Sonny Singh, senior vice-president and general manager of the Financial Services Global Business Unit at technology giant Oracle, has worldwide responsibility of Oracle’s products across banking, insurance, and capital markets. In a conversation with BusinessLine , Singh talks about India’s digital journey so far, the influence of tech such as blockchain in the finance sector and whether having a ‘disruptive’ mindset pays off.
Globally, blockchain technology is starting to get accepted mainstream. Since a lot of clients use legacy technologies, how can they take to blockchain?
I think blockchain is in an early phase of its lifecycle, it’s completely in the public domain, especially banks are not very comfortable with technologies that reside purely in the public domain. So, I think there’s going to be an adoption curve for blockchain.
In banking today, banks are not just looking at fintech as disruptive competition, they are starting to think about them as potential partners in the future. And the forward-looking banks will actually create an environment where they are providing the more secure custodial capabilities, the regulatory knowhow and they are leveraging fintech for disruptive type of financial offers. So, even in financial services, the disruptors will interact with the core companies.
How do you see the evolution of companies that are born with the disruption mindset, like AliPay for instance? It stands to reason that over time these kinds of business stand to benefit more than traditional financial services?
It again depends on scale. You look at what happened to retail. When the retail industry got disrupted with the advent of the internet, Amazon came out and 500 other companies came out, each of them offering some kind of a retail service. But at the end of the day, large number of them did not survive. A few very large companies became very viable, like Amazon, but then every other retailer actually created their own retail online capability. So, in the US, as an example, Target is a big; Walmart, Target, these are very large companies. Each of them have target.com, walmart.com, they are offering mobile apps for you to buy things, have them delivered to browse and they are offering merchandising completely on the fly.
So, the fact of the matter is that they didn’t wait to be disrupted, they basically said, look, we’ve got to go out, they made acquisitions, and they created an ecosystem that allowed them to offer the same services. Yes, some of the companies that didn’t move fast enough, they went out of business, so you do have companies that went out of business but the smarter companies move on.
How much of Digital India has taken off, considering that post demonetisation, cash seems to be back in favour?
On the digital side, I think two things have to happen, one is obviously the various endpoints of the financial system have to provide digital capabilities for merchants, for consumers, for borrowers, to actually interact, but more importantly, the government needs to provide infrastructure.
It’s easy to put digital payment systems in tier-1, tier-2, tier-3 cities, but once you have decided to go for financial inclusion, that they are doing actually through policy of the micro-finance banks and the payment banks, you still need to push a lot of that broadband infrastructure as an example into the smaller marketplaces so you can truly achieve financial inclusion.
This solution cannot be achieved with the wave of a magic wand and say tomorrow it will be there. Investing in that infrastructure, it requires a government to have investment capability and I think bringing all of that money into the active economy gives them some of that capability, so these things are all interlinked.
These are cycles that feed on each other. I think this was a bold move and while it created discomfort, from a long-term view, will see a tremendous impact.