We expect to be fully profitable in 18-24 months: Zeta CTO Gaddipati

In 2021, Zeta, a banking tech startup founded by Bhavin Turakhia and Ramki Gaddipati, achieved unicorn status with a valuation of $1.4 billion after receiving a $250 million investment from SoftBank Group Corp’s Vision Fund 2. While the company's India operations became profitable in the fiscal year 2022-23 (April-March), Gaddipati, who also serves as the chief technology officer (CTO) at Zeta, mentioned in a recent interview with TechCircle that the global operations have yet to reach the same level of profitability. He highlighted Zeta's continuous innovation with cutting-edge technology and the unique solutions provided to its banking clients are setting new standards in customer experience, resulting in high satisfaction ratings and exclusive features that are not found in rival applications. Edited excerpts:  

Which technologies are you excited about for the BFSI sector and what is your focus for this year?

In India, we are particularly excited about the National Payments Corporation of India (NPCI)'s rollout of the Credit Line on the United Payments Interface (UPI) paradigm. We anticipate that it will transform the way credit is granted in the country in the near future. We have a significant array of initiatives in progress to capitalise on this opportunity. Cloud-native, API-first, and microservices-based architecture are also offering substantial benefits to banks, especially as technologies like artificial intelligence (AI) reshape the banking industry. There is also considerable potential in Generative AI.

In what ways are you assisting banks in enhancing their customer service?

Evolving demographics are fostering a demand for improved digital-native banking experiences. Zeta's technology stack, bolstered by tailored engineering services via Zeta Studios, empowers banks to create sophisticated, user-friendly, and contemporary banking experiences across cards, payments, and other products that will engage users. Our technology stack not only meets the stringent requirements of various banking and regulatory teams globally but also provides a unique 'multiple lines of defense' attribute to ensure ongoing compliance with regulatory mandates 24/7.  In May, we launched a digital credit-as-a-service product on the UPI for banks. The product is based on the credit lines on the UPI scheme, which was introduced by the Reserve Bank of India in September 2023. This aimed at lowering financial service costs and enabling customers to receive credit that has been pre-approved through accounts linked to UPI. Zeta's tech stack is led by cloud-native, API-first, and microservices-based architecture, delivering significant advantages to banks. With burgeoning technologies like AI reshaping the banking landscape, banks must embrace these innovations. Generative AI requires specific foundational elements that are deficient in many legacy systems today. Additionally, we support real-time event streams and access to diverse data dictionaries, crucial for effectively leveraging AI. Furthermore, we provide a conversational AI suite for customer service as part of our comprehensive solutions.

Tell us about your recent extended collaboration with HDFC Bank.

We have introduced two products in partnership with HDFC Bank. The first is PayZapp, a payment solution with over 10 million users, acknowledged as a leading global innovation in payments. It offers arguably the most robust and comprehensive payment experience for Indian customers compared to any other payment application. The second and more recent initiative is Pixel, a novel digital-native credit card designed for digitally savvy customers, featuring numerous innovative functionalities. This program has been newly launched, and we are eagerly monitoring its growing traction.

Ensuring the security and compliance of customer data is paramount in banking, how do you ensure this during the transition to the cloud?

Security and trust are of utmost importance in banking. Zeta has crafted our solution around Zero Trust Architecture, a design principle that advocates for the highest grade and most stringent security standards, assuming that no resource or system is inherently trusted. Hence, multiple layers of security and control are inherently applied to isolate and prevent any security breaches as banking workloads migrate to the cloud. Alongside this, we uphold a robust stance on information security and compliance, holding every key industry certification essential, including PCI-DSS, ISO 27001, and 3DS, among others. Zeta undergoes multiple audits by independent third-party auditors and ISG organisations to ensure that we deliver the highest standards to our clients.

How do emerging technologies like AI, ML, among others contribute to banks' strategies for cloud transformation?

We are strong proponents of AI and believe that a significant portion of banking operations will eventually be steered by diverse AI platforms and agents. Notably, two use cases we foresee taking the forefront are Omnichannel Conversational AI to enhance customer experiences and Decisioning AI to improve lending and risk decisions. Many banks still rely on outdated technologies like mainframe and COBOL systems, making it challenging for them to transition to contemporary platforms like cloud and APIs. This impedes their ability to meet the demands of digital banking. However, we foresee changes with more banks going for tech transformation. Currently, we have over 25 million live accounts hosted on our platforms in India and the US. In the next six years, an additional 60 million accounts will be migrated to the platform.

What are your plans for the upcoming months?

The Credit Line on UPI (CLoU) scheme launched by NPCI is predicted to revolutionise digital credit journeys and reshape credit distribution in the country. We are presently collaborating with key banking entities to explore new product opportunities with CLoU. Additionally, we are partnering with major card issuers in the US to enhance their card programs and engage with potential clients keen on leveraging Zeta's modern technology for digital customer experiences. Furthermore, although our company's India operations turned profitable in 2022-23 (April-March), our global operations are yet to achieve the same. We are on track to attain global break-even within this financial year and aim to be profitable within the next 18-24 months.