K Paul Thomas, MD & CEO, ESAF Small Finance Bank:
Ravi Lalwani: The BFSI sector is rapidly shifting toward more personalized and digital-first financial services. What specific advancements or strategic changes does your organization plan to implement by 2025 to meet evolving market expectations? Are there particular markets where you aim to expand your presence or market share?
K Paul Thomas: We are committed to fully transitioning to digital automation and data analytics by 2025. This journey has already begun, with the ongoing migration to our new core banking system (CBS), Oracle Flexcube, alongside the transformation of key peripheral applications. This shift will significantly enhance customer engagement and enable data-driven decision-making.
From a broader perspective, this transformation will reshape the bank, evolving it into a more agile and future-ready entity, accelerating our progress toward our goals.
In addition to targeting unbanked and underbanked customers, we are also focused on attracting new-to-bank and new-to-banking customers, expanding our customer base and strengthening our market presence. Geographically, we plan to further extend our footprint beyond Kerala and Tamil Nadu into new regions in the North and North East. Furthermore, we are actively diversifying both our product offerings and customer segments, ensuring we meet the needs of a broader, more diverse audience and reduces concentration risk.
As you set financial goals for 2025, could you share specific targets, such as revenue growth, customer acquisition metrics, or cost efficiency ratios? How do you plan to leverage key market segments – like real estate, SMEs, or agriculturists – to reach these milestones?
We have established clear targets for business growth, customer acquisition, and cost-efficiency ratios. We aim to diversify our loan portfolio by building the secured assets book with an ambitious target to reach a 50% asset mix by 2027.
We have dedicated business units focusing on key segments, including agriculture, MSMEs, and mortgage. Additionally, we are developing more differentiated products and processes, and have a skilled team in place to drive these initiatives. Our branch teams are also fully trained to meet the evolving needs of these segments. To enhance customer accessibility to finance, we offer hassle-free Gold Loans, Vyapar Vikas Yojana Loans, Micro Enterprise Loans, and QR Code-based Loans. These products will be strategically leveraged across our target market segments, supported by digital marketing and other ATL/BTL platforms to ensure broad outreach.
Furthermore, we are focused on graduating existing MFI customers to a wider range of products and services beyond microfinance, further deepening customer relationships and fostering long-term growth.
Given the rapid digital transformation in BFSI, can you specify which technology initiatives you plan to prioritize by 2025? What are your key milestones, and how do you plan to measure ROI in terms of operational efficiency or customer satisfaction?
As mentioned earlier, the bank has already embarked on this transformative journey. We are actively selecting advanced tools that will enable us to perform underwriting and real-time data analytics powered by AI. This transformation is expected to be completed by mid-2026, at which point it will significantly enhance both our business capabilities and operational efficiency. With personalized underwriting driven by comprehensive behavioral data, we aim to deliver a truly tailored experience for our customers. Ultimately, our goal is to achieve joyful and complete customer satisfaction, which remains the cornerstone of our efforts.
With customers increasingly seeking personalized, on-demand financial services, what innovative solutions or digital experiences (e.g., self-service portals, virtual assistance, or app-based financial planning tools) are in the pipeline to enhance customer experience by 2025? What metrics will you use to assess the success of these initiatives?
Yes, we are committed to meeting the growing demands of our customers. We currently offer self-service portals such as WhatsApp banking and are all set to launch the chatbot with AI capabilities. We have plans to enhance these services as part of our ongoing digital transformation project. At present, we are using virtual assistants for re-KYC processes and plan to extend this technology to other core areas in the future. Additionally, we are in the process of upgrading our mobile app and Internet Banking to further enhance the customer experience. The key metric we use to evaluate the success of these initiatives is Customer Lifetime Value (CLV), which helps us measure the long-term impact of our efforts.
As cybersecurity threats escalate, how is your organization strengthening its defence mechanisms? Do you plan to invest in specific technologies (like zero-trust architecture or AI-based threat detection) or achieve industry certifications by 2025? Could you also share any KPIs related to data breach reduction or customer data protection?
We have implemented stringent information security and cybersecurity policies, aligned with international standards such as ISO 27001 and the NIST Cybersecurity Framework. We are proud to be ISO 27001 certified and are rigorously following the NIST framework – Identify, Protect, Detect, Respond, and Recover.
For the Identify phase, we operate a 24×7 Security Operations Center (SOC), equipped with advanced technology, robust processes, and a team of skilled professionals. We also have a strong governance, risk, and compliance framework, fully aligned with the cybersecurity requirements outlined by the RBI, SEBI, and the IT Act.
Our awareness initiatives encompass the entire spectrum of stakeholders, including the Board of directors, top management, employees, customers, vendors, and service providers. In addition, we maintain an active social media presence to promote cybersecurity awareness and utilize local-language SMS to ensure broader outreach. Our technology products are designed with resilience in mind and undergo a thorough risk assessment process prior to launch.
To reduce the risk of data breaches and ensure customer data protection, we have implemented data leakage prevention technologies across multiple layers, including endpoints, network perimeters, and email solutions. These measures ensure that data is encrypted both at rest and in transit. As part of our new initiative, we are also introducing Zero Trust architecture and AI-based threat detection to further strengthen our security posture. For key performance indicators (KPIs), our Security Operations Center (SOC) continuously monitors data transfer both within and outside of our systems. Content is blocked based on factors such as size, nature, sender policy framework, and receiver domain rating. These parameters collectively ensure that data leakage is effectively prevented. We have established rules to prevent unauthorized data transfers or leaks, and a comprehensive approval process is in place to assess and mitigate risks associated with any data movement.
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