In an exclusive interaction with CIO&Leader, Hemant Verma, Chief General Manager of IT and CTO at Punjab National Bank, shares insights into the bank’s digital transformation journey, key challenges, and strategic focus areas for AI.
Punjab National Bank (PNB), recognized as India’s second-largest public sector bank, has embarked on a fast-track digital transformation journey. Hemant Verma, Chief General Manager of IT and Chief Technology Officer has played a crucial role in spearheading modernization initiatives that are reshaping the bank’s operational landscape.
In recent years, PNB has made substantial strides in enhancing customer experience by leveraging new-age technologies such as artificial intelligence (AI). These initiatives focus on strengthening fraud detection mechanisms, optimizing customer service, and enhancing talent management, all while laying the foundation for a robust and future-proof digital infrastructure.
As a senior technology leader, Hemant Verma brings extensive experience from his previous leadership roles at Oriental Bank of Commerce and Syndicate Bank. He has strong expertise in data warehousing, data center management, information security, and business development, positioning him centrally in the ongoing evolution of PNB’s IT infrastructure and operational excellence.
In an exclusive conversation with Jatinder Singh, Executive Editor of CIO&Leader, and Vikas Gupta, Editorial Director of CIO&Leader, Hemant Verma shares insights into how AI, automation, and hybrid cloud solutions are helping the bank modernize and enhance its systems and processes. He discusses
their impact on talent retention and innovation within the financial sector, providing a detailed overview of the bank’s strategic direction and technological advancements. Here are key excerpts from the interaction.
CIO&Leader: Given its position as India’s second-largest public sector bank with a legacy of over 125 years, Punjab National Bank (PNB) has undergone substantial transformations in the banking landscape. Could you elaborate on some of the key digital transformation initiatives that PNB has implemented in recent years and their impact on the bank’s operations and customer experience?
Hemant Verma: PNB has undergone a substantial digital transformation, especially post-COVID, to modernize and streamline our services. Over the last two years, we have introduced more than 70 digital journeys. One notable achievement is our revamped Pre-Approved Personal Loan (PAPL) service, where we saw a multi-fold increase in business. By optimizing the process from seven or eight clicks down to just four and eliminating unnecessary paperwork, we’ve significantly improved the user experience.
Another milestone is our introduction of the One-Time Settlement (EOTS) service, which allows customers to settle loans digitally without having to visit a branch, enhancing both convenience and efficiency. Our PNB One app also reflects these enhancements—its rating has surged from 2.2 to 4.6, underscoring strong customer adoption of our digital services.
CIO&Leader: In your view, how does PNB compare to other public sector banks regarding its digital transformation efforts?
Hemant Verma: Among public sector banks, PNB stands out in terms of its digital transformation efforts. While private sector banks are traditionally more agile, PNB has succeeded in delivering fast, innovative solutions, even with our large rural and semi-urban customer base. For instance, we manage over 4 crore UPI transactions monthly, a remarkable volume for a public sector bank. We’ve seen rapid adoption of our UPI services, particularly in Tier 2 and Tier 3 cities, signaling that customers in these regions are increasingly embracing digital payments.
CIO&Leader: With AI increasingly becoming integral to modern banking, how are you harnessing AI technologies to enhance your banking services?
Hemant Verma: At PNB, AI is playing an emerging role in transforming customer service and fraud detection. While we are still in the early stages of full-scale AI adoption, we’ve implemented AI-driven chatbots to offer more efficient customer service, and our internal teams use AI tools to quickly access policy information, and for faster customer resolutions. In fraud detection, we are integrating AI into our Enterprise Fraud Risk Management (EFRM) system to identify fraudulent activities in real-time.
Additionally, AI is crucial for enhancing cybersecurity, enabling us to predict and mitigate threats more swiftly than traditional methods. While our AI journey is still evolving, we are confident that it will deliver even greater value in the future.
CIO&Leader: Data governance plays a critical role in driving robust AI implementations. How does PNB ensure strong data governance for its AI initiatives?
Hemant Verma: A solid data governance framework is essential for effective AI deployment, and we have one of the strongest data warehouses in the Indian banking sector. This allows us to analyze large data sets accurately, enabling services like pre-approved loans with high precision. Our data governance ensures that predictive analytics are reliable, helping reduce the risk of bad loans. It also fosters customer trust, as we can assure them that AI-driven decisions are both ethical and accurate.
CIO&Leader: How has AI helped improve fraud detection and cybersecurity at PNB?
Hemant Verma: AI has transformed fraud detection by making it faster and more accurate. We are updating our fraud monitoring systems to be AI-powered, which allows us to detect suspicious activities in real time and respond immediately. In cybersecurity, AI helps predict potential threats, enable us to proactively address risks before they escalate. These AI-driven systems provide a proactive approach to safeguarding customer data and internal banking systems, making AI not just an innovation, but a necessity for ensuring trust and security in banking.
CIO&Leader: What are some of the key challenges you face in adopting AI, and how are you addressing them?
Hemant Verma: One major challenge is building customer trust in AI, particularly in terms of data privacy and transparency. Customers need to feel confident that their data will be handled ethically. Another challenge is justifying the investment in AI. It’s critical to demonstrate early returns on investment (ROI) to secure ongoing support from the board and stakeholders. We’ve adopted a conservative, step-by-step approach to AI, starting with small-scale implementations, and if we see the measurable benefits then we will scale further.
CIO&Leader: How do you evaluate the choice between in-house development and packaged AI solutions from third-party providers?
Hemant Verma: We’re still evaluating which approach works best for us. So far, we have developed smaller in-house AI projects, such as chatbots and fraud monitoring. However, as we monitor their performance, we may consider packaged AI solutions for larger deployments. It’s essential to weigh the ROI, privacy rules and regulations, ethical considerations such as data fairness & integrity, and the level of customer adoption before making significant investments in external solutions.
CIO&Leader: IT governance is critical in banking. How do you align your IT strategy with broader business objectives, and what role does the IT department play in shaping the bank’s growth?
Hemant Verma: Post-COVID, the role of IT has evolved from a support function to a key enabler of business strategy. Today, the CIO has a direct seat at the table in business discussions. Our IT strategy is closely aligned with our business goals, ensuring that technology initiatives like digitization and AI adoption directly contribute to business growth and improved customer satisfaction. IT is now seen as a driver of innovation, helping shape the future direction of the bank.
CIO&Leader: You have invested heavily in private cloud infrastructure. Can you discuss the bank’s current cloud strategy and any plans for future expansion into public cloud services?
Hemant Verma: Currently, we are enhancing of our operations on private cloud by expanding infrastructure while we are using public cloud for a few non-critical services. Although public cloud offers agility, it is not always the most cost-effective solution for large banks like us. Private cloud has proven to be more cost-efficient for storing and processing critical data. However, as we move forward, we may adopt an 80-20 approach, with 80% on private cloud and 20% on public cloud, depending on the criticality of the data and cost considerations.
CIO&Leader: Retaining in-house IT talent is a key focus for most CIOs. How do you ensure that your IT team is equipped to handle the bank’s digital transformation, and what is your approach to talent retention?
Hemant Verma: We prioritize developing in-house talent rather than relying solely on external vendors. Our IT team, which is over 1,500 professionals, manages everything from core banking systems to app development. We provide continuous training and leverage certifications to ensure our staff remains up to date with the latest banking technologies. As a result, our attrition rate is remarkably low—less than 1%. While we occasionally engage external consultants or hire employees for specialized roles, particularly in cybersecurity, our primary focus remains on nurturing internal talent and cultivating a robust culture of growth and innovation.
CIO&Leader: What role do external consultants play in your digital transformation efforts, and how do you balance their input with your in-house capabilities?
Hemant Verma: While we depend heavily on our in-house IT talent, we engage consultants when necessary, particularly for gaining insights on industry trends and global best practices. However, the execution and day-to-day operations largely remains in-house, giving us greater control and reducing reliance on external vendors. For example, our core banking solution is run entirely by our internal teams, without any involvement from system integrators.
CIO&Leader: How has the integration of AI and digital transformation impacted your HR strategies?
Hemant Verma: Our HR strategy is closely integrated with our digital transformation journey, particularly through initiatives like PNB Udaan. This program is designed to clarify roles and expectations from each employee by defining measurable Key Result Areas (KRAs) and introducing job families.
The concept of job families enables employees to transition seamlessly between roles in IT, cybersecurity, and analytics, aligning their career paths with their skills and interests. Additionally, we leverage AI-driven tools to provide employees with real-time data regarding their performance and career progression.
This personalized approach help our people to gain insights into their current standing within the organization and outlines the steps they need to take for professional growth. By integrating our HR practices with digital initiatives, we promote a culture of continuous development and engagements, ensuring our employees are well-prepared for the evolving demands of the industry.
CIO&Leader: Looking ahead, what key trends do you think will shape the future of banking technology, particularly in the public sector?
Hemant Verma: AI, automation, cybersecurity, and data analytics will be the key drivers of future banking technology. AI will transform areas like fraud detection, cybersecurity and customer service, making processes faster and more efficient. However, governance and ethical AI use will be critical to maintaining customer trust. Another significant trend is the increasing adoption of hybrid cloud infrastructure, as more banks, including PNB, balance private and public cloud usage. Finally, the role of the CIO is evolving—IT leaders are now central to business strategy, with their decisions directly impacting the bank’s growth and future direction.
