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In the latest episode of the of EY India Insights, Radhika Saigal, Leader and Partner, Technology Consulting-Financial services, EY India, reflects on an important issue, “From pilots to scale: How financial services firms invest in technology”. She highlights ways in which financial services firms can transition from pilot projects to large-scale technology adoption, with a focus on strategy, governance, operating model and organizational culture.
The conversation also emphasizes ROI alignment, cybersecurity and emerging technologies like GenAI, quantum computing and sustainable tech for future transformation in financial services. Additionally, Radhika points out that true transformation requires integrating technology with governance, culture and long-term strategic vision.
Key takeaways:
C-suite ownership and clear business KPIs are vital for scaling technology successfully.
Clean, unified data and scalable architecture form the backbone of enterprise-wide transformation.
Continuous funding and strong governance enable pilots to evolve into long-term business solutions.
Shifting from annual capex budgets to continuous, product-based funding models enables sustained investment and accountability for ROI realization.
Moving from pilot to scale requires the alignment of strategy, technology and culture, not just tools.
For technology ROI to be realized, it has to be directly related to business. It has to support revenue growth, cost reduction or risk mitigation.
Radhika Saigal
Leader and Partner, Technology Consulting-Financial services, EY India
For your convenience, full text transcript of this podcast is available below.
Pallavi Janakiraman:
Welcome to the EY India Insights podcast, I am your host Pallavi. Today, we are diving into a topic that lies at the heart of transformation: From pilots to scale: How financial services firms invest in technology. Joining us is Radhika Saigal, Leader and Partner in Technology Consulting for Financial Services at EY India, with close to 28 years of experience across financial services and technology, leading complex digital transformation programs at EY India.
In today’s conversation, we will explore how firms move beyond experimentation to embed technology at scale - the strategic choices, governance structures, return-on-investment disciplines and the cultural shifts required to truly transform.
Radhika, a very warm welcome to you and thank you for joining our podcast!
Radhika Saigal:
Thank you very much. I am very excited to have this conversation.
Pallavi:
Thank you, Radhika. To begin with, many financial institutions initiate technology projects as pilots, according to you, what are the critical factors that determine whether these pilots can be scaled successfully across the organizations?
Radhika Saigal:
This is a very pertinent question. Lot of organizations are going through a lot of pilots doing POCs (Proofs of Concept) on multiple next gen technology, including GenAI and others. However, about 80% of pilots do not reach production - they just remain in the sandbox. The key success factors for any pilot to actually reach to production have multiple enablers.
One, it needs to have strategic sponsorship - there needs to be a C-suite ownership with very clear business KPIs, it cannot be just an innovation lab interest. The KPI has to be related to business function and business function owner has to own it. Second, data readiness is an important element. Clean, unified and accessible data pipelines are a must if you have to get any technology POC to reach production and then to scale.
Architectural and integration decisions will be a very important element. We will have to build pilots using scalable enterprise architecture patterns - that means API-first, event-driven or cloud native architecture. We cannot have standalone Proofs of concept which are just working in silos. Change management is very important . We need to embed risk and compliance and ensure that AI and automation are done in a way that it can be scaled enterprise-wide.
Regulatory and risk alignment upfront is a must. Funding continuity will be a very important element, hence many of the organizations are moving from an annual CapEx-based funding to product-based or a value stream-based funding. If a POC or a proof of concept has to reach scale, it is important that we have these sustained investments through.
Last but not the least, it is important to have talent and ownership - dedicated product teams with business technology collaboration, is a must for us to get into scale.
Pallavi:
Thank you, Radhika. How can financial services firms ensure that their technology investments are closely aligned with their overarching business strategies and objectives?
Radhika Saigal:
Again, another pertinent question. We have to have technology ROI to be realized, which has to be directly related to business. It has to support revenue growth, cost reduction or risk mitigation. The best practice around this would be the technical strategy, which has to be a derivative of business strategy. We have to have technical strategy, which is aligned to business outcomes.
Second, as I had mentioned earlier, value-stream funding - that means shifting from project-based to a product- or capability-based funding is a must. Joint ownership between CIO, CTO and business head will be an important element. Architectural alignment with enterprise level architecture, governance boards are set up and new technologies and technology pilots are completely aligned to overall architectural sentiments and alignment is a must.
Last but not the least, there has to be a good governance. A periodic value realization review, a quarterly value council has to be there so that we are assured that we are aligning to the business strategies and objectives and not just running pilots which will never see the light at the end of tunnel.
Pallavi:
Thank you, Radhika. What are some of the common challenges faced when integrating new technologies into the existing systems and how can organizations address these obstacles effectively?
Radhika Saigal:
There are multiple challenges which I see in financial services. Many of the financial services organizations have a lot of core systems which are legacy. They are still on mainframe. There are global based architecture, which is still existing. Second, there are a lot of inconsistent data standards and especially across silos - that inconsistency is a big challenge. Latency and interoperability issues still exist.
Resistance from risk and compliance functions because of certain perceived operational risk is another big challenge that we face. Vendor lock-in with an existing system is another challenge which has to be overcome.
So, how do we address them? We look at this from a legacy modernization perspective. First, we get into our API-first modernization - that means we wrap legacy codes in APIs and we migrate progressively, rather than a wholesale revamp. So, hollow the core and get into a API-first modernization is the first principle that we follow. Second, we need to adopt modular and microservices-based architecture. New capabilities have to be built around decoupled components. Investment is required in middleware integration layers like ESBs (Enterprise Service Bus) and Kafkas, or even streamings to bridge the systems. A parallel run strategy is a must for the old and the new system to be running in parallel before a cutover happens.
Change management, upskilling and reskilling are important elements to be taken into consideration. Cloud native integration platform, where we are accelerating connectivity with lower latency and standardization, is another set of important characteristics that we adopt to overcome some of the challenges that I have mentioned before.
Pallavi:
Thank you, Radhika. To measure the outcome, what metrics or KPIs should financial institutions use to assess the return on the technology investments and ensure that they are delivering value?
Radhika Saigal:
KPIs have to be aligned with three Rs: Run, Risk and Revenue. The key KPIs that we look at has to be the holistic KPIs. First, it has to be related to financial impact, cost to income ratio improvement, unit cost per transaction, productivity gain, tech opex, percentage of revenue, ROI, some of these are financial KPIs which are very important.
Second, a customer impact: NPS uplift, digital adoption rate, average time to service, attrition reduction… this would be on a medium-term basis. Operational impact, where deployment frequency, incident reduction, mean time to resolution, automation percentage. Again on a short-term basis, these are important KPIs to track. Innovation and agility, where we are tracking time from idea to pilot to production to percentage reusable code.
These are some of the important KPIs which have to be tracked over a medium term basis. From a risk and compliance perspective, reduction in audit findings, model governance, compliance score, regulatory breaches are important KPIs to be followed. And as I mentioned, having a very stringent governance where lot of these KPIs attract on a real time basis, as well as there are reviews done to align strategy of technology with business outcome, that is a key to the success for scaling pilots to big production ideas.
Pallavi:
Thank you, Radhika. With increasing reliance on digital platforms, how can financial services firms maintain a very robust data security and comply with the regulatory requirements?
Radhika Saigal:
Important elements like cyber security, regulatory security and resilience are now required. Core principles are zero trust architecture that authenticate every user and device continuously, not just on a login basis. The data minimization and encryption are a must. We mask, tokenize and encrypt data end to end - especially customer PII (Personally Identifiable Information) data is a big challenge and that needs to be encrypted.
Data governance framework is very important. We define ownership, lineage, access controls and retention policies. Regulatory alignment, embedded compliance by design for GDPR, RBI, SEC and MAS and local data localization norms are a must. Continuous monitoring and audit are important, where we are automating some of these control testing in anomaly detection using AI for insert insider as well as external threats.
Third party and vendor security are another important elements. We conduct regular due diligence and continuous monitoring of API integration, SaaS vendors and cloud providers. Incidence response readiness - where you are running tabletop simulations and doing some of those, at least quarterly. That is an important element as well.
Pallavi:
Thank you. Lastly, looking ahead, what emerging technologies do you believe will significantly impact the financial services industry and how should firms prepare for these changes?
Radhika Saigal:
There is good progress that has happened from pilot to moving into scale on multiple technologies and the technological innovation is happening at a pace which we have never seen before. GenAI will continue to rule for significant time, which will have an impact on customer services, code generation, risk and compliance and automation. We will have to prepare a strategy for building AI governance, MLOps, pipeline, data labeling capabilities and lineage capabilities. That is a must.
Quantum computing is another technology which is picking up, which will impact risk modeling and encryption. Monitoring regular stance, starting with quantum safe cryptography pilot is a big-ticket item that everyone is not currently delving into. Embedded finance and API ecosystems will impact new revenue models via partnerships and multiple other avenues. Building secure API platforms and partnership governance will be an important strategy for ensuring that we are enabling it.
Real-time payment and blockchain, blockchain and crypto has again picked a lot of momentum. Cross-border settlements and tokenized assets are areas which are picking up and participating in CBDC and instant payment ecosystems, are important strategies for preparation. AI-driven cybersecurity, where we are doing productive defense and threat intel, that will be an important element. Clean and sustainable tech is the other technology which is highly picking up. ESG reporting and carbon accounting are important elements. From a strategy perspective, integrating sustainability data into the core systems and designs is an important strategy that firms need to take into consideration.
Pallavi:
Thank you, Radhika. That brings us to the end of this conversation. Thank you for spending your time and sharing your valuable insights with us today. A key takeaway to our listeners would be that moving from pilot to scale is not just about technology, but also about aligning strategy, governance, operating model and culture as well. So, thank you.
Radhika Saigal:
Thank you very much. Thanks for having me here. It was a great conversation with you, Pallavi.
Pallavi:
Thank you, Radhika. To all our listeners, thank you for tuning in into our EY India Insights podcast. If you have enjoyed this episode, please do subscribe and share and stay connected for more conversations with our leaders shaping the future. Until next time, this is Pallavi, signing off.
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