Internet and Mobile Banking will be the Big Changes, Going Forward: Naina Lal Kidwai

Anup Varier

CIO: HSBC India is enjoying healthy profit margins. How did you manage this in a down economy?

Naina Lal Kidwai: We tend to be a conservative lender. By not having an aggressive lending strategy in periods which were not that good for the economy, we were spared the large NPAs (non-performing assets) that other banks accumulated.

We also took a view of certain sectors like power and airlines where we either got out in time or just weren't there. So we didn't get hit by those. We got the full benefit of the growth sectors without getting hit by those that didn't do well. I think our risk strategies, analysis, and experience helped us enormously in terms of our lending book.

CIO: How has IT helped you achieve this?

Naina Lal Kidwai: The risk models are developed with two things: Degrees of refinement, and inputs that come in from Hong Kong and the U.K. But at the end of the day, we are dependent on a system that captures data. And here it is all about MI (management information).

It is about data that is captured in a way that reminds you of what may have happened in the past. The analysis of the information and the financials are all, at some level, IT-enabled. So IT's role is very big.

The reports that our risk head presents to us at the APAC board-level meetings are phenomenal. It includes data across all the countries in this part of the world, which represents close to 66 percent of the profits of HSBC. We are able to understand this because of systems that have been set up and are able to pull together data in meaningful ways. To have good risk processes is important and to have the MI around risk--enabled by IT--is also very important.

CIO: What are your expectations from a CIO and what does the role entail?

Naina Lal Kidwai: First of all, a CIO needs to understand the business. If he doesn't understand the business, he wouldn't be able to drive change. While he has to be customer-centric--towards external customers--the CIO should also focus on his internal customers, the employees of the bank.

For a large multi-national like us, the CIO needs to be constantly aware of the next wave of technology. It is important that he inputs and implements those technologies in the country or in his sector. If the technology is relevant, he should put his hand up early enough to get it here. That way, we are at an advantage, since 60 percent of all IT software development for the global HSBC group happens in Pune and Hyderabad.

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