Advancing India: What enterprises can learn from global financial firms

Published: November 20, 2018 1:46:08 PM

As India's reforms take shape and propel the country forward, its corporations and financial institutions will need to embrace technology if they want to become globally competitive.

fintech, industry, online, financial assets, digital applicationsTechnology has become a major disruptor in almost every industry around the world.

Ashlesh Gosain

India’s $2.6 trillion economy has been charting a course to phenomenal growth and as the International Monetary Fund (IMF) stated in its recent report, it is “an elephant that is starting to run” with a momentum that shows no signs of slowing.

Currently one of the world’s fastest-growing economy, India has recorded 8.2% growth in the first quarter of 2018-2019, which is ahead of China’s 6.6% and Indonesia’s 5.3% GDP growth, as predicted by the IMF. Bloomberg’s Chairman Peter Grauer told attendees at a recent Bloomberg economic forum in Mumbai that ‘India’s growth indicators show its animal spirits are very much alive.’

As the country marches closer to becoming a $5 trillion economy by 2025, much still needs to be done to maintain the strong momentum. India’s new bankruptcy code is a good start, and investors agree. In a recent poll of financial professionals in India, 34% of participants felt that the code has sped up NPA resolutions though 29% felt that the high number of court cases is worrying. It’s also no surprise that they felt with this high debt load among corporates, and 74% of participants indicated that distressed assets was an area that was ripe for M&A in India.

Financial organizations have been tracking India’s reforms closely, interpreting the implications of each exciting new development to global investors and India watchers alike. India’s sizable economic growth prospects are advancing global capital markets and unlocking the potential of a billion people. As India’s reforms take shape and propel the country forward, its corporations and financial institutions will need to embrace technology if they want to become globally competitive.

Technology has become a major disruptor in almost every industry around the world and if enterprises don’t adapt, they run the risk of being left behind in India’s economic future. Global financial companies were among the first to adapt to new technologies, seizing on the efficiencies that can be gained from advances in automation and machine learning. These developments have paved the way for advances in how we analyze and manage our data, allowing for more efficient use of capital and compete effectively in an increasingly globalized world.

On the issue, Chairman of the Aditya Birla Group Mr. Kumar Mangalam Birla recently said that it was clear that for a country like India, Fintech and the digital economy were key to unlocking the country’s economic potential. As technology brings the world closer together, the need to embrace new processes and skills should be India’s greatest priority.

Globalization is paving the road to success

As global investors look to India for growth opportunities, financial organizations have an important role to play in developing India’s capital markets and connecting those investors to India. Financial organizations have chronicled India’s growth story in more than 20 years that they have operated in India by providing its investors with best-in-class financial technology, data, news and analytics. Key economic forums also help to bring influential local and international investors, executives and government officials together to discuss actionable solutions that can promote and accelerate regional growth.

While regional banks have been investing in technology to improve their operations, India’s corporations are also starting to use technology to enhance their treasury operations with better tools for risk management. This growth has also led major buy-side firms, such as insurance firms, to follow new investment and regulatory demands brought about by local and international regulations that support strong financial risk management practices.

As India’s institutions become more sophisticated, we expect global investors to express greater interest in the opportunities India is creating for them, and a robust regulation and technology framework will only bolster their confidence in investing in this fast-moving economy.

With growth comes challenges

The steady growth of India has shown that it will not easily be derailed by a global trade war. But it is also necessary to foresee that a potential financial crisis might arise from the rising amount of debt created from this investment boom. In order to advance India properly, effective risk management practices and timely moves in the financial system should be the foundation of its stability. This is where good data management processes among all of its market participants can help ensure financial institutions and government agencies have adequate market transparency to manage any financial crisis.

The way ahead

As India continues to make its markets more attractive to foreign investors, analytical organizations will continue to work with India’s banks, regulators, exchanges, market participants and corporations to take the India story to the world.

The ability for its industry participants to leverage the power of data and technology are critical ingredients in maintaining a strong and healthy financial community. As more investors connect with India, we look forward to seeing how it defines its own financial future and flourish on the world stage.

The author is Head of South Asia, Bloomberg LP. Views expressed in this article are author’s own.

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