Ujjivan Bank: The path ahead to becoming a universal bank through digital innovation
Mangesh Mahale, Chief Technology Officer at Ujjivan Small Finance Bank, highlights his bank’s proactive approach to digital transformation and cybersecurity. He discusses their advancements in mobile and internet banking, including innovative features like voice and video capabilities, as well as digital savings and FDs. The bank’s integration of AI, particularly in fraud detection and predictive analytics for NPAs, is emphasised, alongside their cautious exploration of generative AI. Addressing cybersecurity comprehensively, he discusses the deployment of advanced technologies and prioritises employee training. He further highlights Ujjivan’s plans for digital enhancements, cloud migration, and expanding service offerings to evolve into a comprehensive universal bank, enhancing customer experiences and operational efficiency.
Can you take us through some of the recent digital initiatives that you have taken, and what has been its impact?
At Ujjivan Bank, we align technology strategy with business strategy and prioritise technology to ensure seamless customer experiences. Our ongoing digital initiatives focus on enhancing both mobile and internet banking services. Currently, we’re upgrading these platforms to offer a broader array of services with a new architecture. This strategic move aims to meet all customer needs efficiently and effectively as per their interests. For instance, we even have internal users for the maintenance of these banking services. By implementing this, we aim to increase our customer base, as most people are shifting from branch banking to digital channels like internet banking, mobile banking, UPI, UPI Lite, IMPS, QR codes, etc. We are planning to give more options in mobile banking so that customers will get an all-in-one app for transactions, statements, and various service requests. This will help us increase our CASA business (current account, savings account), and we aim to use these channels for cross-selling and upselling, leveraging our customer data to provide hyper-personalised services. Additionally, we have launched the Ujjivan Mobile Banking app which operates on visual, video, and vernacular principles, available in nine Indian languages. This app has seen more than ten lakh downloads and extensive use due to its voice and video facilities. We also implemented a video banking solution where customers can start a conversation through a video call after authentication. Additionally, we have a phone banking service with IVR and options to connect with customer executives. We also offer digital saving accounts and digital FDs which can be opened online with video KYC. Furthermore, we have implemented robotic process automation, automating 41 processes to improve customer service and reduce turnaround time. As a result, 89.79% of our transactions are now digital.
What are some of the areas in which you are using AI/GenAI? What impact does it have?
AI has become ubiquitous, and we are also not an exception to it. We started using AI in various use cases. We utilise AI for fraud detection, leveraging sophisticated analytics to detect and thwart fraudulent transaction patterns. Our chatbot enhances customer service by providing real-time assistance, showcasing our commitment to cutting-edge technology in customer interactions. Moreover, our early warning system uses AI algorithms to predict potential non-performing assets (NPA) based on comprehensive analysis of customer behaviors and transaction trends. This proactive approach allows us to mitigate financial risks efficiently. Additionally, we use AI to analyse branch performance and decide on the optimal branch locations. Regarding generative AI, it’s a new and exciting frontier for us. We are currently in the process of integrating, cleansing, and transforming data to build a robust data warehouse which will be the foundation for large language model (LLM). Once our data warehouse is ready, we plan to harness generative AI more extensively. For now, we have procured Microsoft Copilot for documentation and email summarisation on a pilot basis, mainly used by top management and specific users. This helps us understand its capabilities and challenges. There are also concerns regarding data security, privacy, and regulatory guidelines with generative AI, and we are observing how other organisations handle these issues. Additionally, we need to consider the cost-effectiveness and value of generative AI, as it requires significant investment in GPUs and other resources.
How do you plan to integrate AI/GenAI strategically into the organisation’s IT roadmap, and what challenges do you foresee in this implementation?
Integrating AI, especially generative AI, into our IT roadmap represents a strategic move for Ujjivan Bank. We aim to leverage AI’s capabilities to enhance customer service, operational efficiency, and decision-making processes. For instance, our early warning system already uses AI to predict non-performing assets based on transaction patterns, enabling proactive measures to prevent financial risks. Similarly, in fraud analytics, AI helps us detect and prevent fraudulent activities early on, safeguarding both customer trust and financial resources. Integrating AI presents several challenges. Ensuring data accuracy is crucial as AI algorithms heavily rely on quality data for effective outcomes. We also need to invest in upskilling our workforce to handle AI technologies adeptly. Moreover, the initial investment in AI infrastructure, including hardware like GPUs and software development, requires careful budgeting and resource allocation. Also, navigating regulatory guidelines and ensuring data privacy are paramount concerns in deploying generative AI. Despite these challenges, we are committed to exploring the full potential of AI across our operations. We’re starting with targeted applications like documentation and email summarisation using tools like Microsoft Copilot on a pilot basis. This allows us to assess AI’s capabilities, refine our approach, and address any emerging challenges effectively. Our goal is to integrate AI seamlessly into our IT framework, enhancing our service delivery and operational resilience in the digital age.
With the increasing importance of cybersecurity, what measures are you taking to ensure the security and integrity of its IT systems and sensitive data?
Our cybersecurity approach is comprehensive, focusing on various policies, risk assessments, and measurements. We use a top-down strategy, starting from the perimeter to the endpoints, to ensure robust security. This includes deploying solutions such as firewalls, web application firewalls, network behavior monitoring, data access monitoring, and deceptive technologies that create virtual traps for potential hackers. Additionally, we have a governance, risk, and compliance (GRC) system and conduct regular vulnerability assessments and penetration testing (VAPT). Patch management is also a key focus to address vulnerabilities promptly. User training is a priority for us, as employees can often be the weakest link in cybersecurity. We provide extensive security awareness training and regularly send security tips to both employees and customers. We also employ a “red team” concept, engaging in ethical hacking to identify and mitigate potential vulnerabilities before malicious actors can exploit them. Moreover, we subscribe to threat intelligence services to stay updated on potential threats and block malicious IPs and domains. For cloud security, we use a Cloud Access Security Broker (CASB) to monitor user activities and ensure the safety of our cloud-hosted applications. Additionally, we have invested in cyber insurance to provide an extra layer of protection. We also participate in quarterly cyber drills organised by regulatory bodies to continuously test and improve our defenses.
In the next six months to one year, what are some of the new digital or technology initiatives planned?
Looking ahead, we plan to explore generative AI applications, migrate more non-critical applications to the cloud, and enhance our digital onboarding processes. We aim to balance physical and digital services, maintain robust data warehousing solutions, and potentially offer forex transactions. These initiatives are part of our strategy to transform into a universal bank, providing comprehensive services comparable to larger financial institutions.
