Q&A: Opportunities and challenges in the financial services sector in India
In this interview, Girish Mehra, MD, Group Finance & Deputy Senior Franchise Officer India shares his views about the opportunities and challenges for the financial services sector in India.
1. What are the top opportunities and challenges you foresee in the next year for shared services in India, especially for the financial services sector?
The opportunities and challenges are increasing significantly with the rising availability of high-end and complex finance skills. There is a strong demand for treasury, capital, and liquidity, as well as statutory and regulatory reporting skills. Global organisations are at different maturity levels and sharing additional work with India, particularly in more complex areas. One of the challenges includes talent management in a high-demand/high-salary inflation market. Therefore, it is very important to identify the right talent, compete for it, and then retain it.
Also, many digital tools and skills are now available for process transformation and automation. This creates opportunities to reduce manual work, and the availability of higher-end talent helps in taking more complex and judgement-based work. This also helps us in moving away from the shared services tag to the value creator/provider. I believe moving away from 'cost arbitrage' to 'value addition' is important to build a strong value proposition for doing high-end work from India.
Another key element is the availability of abundant technology skills in India, which is resulting in increasing technology presence of global organisations in the country. Now, organisations are more integrated across functions such as finance, technology, and risk. This motivates more people to work for an integrated organisation, as it offers more opportunities for internal mobility as well as global roles whilst working in India.
2. As the lead for CFO India, how do you align and communicate with multiple stakeholders? What are the key things you need to do differently?
I have a dual role at Credit Suisse, lead for the CFO function in India and global head for finance operations and applications management.
In my role as the CFO lead, I have defined my vision and strategy for people, organisation structure, and the infrastructure we want to build in India. Some of the things include the approach for developing and retaining talent, right compensation strategies, and how we can build and automate different levels of our organisation pyramid in India. With these strategies in place, it is not difficult to align with stakeholders on common priorities and focus areas.
One of the most important things that I follow is having regular open communications with my key stakeholders. The more I understand their priorities in India, help them leverage opportunities and resolve challenges, the easier it becomes to develop a strong partnership. It also helps build trust and partnership and relationships, and create an integrated organisation.
Another important aspect is the culture of collaboration within the organisation. Understanding different perspectives and being transparent and direct are important aspects of building trust amongst stakeholders.
"Inclusion, strong culture of partnership, and trust are the key principles I follow, and this has worked well for me in aligning with my stakeholders".
3. The industry is going through significant digital transformation.
i. What are the top three disruptive trends that you are witnessing?
Digital disruptions started to pick up four to five years ago, but COVID-19 expedited these disruptions. "When I joined my current organisation, one of my employees asked me if being a CA would still be good enough 10 years down the line." My response was that unless you continuously learn new and emerging skills, such as digital skills, you will be less relevant in the future. It is interesting how times are changing rapidly with the increasing importance and pace of digital disruptions.
a. Coding languages, such as R-studio and Python, are relevant for transforming and automating financial processes. These can be implemented by encouraging more employees to learn these coding skills and apply them to their tasks in an agile manner.
b. Visualisation applications, such as Qlik Sense and Tableau, are becoming more important with increasing focus on analytics and dashboarding. These applications enable the availability of real-time self-service information and are more valuable and effective than PowerPoint presentations.
c. Next is the desire to multi-skill by the newer generations (i.e., Gen Zs). Learning and applying coding to simplify and automate tasks creates a bottom up positive disruption for the organisation, when entry-level employees start using these technologies.
While implementing the changes, it is important to have strong control processes and governance in place.
ii. How do you believe they will specifically affect your business?
Over time, the shape of our organisation pyramid would change. The bottom of the pyramid will get smaller as non-judgement work such as data collation, manual entries, and reconciliations reduce. The middle and upper parts of the pyramid, including work that is difficult to automate and requires human judgment, complex problem solving, and leadership skills, will grow at a greater pace as the availability of these skills becomes more abundant.
iii. Is the Global Financial Services (FS) sector geared up for this disruption?
I believe the FS sector in India is well prepared for these disruptions. But FS companies use several legacy systems. The transition to move to new cloud-based technology could take several years. The large period that it may take to transition provides significant opportunities for digital transformation to help organisations in the short-term implementation of quick wins.
Another challenge in this sector is the increasing number of and evolving nature of regulatory requirements. Putting in place robust control frameworks is one of the most important aspects to deal with this challenge.
iv. How have you managed attrition during the pandemic?
One of the biggest challenges during the pandemic has been the absence of face-to-face connect between employees. Most people went into a virtual closet shadowed by the uncertainties and challenges of the pandemic and it became increasingly difficult to understand each employee’s well-being.
What helped us was having a strong virtual engagement model across our organisation. We continued skip-level meetings connecting with different parts of the organisation. Maintaining discipline to connect regularly with teams and individuals is important.
The virtual work from home environment provided the advantage of more people joining meetings than would have been possible in a conference room, to discuss ideas and challenges; however, it became harder to pick up non-verbal cues, and so more questions/follow ups were required when things didn’t feel right.
Staying competitive on compensation through regular market benchmarking of roles and skills has also been very important to ensure we are paying fairly. Equally important is the organisation culture – how people behave and feel in an organisation. Having a culture that is inclusive, fosters trust, collaboration, accountability, meritocracy, and open communication goes a long way in retaining talent. I believe actively engaging with employees and caring about their aspirations and career paths really help build trust. If you break down hierarchy and title barriers, it works well to have an open and engaging conversation. This helps in creating a positive culture and sense of belongingness in the organisation.
4. Lastly, what are some of your major learnings from the past two years of the pandemic that you would want to share with the other finance professionals?
During the pandemic, we realised the importance of staying connected to our people and being empathetic to different situations and needs. We understood the importance of flexibility and work-life balance. It is important to be respectful of the work time and personal time of your colleagues and teams and be mindful of an end time to the workday. It became even more important to ensure that employees are prioritising their time for physical and mental well-being, including taking time off from work. Providing support for health and well-being of employees, including quick medical and other support during crucial stages of this pandemic, has created a greater sense of comradery and support within the organisation. Also, assisting employees with infrastructure support during work from home has been quite important. Virtual working has been, especially difficult for new joiners. It is important to reach out to them to make them understand the organisation, the office culture, their job, and ensure they have the necessary support. With the pandemic ebbing in India, we expect to move to a hybrid work environment, where we can optimise the flexibility of work from home with the advantages of face-to-face engagement in office.