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Speaking with TechGraph, Jaya Vaidhyanathan, CEO of BCT Digital, discussed how sustainability is moving from a compliance requirement to an integral part of banking strategy as global investors increasingly link ESG performance, and how forward-looking banks are embedding climate and transition risks directly into their credit models, stress testing frameworks, and portfolio strategies to strengthen financial resilience and long-term competitiveness.
She further outlined how BCT Digital’s SustainTech platforms enable banks to integrate sustainability into their operations by linking ESG data with core risk and performance frameworks, aligning portfolio management with measurable sustainability outcomes while maintaining transparency and regulatory consistency.
Read the interview in detail:
TechGraph: Sustainability is often positioned as a corporate responsibility issue, but global investors are beginning to treat it as a risk and return driver. Do you see banks genuinely recalibrating their business models, or is much of it still a compliance-driven tick-box exercise?
Jaya Vaidhyanathan: In 2025, sustainability has clearly moved beyond the realm of corporate social responsibility. Global investors are now treating it as a determinant of risk and return, influencing capital allocation, funding costs, and valuations. Yes, while some banks still approach ESG as a compliance necessity, forward-looking institutions are already restructuring their credit models, portfolio strategies, and stress tests to integrate climate and transition risk directly into decision-making. Regulatory drivers, such as climate-related disclosure frameworks and supervisory expectations on stress testing, are reinforcing this trend.
My perspective is that institutions that view ESG purely as a reporting requirement will increasingly face higher funding costs, reputational risks, and regulatory penalties. Those that embed sustainability into their core strategy, pricing models, risk management, and governance will not only mitigate downside risk but also unlock competitive advantages in attracting capital and customers.
TechGraph: Many banks claim they are embedding climate risk into credit assessments, yet their portfolios still remain exposed to carbon-heavy sectors. How does BCT Digital enable them to shift from rhetoric to measurable portfolio transformation?
Jaya Vaidhyanathan: It’s true that while many banks acknowledge climate risk in theory, they struggle to convert this awareness into measurable portfolio action. BCT Digital enables this transition through four levers: Innovation: We recognize that traditional models do not adequately capture emerging asset classes.
Our tailored Early Warning System (EWS) modules are designed for green finance, ESG-sensitive industries, and BNPL segments. The modularity of our platform allows rapid incorporation of sector-specific risk factors, ensuring agility as portfolios evolve. Portfolio diagnostics: Our Climate Risk solution equips banks with dynamic heatmaps that map physical and transition risks to precise exposures.
This gives credit committees the visibility to rebalance portfolios and optimize capital allocation. Continuous monitoring: Our rt360 Early Warning and Real Time Monitoring Systems (RTMS) are capable of analyzing more than 3,000 structured and unstructured data points (as proven previously in real-world scenarios), ranging from bureau scores and core banking data to news and sentiment, to identify credit stress and climate-linked vulnerabilities well in advance. Proven outcomes: Deployments of our EWS have helped banks prevent more than US$1 billion in potential losses. These results demonstrate that sustainability integration can translate into both financial resilience and measurable portfolio transformation.
TechGraph: ESG disclosures today vary wildly across markets and institutions. What role can technology realistically play in bringing credibility and comparability to sustainability reporting without overwhelming banks with new complexity?
Jaya Vaidhyanathan: Technology plays a critical role, but its impact is meaningful only when standardization precedes sophistication. BCT Digital’s ESG platform helps streamline reporting requirements across global frameworks such as TCFD, GRI, and ISSB, enabling banks to produce consistent and comparable disclosures without duplicating efforts for each standard. It automates data lineage, ensures full auditability, and embeds explainability into reporting workflows.
All of this transforms ESG reporting from a fragmented, manual exercise into a consistent, governance-driven process. In doing so, technology not only restores credibility but also allows banks to focus on improving performance, rather than managing compliance complexity.
TechGraph: Developing economies face the paradox of needing rapid growth while being urged to go green. How do you design SustainTech solutions that respect this economic reality and still drive a credible sustainability agenda for banks in those regions?
Jaya Vaidhyanathan: Emerging markets must balance their growth ambitions with sustainability imperatives. A credible solution acknowledges progressive pathways and proportionality, rather than demanding immediate perfection. Our Climate Risk solution supports this by embedding scenario-based risk assessments into existing credit processes, allowing banks to factor climate vulnerabilities into lending decisions without stalling economic growth.
Equally important, our platforms integrate seamlessly with both legacy infrastructures and modern digital architectures, making them accessible across institutions at varying levels of digital maturity. The guiding principle is that in growth markets, sustainable finance is not an optional overlay but a foundational requirement for long-term credit stability and resilience.
TechGraph: A growing argument is that sustainability-linked finance can be profitable if executed intelligently. What evidence or case studies have you seen that prove SustainTech is not just a cost center but a real value creator for banks?
Jaya Vaidhyanathan: Evidence is mounting that sustainability is a value creator rather than a cost center. We have several real-world scenarios where we guided such outcomes. For example, A large bank deployed our rt360 EWS for continuous monitoring of vulnerable sectors and portfolios. This enabled early identification of at-risk borrowers, reducing default probabilities, proactive portfolio rebalancing, and avoidance of future NPAs, directly strengthening both financial resilience and sustainability outcomes.
This case illustrates that when sustainability metrics are embedded into credit monitoring, capital allocation, and performance management, banks achieve measurable improvements in profitability, efficiency, and risk-adjusted returns.
TechGraph: Partnerships between regulators, banks, and technology providers will decide how quickly sustainable finance matures. Where do you see the deepest gaps today in this three-way alignment, and how is BCT Digital trying to bridge them?
Jaya Vaidhyanathan: The most pressing gaps are threefold: Evolving standards vs. legacy systems: Regulatory expectations often advance faster than most banks can modernize their infrastructures. Data credibility and comparability: Scope 3 emissions and third-party data remain inconsistent, limiting the reliability of disclosures. Supervisory readiness: Regulators expect real-time monitoring capabilities that many institutions are not yet prepared to deliver
BCT Digital bridges these gaps through: Regulatory engagement: Our rt360 Real Time Monitoring System was tested in the RBI’s regulatory sandbox, validating its supervisory relevance. Framework harmonization: ESG solution aligns diverse disclosure standards, enabling comparability across markets. Integrated governance: Our GRC and Model Risk Management solutions ensure that regulatory updates are integrated into operational workflows rather than treated as static compliance checklists
TechGraph: Looking five to ten years out, do you expect sustainability to become an embedded part of banking strategy at the same level as digital transformation, or will it remain a parallel narrative? And what role do you see BCT Digital playing in shaping that trajectory globally?
Jaya Vaidhyanathan: Sustainability will become as integral to banking strategy as digital transformation is today. In the next decade, climate and ESG risk will sit alongside credit, market, and operational risk in capital frameworks, lending models, and strategic planning. Banks that fail to integrate these dimensions will find themselves structurally disadvantaged in both funding and long-term growth.
BCT Digital’s role is to provide the SustainTech control plane for this transition. ESG solution enables disclosures and governance; Climate Risk solution delivers portfolio-level monitoring, scenario analysis, and stress testing; rt360 EWS and RTMS ensure continuous early warning, compliance, and supervisory readiness. Together, these solutions enable banks to measure, manage, and monetize sustainability. In doing so, we position sustainability as an intrinsic element of banking strategy rather than a parallel narrative.