critical and important. A digital factory is a roadmap, a framework with inter-functional collaboration to make it success. You should take baby steps to be successful. Don’t go for big projects because the digital world is changing very fast. You should be agile. You also have to have training for the people to understand the digital impact, otherwise everybody is fearful. So, in our organizations, we created a factory, we created a roadmap to come up with a new product, an e-home loan, which is a 3-minute process. To be the first mover in the industry, you must have a top-down approach. Your project plan cannot be very large, it should be very agile; you should be ready for failure as well.
We do mortgage loans, and mortgage loan is a lifetime loan and mostly it’s a one-time customer. Home loans are probably 1% of the GDP. At that scale, people need personal touch. But in 2015-16, we come up with e-home loan which is fully digital till the disbursal. We created the ecosystem in such a way, you get the loan 24×7 from your home, from anywhere, from the mobile. That initiative in 2015-16 has been very helpful during covid times.
Prashant: With respect to the digital transformation as a journey, we have to propel down the strategy and break into the number of pieces to make it achievable. Everybody is trying to convert their business from tomorrow’s angle in a digital savvy way. Everybody is trying to adopt newer technologies, but your organization is carrying some 2-3 decades of experience which is your asset – your product, your processes, your customer. So, my take as a professional is that pull your strategy, make your roadmaps and try to adopt all best in technologies available in the world by collaborating and partnering with a best-in-class breed. You cannot develop everything on your own. But you have your processes, your own strength is with you.
In selecting partners, one important thing is that how they are agile and ready to work the way we are – because some partners give you the out of box solution. We want somebody to work with us and give us a fine-tuned solution as per our need. We have our in-house products – LMS & LOS – so we don’t want somebody to come and tell me to integrate the API and then start working. We want somebody who will stand with us and do the complete journey end-to-end.
Suresh: Which area or a technology do you feel has created a big transformation?
Jijy: We are a leading housing finance company, specialized in affordable housing in rural and semi-urban pockets. If you look at an organization journey in the initial years, you are in the process of establishing yourself. Once you reach a level, a mid-size level, then you are looking at a larger road map. So, about 2 years ago, we stepped back and looked at where do we want to go in the next 10-15 years and looked at every single piece of capability in the organization. Of course, today, tech is an important piece, but it can’t be seen in isolation, it has to be looked at along with the processes.
We did a tech road map planning, looking at a long-term journey and we took certain hard calls. We stacked up bunch of initiatives that we were expected to do over the course of 3 years, and prioritized them. In that process, lot of enablement had to be done for customers to avail services without having to come to us every now and then. So, when we looked at a 360-degree approach, we had 5-6 big ticket items that we had to do, keeping in mind the scalability, robustness, and tough regulatory regime. For LMS, we looked at primarily scalability and the compliance and robustness part and there we have gone for a platform.
Bottomline, if you work cost efficiently, you can offer better price to the customer.
Subrata: In our context, innovation means solving a problem which is largely unsolved until now. In SME lending, how do you reduce the credit gap through scalable mechanisms – that’s what we are working on. In our journey of innovation, we have had to do things very mindfully, so that we build something which is scalable and sustainable for a long term in the future. It involves setting up some infra and then giving it a kind of maturity and skill that supports our growth journey, making us stronger. Number one is setting up the right infrastructure to collect knowledge and setting the right building blocks for innovation to prosper, which means collecting data and building the technology and the infrastructure.
It is important to collect data which is machine readable, which results in learning in the future. If we just collect the PDF file and keep on storing them, then after 3 years, it will be very hard to analyze. Today all our data integrations are API driven. Second, even if you have a large volume of data, it requires a dedicated effort and competency to mine it. Then we ensure that it is transmitted to every part of the organization. I think this also requires dedicated effort – investment in people and skill sets.
The real objective is to make this second nature. I think everybody in the organization has to understand that using data in their day-to-day decision making is actually helpful, so that they just doing it by habit, and not because it is a specific project or something has been rolled out. That’s the second thing.
When I go to somebody and say AI is saying this – that’s one conversation. If I say that it reduces cost and increases revenue, that’s different. The latter approach has helped us to be what we are.
Gagan: Partners are a key part of org IQ. In partner selection, whoever comes to meet you, stop meeting them and meet other people in their company. Because people who come to meet you initially, when you’re selecting a partner, are mostly sales and business development. You have to focus on meeting those people in the partners who are not meeting you at all, because they will meet you after the business starts. So, I’ve always forced my partners to show me the original team. The second thing which most of you may not like, I generally don’t believe in working with those partners who are market leaders. Because if somebody has been able to sell to 80% of the industry, I don’t think that is necessarily the best partner to work with. I have a very reverse approach. The most innovative partner will never be the market leader, is my view. So that is another perspective on organizational intelligence.
Suman: One of the things that we want all of our employees to understand is how all of our policies and procedures have to work. In any NBFC, you’ll have hundreds of policy documents and no one is really ready to read it. So, in the last 6 months, with Gen AI coming in, using AWS Bedrock, we built a simple Gen AI chatbot. We just uploaded all the PDF documents onto a repository. You ask any question on policy or procedure, you’ll get the answer. That has really helped, because the churn in NBFCs is huge. If someone new joins us wants to know what’s the eligibility criteria for loan against property in Mumbai, he can just write one line and he’ll get the answer. He will also get the policy document and the excerpt from the policy document. So that’s building our organizational IQ.
Suresh: Intelligence is an ongoing process, no start and no end. It keeps on going and empowering. Thank you.
Recent Articles:
HR: Soft Solutions to Hard Challenges
Argenta Bank: Digitization is the root for Customer Satisfaction
