BPO : Definition Scope and Trends

Definition
Business process outsourcing means to engage the services of an external provider (i.e. the
outsourcer) to manage and deliver services in respect of one or more business activities of non-
core nature to the client (or the outsourced).

In an outsourcing agreement, there are two parties the client company or the outsourced which
wants a business activity to be externally performed; and the vendor or the external provider or
the outsourcer which manages and delivers the service to the client company.

The word “Business Process Outsourcing” (BPO) means sourcing from outside. It is the practice
of hiring a company to handle business activities for the other company as a third party. In this
method of outsourcing the third party gets a contract to perform specific and specialized
functions on behalf of the hiring company.

The term outsourcing has more popularly come to be associated with I T enabled services or
Business Process Outsourcing (BPO).

Scope of Outsourcing into 4 major areas

Financial Services: The firm may outsource various financial services like payroll preparation,
Underwriting, Merchant banking etc

Advertising: Business firms generally depend on advertising agencies for designing developing
and disseminating their products and services. Under the agreement the advertising agencies
agrees to provide all the services associated with advertisement

Courier Services: Big firms generally depend on the courier agencies to dispatch their large
amount of parcels

Customer support services: Customer service is the major area where outsourcing applicable.
Almost all the companies outsources its after sale services and customer services. Call centers
are the best example for the customer service outsourcing.

Trends

India has emerged as a hot destination for BPO work in recent years. The success is mainly due
to the fact that there is a ready availability of large numbers of resources fluent in English and
the diligent and hardworking efforts put in by the companies in India that do BPO work.

Further, the fact that Indians are well educated (by Asian standards) and that there is a
humungous body of resources who have graduated in commerce and technology has meant that
the BPO story took off in right earnest in India. Added to this is the fact that the demographics
favor India since a majority of its population is young and under 30. This is the so-called
demographic dividend wherein a country that is youthful reaps the fruits of having a labor force
which can be tapped into. All these reasons have conspired to bring about a revolution in the way
the Indian BPO sector has performed.
However, things are not all that hunky dory since many other countries in Asia seem to be
playing catch-up with Philippines emerging as a viable alternative to India. One of the reasons
for the completion is that the wage differential that India had over the West is eroding since the
industry is maturing and hence wages of the workforce are going up.

This means that other low cost rivals like the Philippines can tap into the advantage that India
hitherto had. Further, there is a certain level of saturation that has set in India with the law of
diminishing returns coming into play. These factors mean that India has to watch out for
competition from other countries. Of course, there are certain steps that can be taken to arrest the
decline and ward off the competition.

For instance, Indian BPO companies can branch out into Tier II and Tier III cities so that their
wages are competitive and that a skilled workforce that exists beyond the cities can be tapped
into. Moreover, the costs can be kept down because of the fact that these cities have a lower cost
of living and doing business than the Tier I cities. The most important step is that Indian BPO
companies can move up the “value chain” which means that they can migrate to higher end
knowledge work or KPO which is more cerebral and pays well. The point here is that it is time
for the Indian BPO industry to take the phenomenon to another level and this is precisely the
reason for many Indian BPO‟s to take up KPO work as well as opening centers in smaller cities.

Finally, the Indian BPO industry has to realize that once the industry matures, profit
margins and return on investment stagnate and reach a plateau. It is for this reason that the
time is ripe for the Indian BPO sector to innovate and move up the curve. With other nations
snapping at its heels, the Indian BPO sector cannot afford to take it easy nor be complacent.

KPO
Knowledge Process Outsourcing (KPO) is the process of outsourcing knowledge intensive
activities that are data driven and encompass the process of gathering, managing, analysing and
delivering objective insights into businesses.
KPO services are broadly classified into four kinds of services:

 Data Analytics and Insights: Addressing business problems across industries and domains
to empower organisations with actionable insights through cutting edge data analytics
 Market Research/ Business Research: Providing research services and strategy consulting
for accurate and succinct answers to the most pressing business questions
 Global Reporting and Performance Management: Providing efficient reporting and
performance measurement across industries to achieve operational excellence and
productivity
 Data Management: Efficient solutions for data integration, storage, retrieval and sharing
for robust business reporting and analytics as required by various stakeholders

The scope of KPO business includes preparation of accounts, tax returns, computer aided
simulation, engineering design and development, financial services, etc.
ENTERPRISE RESOURCE PLANNING

Organizations today face twin challenges of globalization and shortened product life cycle.
Globalization has led to unprecedented levels of competition. To face such competitions,
successful corporations should follow the best business practices in the industry. Shortened life
cycles call for continuous design improvements, manufacturing flexibility, super-efficient
logistics control and better management of the entire supply chain. All these need faster access to
accurate information, both inside the organization and the entire supply chain outside. The
organizational units such as finance, marketing, production, human resource development etc.
need to operate with a very high level of integration without losing flexibility. ERP system with
an organization-wide view of business processes, business need of information and flexibility
meet these demands admirably. One of the developments in computing and communication
channels is providing tighter integration among them.

Nah et al. (2001) defines ERP as “An enterprise resource planning (ERP) system is typically
defined as a packaged business software system that facilitates a corporation to manage the
efficient and effective use of resources (materials, human resources, finance, etc.) by providing a
total integrated solution for the organization‟s informationprocessing requests, through a
process-oriented view consistent across the company
 Suggested Reading material for Trends in service sector
(Article A-F)
A) Foreign tourist arrivals in India slowed down in Jan-Oct 2019: Eco Survey
The Indian tourism sector had witnessed a strong performance from 2015 to 2017, with high
growth in foreign tourist arrivals but slowed down to 2.7 per cent in January-October period of
2019. In terms of foreign exchange earnings from tourism, India ranks 13th in the world and 7th
in Asia & Pacific.
New Delhi: Growth of foreign tourist arrivals to India slowed down to 2.7 per cent in January-
October period of 2019 in tune with the global trend, according to the Economic Survey 2019-
20.
The Indian tourism sector, which is a major engine of growth, had witnessed a strong
performance from 2015 to 2017, with high growth in foreign tourist arrivals, the survey tabled in
Parliament on Friday said.
"However, foreign tourist arrivals growth (year-on year) has decelerated since the then to 5.2 per
cent in 2018 and 2.7 per cent in January-October 2019," it said.
This trend, however, is not unique to India, as the growth in international tourist arrivals globally
also slowed from 7.1 per cent in 2017 to 5.4 per cent in 2018, it added.
As a result, the survey said growth in foreign exchange earnings from tourism sector has slowed
in 2018 and 2019 after registering strong growth until 2017.
"Foreign exchange earnings totalled USD 24 billion in January-Oct .. with a growth of 2 per
cent," it said.
In 2018, India ranked 22nd in the world in terms of international tourist arrivals, improving from
the 26th position in 2017.
"India now accounts for 1.24 per cent of world's international tourist arrivals and 5 per cent of
Asia & Pacific's international tourist arrivals," it said.
The survey said visitors from the top 10 countries -- Bangladesh, USA, UK, Sri Lanka, Canada,
Australia, Malaysia, China, Germany and Russia -- accounted for 65 per cent of the total foreign
tourist arrivals in India.
Among foreign tourists, 62.4 per cent visited India for leisure, holiday and recreation, 16.3 per
cent for business purposes, and 13.5 per cent was Indian diaspora, it added.
With the e-Visa scheme available for 169 countries, the survey said foreign tourist arrivals to
India on e-visas increased from 4.45 lakh in 2015 to 23.69 lakh in 2018, and stood at 21.75 lakh
in January-October 2019, recording nearly 21 per cent year-on-year growth from the previous
year.
B) Five significant steps taken by Modi government to promote Tourism &
Hospitality sector
Tourism & Hospitality sector has been universally recognised as an agent of development and an
engine for socio-economic growth.
Tourism & Hospitality sector has been universally recognised as an agent of development and an
engine for socio-economic growth. According to WTTC‟s India Benchmarking Report 2015,
every $1 million in travel and tourism spending in India generates $1.3 million in GDP.
According to a report released by the government, “Tourism & Hospitality sector has been a
harbinger of „more inclusive growth‟ in India by promoting other industries in the economy
through backward and forward linkages and generating employment in various sectors such as
hospitality, travel, and entertainment, wellness and other sectors.”
In the last two years, the Ministry of Tourism has undertaken several initiatives to provide a
further boost to the sector such as launch of new schemes like Swadesh Darshan and PRASAD,
revamping of existing schemes such as Hunar se Rozgar tak, extending e-Tourist Visas to more
countries, developing a Mobile Application for Tourists, introducing an Incredible India Tourist
Helpline, and undertaking various skill development initiatives such as setting up of Indian
Culinary Institute, approval of new Institutes of Hotel Management etc, claims the report. Based
on it, let‟s take a look at some of the achievements in the Tourism and Hospitality Sector:
1) Creation of world class tourism related infrastructure: Swadesh Darshan scheme was
launched by the Ministry of Tourism for the development of theme based tourist circuits to cater
to both mass and niche tourism. Under this scheme that aims to develop world class
infrastructure to promote cultural and heritage value of the country and enhance the tourist
attractiveness, 27 projects for Rs. 2261.50 crore have been sanctioned for 21 States and Union
Territories since its launch in January 2015.
 The National Mission for Pilgrimage Rejuvenation and Spiritual Augmentation Drive
(PRASAD) scheme, was also launched by the Ministry for the development and
beautification of pilgrimage sites to tap the growth of domestic tourists driven by
spiritual/religious sentiments. The scheme seeks to augment tourism infrastructure at places
of pilgrimage to provide better facilities to pilgrims/tourists and enhance their experience.
2) Growth in tourist footfalls: Foreign Tourist Arrivals (FTAs) during the period January- July,
2016 were 49.22 lakh with a growth of 10.0% over the same period in 2015. In January-July
2015, FTAs of 44.73 lakh were registered with a growth of 4.6% over the same period in
January- July, 2014. Foreign tourist visits (FTVs) to the States/UTs was 23.3 million in 2015, as
compared to 22.3 million in 2014, registering a growth of 4.4% over 2014.
3) Ease of doing business: Ministry of Tourism has set up a Web-based Public Delivery System
for recognition of Travel Trade Service Providers and for classification of hotels in order to ease
the process of filing applications by Travel Trade Service Providers seeking recognition from the
Ministry. This is also to bring in transparency in granting the approvals. This online process has
also been integrated with payment gateway with effect from January 2016.
• Introduction of a Mobile App: The Ministry of Tourism launched a mobile application called
Swachh Paryatan on February 22, 2016, which will let citizens report any hygiene issues at
various tourist destinations across the country.
 Multilingual Tourist Helpline: The Ministry of Tourism launched the 24×7 Toll Free
MultiLingual Tourist Helpline in 12 languages on February 8, 2016. It can be accessed on
Toll Free Number 1800-11-1363 or short code 1363. The languages handled by the Tourist
Helpline include ten international languages besides English and Hindi, namely, Arabic,
French, German, Italian, Japanese, Korean, Chinese, Portuguese, Russian and Spanish.
4) Other initiatives: Promoting the North-Eastern Region: The International Tourism Mart is
organized every year in North-Eastern States with the objective to highlight the tourism potential
in the region. The 4th International Tourism Mart was organized from 14-16 October, 2015 at
Gangtok in Sikkim.
 Adarsh Smarak: ASI has identified 100 monuments to be developed as Model
Monuments. These monuments would be provided necessary tourist facilities including Wi-
Fi, security, signage, encroachment free area, interpretation centres showing short films
about the importance of monuments and signboards of Swachh Bharat Abhiyan. Some of
the monuments included in Adarsh Smarak scheme are Leh Palace (Leh), Humayun‟s
Tomb(New Delhi), Red Fort,(Delhi), Shore Temple (Mahabalipuram), Elephanta Caves
(Mumbai), Taj Mahal (Agra), Rani-ki-Vav (Gujarat) among others.
5) Skill development: In 2014, Tourism & Hospitality sustained a total of 36.7 million direct,
indirect, and induced jobs in India, which is more than the jobs created in banking, automotive
manufacturing, chemicals manufacturing, education, financial services, and mining sectors.
C) Retail Industry in India (Latest update: November, 2019)

Introduction
The Indian retail industry has emerged as one of the most dynamic and fast-paced industries due
to the entry of several new players. Total consumption expenditure is expected to reach nearly
US$ 3,600 billion by 2020 from US$ 1,824 billion in 2017. It accounts for over 10 per cent of
the country‟s Gross Domestic Product (GDP) and around 8 per cent of the employment. India is
the world‟s fifth-largest global destination in the retail space.
India is the world‟s fifth largest global destination in the retail space. In FDI Confidence Index,
India ranks 16th (after U.S., Canada, Germany, United Kingdom, China, Japan, France,
Australia, Switzerland and Italy).
Market Size
Retail industry reached to US$ 950 billion in 2018 at CAGR of 13 per cent and expected to reach
US$ 1.1 trillion by 2020. Online retail sales are forecasted to grow at the rate of 31 per cent year-
on-year to reach US$ 32.70 billion in 2018. Revenue generated from online retail is projected to
grow to US$ 60 billion by 2020.
Revenue of India‟s offline retailers, also known as brick and mortar (B&M) retailers, is expected
to increase by Rs 10,000-12,000 crore (US$ 1.39-2.77 billion) in FY20.
India is expected to become the world‟s fastest growing e-commerce market, driven by robust
investment in the sector and rapid increase in the number of internet users. Various agencies
have high expectations about growth of Indian e-commerce markets.
Luxury market of India is expected to grow to US$ 30 billion by the end of 2018 from US$ 23.8
billion 2017 supported by growing exposure of international brands amongst Indian youth and
higher purchasing power of the upper class in tier 2 and 3 cities, according to Assocham.
Investment Scenario
The Indian retail trading has received Foreign Direct Investment (FDI) equity inflows totalling
US$ 1.85 billion during April 2000–June 2019, according to the Department for Promotion of
Industry and Internal Trade (DPIIT).
With the rising need for consumer goods in different sectors including consumer electronics and
home appliances, many companies have invested in the Indian retail space in the past few
months.
India‟s retail sector investments doubled to reach Rs 1,300 crore (US$ 180.18 million) in 2018.
Walmart Investments Cooperative U.A has invested Rs 2.75 billion (US$ 37.68 million) in Wal-
Mart India Pvt Ltd.
Government Initiatives
The Government of India has taken various initiatives to improve the retail industry in India.
Some of them are listed below:

 The Government of India may change the Foreign Direct Investment (FDI) rules in food
processing, in a bid to permit e-commerce companies and foreign retailers to sell Made in
India consumer products.
  Government of India has allowed 100 per cent Foreign Direct Investment (FDI) in online
retail of goods and services through the automatic route, thereby providing clarity on the
existing businesses of e-commerce companies operating in India.

Road Ahead
E-commerce is expanding steadily in the country. Customers have the ever-increasing choice of
products at the lowest rates. E-commerce is probably creating the biggest revolution in the retail
industry, and this trend would continue in the years to come. India's e-commerce industry is
forecasted to reach US$ 53 billion by 2018. Retailers should leverage the digital retail channels
(e-commerce), which would enable them to spend less money on real estate while reaching out to
more customers in tier-2 and tier-3 cities. The Union Budget 2019-20 is expected to give boost to
the rural consumption in India.
It is projected that by 2021 traditional retail will hold a major share of 75 per cent, organised
retail share will reach 18 per cent and e-commerce retail share will reach 7 per cent of the total
retail market.
Nevertheless, the long-term outlook for the industry is positive, supported by rising incomes,
favourable demographics, entry of foreign players, and increasing urbanisation.
Note: Conversion rate used as on September 2019, Re 1 = US$ 0.014019
References: Media Reports, Press Releases, Deloitte report, Department of Industrial Policy and
Promotion website, Union Budget 2017–18, Consumer Leads report by FICCI and Deloitte -
October 2018
D) Looking forward to 2020 & beyond: top trends for airports and aviation (Insight 11.07.2019)
Airports are often seen not only as gateways to but as jewels of the cities they connect. They can also
be a lucrative window to attract business to countries and high-ranking cities. The more high-tech and
passenger-friendly they become, the more likely they will positively impact local finances. Airports
are therefore the ideal testbed to integrate new technologies in order to benefit from global growth in
passenger traffic and to attract further direct or indirect investment.

Airports remain a strong location investment and are becoming hubs for innovation. Universal
exhibitions, sporting events and the increasing movement of people all provide good opportunities to
modernise airport infrastructure and to adopt technologies that can improve the passenger experience.

In this insight, we have identified several top trends for airports and aviation in 2020 & beyond.

1. Robotic assistants
Robots could be first in line to help passengers in busy and confusing environments like airports (for
example, Troikas check-in robots by LG have been deployed in Incheon Airport, South Korea), and to
improve the ride to the airport (Gatwick airport in the UK is willing to initiate a pilot robotic car park
project in 2019).

2. Passenger-centric solutions
Less futuristic and more tangible, the adoption of 5G networks has started in some airports (e.g.
Manchester), highlighting the way airports are adapting to meet actual passenger demands. Airports
and airlines are changing their decision-making processes from product-centric to passenger-centric.
Products and processes are evolving to adapt to changes in passengers‟ travel preferences and their
access to technology. Airports are adopting technologies that can help expedite the passenger‟s
transactional activities such as check-in, baggage screening, security and customs. In turn, the positive
travel experience is leading to an increase in non-aeronautical revenues for airports and their
stakeholders.

3. Liquids are ready for take-off

Removing electronic devices, liquids and gels from hand luggage is listed amongst the top three “pain
points” of passengers when travelling by air. Technology will soon rescue passengers from this
hassle. Leading screening and detection providers are leveraging technical advances in computed
tomography scanners (CT scanners) to screen luggage in a better way, without the need to remove the
usual suspects from the bag. The use of artificial intelligence in airports via AI-powered scanners that
are able to distinguish explosives and weapons from non-dangerous items (such as belts and keys) is
also being tested in the US, helping operators make better decisions and streamline the security
screening process.

Faster passenger flows and security checks have a positive impact on the overall passenger experience
in the airport and the running of flight operations, with a direct financial benefit to every stakeholder.

4. Paperless and trustworthy, here comes the blockchain

Moving beyond its traditional role in the fintech sector, blockchain technology is being explored by
airlines, airports and government authorities as a way to improve safety and aviation security
operations. Potential applications for this technology include recording and storing bookings, aircraft
parts census and spares tracking. Blockchain transparency and immutability are also believed to be
potential key assets in efficiently dealing with an ever-growing passenger flow – notably for passport
and visa controls – eventually putting an end to manual verification.

5. Biometrics
In 2019, the biometric realm in airports is becoming a reality, heralding a future of artificial
intelligence in aviation. There have multiple trials of face-recognition technology and early adoption
has started in airports from Narita to Athens and from London to NYC and the main Chinese cities.
Alternative approaches using palm-vein identification (South Korea) are also part of this trend. The
principal objective is to decongest security lines and controls, putting the key functionalities at the
boarding gates. Less manned work is required, which expedites boarding processes and leads to
shorter queues – these are the key elements pushing airports to invest in these new technologies.

Biometric technologies offer substantial opportunities for key players to build strong business cases
for further adoption. They are also a key enabler for risk based screening approaches.

6. Secure by design
Continued growth in passenger traffic and the „Amazon effect‟ on logistics is driving the adoption of
more autonomous aviation solutions based on artificial intelligence, enhancing airport security-
screening operations. Increasing reliance on seamless security processes at airports and the digitisation
of traveller authorisations is susceptible to high-impact incidents (affecting security and business
continuity) if the networks hosting these digitised solutions were to be breached.

Aviation and airport security solutions providers are partnering with leading IT companies to develop
secure products and solutions at the design stage.

7. Up in the cloud
The “cloudification” of business processes to streamline efficiencies, reduce upfront capital
investments and offer elasticity to adapt to passenger flows (seasonal airports, passenger demand
because of special events such as Olympic Games, New Year, pilgrimages, etc) is increasingly being
considered by airports and airline companies. Modernising legacy IT infrastructures is one of the main
drivers, closely followed by private investors taking ownership of public airports and looking to
generate revenues more quickly with minimal investments. More specific applications are also
expected to become cloud-hosted, such as control rooms to improve efficiencies in communications
and coordination.

Leading cloud service providers are aligning themselves to industry needs, but aviation specialists are
essential for partnerships because a genuine understanding of airports‟ operating environment is
required. Migrating to the cloud is also a complex task and any negative impact (delays, cost overruns,
etc) on the continuity of operations would be damaging.

8. The unknown-unmanned threat

Managing operational disruptions that impact business continuity and revenue generation is a key
focus for both airports and airlines. With the adoption of new technologies, stakeholders have
improved their responses to such disruptions. However, the rapid evolution and penetration of off-the-
shelf unmanned technologies, such as drones, is posing a significant challenge. The remote nature of
the disruption makes the perpetrator „unknown‟, adding to the complexity of the threat.

Airports across the world are investing in counter-UAS [unidentified aerial systems] technologies that
cause minimal flight disruption and they are expected to invest more heavily in the future. Suppliers
are leveraging experience and expertise traditionally associated with the defence sector to create
tailored solutions for the aviation industry.

9. Improving air-traffic control

Traffic growth is pushing air-traffic control infrastructure and capacity further towards their limits and
is becoming a big challenge in an incredibly congested airspace, reinforced by the technical
complexity of integrating unmanned aircraft systems into civilian airspace.

Digitalising air-traffic control is a developing trend to improve transport safety and is aligned with
airports‟ aim of running flight operations on time and improving passenger throughput. The adoption
of remote-control centres to efficiently manage various airports‟ traffic has emerged recently.

This approach generates strong investment opportunities for well-established players and the redesign
of the future management of airspace control.

10. Destination green

Aircraft are becoming greener, with biofuels being tested, lighter airframe components and trials
taking place on the ground to reduce the carbon footprint when craft are taxiing. Encouraging results
are leading to further experiments, albeit with heavy costs. Low fuel prices have for some time
discouraged green investments in aviation, but low dollar-priced oil will not last forever. Experts
predict a near-term price increase that will eventually have an impact on travel fares. In the meantime,
additional carbon-footprint taxes are in consideration.

Continually reducing aircraft fuel consumption is a big challenge that is being taken seriously by
aircraft OEMs. However, current aircraft designs are no longer able to integrate new power and flight
systems. Rethinking aircraft design and airframes (especially with open-rotors technology) are part of
a greener tomorrow. At the same time, airports are considering how they can reduce their ecological
footprint, by reducing waste and improving efficiencies through technology.

..
E) Emerging Technology Trends for Banking Industry in 2020 & Beyond
Banks around the world are taking advantage of new technologies to streamline their operations
and provide a better experience to their customers. Find out the latest trends that will disrupt the
banking industry in the future!

Today, we live in the digital era where technology is driving change in almost every industry,
whether it is the use of smartphones, automation to improve operations, cloud computing to
collaborate, data analysis to extract insights. Smart use of technology is becoming an integral part
of the success in business. However, no industry is as driven by technology as banking is. A study
by PwC says more than 81% of banking CEOs are considering the impact of digitization in the
finance world. There are several financial organizations trying to keep up with the latest tech
trends like chatbots, Artificial Intelligence (AI), Blockchain, etc.

With so many competitors vying for your customers, the only winning point is to keep track of the
recent trends and start to implement them in the better way before your competitors bring about
the change in the field. Get immense benefits and improve business results by keeping in mind the
latest technologies.

Chatbots
Customers today don‟t have the patience to wait for long hours and get their queries resolved.
Instead, they demand quick response and effective resolution of their issues. Chatbot has made
this possible in banking organizations. Supported by AI technology, chatbots are used by many
finance companies to reduce costs and meet ever-changing expectations. Now, users no longer
depend on traditional methods of two-way communication like email, phone, etc. Report by
Gartner states that more than 85% of customer service interactions will be handled by chatbots in
2020.

Chatbot helps in encouraging conversational banking by providing an exceptional experience that

can be personalized to meet exceeding customers‟ expectations. Brands like Bank of America,
Capital One, etc. have been using bots for many years to resolve simple queries. However,
today‟s advanced bots could offer financial tips, detect fraudulent activities, and even assist
customers during registration. They can help in making smart conversations with millions of
customers, just at a fraction of the cost that would have taken by using human customer agents.
This technology not only helps the banking world to provide centralized financial management
but also improve the way customers connect with their banks. The right Chatbot Development
company is all you need to get your own banking bot and replace human agents for better savings.
Big Data
With the increasing amount of data generated every day by the banking sector, it is becoming
difficult to extract actionable insights that can help in growing more opportunities. Big Data is the
answer! This technology has undoubtedly put all the banking data i.e. debit/credit card
transactions, ATM withdrawals, money transfer, etc. to make informed decisions and process it
effectively to gain valuable information that is needed to stay competitive in the future.

Big Data helps in making banks learn about their customers in a better way enabling them to
make real-time business decisions through analysis of customer‟s purchase habits, sales
management, etc. Other added benefits of big data are better marketing, product cross-selling,
fraud detection, customer feedback analysis and many more. Additionally, it aids in identifying
the latest market trends and streamlining internal processes to reduce risks.

Blockchain Integration

Blockchain is known for cryptocurrency like Bitcoin that helps in keeping track of transactions in
a secure and verifiable way. Talking about security in banking institutions, blockchain will surely
disrupt banks by improving security, saving money and improving customer experience. As
blockchains are highly secure and easy to operate, it can be used for promoting transparency
during payments & currency exchange in banking.

Blockchain acts as a decentralized database and helps in protecting customers‟ personal and
financial data by storing all the information about real-time payments & profile details on
multiple blockchain servers. This resolves issues like fraud detection and cyber attack prevention.
The need for third parties will be removed in the loans and credit system using blockchain making
it more secure to borrow money and reduce interest rates.

Artificial Intelligence (AI)

Banks have benefitted enormously by adopting newer technologies like AI resulting in lower
costs and more revenue through multiple channels. A report from Business Insider Intelligence
says the average estimated cost savings for banks using AI is $447 billion by 2023. Let‟s find out
banks are using AI! It is mainly used to streamline customer experiences with robots and chatbots.
One common example is using AI to facilitate mobile banking enabling customers to get 24/7
access for any banking operations.

AI also helps financial institutions to make more effective lending decisions and better risk
management. This technology work along with other trends like big data analytics, voice
interfaces, RPA, etc.

Cyber Security
Banking is one such industry that deals with sensitive & personal information, which has made it
an attractive target for cybercriminals. Though it is impossible to prevent all the cyber-attacks due
to the diverse interactions with customers‟ money, security is essential and bank institutions must
be ready with the plans to minimize the damage if any mishap occurs.

Banks must share best practices and knowledge to help customers avoid the chances of cyber-
attacks. Additionally, they should invest in technical measures like working with the government
to prioritize cybersecurity, educating customers about their cybersecurity responsibilities, roles in
keeping their data safe.

Robotic Process Automation (RPA)

Using RPA, the bank can use customer service bots to deal with low-priority questions from
customers like account balance check, payment queries, etc. and save the time of human agents to
deal with high-priority concerns. This will not only improve productivity but reduce
labor/operational costs and the error rate. With instant resolution through RPA, users can make a
quick decision for their credit card application without getting any human agents involved in the
process.

Though robotic innovations are still in the adolescent phase, banking organizations should be
aware of all the benefits it offers to maintain long-term AI results. Leverage RPA technology to
deliver the best possible customer experience in the banking world through robots and virtual
assistants. Automate your repetitive tasks without human intervention and save costs efficiently.

Cloud Computing

Another latest trend of the banking industry is cloud computing that will make 24/7 customer
service possible providing any time service to customers. This enhances the performance of
financial institutions and scale-up services more quickly. Customers will only pay for the services
they need enabling banks to control costs.

One can easily avail pay-as-you-go pricing by paying the cloud provider as per the usage, making
it easy for individual customers or businesses to use the cloud. In the banking industry, cloud
computing can promote safe online payments, digital money transfers, wallets, etc.

Closing Statement

With the introduction of new technologies, the face of the banking industry has changed
tremendously over the years. Now, the banking process is much faster than before and more
reliable. The customer relationship with banks has not only improved but the number of the
customer base has also increased because of the benefits like anywhere banking. While banks deal
with rising demands, increasing flexibility needs, new demographics, etc., technologies come into
action to deliver efficient customer experiences. Chatbots is one of the most emerging trends that
will impact the banking industry by saving costs and improving productivity.

F) Indian Insurance Industry Overview & Market Development Analysis

Introduction
The insurance industry of India consists of 57 insurance companies of which 24 are in life
insurance business and 33 are non-life insurers. Among the life insurers, Life Insurance
Corporation (LIC) is the sole public sector company. Apart from that, among the non-life
insurers there are six public sector insurers. In addition to these, there is sole national re-insurer,
namely, General Insurance Corporation of India (GIC Re). Other stakeholders in Indian
Insurance market include agents (individual and corporate), brokers, surveyors and third party
administrators servicing health insurance claims.
Market Size
Government's policy of insuring the uninsured has gradually pushed insurance penetration in the
country and proliferation of insurance schemes.
Gross direct premiums of non-life insurers in India reached US$ 13.66 billion in FY20 (up to
September 2019), gross direct premiums reached Rs 410.71 billion (US$ 5.87 billion), showing a
year-on-year growth rate of 14.47 per cent. Overall insurance penetration (premiums as per cent
of GDP) in India reached 3.69 per cent in 2017 from 2.71 per cent in 2001.
In FY19, premium from new life insurance business increased 10.73 per cent year-on-year to Rs
2.15 trillion (US$ 30.7 billion). In FY20 (till July 2019), gross direct premiums of non-life
insurers reached US$ 5.7 billion, showing a year-on-year growth rate of 16.65 per cent.
The market share of private sector companies in the non-life insurance market rose from 13.12
per cent in FY03 to 55.70 per cent in FY20 (up to April 2019).
Investments and Recent Developments
The following are some of the major investments and developments in the Indian insurance
sector.

 The non-life insurance companies witnessed a rise of 13.1 per cent in their collective
premium in November to Rs 14,590.50 crore (US$ 20.09 billion).
 In November 2019, Airtel partnered with Bharti AXA Life to launch prepaid bundle with
insurance cover.
 In September 2019, Competition Commission of India (CCI) approved acquisition of
shares in SBI General Insurance by Napean Opportunities LLP and Honey Wheat.
 As of November 2018, HDFC Ergo is in advanced talks to acquire Apollo Munich Health
Insurance at a valuation of around Rs 2,600 crore (US$ 370.05 million).
 In October 2018, Indian e-commerce major Flipkart entered the insurance space in
partnership with Bajaj Allianz to offer mobile insurance.
 In August 2018, a consortium of WestBridge Capital, billionaire investor Mr Rakesh
Jhunjunwala announced that it would acquire India‟s largest health insurer Star Health
and Allied Insurance in a deal estimated at around US$ 1 billion.
  In September 2018, HDFC Ergo launched „E@Secure‟ a cyber insurance policy for
individuals.
 Insurance sector companies in India raised around Rs 434.3 billion (US$ 6.7 billion)
through public issues in 2017.
 In 2017, insurance sector in India saw 10 merger and acquisition (M&A) deals worth
US$ 903 million.
 India's leading bourse Bombay Stock Exchange (BSE) will set up a joint venture with
Ebix Inc to build a robust insurance distribution network in the country through a new
distribution exchange platform.

Government Initiatives
The Government of India has taken a number of initiatives to boost the insurance industry. Some
of them are as follows:

 As per Union Budget 2019-20, 100 per cent foreign direct investment (FDI) permitted for
insurance intermediaries.
 In September 2018, National Health Protection Scheme was launched under Ayushman
Bharat to provide coverage of up to Rs 500,000 (US$ 7,723) to more than 100 million
vulnerable families. The scheme is expected to increase penetration of health insurance in
India from 34 per cent to 50 per cent.
 Over 47.9 million famers were benefitted under Pradhan Mantri Fasal Bima Yojana
(PMFBY) in 2017-18.
 The Insurance Regulatory and Development Authority of India (IRDAI) plans to issue
redesigned initial public offering (IPO) guidelines for insurance companies in India,
which are to looking to divest equity through the IPO route.
 IRDAI has allowed insurers to invest up to 10 per cent in additional tier 1 (AT1) bonds
that are issued by banks to augment their tier 1 capital, in order to expand the pool of
eligible investors for the banks.

Road Ahead
The future looks promising for the life insurance industry with several changes in regulatory
framework which will lead to further change in the way the industry conducts its business and
engages with its customers.
The overall insurance industry is expected to reach US$ 280 billion by 2020. Life insurance
industry in the country is expected grow by 12-15 per cent annually for the next three to five
years.
Demographic factors such as growing middle class, young insurable population and growing
awareness of the need for protection and retirement planning will support the growth of Indian
life insurance.