Rendezvous with Dr. Manisha Ketkar
It is BFSI sector which will prove to be catalyst in India’s journey to being a 5 trillion Economy.
A Brief Profile of Dr. Manisha Ketkar
Dr. Manisha Ketkar is a Commerce graduate and a Fellow Cost Accountant (FCMA). She has also done her Master’s in Business Studies (MBS) from the University of Pune.
She has done her PhD in 'Study of supply risk management practices' with Symbiosis International (Deemed University) under the guidance of Dr. O. S. Vaidya from IIM Lucknow. Dr. Ketkar has presented papers in International Conferences and also has some published papers to her credit.
Dr. Ketkar has 29 years of experience. She has handled the operations of a business unit of a pharmaceutical multinational for over 16 years before her passion for teaching made her join Symbiosis in 2006. Her areas of expertise are Cost & Management Accounting and Supply Chain Management.
Dr. Ketkar is acknowledged for her interactive teaching approach. Along with academics, she is also known for her innovative approach to improvements, from student related matters to process reengineering.
It was a pleasure speaking to her and hearing her valuable advice for future management aspirants. Read on to find out more.
Team MBA Rendezvous : How BFSI sector can prove to be termed as pivotal for Indian Economy?
Dr. Manisha Ketkar BFSI also known as Banking, Financial Services and Insurance provides an array of financial products and services like Corporate Banking, Retail Banking (Includes Core Banking), Investment Services etc. to its customers. In the coming years BFSI sector is going to grow as still large section of Indian population don not have access to banking products and services. High growth rate of Indian economy will also aid BFSI sector in its growth.
Indian economy's growth:
National Skill Development Corporation (NSDC) has published a report which talks about the
contribution of BFSI sector in Indian economy. Report explains how BFSI sector has promoted long term
growth of Indian economy. All the major segments of the industry that is Banking, Mutual Funds and
Insurance have contributed immensely.
The most essential role of a bank is to connect those who have capital with those who need capital. Banks can contribute to India’s economic development in the following ways:
- Promote saving habits among people
- Providing access to bank accounts, loans, deposits, etc. to common man, particularly women
- Financial assistance to Industries, particularly in priority sectors and backward areas
- Financial facilities for trade
- Financial assistance to agricultural sector
- Help in implementing Monetary Policy
- Foreign Currency Loans
- Promotion of New Entrepreneurs
- Help in generating employment opportunities
Financial Services sector: Stock markets
Stock market allows companies to raise funds from the public without paying any interest on it and use it for expansion of business. Assuming a company issues one million shares which can be sold at Rs 4/- each, capital raised by the company is 40 million. Company is not paying any interest on 40 million and also debt is not incurred.
Not only company but investors also gain a lot from stock market. By purchasing a share in the company investor becomes an owner of the company and will benefit if company earns profit.
Banks and NBFC (Non-Banking Finance Companies) which are part of BFSI sector have huge opportunity here. Apart from opening saving account, current account and giving out loans, banks also assist people in various financial services like investments in Stock Markets, Mutual Fund and buying insurance policies. People who want to invest in stock market and mutual fund through banks have to open Demat account and trading account. Demat, Mutual Funds and Insurance are not banking products but are called as third party products (TPP). Bank is just using its network for selling TPP and in return earn revenue.
Population of India is around 1.2 billion, out of which only 2% that is 20-25 million people invest in stock market or mutual funds. Reasons why people don’t invest in stock market is lack of knowledge, and lack of expertise to select companies. Bank who have trained professionals can change this by giving adequate training to customers and bringing about behavioural change when it comes to dealing with money. Banks command a lot of respect from common people and also have people with financial expertise who can educate common people on financial concepts like “Inflation adjusted return on investment, Financial Planning etc.” This will also create more job opportunities in the bank which will have positive impact on the overall economy.
Good stock market helps the economy in the following ways:
- Any increase in the price of the stock increases the overall confidence in the economy.
- Increase in stock price increases the wealth of investors who become more confident and purchase goods like car, invest in real estate etc. which helps in equitable growth of economy. So overall economy benefits from a positive stock market.
Insurance helps people to plan for unforeseen risks. Primarily insurance is of two types 1) Life Insurance and 2) General Insurance. Life insurance covers risk on human life whereas General Insurance provides insurance cover for vehicle, property, damage due to fire, etc. In today’s time any hospitalization for period between 5 to 7 days in good hospital will be expensive. Medical emergency is one of the primary reason why many people become poor. Simple solution for this is taking the right health insurance policy. Insurance policy also provide financial protection for family members when the bread winner is no more.
Despite all the benefits of insurance, insurance penetration in India is at dismal 3.69%, one of the lowest across the world. Banks and NBFCs have in the recent past helped in increasing the insurance penetration but there is long way to go. Insurance sold through banking channels is called as Bancassurance. As banks have network of customers and bankers have trust of people they are able to sell insurance better compared to pure insurance companies. Today customer does not buy product but they buy experience. Bancassurance provides complete solution of all insurance related problems to customers under one roof that is bank.
As more and more people are becoming aware about the importance of insurance, bank assurance will provide a lot of job opportunities for people who are interested in selling products. This will have a positive effect on Indian economy. Insurance companies also help economy in following ways:
- Insurance companies help keep our farms operating ( by providing insurance to farmers, crop insurance)
- Insurance companies help finance economic development projects
- Many insurance companies have come up with insurance plans for economically weaker section ( Social Insurance)
Team MBA Rendezvous : How research can balance challenging nature of BFSI environment?
Dr. Manisha Ketkar Three major reforms have happened in Indian Banking System in the last three decades. First reform happened in the year 1969 and was called as Nationalization phase, it was movement from class banking to mass banking. Eighties was referred as the phase of consolidation and in nineties major technological changes were introduced in banks.
Objective of each phase had been financial inclusion that is taking banking to masses, making credit available for all enterprising people irrespective of their caste, creed or religion. First phase which was nationalization phase, banks were nationalize with the objective of utilizing nation’s resources for development of infrastructure, setting up of industries and creation of employment. Second phase which was consolidation phase new technology like Core Banking was introduced which allowed banks to do away with manual ledger and move banking to computer age. People thought advent of new technology would reduce jobs and banking would become difficult in country like India where large section lack basic education. To everyone’s surprise effect of technology on banking was hugely positive, with the help of technology bankers were performing complex banking transaction with click ofa button and geography of the customer did not matter that is sitting in Pune banks were able to handle customers having account in Bangalore. This brought more and more people of various background to banks thereby promoting financial inclusion, the original goal of bank nationalization.
In third phase of banking reforms technology further gave new tools to banks like ATM, net banking, SMS banking, mobile banking ,mobile wallets which added a new dimension to banking. Now customers can perform their own banking transactions, also bankers can directly communicate to customers anytime and educate them on various banking products and also help them in financial planning. Bankers are also able to handle rural customers at faraway places better as most of them have at least basic mobile handset which allows banks to communicate with them and guide them on financial matters through SMS, phone banking. Farmers have greatly benefited with this latest technology in bank, as banks have promoted agriculture loans, crop insurance and created lot of awareness of these products.
- BFSI environment is very dynamic, so continuous research in technology is required. For banks to gain more customers, technology has to be secure, reliable, affordable and should continue to give competitive advantage to banks. For next phase of reforms to happen in bank new technology should come which has Artificial Intelligence (AI). AI will allow banks to find out requirements of the customers and offer them tailor made products.
- Phone banking is a very important digital banking tool but is used sparingly as there is a long wait time on it. Usage of phone banking can be increased if wait time is utilized in constructive manner or people are not asked to wait but are called separately by banks later, instructions are given in local language rather than in Hindi or English. Banks should also send customer statements in local language.
- Bank customers are hesitant in using cash deposit machine as they fear any error will cost them their money. Banks can incorporate step by step audio instruction in the cash deposit machine which will increase the usage of cash deposit machine. Instruction should be -multilingual. Any error in cash deposit like customer’s account not credited but cash is -accepted by the machine should not require human interface for correction. Machine should be able to solve problem, this will encourage people to deposit cash in machine even on bank holidays.
- Bank should look to tie up with Google which will allow them to use Alexa (Robot) for guiding customers on use of technology or they can develop something like Alexa. HDFC has already implemented this in net banking, customers can go to hdfcbank.com and chat with “EVA” for any banking related problem.
Team MBA Rendezvous : What can be the road ahead of BFSI sector to augment India’s aim of 5 Trillion Economy?
Dr. Manisha Ketkar Over the period of time many changes have happened in banking sector to meet the ever changing demands of the country. Customer satisfaction is of paramount importance for banks in today’s time. In fact many bankers say customer satisfaction is not enough and one should strive for customer delight.
This attitude has changed the very approach of bankers for example these days Account opening is referred as Relationship opening. Phrase account opening did not have any emotional connect, relationship opening on the other hand reflects care towards customer and also their family members. As customer service is a differentiator in today’s time banks have introduced services like “Door step banking” which provide customers banking services at home. Technology has also enabled in improving the customer service.
Door-step banking, plastic money, seamless multi-currency transactions, FinTechs giving access to finance are the future of banking industries.
BRICS Bank will provide strong impetus in developing infrastructure projects in developing countries.
Retail financial services will benefit from demographic dividend. Many will apply for loans which will lead to growth in retail financial services.
Banks will have rural market to explore. With strong impetus by the government on contract farming and rural housing, this area will soon become profitable for the banks.
Requirements for future:
Like any growth opportunity there is risk, banks will also have to be prudent while trying to expand that is growth should not happen at cost of financial health.
- Take steps to improve Limited Transparency due to inadequate disclosurese
- Regulations to support growth and ensure sustainability - Basel III norms, Liquidity requirements
- Stressed Assets management
- Asset-Liability mismatch
- Protection from frauds
Team MBA Rendezvous : What can be a dream mission for this sector to set goals to compete at International level?
Dr. Manisha Ketkar What will help:
- Culture of innovation
- Customer centric organisations
- Automation, best-in-class processes, and Universal banking
- Financial Inclusion and Inclusive Growth – banks have to come up with products that are affordable to large section of population.
- Pragmatic, integrated Risk Management
Team MBA Rendezvous : How a student gets transformed as financial expert at SSBF & creates employability regimen to fit in BFSI sector?
Dr. Manisha Ketkar There is immense demand for trained human resource - BFSI sector which is having a positive impact on the economy as a whole. SSBF focuses on practical training to create managers which are ready to take up respective jobs in the BFSI sector without much pre-job training. SSBF has recorded 100% placement over the last few years with highest CTC of Rs 10.25 LPA. Our students have been placed in top banks like Axis Bank, J P Morgan Chase, ICICI Bank, Ujjivan Bank, HDFC Bank and Federal Bank.
BFSI sector has lot of job opportunity and career prospects for a new employee -. SSBF trained student is ready for job on day one and doesn’t require much on job training as most of the banking concepts are covered here.
Associated Job roles in BFSI:
- Insurance agents: People who are working for insurance companies and are selling various insurance plans for them. They earn very good commission, apart from the salary they get.
- Bank and Financial product sales executive/Relationship managers: These people are responsible for managing portfolios assigned to them. One portfolio can have 100 customers and their complete banking needs, financial needs have to be understood by relationship managers and only then the product should be sold to them.
- Equity product sales executive/Relationship managers: these people are responsible for checking latest equity trends, fund management, and generating total returns on allotted assets
- Investment representatives/Relationship managers: these are people who work at either banks, credit unions, or investment firms to provide advice related to investment products and other financial services. They offer advice for various financial products like - Annuities, Estate planning, Insurance, Mutual funds, Retirement plans, Stocks, Education savings, and Trust funds
- Stockbrokers: people who are associated with brokerage firms or are independent brokers who buy and sell stocks and other similar securities for retail as well as institutional patrons. They earn good commission for doing the job well.
- Credit Manager: The credit manager position is accountable for the entire credit granting process, including the consistent application of a credit policy, periodic credit reviews of existing customers and the assessment of creditworthiness of potential customers with the goal of optimizing the mix of company sales and bad debts losses.
- Business Management Analyst: These people works with Business Management team to support reporting and review the activities, data reporting. Develops MIS documentations and dashboards to allow for smooth operations and easy system maintenance. Document processes and contribute to business management process manual. Prepare weekly monthly presentations to the leadership team which will provide the overview/ insight on business. Provide the ideas, take initiatives and be proactive regarding the view/graphs/tables for presentation. Sound knowledge on monitoring of engagement/ project finance and reviews.
Career projection: In 2 or 3years time people in this line can move up to the position of advisors if they good skills and industry knowledge.
Skills required: Most sought out skills in BFSI are:
Proficiency in sales
Stock market knowledge
Mutual fund awareness
Knowledge about banking operations
Behavioural skills are equally important as without them above skills cannot be executed. Common soft skills are:
BFSI sector is very dynamic and regular update of knowledge is the need of the hour. Students looking to join BFSI should clear certifications like NISM (V-A Series), NISM (VI), NSDM Depositors module, IRDA, JAIIB and CAIIB.
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