FINOMENAL 2016: ECHO – Panel Discussion – ‘Fear of Automation in Financial Industry’

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Nilanjan Das, Deputy Head Asset Management and Wealth Management Centre Mumbai – Deutsche Bank

Mr. Nilanjan Das started the discussion by explaining the importance of automation in increasing the efficiency of financial transactions and in rightly maintaining the regulatory standards. Talking about the Indian banks Mr. Das mentioned that Indian banks are more agile in the implementation of automation. Mr.Das on Algorithmic trading and High Frequency Trading stated that the world has gone far ahead in terms of Algorithmic trading, so we should decide where the world is moving and where we want to be. He further advised the students, who are the fresh entrants to the finance industry to focus on the innovations happening in technology. About credit risk management Mr.Das elaborated on the importance of statistical data and the study of historical data in analyzing an entity’s credit worthiness. Regarding the market positioning of IT and non IT people Mr.Das stated that the focus should be on being a specialist rather than a generalist and highlighted the importance of continuous reeducation.

Ashwani Agarwall, Equity Analyst – Baroda Pioneer Mutual Fund

Mr. Agarwall started the discussion by stating that with the advent of more technical driven transactions, requirement of human intervention has gone down. Talking about the extent of automation, Mr. Agarwall stated that banking system in India can be broadly divided into three segments, private global banks, private Indian banks and public sector banks. The biggest advancements in automation has come in from the private Indian banks. They use data analytics extensively, evaluating about 120 parameters in 5 minutes. Global private banks are driven by standardization and widespread presence which hamper quick change. On the other hand, public sector banks of the country function more as social banks and have a lot to catch up with. He ended the discussion on a note that disruptions are caused by the external environment, not within the industry.

Gajendra Kothari, Managing Director & CEO – Etica Wealth Management Private Limited

Mr.Gajendra Kothari started the discussion by stating the quote of Jeff Bezos, “There is no point predicting what is going to change, we should focus on what does not change”. He further elaborated that it is the medium which changes and not the basic need. About the Indian ecosystem Mr.Kothari spoke about how the government schemes like Jan Dhan, Aadhar and Digital India are challenging the virtues of the world. He stated that competition can arise from unexpected corners and banks today are competing with Fintech companies like Paytm. On algorithmic trading Mr.Kothari said that an algorithm is as good as the human being who has designed it. About risk management Mr.Kothari stated that the efficiency of a risk management system depends on the amount of data it can crunch and elaborated on the importance of digital footprint in credit risk analysis. Mr.Kothari ended by asking the students to disrupt themselves by investing in knowledge before technology disrupts them.

Atul Khadilkar, Member – India Management Committee and Head – Financial Institutions Group, South Asia (National Australia Bank)

Atul khadilkar started the discussion by stating that automation helps mundane tasks to be done faster. Automation has brought in efficiency due to which people can add more value. The focus should be on the output that comes out of the automated system. He added that, in India automation is more relevant in the payment system. An emerging economy gets better access to technology. He focused on the aspect of fear that stems out of the automation process. The extent of risk differs from person to person. Automation should focus on solutions for the risk involved. He concluded the discussion by stating that Risk management automation should be looked at keeping in mind the stakeholders involved.

Mahesh A. Chhabria, Investment, Risk and Wealth Management Professional Entrepreneur – Mac Financial

With a dynamic career of 20 years in Investment Management, Fixed Income Markets, Risk Management, Credit Research, Quantitative Analysis, Treasury and Audit & Business Assurance Services, Mr. Chhabria believes that automation is not to be feared.

Mr. Chhabria agreed that although automation has increased the efficiency of financial processes, some cases of automation in the existing inefficient processes have shown signs of magnified inefficiencies. According to him, as much as there is a risk of unemployment due to automation, there is always scope of deploying human workforce in other inefficient systems.
In his take on high frequency trades and trading algorithms, he said, “Risks, Reforms and Regulations play an important role in the future of algorithm trading in India. We need to understand the functions of risks involved and the benefits of the reforms.
He concluded by stating that Innovation is definitely the key in the financial services industry. The world is quite dynamic and anything can be linked to anywhere.

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