This document discusses the importance and opportunities of digital transformation for organizations, especially in the banking and financial services sector. It defines what constitutes a truly digital organization as one that leverages digital technology strategically and uses a two-speed architecture to ensure stability while embracing agility and change. Managing the transformation journey requires dealing with cultural issues and having a long term view that integrates systems and data sources. Leadership buy-in and ongoing adaptation are also critical to the success and sustainability of digital initiatives.

1. Embracing
Digital Transformation
Point of view

2. Contents
2
Executive Summary 03
Embracing Digital Transformation 04
What Constitutes A Truly Digital Organisation? 05
Managing the Transformation Journey 06
Taking a Long Term View 07
Importance of Digital Ergonomics 08
Creating New Opportunities 09
Role of Leadership 10
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3. 3
The role of enterprise digital is rapidly gaining prominence amongst businesses
worldwide. According to Gartner, digital strategies will influence at least 80 % of
consumers' discretionary spending in 2015. Even in times of an overall budget crunch,
businesses are not likely to shy away from investing in digitisation.
This trend is visible especially in the Banking and Financial
services sector. As per KPMG's Mobile Banking Report, the
number of mobile banking users worldwide is set to rise from
0.8 billion in 2014 to 1.8 billion in 2019. Another study, IDC's
Financial Insights, estimates that retail banks in the USA will
spend $16.6 billion on digital transformation initiatives in 2015.
This spending is expected to grow at 10.4% CAGR till 2019.
Given these trends, it would be interesting to explore the best
methods that organisations can employ to leverage digital as an
opportunity. This whitepaper assesses the options that Indian
BFSI organisation may have and delves into the attributes of a
truly digital organisation.
As banking organisation begin their enterprise digital journeys, a massive empowering
effect of digital will be felt within these organisations. Digital can help them innovate
and undertake creative deployment of solutions to be responsive and adaptive to ever-
changing customer requirements.
Besides efficiency and growth, the additional outcomes of enterprise digital's adoption
can be path-breaking. A systematically planned digitisation journey can help an
organisation to get deeper understanding of customers and expedite decision-making.
It can also deliver reduced service turnaround times and a significant improvement in
customer- and employee-satisfaction levels.
Executive Summary
In this whitepaper
?Get insightful industry-specific
perspectives from India's vast and
fast-evolving banking and retail
sectors.
?Explore the models such as two-
speed IT that organisations can
follow to stay on course of their
enterprise digital initiatives.

4. 4
Embracing digital transformation is not an option any more. That we are sure is now
well understood across business verticals, particularly in Banking and Financial
Services. However, defining the characteristics of a truly digital bank is not an easy
task—the concept continues to evolve. Being an emerging trend, enterprise digital
maturity could be assessed in a number of ways. Even within the same industry,
organisations may view it differently. One thing however is certain, the growing
adoption of enterprise digital technology is a fact of life across industries.
Embracing Digital Transformation
Exhibit 1 — Asia: Growth in Digital Banking Customers
Enterprise digital technologies present a range of opportunities for organisations from
the banking and financial services industries (BFSI). Driven primarily by a rise in the
number of smart phone users, the potential areas for companies include complete
process automation, integrated omni-channels, intelligent – low friction engagement,
API banking, and more. According to Digital Banking in Asia 2015 report by McKinsey &
Company, the total digital-banking consumers in Asia which stood at 670 million in
2014, is expected to reach 1.7 billion by 2020.
Further, according a report by Forresters on 2015 Marketing Spends, the budgets for
digital marketing are likely to go up by 50% even as the overall budgets rise just by
about 5%. Mobile marketing seems to be the top digital marketing priority (53%
respondents), followed by social (46%).

5. 5
There is a huge difference between an organisation that does a
few things through digital means and an organisation that
embraces digital technology to transform itself. According to
Aubrey Corda, Senior Advisor at Mastek Ltd, “A truly digital
enterprise leverages digital technology as a strategic
opportunity. It adopts a two-speed architecture and operations
to ensure stability, predictability and security. By embracing
agility and the resultant chaos that accompanies change, it delivers far superior
customer- and employee experiences, thus creating an exponential business-value.
Such organisations transform themselves into truly responsive, adaptive, creative
enterprises with the help of digital innovation."
For Sudhakar Ram, Mastek's Managing Director & Group CEO, embracing digital
technology is all about empowerment. “While the traditional organisational
structures lay emphasis on order and predictability, enterprise digital ushers in an
environment of agility, uncertainty and chaos. It topples the hierarchical power
structures and places more power in the hands of every individual—customer,
employee, partner and citizen.”
What Constitutes A Truly Digital Organisation?
The number of mobile banking users
worldwide is set to rise from
0.8 billion in 2014 to 1.8 billion in 2019.
KPMG Mobile Banking Report

6. 6
The digital world is a dynamic one where change is rapid and
continuous. Customer requirements change; new features
and functions are added regularly. Competition catches up or
gets ahead and the cycle of innovation needs to get faster by
the day. For instance, a bank may create an amazing social
media experience, but its competition may render that
obsolete in no time.
Managing the Transformation Journey
Exhibit 2 — Managing the Two Worlds
The retail banks in the USA are
expected to spend $16.6 billion
on digital transformation initiatives
in 2015. This spending is estimated
to grow at 10.4% CAGR till 2019.
IDC Financial Insights
Robust Backend
Operations
Dynamic , Ever
Evolving Front
End
Going Digital
Key to differentiated experience
Support continuous innovation
Shrinking “First-To-Market” window
For better or worse, impact is fast and
furious
Personalization is hygiene
Analytical insights enable intelligent
engagement
Complete Clarity
Before Build
Tolerant Towards
Provisioning Speed
of In-house Data
Centres
Well Planned
Releases Bring In
Economies Of Scale
Waterfall
Development,
Testing, Operations
Incremental,
Rapidly Evolving
Think, Design,
Develop, Deploy
With Agility
Multiple Releases
Yet Contain Impact
In Production
Dynamic
Provisioning,
Continuous
Production
Structured Data-
Master,
Transactions,
Enterprise
Warehouse
Unstructured
Data - Social
Media, High
Velocity and
Variety, Real Time
Insight
Stability
Reliability
Availability
Standardisation
Controlled environment
Controlled change management
In Our Digital Age, Business And IT Need To Manage Two Different Worlds
There are cultural issues to deal with as well. Large organisations, for instance, may
face a hurdle when traditional mind-set's are challenged. For instance, a young and
digitally savvy employee, who is extremely talented, may have a disregard for the
company hierarchy or policies. It can be a challenge for the company's HR team to
integrate such professionals with the existing teams and tackle the chaos it may lead
to. Encouraging the digitally savvy and enthusiastic individuals with great
interpersonal skills to act as digital advocates within the organisation can immensely
help in addressing such cultural issues.
Some BFSI organisations are conservative about experimenting with social media. They
see it as a double edged sword. But considering social is a critical consumer
engagement platform, they may have to let go of such inhibitions and learning the art
of containing and managing negative social content.

7. 7
Digitisation at the enterprise level is not an event; it requires thorough planning. A
case in point is the global banking corporation Societe Generale. For its digital
journey, Societe Generale outlined three areas of focus—improving customer
experience, changing the way employees collaborate, and investing in the right
foundational systems to help its business embrace digitisation.
In a large bank for example, numerous isolated systems exist in various departments.
For an enterprise digitisation effort to bear fruit, well-thought-out data integration
and process re-engineering exercises are essential. It may even warrant replacement
of old, hard to maintain, monolith legacy systems with modern, well architected,
service oriented solutions that enable agility.
Taking a Long Term View
Exhibit 3 — Insight-led Engagement With Customer At The Core
In addition to integrating all major systems like Core Banking, Loan Management, Card
Management, CRM, and so on, it is also essential to harness and integrate external
data/information sources from Government, Business Correspondents, Credit Rating
Agencies and Social Media in order to get a multi-dimensional view of the customer and
the business.
Mobile
Apps
Branch
Teller
Call
Center
Virtual
Expert
ATM
Real Time
Analytics engine
Workflow
Engine
OLTP
Engine
Predictive
Analytics
Engine
Business &
Regulatory
Reporting
Engine
Internal
Data
Shared
Partner
Data
Public,
Social
Data
Big Data
Insight
Factory
Creative
Highly Customer Focussed
Designed for Interaction
Powered by Insights
Integrated Omni Channel Engagement
Payment
Engine
Adaptive
Service Oriented
Easy to Develop, Maintain and
Deploy Micro Services
2 Speed Architecture
Responsive
Big Data Foundation
Cloud-Ready On Demand Provisioning
2 Speed, Real Time Enterprise
DevOps Enabled

8. 8
As enterprise digital initiatives break the shackles of the traditional order, it is
important to provide users with an easy, intuitive user interface. The popular
messaging app, WhatsApp succeeded because millions of Indians and the world around
us, across the social and economic spectrum were able to use it without training. This
explains why some banking and payment apps succeed while others do not. Digital
ergonomics, which, among other things, incorporates creatively designed intuitive
user-interfaces delivering engaging user experience, is critical to success of an
organisation's digital strategy.
It is also necessary to define exactly which services or engagements carry greater value
for customers.Abank-customer may not be very eager to interact with her/ his banker
on social media. Whereas, the same customer may without hesitation buy goods worth
thousands of rupees through an online retailer's mobile app and let the world know
about the experience on social media. Organisations may therefore have to
understand their customer's preferences or invest in altering customer behaviour
while investing in their digitisation efforts.
Importance of Digital Ergonomics

9. 9
In August 2015, the Reserve Bank of India granted permission
to 11 entities to establish payments banks in the country. This
was followed by permission to 10 applicants to establish Small
Finance Banks. These measures are in line with the
government's financial inclusion objective—to make banking
affordable and take it to the unbanked.
These new entrants are expected to launch their services as
lean, digital, agile banks and are likely to create disruptive competition in the sector.
Enterprise digital technologies, indeed, are changing and challenging the competitive
landscape of the banking sector. Commenting on the new competition and business
challenges, the MD & CEO, of a leading universal bank was quoted as saying, “For every
challenge there will be equal opportunity but you need to be agile to succeed.”
Embracing digital technology at the enterprise level offers immense opportunities to
be agile and improve customer engagement. Aubrey Corda of Mastek Ltd. shares an
interesting example of how banks can proactively offer relevant products and services
to their customers using enterprise digital technologies as below.
Creating New Opportunities
When people adopt technology,
they do old things in new ways.
When people internalize technology,
they find new things to do.”
Exhibit 4— Insightful Engagement - Proactive Forex Offer
Internet
Enterprise Service Bus
Mobile Apps
Transaction Engine
Activity
Balance Enquiry
Balance Enquiry
GPS Sensor data– Foreign Location
Analytics Engine
Location Change Event
Customer Relationship
Engine
Moment of Truth - Foreign Travel, Forex
Product Engine
Customer Specific Forex Rate
Customer Interaction
Engine
Forex Promotion
In-App notification for promotion
Forex Rates
Scenario– Insightful Notification– Proactive Forex Offer
Enterprise Cloud Partner Cloud Public Cloud
RequestServiceValueConsumerIII
James McQuivey, Forresters Research
As per example, when a customer checks the account balance using a bank's
mobile app, the bank also receives information about the customer's location. In case
the customer is in a different country, the bank can proactively reach out and check
whether the customer has a Forex requirement. Thus, the bank can improve its
engagement with the customer by making a competitive offer, on the spot.
the above

10. 10
Success of any enterprise digital strategy depends on two critical factors. One is
investing in the right digital architecture, technologies and capabilities and the other
is leadership—the direction and support offered by top management. If the CEO of an
organisation is not digitally inclined, all the efforts and investments may go wasted.
But if CEO takes keen interest, it is half the battle won. Lastly, organisations must
recognise that when a digital transformation project delivers expected results, it is
merely a good start. In the digital world, success is not a destination, but a journey.
What we see on the horizon as a new year begins is the disruption created by startups in
Finance, Retail and Commerce. The rapid growth in Mobile & Web based Commerce
and the increasing consumer adoption of mobile devices not just in large cities but in
semi-urban and rural India are redefining the way organisations engage with their end-
customers. 2016 will also see the emergance of niche Payment and Small Finance
Banks that will soon make their presence felt. In such a dynamically evolving
environment it is impreative that financial services companies and retail sector
organisations accelerate the pace at which they are building competitive advantage
by exploiting the potential that enterprise digital technologies offer. The true
potential of these technologies lies in helping organizations innovate, stay ahead and
bolster business-growth by exploring new business models and markets and not staying
satisfied with incremental benefits like higher productivity and efficiency.
To Conclude
Role of Leadership

11. Mastek is a global, enterprise-level technology solutions provider with over three
decades of experience. Our clients have relied on us to architect, design and deliver
modern technology solutions that have improved the lives of millions of citizens and
customers. We utilise agile methodologies that deliver early business value and enable
organisations to adapt to dynamically transforming IT environments. Our core IT
services portfolio covers application development, service management and testing,
maintenance, IT consulting, systems integration, mobility, data warehousing, business
intelligence and analytics.
We specialise in building, maintaining and managing bespoke digital solutions for
clients in Government, Health, Retail, Banking and, Financial Services. Our flexible
delivery model, which blends onsite and offshore implementation, coupled with a
collaborative culture makes us a trusted partner to our customers. With 19 offices in
eight countries, Mastek operates across the UK, Europe, the US, Canada, Asia-Pacific
and the Middle East.
About Mastek
MASTEK LTD
#106, SDF IV, Seepz, Andheri (East), Mumbai 400 096
Tel: +91 22 6695 2222 / 2824 7999 Email: info@mastek.com Web: http://www.mastek.co.in