SaaS lets banks monitor data usage, mitigate security risks: Shailesh Singla

Software-as-a-service (SaaS) is a growing segment in India and presents immense business opportunity. How are the country's businesses, particularly those in the banking and financial services and insurance (BFSI) space, adopting SaaS? What are the challenges, pain points and data privacy concerns? As part of the Great Indian SaaS Story, an insightful series of deep-dives where we interview key players and stakeholders and understand their perspectives, the team of 'Ignite - a Business Standard Marketing Initiative', caught up with Shailesh Singla, Country Head - BFSI & Senior Director, Oracle India at Oracle India, a key SaaS player. Mr Singla shared his thoughts on the evolution and challenges, and much more, in this interview. Edited excerpts:

Q. Can you provide an overview of the current state of SaaS adoption within the BFSI sector and how it has evolved over the past few years?

The Indian SaaS industry is expected to reach $50 billion by 2030, according to Bessemer Venture Partners (BVP). In fact, last year, SaaS accounted for the largest share of the overall public cloud services market, according to IDC. Banking and Finance services sector has been one of the biggest growth drivers for the SaaS market. For Oracle, in the first half of last financial year (FY23), we saw a 74% YoY growth in business from the BFSI sector for our SaaS business. Customers in the BFSI space have come a long way in terms of SaaS adoption over the years. Most of the BFSI customers in India have already adopted SaaS offerings across multiple functions to transform their core banking systems and have gained traction.

SaaS solutions offer banks, the scalability and agility required to adapt to changing market dynamics. Traditional legacy systems often face limitations when it comes to expanding operations quickly, within a short time. However, SaaS platforms are designed to scale effortlessly, allowing banks to accommodate increasing customer demands and expand their offerings without significant infrastructure investments.

Banks are leveraging SaaS-based solutions for one or multiple business functions like financials, supply chain, human capital management, customer relationship management, policy management, loan processing, risk management, and compliance. By leveraging cloud-based SaaS platforms as offered by Oracle, banks can significantly improve operational efficiency. Oracle provides the best-of-breed applications for finance, human resources, supply chain and manufacturing, sales, service, and marketing. This efficiency translates into cost saving, thereby enabling banks to allocate resources towards other strategic initiatives and bring innovation.

There is opportunity for banks to monitor the usage of data and be able to mitigate security risks proactively. A good SaaS product regularly audits its usage patterns to look for any suspicious activities and complies with data privacy regulations.

SaaS-based solutions also enable banks to offer convenient and accessible banking services through multiple channels, such as mobile banking applications and online portals. Customers can access their accounts, perform transactions, and seek assistance at their convenience, leading to increased satisfaction and loyalty.

Q. What specific challenges or pain points are driving the BFSI sector towards adopting SaaS solutions for their operations and customer interactions?

One of the primary reasons for the adoption of SaaS by the BFSI sector in India is cost savings. Traditional software deployment models required significant upfront investments in hardware, software licenses, and maintenance. However, with SaaS offerings, today enterprises can eliminate these costs as the software is hosted and maintained by the service providers This allows BFSI customers to allocate their resources more efficiently and focus more on their core business operations.

Security is a critical concern for the BFSI sector, given the sensitive nature of financial data. SaaS providers invest heavily in robust security measures to protect their clients' data. These measures include encryption, access controls, regular backups, and disaster recovery plans. By adopting SaaS, BFSI companies can leverage the expertise and resources of the service provider to ensure the highest level of data security, reducing the risk of data breaches and cyber-attacks.

The option of self-hosting banking solutions in the public cloud means that banks would be responsible for Security & Compliance Controls, such as aligning and implementing deployment security controls, setting-up and running security monitoring, etc. - all of this being costly and tedious to setup and maintain. One of our integrated cloud platforms, Oracle Compute Cloud@Customer enables organizations to use Oracle Cloud Infrastructure (OCI) compute services anywhere. Organizations can run applications and middleware on OCI compute, storage, and networking services with flexible virtual machine (VM) shapes in their data centers. Developers and IT managers can use the same APIs and management tools to deliver a consistent user experience everywhere. An alternative option is to consider that a SaaS provider, to provide comprehensive SaaS certifications and accreditations, that is, such as SOC 2 and ISO 27001 series.

Q. Data privacy is a paramount concern in the BFSI sector. How does SaaS address data privacy concerns while enabling seamless customer experiences?

Data privacy is a fundamental need from any BFSI customer. The amount of personal data that businesses collect from their customers has increased exponentially over the last few years and the need to protect this data has never been greater. Today, credit card companies are collecting customer data ranging from user's address, contact details, buying history to their spending and saving patterns. There is a need safeguard this sensitive data.

By adopting SaaS solutions, banks can mitigate the risk of data breaches, fraud, and non-compliance, enhancing customer trust and maintaining a strong reputation. SaaS platforms are helping them to ensure compliance with various regulations such as the Reserve Bank of India (RBI) guidelines, the Payment Card Industry Data Security Standard (PCI DSS), and the General Data Protection Regulation (GDPR).

Encrypting data, before it is stored or transmitted is an important measure to prevent unauthorized access. This is especially important for sensitive data like credit card information and social security numbers. Data privacy in SaaS products provide encryption of sensitive information guarding against malicious data theft.

Q. Can you share examples of successful SaaS implementations in the BFSI sector that have led to improved operational efficiency and enhanced customer satisfaction?

Oracle Solutions with embedded finance capabilities are assisting customers in the banking sector to improve their client servicing processes through data-driven strategies. We're one of the only providers to offer a front-to-back banking stack. With its diverse and comprehensive stack of solutions ranging from Cloud Applications to Cloud Infrastructure to Database, we are playing an influential role as a supporter of these organisations. For instance, Kotak Bank is running their end-to-end finance and human resource functions using Oracle Fusion Cloud ERP and Oracle Fusion Cloud HCM to optimize their critical business operations.

Federal Bank, one of the pioneer banks in India, has partnered with Oracle to deliver personalized customer experience leveraging Oracle CX Sales and marketing cloud. Bajaj FinServ is leveraging Oracle marketing cloud and customer 360 to run effective campaigns to targeted audiences resulting into better sales and service.

SBI Cards has laid a single cloud layer leveraging Oracle financials, supply chain and human capital management. IDFC Bank has started their journey on Oracle Fusion Cloud HCM to offer a streamlined employee experience for its entire workforce.

Q. As the Country Head for BFSI at Oracle India, how is Oracle's approach to SaaS uniquely positioned to meet the specific needs of the BFSI sector?

Oracle is uniquely placed to offer an end-to-end applications layer on single Instance - Financials, Supply Chain, Human Capital Management, Sales, Service, Customer 360 and Marketing cloud. Our unique configurations and offerings are helping banks and financial institutions to set up a simple architecture offering a layer of rich Business Intelligence (BI) capabilities on top of it across business functions ensuring a uniform user experience, seamless mobility, chat-bot assistance and voice capabilities. Additionally, our Oracle Fusion Cloud applications suite comes with embedded AI and ML capabilities to generate great predictive insights. We own the entire technology stack powering our cloud applications and are able to add security to every layer, which is critical in the face of rising cybersecurity threat. Our security-first design principles include isolation, so that your data is kept separate from other customers, as well as data protection to preserve privacy, integrity, and authorized use. A single integrated platform from Oracle helps the customers do away with the need of individually making them work with each other. This also helps in lowering the total cost of ownership for the customers.

Q. What trends do you foresee in the next few years regarding the adoption of SaaS within the BFSI sector, and how should organizations prepare to leverage these trends?

ESG (Environmental, Social and Governance) associated opportunities and risks are becoming more and more relevant for banks. Carbon emissions resulting from banks' end-to-end technology infrastructure are coming under intense scrutiny. This also includes the energy consumption from consumed SaaS cloud services, making many banks eager to measure and reduce their overall carbon footprint and meet set targets. Oracle SaaS offers our customers with carbon emission assessment to measure, improve and report emissions from their services, helping them reach sustainable targets.

Application programming interfaces (APIs) are at the core of SaaS innovation and are changing the way SaaS functions, enabling software solutions to connect seamlessly with other applications. It also enhances the value which the systems can bring in conjunction with other external systems.