Lakshmi Vilas Bank: Facilitating game-changing innovation

Read about the financial services industry that has seen drastic technology-led changes

Lakshmi Vilas Bank, which was founded in 1926 by a group of seven progressive businessmen of Karur in Tamil Nadu, has a network of 508 branches (plus seven extension counters) across India. It has 11 regional offices and nearly a thousand ATMs. Excerpts of an interview with Parthasarathi Mukherjee, the Managing Director and CEO of the bank: 
What are the factors that have led to the emergence of Chennai as the regional financial hub?
Chennai has been best known as a base for manufacturers and having said that I feel happy to note that it is now steadily progressing and emerging as an investment destination for services companies in the banking and financial segments.
A number of reasons can be cited such as cost, infrastructure, and availability of skilled personnel. One has noticed that there is a move away from cities such as Mumbai and Delhi-NCR into other cities. A number of corporates are known to express interest in setting up their business hubs in Chennai or expanding their presence in the city.
The key drivers for a possible shift to Chennai are the city's infrastructure and connectivity with international and regional locations. In addition, lower costs in establishing a base in Chennai, and presence of a strong, local technical pool are also the differentiators vis-à-vis other cities. 
I recently came across an employment survey conducted by a leading HR consulting company, which also indicated that Chennai recorded the best growth in hiring out of any Indian city over the last four quarters. The report mentioned that business outlook for financial services in Chennai was better than in cities such as Mumbai, Delhi, Bangalore, Hyderabad, Ahmedabad, Kolkata and Pune. 
Does your bank have a strong presence in the Gulf in terms of tie-ups with other partners?
We are in the process of completely revamping our coverage of the Gulf and hope to announce these soon. In the meanwhile, our correspondents like Mashreq Bank and Standard Chartered Bank have been willing partners.
Do you see a rapid growth in remittances from the Gulf over the coming months?
Remittances to India dropped by nearly 9 per cent in 2016 according to a report published by the World Bank. 
India, while retaining its top spot as the world's largest remittance recipient, saw a decline in remittance inflows amounting to $62.7 billion in 2016 from $68.9 billion in 2015. Keeping this trend in mind, it is not very easy to predict the outline of growth in terms of remittances. 
What are the various options that Gulf-based NRIs have for investing in the financial services sector?
For the average NRI, the best option is usually the mutual funds route. We would advise NRIs to choose a few mutual funds and adopt the SIP route for their investments. For the more active investors, the PIS route through their respective banks is also there. 
Do you have any specific offerings for NRIs? 
We are particularly happy about the launch of our NRE savings bank product - Crown NRI. This is an extension of our flagship Crown product to NRIs.
Could you share your views on the rapid technological changes that are occurring in the Indian financial services segment?
The financial services industry has seen drastic technology-led changes over the past few years. Many look to their IT departments to improve efficiency and facilitate game-changing innovation, while somehow also lowering costs and continuing to support legacy systems. 
Meanwhile, FinTech start-ups are encroaching upon established markets, leading with customer-friendly solutions developed from the ground up and unencumbered by legacy systems.
Customers have had their expectations set by other industries; they are now demanding better services, seamless experiences regardless of channel, and more value for their money. 
Regulators demand more from the industry too, and have started to adopt new technologies that will revolutionise their ability to collect and analyse information. And the pace of change shows no signs of slowing.
In fact, in financial services, most will agree that the speed of change in technology is indeed a concern. One important factor is that the time it takes to go from breakthrough technology to mass-market application is collapsing. 
Let's say you are a bank executive. Imagine that you are competing against a truly global, multi-service, low-cost, digital bank: customers accessing their accounts through their mobile phones, paying with a tap on their wearables, sweeping savings to an ETF (exchange traded fund) portfolio, designed by an AI (artificial intelligence) engine based on their savings goals and risk appetite profile, offering no-fee, cross-border payments. 
Imagine if you faced a competitor bank like this, with a low and nimble footprint, prototyping new services quickly, managing regulatory compliance transparently, using an AI system to limit fraud losses, and hedging currency risk using crypto-currencies. This competitor does not exist today. But in the next few years, it is a very real possibility. Then what?
For the average NRI, the best option is usually the mutual funds route. We would advise NRIs to choose a few mutual funds and adopt the SIP route for their investments. For the more active investors, the PIS route through their respective banks is also there. 

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