Beat the Curve

Problem Statement

About ZBank Limited

1. ZBank Limited (“ZBank”) is a listed private sector bank incorporated in India. ZBank is
a pioneer in technology driven banking solutions and has been a frontrunner in
curating products in line with the ever-changing requirements of its customers. This
characteristic has allowed ZBank to maintain its position as one of the market leaders
in tech-focused innovation.
2. ZBank’s CEO and MD, Mr. John Smith’s vision is to leverage ZBank’s people,
technology, speed and financial capital to be the banker of first choice for its customers
by delivering high quality, world-class products and services.

Trident

3. ZBank is proposing to engage with the Indian Space Organization (“ISO”) to launch a
low earth orbit satellite, named “Trident”, into space, to bolster its technological
operations of a new suite of ZBank’s services called “CHIPS”. CHIPS will be aimed
towards providing all-round solutions for every banking need of a ZBank customer.

CHIPS

Business Terms for CHIPS

4. To give effect to ZBank’s vision of creating a one-for-all product, ZBank is aiming to

purchase the exclusive rights to the technology developed by tech giant, Umbrella
Corp. (an entity incorporated in California, U.S.A) (“Umbrella”), that acts as a
Complete Home Interface and Payment System (“CHIPS”), an intelligent personal
assistant capable of voice interaction and digital payments using biometrics (such as
fingerprint, retina scan or face scan) or Aadhaar card number. CHIPS is designed as a
virtual assistant, linked to various compatible electronic devices (“Compatible
Devices”) at the customer’s home, and can aid the customer in its day to day needs
like answering queries in relation to weather conditions, news, traffic updates and stock
market movements.
5. To offer CHIPS to ZBank, Umbrella has proposed the following terms:
a) ZBank will have the exclusive license to CHIPS, for a period of ten (10) years
(“Exclusive Period”) and a non-exclusive, perpetual license post the expiry of the
Exclusive Period, for an initial price of USD 50 million;
b) Umbrella shall be responsible for all maintenance and tech-related queries, for the
Exclusive Period;
c) Post the end of the Exclusive Period, ZBank shall pay an additional sum of USD 1
million every year for Umbrella’s assistance.

Services Offered

6. In addition to regular services offered by home assistant devices like playing music,
online search and so on (“Regular Activities”), ZBank is proposing to provide
customers various financial and non-financial services through voice command, such
as (a) fund transfer; (b) utility bill payments; (c) checking account balance; (d) loan
repayment reminder; (e) credit card payment due date; and (f) payments to be made

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 to third party application providers or for various online purchases made by customers
(“Voice Banking Transactions”).
7. ZBank is also proposing to provide customers with an option to carry out financial
transactions, similar to Voice Banking Transactions, using biometric or Aadhaar details
(“Digital Transaction”).

How to use

8. To avail the aforesaid services, customers need to follow these steps:

a) Customers would need to have the CHIPS enabled device;
b) Customers need to install the CHIPS application (which is pre-bundled with ZBank’s
services) (“CHAP”) on their phone by accepting terms and conditions in relation to
the CHAP by clicking on a checkbox and providing the necessary consents;
c) In order to carry out Voice Banking Transactions, the customer would need to give
the instruction, either through voice based protocols or directly through CHAP;
d) Customer would be requested by CHIPS to speak out the last four digits of the
debit/credit card, as preferred by the customer, confirm the amount to be debited
and confirm the 4-digit PIN for the said card or last 4 digits of the account, linked to
the credit/debit card, to be directly debited.
e) In order to carry out Digital Transaction, a Unique Customer Code needs to be
generated for each customer linking all relationships of a customer with ZBank –
such as credit cards and deposit accounts;
f) Each customer opting for Digital Transaction would be required to provide the
following for authentication:
i) Finger print data of at least 2 fingers; or
ii) Secure facial scanning through infrared, dot projection, flood illumination and
depth sensing cameras.
iii) Alternatively, customers may provide Aadhaar details to ZBank (including their
biometric data), for storage, and use to authenticate payments.
g) Payments may be facilitated through one or more modes of authentication. Source
of payments shall be at the choice of customers’ credit or deposit accounts
maintained with ZBank.

Additional Services

9. In addition to the above, ZBank proposes to link CHIPS with Trident to allow collection
of behavioural data, population density data, heat mapping, etc. and feed it into the
CHIPS’ artificial intelligence to make the technology smarter. ZBank proposes to allow
access, to third party service providers, of such data collected by Trident (on a real
time basis or consolidated data). Some use case scenarios of such data can be as
follows:
a) In case any Compatible Device being currently used by a customer is due for
servicing or is due for upgrade/change, CHIPS through Trident will provide such
due date of service along with the customer details to the service provider located
in the vicinity of the customer. Such service provider can opt for targeted
advertisement to such customers.
b) CHIPS analyses the monthly spending by a customer to assess the spending habits
of the customer and identify sectors where the customer expends the most amount
of his money, such as for health related products, restaurants, apparel shopping
etc. and suggest best offers available to the customer.
c) CHIPS analyses lifestyle habits of each customer i.e., the hours of sleep, office
hours, hobbies and relays such information, through Trident, to various mobile
applications and other service providers who can in turn (whether through CHIPS

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 or otherwise) connect the customer with the nearest gym/yoga classes/consultants
who provide counselling/ life style related advices/any doctors etc.

10. The business team at ZBank has approached you with the above mentioned
proposition in relation to Trident and CHIPS. They want you to advise them in the form
of a written response which should contain the following parts:
a) Part A: Market Survey and Interaction
A survey of a sample group of customers regarding the potential feasibility, utility,
impact and perception of Trident and CHIPS. Please also include feedback,
suggestions, opinions or comments from stakeholders in the financial markets
about Trident and CHIPS;

b) Part B: Additional Solutions

Types of additional neo banking services that may be provided by ZBank to its
customers, within the current technological description of CHIPS. The solutions
suggested should be legally compliant and benefit ZBank, either by increasing the
revenue directly or increase the customer traction for ZBank;

c) Part C: Legal Analysis

Legal Analysis of Trident and CHIPS which should contain the following:
i) Applicable laws and their relevant analysis: A brief analysis of the laws that you
think are applicable to Trident and CHIPS.
ii) Legal Risk Analysis: Legal risks, in general or relating to any particular aspect of
the aforementioned proposals and product innovation to be undertaken by
ZBank along with mitigants for the highlighted risks;
iii) Legal Advocacy: Reasonable amendments to the prevailing legislations to
make the aforementioned business proposal viable and lawful. Please provide
the rationale for proposing such amendments to the applicable laws.
iv) Legal Checklist: Provide the business group with the following:
 consents to be obtained (whether from the customer, or otherwise) to
enable the aforementioned business framework;
 Authorisations from regulatory bodies to enable the aforementioned
business framework.
v) Specific Issues: If CHIPS were to be offered to (i) minors; (ii) senior citizens; (iii)
partnership firms and (iv) companies, what are the critical legal requirements to
be met in order to protect the interest of ZBank. Students are also encouraged
to suggest good practices (if any) while extending the services to the above
class of customers.

Assumptions:

1. Consider all relevant bills including Personal Data Protection Bill, 2019 and Space
Activities Bill, 2017 passed, as they are, without amendments.
2. Customers of ZBank include NRIs as well.
3. ZBank’s servers are in India and overseas.