“We Encourage Thought Leadership, Not Technology Centrism” Says Jaya Vaidhyanathan

By S G Rickman On Oct 20, 2022

Doing business is not all about making profits by putting ideas and capital to use. As a company spreads its wings into different domains expanding to different parts of the world, it should keep the compliance and risk factors pertaining to a country’s regulatory framework, under the radar, all while keeping up with shareholders and brand value. BCT digital, Fin-Tech firm offers various services in risk management, asset & liability management, and governance & compliance management tools with a ‘Business First, Technology Next’ approach. Analytics Insights has engaged in an exclusive interview with Jaya Vaidhyanathan, CEO, of BCT Digital.

1.Kindly brief us about the company, its specialization, and the services that your company offers.

BCT Digital is an award-winning digital transformation company delivering FinTech, RegTech, and CleanTech solutions to international banking and financial markets, and key industry sectors. Ranked among the top 100 global companies by Chartis Research, the company offers disruptive, new-age solutions that empower large organizations and transform the way they do business.

BCT Digital has transformed some of the world’s leading financial institutions through its flagship rt360 Risk Management Suite that draws on the strengths of next-generation technologies, sophisticated AI/ML models, data-driven algorithms, and predictive analytics. Through the rt360 suite, the company helps enterprises optimize their core Governance, Risk, and Compliance (GRC) processes, enabling them to augment their positioning and go-to-market capabilities.

2.Please brief us about the products/services/solutions you provide to your customers and how they get value out of them.

BCT Digital offers a range of products to manage different types of risks for banks, financial institutions, and other enterprise verticals. The top products include the below:

Cloud-ready rt360-Credit Risk Suite
- rt360-Early Warning System (EWS) – enables proactive analytics of borrower accounts issuing real-time alerts to prevent credit default or frauds and improve profitability
- rt360-Expected Credit Loss (ECL) – an integral part of the IND AS 109 product suite that helps banks assess any significant increase in credit risk
- rt360-RAROC Calculator – enables risk-based pricing and capital allocation
rt360-Model Risk Management (MRM) – Manages the life cycle of models used in a bank, mitigates risks that can arise from their usage, and ensures model validation, governance, and regulatory compliance
rt360-Governance, Risk, and Compliance (GRC)

- rt360-Enterprise Risk Management (ERM) – helps organizations identify, assess, mitigate, and monitor risks arising out of their operations
- rt360-Audit Management – offers a structured, integrated and proactive approach to audits, helping to control costs and risks
- rt360-Compliance Management – automates the overall compliance process, protecting the company from reputational damage and high financial penalties
- rt360-Environment, Social, and Governance (ESG) – helps organizations gauge their processes and frameworks against global benchmarks and regulatory standards and ensure deep-seated ESG involvement

3.How does your company’s strategy facilitate the transformation of an enterprise?

The FinTech, CleanTech, and RegTech markets are fast expanding, which is why we are constantly building new products and innovating on existing ones. Our strategy has been to look for whitespaces and critical gaps in the risk and governance space and create innovative products to close these gaps. We facilitate the transformation of an enterprise by focusing on:

Business Success – Through topline growth, cost reductions, lesser legal intervention, productivity boosters, investment, and asset optimization
Attracting talent – Prospective employees are more inclined to join companies that have a positive social impact
Reducing costs – Proposing alternate methods of energy consumption and reduced usage of natural or non-renewable resources
Regulatory compliance – When a company projects strong ESG value, it tends to receive more support from the government and regulatory bodies and lesser interventions.
Ensuring investments – Strong ESG practices help to build interest among investors and attract investments

4.What is your biggest USP that diﬀerentiates the company from competitors?

BCT Digital owes a fair share of its success to its lightweight, cost-effective, and innovative product portfolio. As a company that is built by industry specialists and technologists, innovation and out-of-the-box thinking are critical components of our DNA. We rely on our core team to solve complex challenges in the risk management, governance, and compliance space, and establish a steady grip in an extremely niche marketplace.

Another key differentiator is how we use technology to facilitate the thought leadership that is demonstrated by our products – but never let technology take center stage. The focus has always been on the business problem at hand, and technology acts as an enabler to solve the problem in the most cost-effective, innovative, and agile way possible.

Strategically, BCT Digital has been founded on the threshold of the Make in India movement. We leverage the groundbreaking ‘Make local, take it global’ scale-up strategy to tailor-make products for the Indian market and then expand it to international waters. Thanks to this strategy, the company has seen robust organic growth.

5.What are some of the challenges faced by the industry today, more specific to the banking sector and the industries that rely on credit for growth?

ESG reporting and related requirements are still evolving areas. Organizations that are trying to imbibe the principles of ESG into their operations often face multiple challenges, including the below.

Multiple ESG frameworks and standards: Globally, numerous frameworks and standards underpin ESG. Yet, very few countries have come up with a designated standard for ESG reporting. Consequently, organizations often struggle with their ESG reporting, having to adapt to multiple ESG frameworks at a time
The lack or abundance of data: Data governance and management play a critical role in ensuring that organizations are able to meet their ESG reporting requirements. Most organizations suffer from a lack of adequate data, or inadequate data management and governance to meet mandatory regulatory requirements. In other cases, they also suffer from an abundance of data as they are unsure of what they need to utilize for specific reporting requirements.
ESG is a journey and not a destination: Most organizations look at ESG requirements as a one-time activity. They need to look at their process holistically, over the long term, and embrace ESG as a journey. They also need to constantly evaluate changes in the external environment and check and realign their ESG roadmap.
Lack of defined ESG Metrics/KPIs: Most of the existing metrics and KPIs relating to ESG efforts stem from one or more of the prevailing standards and frameworks. Organizations face significant challenges in determining the metrics and KPIs that are relevant for them as there is still no global standard available.
Evolving regulations and changing landscape: The regulations relating to ESG are still evolving and the landscape is constantly changing. Organizations face challenges in staying updated on the changing regulations and trying to comply with the same.

Banking

To ensure profitability and sustainability, banks need to integrate ESG into their lending framework. One way to do this is to restrict their credit transactions to companies that have invested in strong ESG practices. A robust ESG performance is indicative of the future success of a company. However, before they inculcate these practices, banks need to fortify their own systemic wellness, by overcoming challenges prevalent in their industry sector today.

Prudence to ensure asset health: Banks need to be more cautious and compliant in their lending practices in order to keep their NPA levels low and balance sheets profitable.
A culture of digital awareness: Even with the growing number of internet users, the overall digital awareness of banking customers remains low in India. This poses challenges in digital finance adoption as well as an increased risk of fraud.
The need for better customer experience: The current wave of digital transformation has widened the gap between customer expectations and conventional banking, creating major challenges (and opportunities) for banks.
Technology enablement is a must: If banks plan to remain relevant, they should stay abreast with technology, remain updated with market needs, and be enabled to serve diverse customer segments.

6.How do you see emerging technologies impacting your business sector?

Banking technologies are evolving rapidly, even as challenges in banking – such as keeping pace with compliance and regulatory requirements, threats of data breaches, and security challenges – continue to grow. As banking remains primarily paper-based, many parts of the system are inefficient and incur significant overheads. Banks have to rethink their operating models to stay competitive in the new digital era.

Thankfully, with digitalization, new technologies are rapidly transforming the banking sector, which has the potential to benefit banks and consumers immensely. Technology offers a greater degree of autonomy to perform tasks that have become increasingly difficult. Innovative banks are finding ways to adopt emerging technologies, by automating tedious processes, reducing the cost of compliance through AI/ML/big data, and using predictive analytics to strategize and manage risks.

For example, BCT Digital has been drawing on the strengths of disruptive technologies, like AI/ML, analytics, and so on, to enable better accountability and predictability in banking risk management. However, for us, the focus is not only to stay profitable and risk-averse but also to create sustainable and socially resilient workplaces and communities.

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