Anooshka Soham Bathwal, CEO & Founder of Dhanvesttor, navigates the challenges of costs and skills shortages along with the opportunities of AI and innovation:
Ravi Lalwani: With hyper-personalization becoming the key business objective (supported by a variety of technologies), how is innovation evolving? In what areas is it needed the most today in your industry?
Anooshka Soham Bathwal: Innovation in the financial industry is increasingly driven by the need for hyper-personalization and the adoption of various technologies to achieve it.
AI is becoming a growth catalyst in the financial services industry, boosting customer experiences and operational efficiency. For example, AI-driven portfolio management and automated tax optimization support wealth management. While I firmly believe that human intellect is essential in various jobs, especially in the financial sector, such as portfolio management, I do support the idea that AI can be effectively utilized for time management and streamlining decision-making, especially when you are catering to personalized and bespoke financial services. Decentralized Finance (DeFi) is poised to go mainstream, offering innovative financial products and services that operate without traditional intermediaries, thereby increasing accessibility and personalization, especially in case of digital asset investments. With the increasing digitization of financial services, there is a growing need for robust cybersecurity strategies to protect sensitive data and maintain customer trust.
That being said, I would like to highlight that the type of AI and cybersecurity tools a company can use largely depends on the asset classes they cater to and the kind of innovation and personalization you are looking at. Additionally, completely relying on AI for wealth-management is not something that I can endorse.
Which skills shortages do see easing in the next 2-3 years, thanks to AI?
The integration of AI in financial services is expected to alleviate certain skill shortages over the next few years. As AI takes over routine tasks, there will be a greater emphasis on skills related to strategic thinking, problem-solving, and client relationship management. This shift will require professionals to develop competencies that complement AI technologies. Investment banks are planning to implement AI projects to minimize repetitive tasks performed by junior bankers, allowing them to focus on more value-added activities. Even at Dhanvesttor, our research team uses various databases to perform tasks like data collection and storage, allowing them to focus more on analysis and decision-making.
Many large companies are laying off employees while start-ups are hiring. Do you see this as a short-term trend or a long-term trend? What employment trend do you expect to see?
The current trend of large companies reducing their workforce while startups and smaller firms expand, is influenced by several factors. Economic uncertainties and market dynamics are prompting large firms to streamline operations, while smaller companies seize opportunities for growth and innovation, which calls for talent acquisition. Advancements in technology, particularly AI, are enabling startups to disrupt traditional financial services, leading to increased hiring to support expansion. AI-powered startups are attracting significant investment and transform the financial industry’s operating efficiency and customer experience. I feel that this trend may continue as technology lowers entry barriers and you need skilled workforce to effectively utilize the technology advancements. In the financial services industry, there is an expectation of continued innovation and a focus on customer-centric services, which may influence employment patterns.
When there is a cost pressure, often employees have been laid off. Now-a-days, technology is a big cost component. How can BFSI companies manage technology costs during tough times, given that many technologies are key to customer engagement, regulatory compliance, fraud prevention, etc?
In the financial sector, technology expenses have grown substantially, especially during economically challenging times. From my experience, I can suggest a few strategies that companies can use to manage technology costs without losing essential functions. My strategy personally includes, prioritizing essential technologies that directly impact customer engagement, regulatory compliance, and fraud prevention, ensuring that critical operations always remain uninterrupted. I also focus on strategic investment in automation by implementing automation tools that enhance operational efficiency and reduce manual processes. Companies can also engage in outsourcing and partnerships with specialized technology providers that offer access to advanced technologies without the need for substantial upfront investments. Outsourcing can also provide expertise in areas like cloud computing and AI, facilitating knowledge-sharing with in-house teams. The strategy a company chooses depends on factors like workforce size, scale of operations, data needs, and current technology.
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