Evolving Landscape: AI Startups Take Centre Stage in 2024

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The tech industry tends to move in waves, driven by the significant, disruptive changes in technology, such as cloud and smartphones. Sometimes, it is driven by external events that bring tech buyers into sync – such as Y2K and the more recent pandemic. Some tech providers, such as SAP and Microsoft, are big enough to create their own industry waves. The two primary factors shaping the current tech landscape are AI and the consequential layoffs triggered by AI advancements. 

While many of the AI startups have been around for over five years, this will be the year they emerge as legitimate solutions providers to organisations. Amidst the acceleration of AI-driven layoffs, individuals from these startups will go on to start new companies, creating the next round of startups that will add value to businesses in the future. 

Tech Sourcing Strategies Need to Change 

The increase in startups implies a change in the way businesses manage and source their tech solutions. Many organisations are trying to reduce tech debt, by typically consolidating the number of providers and tech platforms. However, leveraging the numerous AI capabilities may mean looking beyond current providers towards some of the many AI startups that are emerging in the region and globally. 

The ripple effect of these decisions is significant. If organisations opt to enhance the complexity of their technology architecture and increase the number of vendors under management, the business case must be watertight. There will be less of the trial-and-error approach towards AI from 2023, with a heightened emphasis on clear and measurable value. 

AI Startups Worth Monitoring 

Here is a selection of AI startups that are already starting to make waves across Asia Pacific and the globe. 

  • ADVANCE.AI provides digital transformation, fraud prevention, and process automation solutions for enterprise clients. The company offers services in security and compliance, digital identity verification, and biometric solutions. They partner with over 1,000 enterprise clients across Southeast Asia and India across sectors, such as Banking, Fintech, Retail, and eCommerce. 
  • Megvii is a technology company based in China that specialises in AI, particularly deep learning. The company offers full-stack solutions integrating algorithms, software, hardware, and AI-empowered IoT devices. Products include facial recognition software, image recognition, and deep learning technology for applications such as consumer IoT, city IoT, and supply chain IoT. 
  • I’mCloud is based in South Korea and specialises in AI, big data, and cloud storage solutions. The company has become a significant player in the AI and big data industry in South Korea. They offer high-quality AI-powered chatbots, including for call centres and interactive educational services. 
  • H2O.ai provides an AI platform, the H2O AI Cloud, to help businesses, government entities, non-profits, and academic institutions create, deploy, monitor, and share data models or AI applications for various use cases. The platform offers automated machine learning capabilities powered by H2O-3, H2O Hydrogen Torch, and Driverless AI, and is designed to help organisations work more efficiently on their AI projects. 
  • Frame AI provides an AI-powered customer intelligence platform. The software analyses human interactions and uses AI to understand the driving factors of business outcomes within customer service. It aims to assist executives in making real-time decisions about the customer experience by combining data about customer interactions across various platforms, such as helpdesks, contact centres, and CRM transcripts. 
  • Uizard offers a rapid, AI-powered UI design tool for designing wireframes, mockups, and prototypes in minutes. The company’s mission is to democratise design and empower non-designers to build digital, interactive products. Uizard’s AI features allow users to generate UI designs from text prompts, convert hand-drawn sketches into wireframes, and transform screenshots into editable designs. 
  • Moveworks provides an AI platform that is designed to automate employee support. The platform helps employees to automate tasks, find information, query data, receive notifications, and create content across multiple business applications. 
  • Tome develops a storytelling tool designed to reduce the time required for creating slides. The company’s online platform creates or emphasises points with narration or adds interactive embeds with live data or content from anywhere on the web, 3D renderings, and prototypes. 
  • Jasper is an AI writing tool designed to assist in generating marketing copy, such as blog posts, product descriptions, company bios, ad copy, and social media captions. It offers features such as text and image AI generation, integration with Grammarly and other Chrome extensions, revision history, auto-save, document sharing, multi-user login, and a plagiarism checker. 
  • Eightfold AI provides an AI-powered Talent Intelligence Platform to help organisations recruit, retain, and grow a diverse global workforce. The platform uses AI to match the right people to the right projects, based on their skills, potential, and learning ability, enabling organisations to make informed talent decisions. They also offer solutions for diversity, equity, and inclusion (DEI), skills intelligence, and governance, among others. 
  • Arthur provides a centralised platform for model monitoring. The company’s platform is model and platform agnostic, and monitors machine learning models to ensure they deliver accurate, transparent, and fair results. They also offer services for explainability and bias mitigation. 
  • DNSFilter is a cloud-based, AI-driven content filtering and threat protection service, that can be deployed and configured within minutes, requiring no software installation. 
  • Spot AI specialises in building a modern AI Camera System to create safer workplaces and smarter operations for every organisation. The company’s AI Camera System combines cloud and edge computing to make video footage actionable, allowing customers to instantly surface and resolve problems. They offer intelligent video recorders, IP cameras, cloud dashboards, and advanced AI alerts to proactively deliver insights without the need to manually review video footage. 
  • People.ai is an AI-powered revenue intelligence platform that helps customers win more revenue by providing sales, RevOps, marketing, enablement, and customer success teams with valuable insights. The company’s platform is designed to speed up complex enterprise sales cycles by engaging the right people in the right accounts, ultimately helping teams to sell more and faster with the same headcount.  

These examples highlight a few startups worth considering, but the landscape is rich with innovative options for organisations to explore. Similar to other emerging tech sectors, the AI startup market will undergo consolidation over time, and incumbent providers will continue to improve and innovate their own AI capabilities. Till then, these startups will continue to influence enterprise technology adoption and challenge established providers in the market.

AI Research and Reports
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Future of the Sustainable Organisation: Top 5 ESG Trends in 2024

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The UN’s global stocktake synthesis report underscores the need for significant efforts to meet the ambitious goals of the Paris Agreement to keep the global warming limit to 1.5ºC, compared to pre-industrial levels. Achieving this requires collective action from governments, organisations, and individuals.

While regulators focus on mandates, organisations today are being influenced more by individual responsibility for positive impact. Customers and employees are leading ESG actions – another fast-emerging voice driving ESG initiatives are value chain partners looking to build sustainable supply chains.

Ecosystm Predicst: Top 5 ESG Trends in 2024. Most Vocal Advocates of ESG.

Ecosystm research reveals that only 27% of organisations worldwide currently view ESG as a strategic imperative, yet we anticipate rapid change in the landscape.

Click below to find out what Ecosystm analysts Gerald Mackenzie, Kaushik Ghatak, Peter Carr and Sash Mukherjee consider the top 5 ESG trends that will shape organisations’ sustainability roadmaps in 2024.

Click here to download ‘Ecosystm Predicts: Top 5 ESG Trends in 2024’ as a PDF.

#1 Organisations Will Evolve ESG Strategies from Compliance to Customer & Brand Value

Many of the organisations that we talk to have framed their ESG strategy and roadmaps primarily in relation to compliance and regulatory standards that they need to meet, e.g. in relation to emissions reporting and reduction, or in verifying that their supply chains are free from Modern Slavery.

However, organisations that are more mature in their journeys have realised that ESG is quickly becoming a strategic differentiator and compliance is only the start of their sustainability journey.

Customers, employees, and investors are increasingly selective about the brands they want to associate with and expect them to have a purpose and values that are aligned with their own. 

Ecosystm Predicst: Top 5 ESG Trends in 2024. Organisations Will Evolve ESG Strategies from Compliance to Customer & Brand Value.

#2 Sustainability Will Remain a Stepping-Stone to Full ESG

Heading into 2024, the corporate continues to navigate the nuances between Sustainability and Environmental, Social, and Governance (ESG) initiatives. Sustainability, focused on environmental stewardship, is a common starting point for corporate responsibility, offering measurable goals for a solid foundation.

Yet, the transition to comprehensive ESG, which includes broader social and governance issues alongside environmental concerns, demands broader scope and deeper capabilities, shifting from quantitative to qualitative measures. The trend of merging sustainability with ESG risks is blurring distinct objectives, potentially complicating reporting and compliance, and causing confusion in the market. Nevertheless, this conflation ultimately paves the way for more integrated, holistic corporate strategies.

By aligning sustainability efforts with wider ESG goals, companies will develop more comprehensive solutions that address the entire spectrum of corporate responsibility.

#3 ESG Consulting Will Grow – Till Industry Templates Take Over

At the end of 2022, LinkedIn buzzed with announcements of Chief Sustainability Officer appointments. However, the Global Sustainability Barometer Study reveals that only around one-third of global organisations have a dedicated sustainability lead. What changed?

Organisations have recognised that ESG is intricate, requiring a comprehensive focus and a capable team, not just a sustainability leader.

Each organisation’s path to sustainability is unique, shaped by factors like size, industry, location, stakeholders, culture, and values. Successfully integrating ESG requires a nuanced understanding of an organisation’s barriers, opportunities, and risks, making it challenging to navigate the sustainability journey alone. This is complicated by the absence of clear government/industry mandates and guidelines that frame best practices.

Ecosystm Predicst: Top 5 ESG Trends in 2024. ESG Consulting Will Grow – Till Industry Templates Take Over.

#4 Sustainability Tech Will Finally Gain Traction

Many organisations initiate sustainability journeys with promises and general  strategies. While the role of technology in accelerating goals is recognised, alignment has been lacking. In 2024 sustainability tech will gain traction.

Environmental Tech. Improved sensors and analytics will enhance monitoring of air and water quality, carbon footprint, biodiversity, and climate patterns.

Carbon-Neutral Transportation. Advancements in electric and hydrogen vehicles, batteries, and clean mobility infrastructure will persist.

Circular Economy. Innovations like reverse logistics and product lifecycle tracking will help reduce waste and extend product/material life.

Smart Grids and Renewable Energy. Smart grid tech and new solutions for renewable energy integration will improve energy distribution.

Ecosystm Predicst: Top 5 ESG Trends in 2024. Sustainability Tech Will Finally Gain Traction

#5 Cleantech Innovation Will See Increased Funding

Cleantech is the innovation that is driving our adaptation to climate change. We expect that investments into, and the pace of innovation and adoption of Cleantech will accelerate into 2024.

As companies commit to their net-zero targets, the need to operationalise the technologies required to fuel this transition becomes all the more urgent.  BloombergNEF reported that for Europe alone, nearly USD 220 billion was invested in Cleantech in 2022.

But to meet net-zero ambitions, annual investments in Cleantech will need to triple over the rest of this decade and quadruple in the next.

Ecosystm Predicst: Top 5 ESG Trends in 2024. Cleantech Innovation Will See Increased Funding.
Ecosystm Predicts 2024
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Breaches are Inevitable – Build Resiliency through Recovery & Backup

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A lot gets written about cybersecurity – and organisations spend a lot on it! Ecosystm research finds that 63% of organisations across Asia Pacific are planning to increase their cyber budget for the next year. As budgets continue to rise, the threat landscape continues to get more complex and difficult to navigate. Despite increasing spend, 69% of organisations believe a breach is inevitable. And breaches can be EXPENSIVE! Medibank, in Australia, was breached in (or around) October, 2022. The cost of the breach is expected to reach around USD 52 million when everything is done and dusted – and this does not include the impacts of any potential findings or outcomes from regulatory investigations or litigation.

Recovering Strong

While cybersecurity is still crucially important, the ability to recover from breaches quickly and cost-effectively is also imperative. How you recover from a breach will ultimately determine your organisation’s long-term viability and success. The capabilities needed to recover quickly include:

  • A well-documented and practices incident response plan. The plan should outline the roles and responsibilities of all team members, communication protocols, and steps to be taken in the event of a breach.
  • Backup and Disaster Recovery (DR) solutions. Regular backups of critical data and systems are essential to quickly recover from a breach. Backup solutions should include offsite or cloud-based options that are isolated from the main network. DR solutions ensure that critical systems can be quickly restored and made operational after a breach.
  • Cybersecurity awareness training. Investing in regular training for all employees is crucial to ensure they are aware of the latest threats and know how to respond in the event of a breach.
  • Automated response tools. Automation can help speed up the response time during a breach by automatically blocking malicious IPs, quarantining infected devices, or taking other predefined actions based on the nature of the attack.
  • Threat intelligence. This can help organisations stay ahead of the latest threats and vulnerabilities and frame quicker responses if a breach occurs.

Backup and Disaster Recovery is Evolving

Most organisations already have backup and disaster recovery capabilities in place – but too often they are older systems, designed more as a “just in case” versus a “will keep us in business” capability. Backup and DR systems are evolving and improving – and with the increased likelihood of a breach, it is a good time to consider what a modern Backup and DR system can provide to your organisation. Here are some of the key trends and considerations that technology leaders should be aware of:

  • Cloud-based solutions. More organisations are moving towards cloud-based backup and DR solutions. Cloud solutions offer several advantages, including scalability, cost-effectiveness, and the ability to access data and systems from anywhere. However, technology leaders need to consider data security, compliance requirements, and the reliability of the cloud service provider.
  • Hybrid options. As hybrid cloud becomes the norm for most organisations, hybrid solutions backup and DR that combine on-premises and cloud-based backups are becoming more popular. This approach provides the best of both worlds – the security and control of on-premises backups with the scalability and flexibility of the cloud.
  • Increased use of automation. Automation is becoming more prevalent in backup and DR solutions. Automation helps reduce the time it takes to backup data, restore systems, and test DR plans. It also minimises the risk of human error. Technology leaders should look for solutions that offer automation capabilities while also allowing for manual intervention when necessary.
  • Cybersecurity integration. With the rise of cyberattacks, especially ransomware, it is crucial that backup and DR solutions are integrated with an organisation’s cybersecurity strategy. Backup data should be encrypted and isolated from the main network to prevent attackers from accessing or corrupting it. Regular testing of backup and DR plans should also include scenarios where a cyberattack, such as ransomware, is involved.
  • More frequent backups. Data is becoming more critical to business operations, so there is a trend towards more frequent backups, even continuous backups, to minimise data loss in the event of a disaster. Technology leaders need to balance the need for frequent backups with the cost and complexity involved.
  • Super-fast data recovery. Some data recovery platforms can recover data FAST – in as little as 6 seconds. The ability to recover data faster than the bad actors can delete it makes organisations less vulnerable and buys more time to plug the gaps that the attackers are exploiting to gain access to data and systems.
  • Monitoring and analytics. Modern backup and DR solutions offer advanced monitoring and analytics capabilities. This allows organisations to track the performance of their backups, identify potential issues before they become critical, and optimise their backup and DR processes. Technology leaders should look for solutions that offer comprehensive monitoring and analytics capabilities.
  • Compliance considerations. With the increasing focus on data privacy and protection, organisations need to ensure that backup and DR solutions are compliant with relevant regulations, often dictated at the industry level in each geography. Technology leaders should work with their legal and compliance teams to ensure that their backup and DR solutions meet all necessary requirements.

The sooner you evolve and modernise your backup and disaster recovery capabilities, the more breathing room your cybersecurity team has, to improve the ability to repel threats. New security architectures and postures – such as Zero Trust and SASE are emerging as better ways to build your cybersecurity capabilities – but they won’t happen overnight and require significant investment, training, and business change to implement. 

The Resilient Enterprise
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Embedding Sustainability in Corporate Strategy and Operations​

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In our previous Ecosystm Insights, Ecosystm Principal Advisor, Gerald Mackenzie, highlighted the key drivers for boosting ESG maturity and the need to transition from standalone ESG projects to integrating ESG goals into organisational strategy and operations. ​

This shift can be difficult, requiring an alignment of ESG objectives with broader strategic aims and using organisational capabilities effectively. The solution involves prioritising essential goals, knitting them into overall business strategy, quantifying success metrics, and establishing incentives and governance for effective execution.​

The benefits are proven and significant. Stronger Customer and Employee Value Propositions, better bottom line, improved risk profile, and more attractive enterprise valuations for investors and lenders.​

According to Gerald, here are 5 things to keep in mind when starting on an ESG journey. 

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Your Organisation Needs an AI Ethics Policy TODAY!

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It is not hyperbole to state that AI is on the cusp of having significant implications on society, business, economies, governments, individuals, cultures, politics, the arts, manufacturing, customer experience… I think you get the idea! We cannot understate the impact that AI will have on society. In times gone by, businesses tested ideas, new products, or services with small customer segments before they went live. But with AI we are all part of this experiment on the impacts of AI on society – its benefits, use cases, weaknesses, and threats. 

What seemed preposterous just six months ago is not only possible but EASY! Do you want a virtual version of yourself, a friend, your CEO, or your deceased family member? Sure – just feed the data. Will succession planning be more about recording all conversations and interactions with an executive so their avatar can make the decisions when they leave? Why not? How about you turn the thousands of hours of recorded customer conversations with your contact centre team into a virtual contact centre team? Your head of product can present in multiple countries in multiple languages, tailored to the customer segments, industries, geographies, or business needs at the same moment.  

AI has the potential to create digital clones of your employees, it can spread fake news as easily as real news, it can be used for deception as easily as for benefit. Is your organisation prepared for the social, personal, cultural, and emotional impacts of AI? Do you know how AI will evolve in your organisation?  

When we focus on the future of AI, we often interview AI leaders, business leaders, futurists, and analysts. I haven’t seen enough focus on psychologists, sociologists, historians, academics, counselors, or even regulators! The Internet and social media changed the world more than we ever imagined – at this stage, it looks like these two were just a rehearsal for the real show – Artificial Intelligence. 

Lack of Government or Industry Regulation Means You Need to Self-Regulate 

These rapid developments – and the notable silence from governments, lawmakers, and regulators – make the requirement for an AI Ethics Policy for your organisation urgent! Even if you have one, it probably needs updating, as the scenarios that AI can operate within are growing and changing literally every day.  

  • For example, your customer service team might want to create a virtual customer service agent from a real person. What is the policy on this? How will it impact the person? 
  • Your marketing team might be using ChatGPT or Bard for content creation. Do you have a policy specifically for the creation and use of content using assets your business does not own?  
  • What data is acceptable to be ingested by a public Large Language Model (LLM). Are are you governing data at creation and publishing to ensure these policies are met?  
  • With the impending public launch of Microsoft’s Co-Pilot AI service, what data can be ingested by Co-Pilot? How are you governing the distribution of the insights that come out of that capability? 

If policies are not put in place, data tagged, staff trained, before using a tool such as Co-Pilot, your business will be likely to break some privacy or employment laws – on the very first day! 

What do the LLMs Say About AI Ethics Policies? 

So where do you go when looking for an AI Ethics policy? ChatGPT and Bard of course! I asked the two for a modern AI Ethics policy. 

You can read what they generated in the graphic below.

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I personally prefer the ChatGPT4 version as it is more prescriptive. At the same time, I would argue that MOST of the AI tools that your business has access to today don’t meet all of these principles. And while they are tools and the ethics should dictate the way the tools are used, with AI you cannot always separate the process and outcome from the tool.  

For example, a tool that is inherently designed to learn an employee’s character, style, or mannerisms cannot be unbiased if it is based on a biased opinion (and humans have biases!).  

LLMs take data, content, and insights created by others, and give it to their customers to reuse. Are you happy with your website being used as a tool to train a startup on the opportunities in the markets and customers you serve?  

By making content public, you acknowledge the risk of others using it. But at least they visited your website or app to consume it. Not anymore… 

A Policy is Useless if it Sits on a Shelf 

Your AI ethics policy needs to be more than a published document. It should be the beginning of a conversation across the entire organisation about the use of AI. Your employees need to be trained in the policy. It needs to be part of the culture of the business – particularly as low and no-code capabilities push these AI tools, practices, and capabilities into the hands of many of your employees.  

Nearly every business leader I interview mentions that their organisation is an “intelligent, data-led, business.” What is the role of AI in driving this intelligent business? If being data-driven and analytical is in the DNA of your organisation, soon AI will also be at the heart of your business. You might think you can delay your investments to get it right – but your competitors may be ahead of you.  

So, as you jump head-first into the AI pool, start to create, improve and/or socialise your AI Ethics Policy. It should guide your investments, protect your brand, empower your employees, and keep your business resilient and compliant with legacy and new legislation and regulations. 

AI Research and Reports
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A 12-Step Plan for Governance of Customer Data​

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In my last Ecosystm Insight, I spoke about the 5 strategies that leading CX leaders follow to stay ahead of the curve. Data is at the core of these CX strategies. But a customer data breach can have an enormous financial and reputational impact on a brand. ​

Here are 12 essential steps to effective governance that will help you unlock the power of customer data. 

  1. Understand data protection​ laws and regulations 
  2. Create a data governance framework
  3. ​Establish data privacy and security policies
  4. Implement data​ minimisation
  5. Ensure data accuracy
  6. Obtain explicit consent
  7. Mask, anonymise and pseudonymise data
  8. Implement strong access controls
  9. Train employees
  10. Conduct risk assessments and audits
  11. Develop a data breach ​response plan
  12. Monitor and ​review

Read on to find out more.

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The Experience Economy
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Ecosystm Predicts: The Top 5 Trends for Cybersecurity & Compliance in 2023

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With organisations facing an infrastructure, application, and end-point sprawl, the attack surface continues to grow; as do the number of malicious attacks. Cyber breaches are also becoming exceedingly real for consumers, as they see breaches and leaks in brands and services they interact with regularly. 2023 will see CISOs take charge of their cyber environment – going beyond a checklist.

Here are the top 5 trends for Cybersecurity & Compliance for 2023 according to Ecosystm analysts Alan Hesketh, Alea Fairchild, Andrew Milroy, and Sash Mukherjee.

  • An Escalating Cybercrime Flood Will Drive Proactive Protection
  • Incident Detection and Response Will Be the Main Focus
  • Organisations Will Choose Visibility Over More Cyber Tools
  • Regulations Will Increase the Risk of Collecting and Storing Data
  • Cyber Risk Will Include a Focus on Enterprise Operational Resilience

Read on for more details.

Download Ecosystm Predicts: The Top 5 Trends for Cybersecurity & Compliance in 2023 as a PDF

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Cloudification of India’s Banking Industry

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In this Insight, guest author Anupam Verma talks about the technology-led evolution of the Banking industry in India and offers Cloud Service Providers guidance on how to partner with banks and financial institutions. “It is well understood that the banks that were early adopters of cloud have clearly gained market share during COVID-19. Banks are keen to adopt cloud but need a partnership approach balancing innovation with risk management so that it is ‘not one step forward and two steps back’ for them.”

India has been witnessing a digital revolution. Rapidly rising mobile and internet penetration has created an estimated 1 billion mobile users and more than 600 million internet users. It has been reported that 99% of India’s adult population now has a digital identity in the form of Aadhar and a large proportion of the adult Indians have a bank account.

Indians are adapting to consume multiple services on the smartphone and are demanding the same from their financial services providers. COVID-19 has accelerated this digital trend beyond imagination and is transforming India from a data-poor to a data-rich nation. This data from various alternate sources coupled with traditional sources is the inflection point to the road to financial inclusion. Strong digital infrastructure and digital footprints will create a world of opportunities for incumbent banks, non-banks as well as new-age fintechs.

The Cloud Imperative for Banks

Banks today have an urgent need to stay relevant in the era of digitally savvy customers and rising fintechs. This journey for banks to survive and thrive will put Data Analytics and Cloud at the front and centre of their digital transformation.

A couple of years ago, banks viewed cloud as an outsourcing infrastructure to improve the cost curve. Today, banks are convinced that cloud provides many more advantages (Figure 1).

Why banks adopt cloud

Banks are also increasingly partnering with fintechs for applications such as KYC, UI/UX and customer service. Fintechs are cloud-native and understand that cloud provides exponential innovation, speed to market, scalability, resilience, a better cost curve and security. They understand their business will not exist or reach scale if not for cloud. These bank-fintech partnerships are also making banks understand the cloud imperative.

Traditionally, banks in India have had concerns around data privacy and data sovereignty. There are also risks around migrating legacy systems, which are made of monolithic applications and do not have a service-oriented architecture. As a result, banks are now working on complete re-architecture of the core legacy systems. Banks are creating web services on top of legacy systems, which can talk to the new technologies. New applications being built are cloud ready. In fact, many applications may not connect to the core legacy systems. They are exploring moving customer interfaces, CRM applications and internal workflows to the cloud. Still early days, but banks are using cloud analytics for marketing campaigns, risk modelling and regulatory reporting.

The remote working world is irreversible, and banks also understand that cloud will form the backbone for internal communication, virtual desktops, and virtual collaboration.

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Strategy for Cloud Service Providers (CSPs)

It is estimated that India’s public cloud services market is likely to become the largest market in the Asia Pacific behind only China, Australia, and Japan. Ecosystm research shows that 70% of banking organisations in India are looking to increase their cloud spending. Whichever way one looks at it, cloud is likely to remain a large and growing market. The Financial Services industry will be one of the prominent segments and should remain a focus for cloud service providers (CSPs).  

I believe CSPs targeting India’s Banking industry should bucket their strategy under four key themes:

  1. Partnering to Innovate and co-create solutions. CSPs must work with each business within the bank and re-imagine customer journeys and process workflow. This would mean banking domain experts and engineering teams of CSPs working with relevant teams within the bank. For some customer journeys, the teams have to go back to first principles and start from scratch i.e the financial need of the customer and how it is being re-imagined and fulfilled in a digital world.
    CSPs should also continue to engage with all ecosystem partners of banks to co-create cloud-native solutions. These partners could range from fintechs to vendors for HR, Finance, business reporting, regulatory reporting, data providers (which feeds into analytics engine).
    CSPs should partner with banks for experimentation by providing test environments. Some of the themes that are critical for banks right now are CRM, workspace virtualisation and collaboration tools. CSPs could leverage these themes to open the doors. API banking is another area for co-creating solutions. Core systems cannot be ‘lifted & shifted’ to the cloud. That would be the last mile in the digital transformation journey.
  2. Partnering to mitigate ‘fear of the unknown’. As in the case of any key strategic shift, the tone of the executive management is important. A lot of engagement is required with the entire senior management team to build the ‘trust quotient’ of cloud. Understanding the benefits, risks, controls and the concept of ‘shared responsibility’ is important. I am an AWS Certified Cloud Practitioner and I realise how granular the security in the cloud can be (which is the responsibility of the bank and not of the CSP). This knowledge gap can be massive for smaller banks due to the non-availability of talent. If security in the cloud is not managed well, there is an immense risk to the banks.
  3. Partnering for Risk Mitigation. Regulators will expect banks to treat CSPs like any other outsourcing service providers. CSPs should work with banks to create robust cloud governance frameworks for mitigating cloud-related risks such as resiliency, cybersecurity etc. Adequate communication is required to showcase the controls around data privacy (data at rest and transit), data sovereignty, geographic diversity of Availability Zones (to mitigate risks around natural calamities like floods) and Disaster Recovery (DR) site.
  4. Partnering with Regulators. Building regulatory comfort is an equally important factor for the pace and extent of technology adoption in Financial Services. The regulators expect the banks to have a governance framework, detailed policies and operating guidelines covering assessment, contractual consideration, audit, inspection, change management, cybersecurity, exit plan etc. While partnering with regulators on creating the framework is important, it is equally important to demonstrate that banks have the skill sets to run the cloud and manage the risks. Engagement should also be linked to specific use cases which allow banks to effectively compete with fintech’s in the digital world (and expand financial access) and use cases for risk mitigation and fraud management. This would meet the regulator’s dual objective of market development as well as market stability.

Financial Services is a large and growing market for CSPs. Fintechs are cloud-native and certain sectors in the industry (like non-banks and insurance companies) have made progress in cloud adoption. It is well understood that the banks that were early adopters of cloud have clearly gained market share during COVID-19. Banks are keen to adopt cloud but need a partnership approach balancing innovation with risk management so that it is ‘not one step forward and two steps back’ for them.

The views and opinions mentioned in the article are personal.
Anupam Verma is part of the Leadership team at ICICI Bank and his responsibilities have included leading the Bank’s strategy in South East Asia to play a significant role in capturing Investment, NRI remittance, and trade flows between SEA and India.

Cloud Insights
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Personalisation – The New Digital Imperative in Financial Services

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If you are a digital leader in the Financial Services industry (FSI), you have already heard this from your customers: ‘Why is it that Netflix and Amazon can make more relevant and personalised offers than my bank or wealth manager?’ Digital first players are obsessed with using data to understand their customer’s commercial and consumer behaviour. Financial Services will need to become just as obsessed with personalisation of offerings and services if they want to remain relevant to their customers. Ecosystm research finds that leveraging data to offer personalised service and product offerings to their clients is the leading digital priority in more than 50% of FSI organisations. 

Banks, particularly, are both in a strong position and have a strong incentive to offer this personalisation. Their retail customers’ expectations are now shaped by the experience they have received from their favorite digital first firms, and they are making it increasingly clear that they expect personalised offerings from their banks.  Furthermore, they are well positioned as a facilitator of commercial relationships between two segments of customers – consumers and merchants. The amount of data they hold on consumer interactions is comprehensive – and more importantly they are a trusted custodian of their customers’ data and privacy. 

The Barriers to Personalisation

So, what is stopping them? Here are three insights from over 12 years of experience driving digitisation of Financial Services:

  • Systems Legacy.  Often the data and core banking systems do not allow for easy access and analysis of the required data across the data sets required (eg. Consumers and Merchants).
  • Investment Priorities. There is still a significant investment happening in compliance and modernisation of core banking systems. Too often the focus of these programs can be myopic, and banks miss the opportunity to solve multiple pain points with their investments driven by overly focused problem statements.
  • Culture and Purpose. Are banks stuck in a paradigm of their own making – defining their business models by what has served them well in the past? Will Amazon think about its provision of working capital to their small and medium business partners the same way as a bank does?

Vendor Focus – Crayon Data

Thankfully, there is a new breed of tech vendors who is making it easier for banks to drive personalisation of their offerings and connect customers from across segments. Crayon Data is a good example, with their maya.ai engine unearthing the preferences of customers and matching them to offerings from qualified merchants. It benefits all parties:

  • The Consumer receives relevant offers, is served from discovery to fulfillment on a single platform and all personal data and information guarded by their bank. 
  • For Merchants, it allows them to reach the right customers at the right moment, develop valuable marketing and insights and all this directly from their bank partner’s platform.
  • For Banks, it provides a scalable model for offer acquisition and easily configurable and measurable consumer engagement.

maya.ai leverages patented AI to create a powerful profile of each customer based on their buying habits and comparing these with millions of other consumers drawn in from their unstructured data sets and graph-based methodology. They then use their algorithms to assist their Financial Services client to make relevant offerings from qualified merchants to consumers in the right channel, at the right moment. All of this is done without exposing personal client information, as the data sets are based on behaviour rather than identity.

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Conclusion

There are significant considerations for banks in offering these types of capabilities, such as:

  • Privacy. While the technology operates on non-identifiable information, the perception of clients being ‘stalked’ by their bank in order to drive business to a merchant is one that would need to be managed carefully. 
  • Consumer opt-out. The ability for customers to opt out of this type of service is critical.
  • Consumer financial wellbeing. It may be in the best interests of some consumer to not receive merchant offers, for instance where they are managing to a strict budget. These considerations can be baked into the overall customer journey (eg. prompts when the consumer is nearing their self-imposed monthly budget for a category), but care will need to be taken to keep customers’ best interests at heart.

While there are multiple challenges to overcome, the fact remains that personalisation is quickly becoming a core expectation for consumers. How will banks respond, and will we see AI use cases like Crayon Data become more prominent?

Artificial Intelligence Insights
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