In 2016, Royal Bank of Scotland (RBS) decided to wind up its retail and corporate banking in India. However, India continues to play an important role in delivering vital functions to help support RBS’ customers in the UK through technology, global finance services, risk, operations and some shared services. With India’s fintech coming of age, RBS’ Head of Design and Transformation, Personal and Business Banking, Louise Smith, talks to BusinessLine on how the bank is not only looking at the Indian fintech space for partnerships, but is also keen on investing and mentoring interesting fintech start-ups through its global incubation ecosystem. Edited excerpts:

Why is fintech innovation so exciting for banks?

Financial innovation isn’t new, it has been around for years. If you think about the ATM, that was an innovation on how you access cash. You can think about the plastic cards we all use for payments. Fintech is very different. Fintech innovation is about how you take new technologies, some of them emerging, some of them very new, and look at new ways of deploying them.

Why that is really important is because customers before were transactional entities for their banks. Since the financial crisis, customer demand has completely changed. They (customers) want you (banks) to know them, they want you to help them and want you to support them. But importantly, they want you to help them live well.

And if you think about what we know about our customers and our responsibility, there is no reason why we cannot do that. And actually, fintech innovation is exciting because it is putting that customer demand of know me, support me, help me, and when things change, help me again; they are actually deploying them in a way that we have never seen.

So, how do you leverage machine learning, deep learning with big data with artificial intelligence, and, I know, they are all kind of the same theme, but then, if you start to converge that with augmented reality along with great design and new types of cloud computing to get better speed ....for me, this is why fintech is really exciting, with financial services where it is, you can reimagine the entire industry.

India is at the cusp of a fintech revolution. What is RBS doing to tap the opportunity?

We are looking at two things here. We are looking at ways in which our teams across different continents can collaborate closely to form a single unit. Second, I want to understand the market.

To your point, the predictions are India will be the second fastest-growing economy within the next three-five years. I have been coming here now for about 12-14 months, and I have seen it change dramatically.

Two things are driving that: the social purpose is at the core here. So, how do you help solve the access to infrastructure to drive the entrepreneurial mindset?; how do you solve the unbanked; how do you then get the payment-related activity?

How do you see the Indian market in terms of fintech?

Everybody says it will bring about the fourth industrial revolution.

Think about it: version one was about how to create things like cash.

Version two was about how to make payments; and version three was about how to get the infrastructure, the capabilities and the technologies to people so that they can do things digitally.

Version four could be really exciting for countries like India.

If you take some of the things I am seeing emerge, credit risk decision is a really big thing here. So, getting lending to the right people and at the right time in a real simple and immediate way. You have been driving wallet disruption and payment disruption for years with things like Paytm.

For want of a better word, your digital identity, Aadhaar, where you will be able to identify customers and connect the two. And if you look at all the things that I am seeing around data and Artificial Intelligence, how are algorithms constantly learning, constantly adapting. If you connect all of that, version four could be all about targeted solutions for a whole city.

What all are you

doing in India?

We have a hatchery, and we call them ‘chicklets’, powered by entrepreneurial sparks. We have it in UK, but I will connect it to India and that is something we are doing at the moment.

This entrepreneurial sparks movement is in all of our major locations in the UK and it helps start-ups. In the last 10 months, we have opened it up to specific fintechs.

In India, we have launched an entrepreneurial academy. We launched it in April with the first batch of 500, we have another trench coming out in July and another in September.

The second bit we are starting to do now is that we have platforms in Tel Aviv where we have partnership with The Floor; we have extended that partnership into Asia. And now we have started to look at what do we want to do here.

There is a fear that fintech will take away jobs...

If you look at all the data points, it says that there will be more jobs, but the jobs will be different. So, do I think some jobs won’t exist. There is big opportunity for data scientists and data engineers. There will be a blurring of industries; most customers will want to move not just digital but voice to build a connect with them emotionally, especially when you do not see those customers. This will be through great design. So, you will have a need for much more design capability and much more of that creativity. It’s about how do you leverage the workforce you have and how to prepare them for the future.

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