The BFSI sector is rapidly evolving. No longer is it a 9-5 banking job, the most aspirational job and safe job out there. Today the BFSI sector seems to have shifted focus, from public institutionalised players ruling the roost to new private players taking the lead. If you want to create a career in banking and finance, you can no longer be okay with just being a paper pusher. Neither are you simply going to assist processes. Your job will certainly involve connecting with and understanding your consumers’ needs as well as comprehending technology. But how do you achieve this? There’s a need for fresh pedagogy and an evolved curriculum with these shifts in the market. In this article, find out about just such a course.
Goa Institute of Management (GIM) introduces a freshly minted course just for the BFSI aspirants. They’re here to tell you that your MBA in finance is great. But you can get something even better in order to facilitate you to think like a new age banker of finance professional. GIM introduces a PGDM BFSI course. Check out details about the course itself here.
We spoke to Neeraj Amarnani, Dean (Academics) and Professor of Finance at GIM to get a better understanding of the course itself as well as the need for it. Check out his full profile here. Here’s excerpts from his interview
What is your view of the BFSI sector in India and abroad?
The BFSI sector as a whole is witnessing a lot of changes today. There is a radical relook at the entire way the sector functions. Earlier, financial services were mechanisms to support transactions and performed the activity of financial intermediation. The institution was very important. Banks and financial institutions played a critical role. However, gradually, the focus is more on the service aspect and less on legacy businesses. It’s all about whoever can provide more and better services. More than the brand of the institution, it’s now the brand of the service and the service delivery that now matters. In fact, existing players are witnessing a lot of challenges. Some of them are even suffering setbacks. At the same time, new players are creating new services and giving great service, I think.
How do you think economic and public factors like GST, demonetisation, etc change the BFSI sector in India?
Demonetisation ended up promoting electronic payment transactions. In fact, if you see, the government also came out with various tech initiatives like IMPS and UPI, both innovations created bythe National Payments Corporation (NPCIL). These are very effective homegrown transaction systems which have emerged. In fact, I think these are very innovative measures that have been lauded globally. This is not to speak of the efficacy or not of demonetisation, that’s a separate economic question. But, demonetisation acted as a stimulus for technological advancement in India in the financial services sector. It brought many more people on the electronic payments interface. Apart from that many major legacy players have suffered too in recent years.
A case in point: SBI, once considered the nation’s bank, today it’s market capitalisation is lower or comparable than that of a Bajaj Finance, which is a private NBFC. So, Bajaj Finance’s valuation is more than SBI today! This speaks of the way the market perceives these entities today.
People are willing to put more money and valuation in the hands of a private limited player in the domain of finance as against SBI which was practically the nation’s banker. That is the major change we’re witnessing currently. Some years ago, you wouldn’t have anticipated that HDFC Bank would be the most valuable bank in India, followed by Kotak Mahindra Bank and SBI would be behind them as well as ICICI Bank even before 2020. Some of these changes are of course due to technological advancement and more prudent business practices, as well as taking advantage of business opportunities that have been opening up.
What is the industry need for a BFSI focussed MBA course that you are bringing out at GIM?
As we discussed earlier, the BFSI sector has evolved. And this change is an opportunity for the employment in the BFSI sector. What was passing off as BFSI curriculum until now, has become redundant today. As technology improves a lot of the systems in banking, learning about regulations and process is not as important as it was. Of course, you need to know about these too. But their significance has reduced. Now it’s more important for BFSI students to be able to use technology whether for improved customer service or to automate processes or through analytics to understand consumer preferences and credit worthiness.
In fact, today the whole concept of pre-approved loan exists because banks already have data and they can assess your creditworthiness relatively easily based on your transaction history. All these are causing a lot of change in the typical banker’s role. From being a process executive or a form filling individual who’s managing paperwork and processing documentation physically, it’s becoming a much more value added role in terms of perceiving the consumer needs, analysing the data to understand customer needs, preferences and possibilities of services and then taking this information to create value added products - whether it’s a bank, a financial services company, or an insurance company that can understand your risks better. To create managers who will fit into this age of BFSI, we feel this is a great time to launch a new program built from scratch.
How would the course prepare a young student to transform into a good manager in the BFSI industry?
First, like I said, this course is created from scratch. So we are designing the curriculum ground up to serve the needs of the industry. But the major takeaways from this would be:
Fundamentals of understanding BFSI sector: Students would get a strong background and in depth information on the BFSI sector. The emphasis will be on the BFSI sector and basics.
Strong Input on Tech Aspects: There will be a strong grounding in technology as well. There will be inputs on new technological business models that have emerged. We want our students to be aware of the innovation in banking and finance. Tech to automate process, understanding data analytics to serve consumers, etc will all be focus areas.
Values & Ethics: We pride ourselves at GIM for teaching ethical practices and value based learning. This is something in general very relevant to the business world. Especially, today if you look around, you have enough problems in the BFSI space emerging from the lack of ethics. We want to therefore emphasize on ethics and values in the BFSI sector.
These 3 components we feel would provide a very strong background and help students become value adding professionals.
Technology has caused disruption in the BFSI sector through P2P lending, AI, Blockchain, Data Analytics, etc. How do you account for that in the course?
Since this is a course on BFSI, that will of course be a focus of the course, But given how important technology and analytics have become, there will be a fairly decent component of how analytics is used in business. Concepts like credit analytics, risk analytics, are specific things we will focus on.
Apart from that business process improvement like bots will also be a focus area. We will focus on how banks use chatbots, the basic tech that goes into such aspects, etc. We will have an interplay of finance and technology and the application of technology.
Can you tell us some examples of BFSI jobs that students will be ready for thanks to this course?
We broadly looking for career openings in the sector of banking, financial services and insurance. For example, in banks, treasury is a role that companies need MBA graduates for. People can get into asset and liability management, forex dealing, derivatives, risk management, etc.
There are also openings for credit risk management involving appraising credit risks, pricing loan products, etc. There are corporate banking opportunities like corporate account management. Business analyst is role that’s in demand today. IT companies specially need business analysts for their strong BFSI verticals business
There are M&A openings in investment banks, risk management, business development, etc. These are some of the possible careers you can look at after doing this PGDM course.
What's different about the course than say a generic MBA with a specialization in Finance?
The major difference would be in terms of the breadth of approach versus the depth of approach. If you’re doing an MBA in finance, you’ll be focusing mostly on the principles of management. So you’ll be covering various financial concepts which may be used in the BFSI sector, but may also not be as relevant, and more applicable from a corporate finance perspective. The crux of this new course by GIM is to ensure that the gap between industry and learning is plugged. The major difference therefore is in the focus, to make it more relevant to the specific needs of the sector.
What is the structure of the course?
It’s a two year full-time, residential PGDM course divided into 6 trimesters. The curriculum has been designed from scratch and is for the BFSI sector. But the highlight is the 18 weeks internship you’ll be doing after your first year.
Like I said, in order to bridge the gap between learning and the real world, we introduced this internship. It helps students get an insight into the real world of banking and financial services. All of this also makes it possible for the students to choose exactly which subject they want to study next.
Can you tell us the role of behavioral finance in today's world and why its an important subject for students to study?
The principles of finance are largely based on the understanding that human beings are rational and most theories evolve from this assumption. Most of the financial models like the capital asset pricing model, portfolio theory, valuation models, etc are derived from this assumption.
However these rationality based models are unable to explain the major deviations in valuation, market crashes, and other such financial phenomenon. That’s why behavioural experts provided an alternative saying that individuals have biases, and these cannot be averaged out. Behavioral finance has opened our eyes to the fact that at times biases are systematic, that the market as a whole can get biased in a certain manner - for example basing your investment decisions on a recent phenomenon. Even out tendency to make decisions by looking at gains and losses rather than total economic value demonstrate this fact.
This is where behavioural finance comes up with an alternate understanding of market dynamics.
Any message for students wanting to build careers in the BFSI sector?
I’d be happy to convey that the BFSI sector that is challenging and is undergoing a lot of change. If you scratch the surface though, you’ll see a lot of opportunities for people with new age skills in this sector. There are ample opportunities for people who can work in the fintech sector, with AI, automation for transaction, analytics for credit and risk and other contemporary and emerging skill sets..
All of this is making BFSI very exciting. You need the right skill set in order to get the best out of these changing times. And if you want to reinvent yourself and upgrade your skills or learn the right kind of skills to fit into this new, exciting sector, GIM’s MBA in BFSI is for you.
Check out details about this new boutique course by GIM here.
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