How Godrej’s housing finance ramped up during the pandemic
“Identifying risks and controls is of the utmost importance in any process before it is implemented,” says Shalinee Mimani, Risk Director at Godrej Housing Finance.
A chartered accountant with over twenty years of experience specializing in retail risk in underwriting, policy management and portfolio management, Shalinee’s career spans multinationals such as Bank of America, ABN Amro Bank & Barclays, as well as private sector banks like HDFC Bank and DCB, and NBFCs like Fullerton India, and now with Godrej Housing Finance. During her career, she has played key roles in the initiation and implementation of risk management in the retail industry.
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As post-pandemic chaos has driven innovations and accelerated digital transformations, the associated risks are also a cause for concern. Organizations continue to face the unprecedented changes brought about by the constant blockages and disruptions of economic activities. With this in mind, Analytics India Magazine spoke with Shalinee to understand the evolving role of risk directors and risk management in the post-COVID world, as well as the risks and controls of Godrej Housing Finance for ensure a smooth process and operation.
Thrive in the pandemic
Speaking about the business and its creation during the pandemic, Shalinee said, “As a new entrant, we have always focused on a digital first approach to enabling home ownership, and ever since we have Launched our business during the pandemic, the use of digital technology has been a “must” and not a “good to have” option for us. “
Godrej Housing Finance has spent a considerable amount of time evaluating all the technology solutions available in the market to provide a minimal or contactless experience to its potential clients. The company has assembled interdisciplinary teams diverse enough to brainstorm and design the automated workflows, followed by a robust execution strategy. “We continue to remain focused on analyzing changing consumer needs and related behaviors as we seek to build a long-term sustainable real estate finance business,” added Shalinee.
The company has firmly positioned itself in the market with KYC video and automated fraud detection at various stages of the data analysis and customer journey processes, from data quality control to identifying incorrect data. during the data capture process.
“All of this is needed to ultimately translate into faster turnaround times, lower costs and more accurate information for customers,” Shalinee said. “We are looking for holistic solutions to integrate any eventualities that may arise. “
“One of the biggest challenges the company has faced has been developing solutions with very little or no data. To address this, we are following an agile approach enabling technological and cultural change that fosters improved collaboration and automation, ”said Shalinee. “We are also investing in data structures, with sufficient layers of protection to create a successful analytics organization that reduces the time it takes to get insights and make decisions,” Shalini continued.
“Additionally, as a startup, our challenges were not just about digital transformation, but rather improvement and integration with associated leverage technology that could provide business functions such as virtual employee onboarding, train in a seamless adoption of digital solutions, enable work from home and improve the customer experience without compromising the quality of the portfolio and the security of our employees, ”added Shalinee.
Risk management in action
As a digitally driven organization, Godrej Housing Finance’s culture is designed with its clients at heart. “At GHF, we encourage people who come up with new and diverse ideas and welcome those who learn quickly and share our values. “
The company is convinced that there is a large pool of talent available in the market, with young data analysts, aspiring scientists and engineers ready to embrace technological change and therefore play a significant role in the growth journey of the company. “We believe in giving opportunities to people who want to grow with us. We are investing in building a cutting edge technology and analytics team because we believe this is a great recipe for building a lending organization that uses data analytics to make decisions ” , Shalini said.
In addition, the monitoring and management of credit risk is an integral part of any lending industry; However, COVID-19 has posed various challenges, which have forced every industry to realign risk management practices and make themselves more resilient and ready for the future.
Shalinee believes there is now an urgent need to ensure that risk management programs are powered by data, metrics and technology. Thus, Godrej Housing Finance is investing critically in creating platforms to store, manage and operationalize all aspects of the program, from risk identification, physical security or cyber-resilience to operational response, recovery in case crisis management and business continuity. “Managing risk at the enterprise level is our priority. We are investing in building robust metrics, real-time dashboards, ”she said. “In a post-COVID world, the requirement to better understand current events and their impact on our business will play a critical role in assessing risks – as well as opportunities. We use technology to automate the controls and the assurance framework.
Critical risk areas need to be considered: strategy, technology, operations, third party access to data, regulation, forensics, cyber resilience, data breach and privacy in any digital ecosystem. “Managing risk by implementing risk-based controls applicable in a changing era is essential to the sustainability of an organization. Therefore, putting the building blocks of the digital risk strategy in place is crucial for its success, ”added Shalinee.
She further explained that an important aspect in defining controls is taking into account the nature and level of digitization in operations, as most of these aspects are nascent and closely related to manual systems or processes. For example, while customer profiling is important for better customer deals and experiences using digital and analytical solutions, protecting the privacy of customer data is just as essential.
The need for risk management in the post-COVID world
Speaking of the changing scenarios, Shalinee believes that the role of risk manager in the post-pandemic environment has taken on multiple importance with the addition of data security and cyber risks. “It has become imperative to realign old risk management practices with the new realities of the post-COVID-19 world to make an organization robust and resilient in the new normal,” added Shalinee.
It is believed that the role of risk management should increasingly become that of a business advisor rather than simply a control function. As a result, proactive recalibration of credit scoring models to incorporate new risk profiles of impacted companies, real-time portfolio monitoring, increased agility to proactively take corrective action, and stress testing of portfolios in various scenarios have become extremely relevant. In addition, the implementation of a strong framework for liquidity management by securing and putting in place a solid funding plan in the event of unforeseen deficits has assumed great importance.
“A complete overhaul of capabilities to manage cyber risk, technology risk, human capital risk, as well as organizational reputation risk, in addition to business continuity management, has also become a key, account given the uncertainties of the operating environment, ”Shalinee said. “Crisis management is the new risk management standard to combat ‘black swan’ events as fundraising moves away from traditional concepts. Data and analytics based on real-time information should be the pillars of the new operating model, and the sooner risk management practices are realigned, the greater the resilience capacity of any organization will be. “
Housing finance in Godrej currently uses machine learning based fraud detection solutions by partnering with offices. The company also plans to leverage machine learning to launch other products in its retail finance portfolio. In addition, the firm is constantly seeking to automate its processes to improve the productivity of its team. Real-life examples – RPA, robotic process automation, is one such tool that GHF uses effectively to automate its repetitive tasks, ensure process accuracy, and reduce operational risk.
However, this has not always been the case. One of the biggest challenges faced by GHF has been to develop analytical models with very limited or no data. Shalinee explained that the company follows an agile approach enabling technological and cultural change that promotes improved collaboration and automation. “We are investing in data structures, with sufficient layers of protection to create a successful analytics organization that reduces the time it takes to get insights and decisions,” Shalinee said. “We are also building a culture where all decisions are informed by data. Currently, the lack of internal data is a challenge. However, we use data from various external sources to make decisions. “
Data breaches and cybersecurity risks, along with vendor risks and climate risks, are some of the new emerging threats that are getting a lot of attention in the post-pandemic era. To resist, GHF is critically focused on prioritizing risk and a mitigation plan at the enterprise level. Therefore, frequent testing and monitoring of these and existing risks has become an essential aspect of risk management. “We strive to create a culture of risk management at Godrej Housing Finance,” Shalinee concluded.
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