Future of finance is digital and virtual.

good evening everyone thank you for joining today's session on future of finance i would like to introduce today's presenter renee solanki is general manager and head at nepino digital solutions a leading iot and electronic service provider in india he brings over 18 years of experience in business development strategy partner management sales and technology management within domains such as iot digital transformation wi-fi fintech and trading technologies he has leadership experience across industries such as pc telecom investment banking and it while working at lenovo aetel goldman sachs and tcs respectively when i hold an mba from i am ahmedabad an ms in computer science from state university of new york binghamton usa he is the founder of the world's third largest iot community iot ncr with over 8 000 members he is recognized as one of the top 20 thought leaders globally in iot and analytics by thinker 360 and as one of the top i 20 iot thought leaders by cbt usa he is a tedx speaker the most followed iot expert on quora a member of nasscom.tech and an author on your story efi iot central and other international media platforms a warm welcome to the night we are glad to have you present at the online multiple plus series before we start the session i would like to request the audience to ask questions only in the q a tab we will take them at the end of the session also to help us continue to make our programs better we request you to please take the shots away at the end of this webinar over to uni thank you thank you very much for the introduction i hope i'm audible and clear yes okay uh so first of all um uh good evening everyone was joined on the session today i think we are we are going to talk about a very very interesting topic uh which impacts all of us as as consumers as individuals or as um even business users um which is finance right i think um yeah when we look at india today uh one of the revolution or i would say evolution that is happening very rapidly um is in the domain of financial services for for india as a country uh we are a very very big country right very wide and deep uh you know and it ranged from uh tier one cities to rural areas and i think uh when you think of finance um what is happening and what we are going to cover today is about uh finance becoming very very digital in nature uh and at the same time virtual it means uh you're basically consuming financial services either online or through an application so that's why the topic says future finance digitally virgin moving forward i think what we will cover today um is we are going to first take a look at why uh why fintech why what is the need for financial technologies right and why technology play a crucial role in financial services then we will move and look at um the ecosystem of financial technology or fintech as an ecosystem of players and as an ecosystem of service offerings once we complete this we will take a pause for taking some questions uh from the audience um and then we move uh over to cover uh the rest of the two sections for today one is uh use cases and case studies we are going to touch upon some of these use cases that you see here uh and then we'll wrap up the session with uh basically covering uh what kind of careers one can actually build in in fintech domain right for themselves or how can a company or a business adopt fintech um in their own setup so uh let's think about why technology is so crucial for financial services i think as you heard in my introduction um i'm a technologist at heart right and um i think uh i've been following fintech for many many years i've worked um in uh uh in in the past in investment banking then i was also handled the mobile wallet ecosystem at uh airtel for for some time um and that's where i realized the power of uh leveraging technology to offer financial services to the consumers but before going there i think if you look briefly at the evolution of money right i and let's go back to to do the era of battery if you remember um or if if you probably are interested enough you would know and remember that people were just trading certain goods in exchange for value which means you you give me your rights and i give you my weak for example right that was both more likely likely an exchange of value between two individuals right which was called as a barter system and then after barter came um i would say the currencies or or cash we started uh with coins um in the early 1600s or 1500s and then from there we move to other form of currencies right paper-based currencies uh then i think very recently i would say even this century in the current in the past century we uh we basically launched money in form of plastic um credit cards or debit cards and so on uh and we stayed with that form of exchange for a very long time or as a mode of transaction uh before mobile wallets came into picture uh right um which is very recently i would say a few a couple of decades back um and and then uh well i think today when we look at um i think a mode of exchange you must have heard uh whatsapp money or money uh over a facebook messenger uh which is by meta um or even wechat in china is very popular as a mode of sending money or receiving money uh it is a simple messenger with an option to pay or receive money right so again if you see from left to right here uh more and more the money is becoming more digital in nature um it is there in the software it is there in bytes um or zeros and ones right it is not there in physical format anymore in fact today i forget to take my wallet many a time uh but i never realized that i will have a challenge of uh buying something or or doing some financial transaction because i have my phone ready with me with a qr code mostly available on every application where i need to buy something from a store or pay for a service in a restaurant and so on so why was there a need i think i i basically want to really spend some time here for you to understand when you think of uh traditional mode of um financial services um i think if i go back again few years and think of the traditional format of banking all right where somebody has to go and open a bank account and after they open the bank account uh then they will be able to transact they will be able to store their money or or maybe gold or some other asset like their documents of their real estate in a locker and then they are supposed to uh use that uh account for transaction with other parties um i think one of the biggest challenge in those era i think i would say in the early 1900s right when the bank became popular uh was first is transparency there was no proper uh information about criteria of evaluation right like a bank was free to reject you uh and not open your bank account like in the us there was the bank were given the power to just say no to someone to not open their bank account they may share a reason they may not even share a reason for example right that was a simple selection process that was not even disclosed to the consumer i'm talking about only one example there were many other examples about transparency like for example you want to apply for a home loan and the bank does not offer you a loan or they offer your loan at a very high interest rate second uh was the access to the banking service uh which i call as channels right um is basically how the financial services are delivered to you and me as a consumer or to businesses or even enterprises or industrial setups um or anyone right who needs uh to get access to money to run their business or to buy some asset the channels were very very fragmented they were not connected on interlinked with each other right either you go to a bank or you go to a broker or or sometime you have to go to a middleman and again it will add to more layers it will add to less transparency the banking services at the same time were very expensive actually uh the interest rate offered versus the interest uh you have to pay on on loans uh the delta was very high right i think if you look at uh in india today uh and when you look at the rate of interest that the rbi regulates right and after that you basically look at how you basically get the access to those uh interest rate benefit from your bank you basically pay certain delta or certain margin for the bank to run their business but the the delta is not very high if the rbi rate is six percent the bank might offer a loan to a good customer with a good credit score at six point nine percent okay uh so the the delta is point nine or ninety basis point or nine hundred basis point um i will talk about basis point in in some time right but in the traditional formats it was very very expensive because again it was not penetrated very wide and deep as a financial service so there was probably no option by the bank but to uh but to charge more or they were just making uh taking the advantage of uh customer not having too many options right third is performance the transactions were very slow again i don't know how many of you remember is how much time it used to take for a check to clear in your account um i i remember like um in my early days my first salary that came in i think 2004 um i was paid uh in a check that i go and deposit in my account and then it takes seven business days for the check to get clear into my account right or if i get a check from someone else right or even if i have to do some other transaction uh as simple as transferring money to someone else um then i have to go to a branch fill a form uh for a wire transfer then deposit it uh then give some documentation and then after that the transaction might take three or four days basically there was also no sms in the early days right for transaction updates i have to actually rely on the bank services and then when we call someone and ask them um the fifth one is k wise no kyc stands for know your customer right uh i think um if many of you are doing your kyc today uh with aadhaar where you can actually verify through e aadhaar right you don't have to go anywhere you open your phone put your radha number get an otp and you get verified and your kyc is done right uh but think of the era where there was no process but to go to a branch or to a location or to an address with physical copy of your documents maybe your ration card maybe your driver license or your passport um then then submit the proof and wait for some process to be completed for the customer's onboarding process at a financial institution even taking a loan was very cumbersome there were like 20 plus documents required to be submitted um and the last was because of transparency and fragmented channels right there was there was high gap in between how the risk and the fraud are managed um i think the risk management was not very uh technologically enabled the risk management was done in a very different way even the rbi or the regulators were not very technologically advanced or even if you go to uh the u.s right the the the counterpart of rbi there the feds were basically uh leveraging traditional tools to monitor the health of the financial institution i monitor the health of any bank right i think today if you in the last few years you see um how closely uh we get updates about the health of the financial institution the number of debt that a bank are carrying today um if you i don't know how many of you reading newspaper but it's increasing gradually uh and actually sharply now even with this current situation of the war in um in between russia and ukraine um if the if the institution becomes too big to fail it is a very very big risk to anyone right it is a risk to government it is a risk to the institution itself and to all the stakeholder holder of that institution uh example could be lehman brothers collapsed in 2008 it was considered as one of the most stable um and a long-lived investment bank but it crashed in 2008 it became too big to fail it was not able to manage its risk and its books financial books the same applies to many banking institutions many banks have failed in the in the last 30 40 years actually uh due to not following the right risk management practices so with these six areas i think uh why you need to understand this is because this is where technology comes and starts filling the gap of uh making system more friendly more transparent uh more only channel uh more less uh i thinks are automated and so on so moving on i think if you look at the challenges and if you look at the evolution of financial services i try to create a map here uh um and i i was actually trying to understand uh at least as far as back uh i could go to understand when was the first plastic card launched right so i forget about the barter and the cash that was way way before that and it ran for many many years many centuries i would say um guidance club is credited as a first institution to launch the credit card the first credit card uh in 1950s right so we're not talking too long back it was like around 70 years or so right in 60s i came the first atm which was launched by barclay then in 70s nasdaq was open in in us as a first electronic trading exchange i think we all understand the word exchange in exchange or in a trading exchange is an institution that allows you to trade um in uh financial products like stocks or bonds a bonds are government bonds like debt instruments stocks are like equity instruments uh typically of any public listed company that you can buy or sell or today you can do mutual funds another thing nasdaq was the first electronic trading exchange before that uh of course nyse was there it is still there that was basically running in a very paper based mode i highly advise if you want to understand what happened in the u.s in the early days go and watch the movie the wall street that is i think one of the fabulous movie talking about what happens in that ecosystem in 80s came tele banking the first online brokerage actually so this is again as i said 40 years back roughly 40 42 years back when the telebank is like where you can pick up a phone and uh do some financial communication over a phone uh on the other side with using some code or a passcode or a unique id that is given to you in your checkbook or in your passbook um it was also the time when online brokerage started happening where you can actually register and start trading online on the internet uh um i think uh 90s is credited the time of dot com right uh the era where internet became more and more popular um some of you might have heard dot com bust as well uh but online banking website became more i think penetrated and possible in 1990s uh this is again starting from the west and then moving towards the east um like u.s and europe were the first uh

regions to adopt uh online banking and then gradually moved to the uh part of asia africa and so on um elon musk i think we most of us should know uh right uh the founder of tesla and then spacex and many innovative technology company uh he's one of the richest man now uh but in 2000 um i think uh maybe he he was one of the thought leader who thought that why can't i use uh uh something uh as simple as an application online or a mobile phone to transact right and that was the invention of paypal uh which is started in 2000 along with other co-founders uh of course paypal is still there as an entity um uh and paypal was actually the one of the companies um that basically made it possible for the industry to understand that you can move beyond traditional channels of uh financial transactions okay in 2010 came mobile wallets um uh i think somewhere around that time mobile wallet is now i think a norm in india um they are norm in africa as well uh africa is one of the region which has adopted mobile wallet very very rapidly uh because the penetration of banking institution is far lower in in the african continent and and most of them have mobile phone where you can either use sms or a simple app um to transact um in fact as i said i i was actually fortunate to work in atl money where i was handling in india and africa and i i traveled around africa and few countries to understand how they use mobile wallet you will be surprised that here we just probably pay or buy something from a store there everything happens on a mobile wallet starting from taking a loan to taking an insurance to paying emis and everything um then in 2012-ish time frame i think uh uh the debut of blockchain based bitcoin happened blockchain is a technology platform or a technology ecosystem uh on which uh uh an application of uh virtual or a cryptocurrency came into play um we'll talk about that shortly um and then the i think um i think not 2020s but even before that uh the concept of open banking was was in discussion that how can you make banking uh even more widespread by taking it from traditional banks or nbfcs into open api based banking infrastructure moving on um like when we talk about fintech right and if you see what i covered in the last two two slides right the need of fintech and the evolution of financial services industry uh this chart actually very beautifully represents uh the umbrella of fintech applications i would say or the areas in which it could be uh taken advantage of right now because technology is so widespread today that you can apply to everywhere either running on cloud or running on a on a on some kind of a server uh in 2018 cb insights came out with this umbrella where starting from the left if you look at lending like marketplace lending and alternative underwriting platform uh crypto or blockchain uh based cryptocurrencies uh right today we are hearing about nft a lot um in the market uh i think one of the uh one of the stream of fintech is also regulatory like i think i was talking about how rbi or feds they started leveraging technology for risk management audit purpose uh and regulatory and compliance uh softwares as well there are many companies that build these softwares infosys is actually very popular with their financial platform that offer many of these services um uh to the industry um personal finance i think personal finance is more about how do i manage my own finance and and and what kind of tools i can leverage to manage my bills or even track personal uh credit card information uh in india one of the very popular platform is cred c r e d uh if you are not on credit uh please download it i think it fabulous gateway um right like bill desk um uh or or any other payment gateway today so when you go and make your transaction on amazon pay google pay paytm and behind the scene there is a gateway that basically process your transaction um then insurance i think i'm particularly bullish about insurance uh as in industry and specifically for india because uh it is uh it is evolving and it is transforming now uh traditionally insurance was one of the most uh uh uh i think difficult industry to understand very very less transparent but um with the evolution of fintech and with the companies that have really come into the market like eco ac ko which offer insurance in a very quick time or even uh think of a policy bazaar right where you can buy insurance now online for your car for your home and so on um uh capital markets i think i covered this briefly we'll talk more about this like stock trading brokering sales and trading online using financial institution backend services for equity stock gold commodities oil etc then wealth management is another area i think this kind of isn't personal finance space but there are a lot of tools now uh which can actually tell you and advise you how to invest in a mutual fund how to manage your wealth where do you how do you want to split your investment between real estate and gold and cash and so on uh money transfers and emittance i think um uh this is an area which which has rapidly evolved uh in the last 10 years i would say when you want to transfer money but also remittances overseas like i think a few years back there was only one uh or two companies that you can hear to transfer your money uh the one with the yellow color logo which is very popular uh right if you know the name you can guess it on the chat window later on in my qa session uh there is no price for that but i'm just asking a question uh it's it's there are two or three which were popular earlier now there are some more that has come up uh but one with the yellow background logo which is still actually very very popular and then the last is uh fintech in in mortgage and real estate industry right like um uh especially for india like market where most of us or many of the player they invest in real estate we park a lot of our investment into physical assets uh at least traditionally now the uh uh we are changing very rapidly we are moving to other instruments but mortgage is very crucial so um like um looking at the key drivers right i think i covered some of this in the previous slide uh when you think of the industry and all those services in different area like mortgage insurance etc if i look at this chart right it beautifully represents one thing and the core is operations in infrastructure so this is like the platform or the technology which offers you the the the capability to operate and provide the infrastructure and around that you see the segments right from retail at the top left um starting with that then wealth management insurance and so on now this is where you're actually thinking beyond a bank you're you're not just thinking bank as a financial institution in your head you're actually starting to think that even a retail setup can be a a mode of financial uh uh services or transaction right now think of peer-to-peer lending p2p um or uh aggregation of comparison engines right like if you go to policy bazaar you can see insurance service or financial service from multiple companies in one single place right if you go um or to companies or to apps like uh there is one called lending card where you can lend to a peer and you can make an interest now there are many more moving toward the right in the wealth management uh i have seen a fast pickup of crowdfunding as a as a platform in india crowdfunding is still not allowed but if you look at indiegogo or kickstarter these are the players in u.s where people can raise funds for their startup or they can put a product online and they can fund it but i find their investment in r d or in marketing and sales by from different individuals right crowdfunding is very popular in fact um during the pandemic i was part of mission oxygen one of the largest mission in india and we we beautifully ran crowdfunding which is technically not crowdfunding it's more of a platform where we went on and we collected fun to donate oxygen concentrator to the hospitals uh and i think it works very beautifully there are many many platforms now in india for that robo advisory goal advisory means ai an artificial intelligence tool advising you on your wealth management capability again uh use case will be covered here then uh uh i think uh when you look at digital for unbanked or areas like insurance right um there are many areas which are picking up there in this segment unlike blockchain um then application programming interface ecosystem api which is open banking and so on uh i will not go through all the topics here but if you look at this summary right a lot of this area are talking about evolution of different channels of financial services right whether i want to lend money to you or i want to transact with the bank or i want to take a loan or i want to take an insurance and so on what one interesting area is in the insurance is evolution of iot right it's like technology called as internet of things where a device is connected to the internet the people are actually looking at leveraging iot in a vehicle so that they can look at the driver behavior and based on that they can offer you a better insurance premium i think in when i was in the u.s um and i was driving my car that time the insurance company gave me a dongle i can connect into my car for six months and they will then track my behavior that how many kilometer i drive in a day do i go into highways more often or do i apply a lot of brake or do i speed up and so on based on my driving behavior they know that what is the riskiness of me and the driver and based on that they either will increase my premium or they will decrease my premium most likely i think people who take this uh [Music] device will actually be uh people who are driving for work or driving for school in other area uh who are technically a good good drivers basically and that's where the insurance company can pass back the benefit if you're if you're if you're a good driver that means a chance of accident or a claim is lowered for you so iot is actually becoming quite popular in other areas as well apart from insurance um i think we'll cover briefly when we talk about um the cryptocurrencies around it as well so i think this was my first section uh where i wanted to cover about why the need of fintech um and we saw the evolution of uh evolution of money and also the different applications or uh the areas where fintech is going to become applicable right or relevant um as a as a technology platform before we move on to use case let me spend some time on the ecosystem of financial technology i think um what you will see here um is basically from left to right if i uh covered what i was talking about recently right the traditional banking uh where you own a customer uh you basically uh say that you are my customer uh you don't have too many options to work to do financial transaction and i am the bank that will offer you most of your requirement and meet most of your need maybe apart from lic and insurance and so on but at the same time traditional banking as i covered right it was a closed environment uh offers a very traditional there was no innovative instruments for you to invest in or innovative uh interest rate regime um or even products that you can actually evaluate and compare and contrast um so i think here the application was uh was also designed by the company the bank sjfc having its own app icsa having its own app so proprietary apps right basically managed by the banking institution or sbi and so on like sbi actually came out with their app very late uh you know uh y o n o uh which is one of their new age update but if you look at that they were pretty much close ecosystem what is happening now uh is moving from owning a customer to actually becoming centric customer centric i think if you buy from amazon uh amazon is considered as the most customer-centric uh when it comes to e-commerce industry right as a player because they offer you the best service and uh but with the best experience right honestly i still use amazon in india compared to flipkart because i still stay to to amazon for multiple reasons so same is happening in banking right you you cannot take customer for granted for forever uh now what is happening is with open api if you're not from a technology industry don't worry about the word api just think of it's like a pipe or a channel in which a traditional banking have to offer it to some uh technology company to build other applications on top of this so think like an app store an amaz apple app store or android app store right which provides a platform with api and then companies they build mobile applications for your usage right so you can actually build a paytm on that or you can build maybe a gaming app on that right so open api will make that enable in open banking um additionally the the bank have to share data about the customer certain data with the third party service provider or the i uh in technology company so that they can offer other uh invent i think innovative services to to us right uh they can also become aggregator for distribution of different services so this is very important for india if i have to go to rural areas right a bank will not be there everywhere but what is there everywhere in india again a question but um there are two things which are there present in every rural uh place in india most of the rural place in india the first is the post office okay and you must have heard of the bank the post office bank right uh there is second uh which is also very widespread uh uh again no price for the answer but you can post it on the window we will talk about that later a propriety in third party apps and developer sandbox so again this is a technology term but what i'm trying to say is open banking is more going to enable uh different companies to come into the ecosystem of providing banking services or financial services in a very customer centric mindset uh if that becomes possible then i think very soon you will see banking as a service right where today you have heard of nbs right non-banking financial uh companies right uh which are basically like the yojana that was launched on nbsc then you must have heard of many other type of small nbfcs which offer services to tier 2 tier 3 cities and rural areas right now look at banking as a service as a as an area like um i i think if some of you have worked in um technology you must have heard of the word platform as a service or application as a service or even uh as a service model right where you don't own an asset but you basically provide a subscription charge monthly to take a service from someone right which means you don't pay upfront for everything so that is going to become possible in i think in the near future uh white label banks i would call it uh example is intercent in india uh they are actually a banking institution but they also uh can offer services of other banks through their uh channels uh or like sjfc or icsa offerings as well um and then the last will be banking as a platform i think that is uh some some time away i think even in the west i've not seen it becoming um uh i think applicable very soon uh but with the invention of blockchain technology or distributed banking ecosystem this will be very very uh i think relevant where it will become like a marketplace i want to take a loan i have a marketplace i want to take any banking services open an account i have a marketplace uh it's like you and i cannot actually start offering some of our services uh on that marketplace as well to someone else right uh basically creating a network effect which is not getting created uh in many other industries right iot is also a network effect application ai is a network effect uh facebook is a network effect linkedin is a network effect right and the same is going to happen in banking area uh i think um again there is uh i will not spend time on this uh i think the slides will be shared with you but this is a very very good map that was uh created by cb insights last year 2021 um it actually talks about the player in the fintech ecosystem uh globally most of them uh will be spread between the west china and india um i think and they are categorized by different offering if you see and if you go to that umbrella that i covered and also the services that i covered accounting and finance asset management financial services automation uh capital market which is um uh we talked about that right personal finance our point of services and consumer lending i think again um a question here there is one of the pos service provider in india and which gives you a device for any store for taking payment from you and me which is very very popular now uh the name of the company also starts with the p uh if you can put it on the chat window i will again answer that later on the pos company which has now become a unicorn it has actually become a billion dollar valuation company then real estate and mortgage uh payroll benefits and so on so i think if you go through this chart and you look at this uh i think fintech is becoming the next big thing globally including india coming to india uh if i just look at india on the same market map this is a bit old i think the new one will be coming up this year but uh these are some 78 private companies empowering digital india again uh you see they are categorizing payments like razer pay insta pay uh just pay etc uh merchant services lending and banking like sma veritas innovati uh a lending card all right then insurance company uh secure now is there uh even uh i talked about eco ac mobile wallets like paytm oxygen and now there are like more than 25 or 50 mobile wallet company in the market um and they are all competing with each other for a customer share then government and corporate initiatives i think npci was one of the fabulous initiative done by india national payment infrastructure and that has opened up uh uh i think very very innovative solutions on top of that stack uh beam is one of that bhim bhim as an app for upi payments uh on npca there are many other apps that have opened up and launched but of course uh they need services like aadhaar and so on and then the last is personal finance section okay so i think um when when you look at fintech in india perspective this slide uh going forward a step for further from the previous slide what it talks about is that you cannot offer financial technology services to any one of us individually you have to partner and collaborate you have to acquire technology um and that is what i have seen in the last few years every big bank is acquiring innovative companies and startups in the fintech area very very rapidly this actually is around two years old but in this last year alone uh the number of acquisition in fintech has like really boomed and rapidly grown like example is ica bank acquiring nikki dot ai uh it is an ai based chatbot right for transacting with a customer on a chat board where you can answer the queries or paperless onboarding of customers um right uh look at rbl bank um they they acquired and partner with money tap for lending services kotak did the same uh in consumer credit analytics with credit saver it's like i think you've heard of civil rights cibil which actually does credit scoring for all of us to create a score in a range of 100 to 800 typically the good credit score is about 700 uh based on which the bank will decide whether to give you money or what interest rate you have to pay if you're a risky customer your credit score is going to be low right especially if you don't use credit cards or you don't have a lot of emis or you don't buy services on on loan another thing you probably don't have a credit record in that case um and i think it is important that you you use certain services to build a credit scoring for for your future if you don't need money now you might need tenure down the line right so i think with that i will take a pause now uh to take up questions um before we move on to the use cases and then and then the career sections uh okay um mac has a query india being a country of people belonging to wealth bucket uh to extremely poor the range is pretty high fintech has given an opportunity to cover the gap but uh what he feels is that the internet connectivity is one of the major loopholes which is not going to help uh the deeper penetration of fintech especially uh wale uh services so uh what if the fintech becomes completely offline like the latest npci platform european et cetera and upi lite which is quite close to that so um you know your inputs on this event so is it possible for us to completely integrate yeah with this technology so i think if i answered the question correctly and there was a question and some comments in that uh it's like you're talking about offline uh modes of uh financial transactions in areas where there is no connectivity yes yes yes yeah yeah i yeah i think see the offline mode of financial services is already there in many countries and uh also the challenge would be that the amount of services or the number of services you can offer will be limited on an offline mode right versus a completely connected online mode uh you're right uh penetration in internet in india is still uh uh long uh i think uh i think long before we will have hit 100 at least another 10 to 10 to 15 years i think um but it's not too far i think um there are financial services that can be done simply on an sms platform you don't need any internet for that i think if you look at how the farmers they they basically uh do some transactions um at the local uh monday right they have they can do it on an sms uh uh so it's called sms banking sms doesn't really internet it actually uses different connectivity but let's assume there is no no phone with the user right or no mode of technology um then also there is there are channels now which has become popular and i think you covered couple of them i'm not an expert on those channels yet but um i think uh services like post office bank uh is a very good example where you can actually go to a physical post office nearby and do your transaction right deposit a money or take a small loan or even transfer money to somebody that you want to transfer okay uh he has another uh parallel question to this uh say you know uh saying that you know uh if we we go forward uh with you know uh technology in the financial sector so what about the human intervention which is also equally essential yeah so are we going to be looking at uh you know a place where you know uh you know we are completely technical in our transactions in the banking space [Music] so again i think that the question is is it more around like what is the human interaction with this technology ecosystem yes uh what is the human interaction with this technology and uh is this the possibility that human intervention completely will be negligible going forward yeah yeah that's quite possible i think uh somebody has posted a comment also about new banking um on on the chat i was looking at and forget about new banking for a moment but the bots right uh or ai which basically will become more and more intelligent over the period of time uh and more and more relevant uh and actually it's like when you talk to someone today on a chat board you don't know if there is a person on the other side or it is just about talking to you or doing your service or answering your questions or even your transactions nowadays is human intervention going to become completely zero no um there will be some amount of human intervention in difficult complex transactions or services beyond a certain value so if you want to transfer an amount up to 5000 rupees for example today right you can do on um if you take take an example of the wi-fi chip in your cards now you can just tap and pay but beyond a certain amount you can regulate and say there has to be an otp entered by a person uh okay or the same can be applicable in other services which appear to appear well there is no need of a human uh at the end of the service point uh a computer or service can actually offer you what it is needed right but uh what i feel is uh the the co-existence of human and in and intelligence um is is going to happen for a very long time before it is going to become completely autonomous so it's like think of autonomous driving today it is it is a good tool it is a good area uh with where the car can drive on their own but will it replace the human driving in the near future the answer is no it is going to become a co-existent um offering the same will apply to fin technol fintech right okay mac i hope uh that answers your question yeah going on to the next one um this is by sale is there regulatory uh laws around fintech banking to product customer privacy yeah yeah yeah there is there is lot of regulation by rbi and also by other financial institutions which are sub-entities uh that basically uh regulate how is the data uh that you share is protected uh right uh there is a lot of rules and regulations around how the data is stored number one uh for example the data can only be stored in india for indian customer it cannot leave the country boundary uh especially if the technology company or the fintech provider is storing it in the cloud number one the second is what kind of info can be shared or used for marketing purpose is also there uh and and the third is more around uh the privacy around uh my credit score and other information uh but uh salil i also will be honest that uh there are a lot of incentive now these companies are giving for people to share their info or do social media uh marketing or other things right if you look at uh privacy it is a it's a term which is defined in a different way in different country uh china when you go to china people say there is nothing called as privacy in china the government knows everything about everyone there when you go to us uh people say it is it is quite well regulated europe is more uh stringent on customer privacy with lot of their regulation they have launched including gdpr and so on india also is coming with india data privacy law idp which is very much regulated on gdpr a model on the gdpr format which will protect the customer or data privacy and data security both and regulate what you can store and what you cannot store simple example is uh you will have an option to tell the bank that don't remember my birthday for example uh by the way budget might not be an option but don't remember my location or delete my um house address after 100 days because you don't need it or for some reason this is my uh temporary admins things like that so that is where it will go become i think relevant for us to also uh decide what to share and what not to share okay uh moving on to the next question um shall we pandey has a question uh if government uh legalizes digital currency uh is there a scenario where it will completely represent the paper currency uh and is it is that advising uh is there a scenario uh i don't know honestly can uh can we all trade just on cryptos and nfts and in metawars uh in the future and transact there uh on a peer-to-peer platform with no physical transaction of cash or currency i would say um maybe in certain application area it might be completely virtual completely uh uh crypto and certain uh applications of certain transactions it have to be a in a format of paper currency uh um right i can't think of paying a crypto to uh my kiranawala or so or maybe in a remote area at least in the next 20 years um uh but uh it's quite possible you never know right at least if you go to us uh because everyone is buying things from a from a regular uh regulated uh platform um even if you buy a grocery you go to a a big store right like a walmart you're not going to a small service provider so walmart says that i will accept crypto for all the needs of your grocery or or maybe some other provider there like laymars um in europe or other players it's it's possible right uh uh whether it is good for us or not that is an answer that that only time will tell okay uh saipan has a question uh going forward government imposing tax on crypto withdrawals does it indicate that in future government is going to replace paper currency to crypto uh or are you seeing any any trends from the government uh uh you know uh in terms of pushing the cryptocurrency uh if you're talking about india um yes i think uh um to a certain level right uh i don't think the government has an intention of replacement the government has more intention of regulating and ensuring there is no tax division there is no money laundering and things like that i think one area that we did not talk about a lot is money laundering right uh especially if you start uh opening up channels which are not well regulated uh it is going to result in black money converting into white on the such channels right and that is what government doesn't want especially on cryptos um uh they don't want uh people to park their black money in such uh areas right uh uh uh i think uh my uh my take is uh uh by the way just to clarify i don't invest in in crypto yet i i never i i uh basically understand them deeply well in terms of financial instrument so i haven't done that yet uh but uh i think what cryptos are doing is they are opening up a very very innovative format of uh distributed trust mechanism uh so think like this right i don't trust my let's say i don't trust my central banking institution or the government or for a certain reason and i want to trust more of a channel which is very network effect enabled uh yeah and uh i think that is where maybe people will start relying more on such uh modes uh thanks vinay uh that's all for now uh we will take the rest of the questions at the end of the session yeah we can continue with the presentation okay uh so i think uh first of all thanks uh i think very very interesting questions from people on the call um and some of those questions uh are the use cases that we are talking about right um especially starting from trading and broking uh um like i've done my myself i got reading i used to write algorithms for trading on uh nasdaq and nyc um and other platforms in u.s when i was working with goldman um uh and and and also offering broken services to the players even uh in 2006 or eight when i was working there i joined in 2006 i had not heard of too many um technology enabled uh brokers right uh which were leveraging the new age cutting edge tech and challenging the de facto uh banking ecosystem of broking and trading uh but then rapidly i think in 2010 onwards and in the last 12 years i've seen uh that that uh such players have really challenged everyone in the market uh shaykh khan was uh one of that um and now there are many in india from growth to so on one that catches attention every for everyone is zero dhar i think it has now become a unicorn so sometime back in zerudha uh actually grew so rapidly if you see this chart right in march um of that year 2019 i think i they had 5.4 lakh customer on their platform and in in by december it's like around nine months they grew to 8.5 uh the growth

was like tremendous right that that's 57 growth in in nine months compared to all the other players that you see the largest is uh hdfc um uh um from a traditional bank then angel broking was 40 in person of course carvey and uh other also did well uh now what zerudha really did very very well is made the the platform so easy to understand for anyone and and made it customer centric if you remember the chart i was showing right uh owning the customer is important but at the same time respecting the customer's uh viewpoint and making customer-centric making it so easy and transparent i think zeroth has done absolutely well there i have an account on xeroda for uh trading on some of the stocks and mf i also have an account in grove g r o double w uh is two w's basically uh but i think uh this has really created an ecosystem of players in the country and they were one of the first i would say uh who has done it really well um if you look at uh another use case right um it's small and medium businesses i think this is very very relevant for india as a market um [Music] when i think of lending right uh money to someone that is the core of any economy to operate if people cannot lend and take loan they cannot function right especially businesses especially small scale and medium scale they always need money working capital they need po financing purchase order financing they need other things to buy kpex or invest right because they are not very cash rich like big companies especially in india africa asia pacific look at a number of msmes there it is one of the largest job providers in india actually uh so in order to support them the lending has become now very very inclusive and it is continued it will continue to become more and more and more interesting with with fintech into the picture right the banks have started offering msme catering services or basket of loans or even large ticket size in small ticket sites nbfc really has i think done fabulous in many in area especially farming agriculture uh industry or even small scale textile uh manufacturing services um because there are so many textile companies in india which are very small scale uh and and think of any other fragmented industry right like fishing uh fish fishery industries right uh that is one of the largest in india given the amount of ports we have and and and uh and consumer of such uh products we have right so micro financing institution i think now they have challenged the big banks where they can offer small loans at a interest rate and a small payment back term right they offer mfis which offer like small ticket size loan uh in a better uh faster kyc turnaround right and then fintech is also getting into uh p2p uh area right i think i covered this use case of crowdfunding uh for social courses like uh during pandemic or peer-to-peer lending like you and i going on a platform uh lending 10 000 rupees to someone we don't know who we are lending at times and sometimes we know who we are lending there are both scenarios or maybe there is a middlemen and they give us an interest in uh x number of months right you can say i want to lend for six months i want to learn for three months i want to lend for a year um and then you get an interest back now it is risky it is not completely without risk right people might not end up paying but what uh we have seen and i have observed that p2p has done well because people who take small loans typically whatever challenge paying it back because if they don't pay back they can't go again uh there are some rate of fault and rate of uh failures i would say uh where people will uh default on their payment but that's that's minimal and i think that this a p2p platform will manage that date of default and the rate of risk because they take a cut or a margin right so watch out for this this area i think in the next five years if you're looking for building a career uh into such kind of a domain think of understanding p2p lending really well and for specific for india it is going to boom very very fast right because banking cannot provide everything for everyone in india i think somebody asked right offline mode of uh transaction rule area um think of an offline mode of lending uh to a small farmer or a small scale business owner in a in a rural town and him or her getting that access to money at a lower interest rate think of the volume it can generate uh and the amount of market side it can enable for all of us to track right because people who can't pay high emis or high interest rate will never probably get into the banking infrastructure and india still have a lot of people who are not in the banking or financial ecosystem yet um and that is a very very big opportunity uh then venture debt funds i think uh i won't talk much about this but venture debt funds are more to do with uh venture-based equity financing and equity investment um into companies and assets especially for msme um area uh development financial institutions i think nabard sydbe xm idbi um they provide the credit in the form of term loans um or or maybe against a guarantee of or some instrument or collateral right uh maybe take they take an equity into the company uh very much like a venture debt fund will probably take either an equity bank or they will take a collateral um as well right so when you look at msme uh i i i'm really bullish on this whole ecosystem um especially for for uh india to to become uh i think very relevant um so going forward uh from msme lending into microfinancing if i give an example of microfinancing um lending card is is one of them but before talking to lending card about trending card when you look at this report the graph on the side right china versus rest of asia i think in 2014 china was actually taking 78 of the vc back alternative lending deal activity uh but uh over the period of last seven to eight years now other countries like india indonesia pakistan bangladesh vietnam philippines they have actually adopted digital technology for micro financing and alternative lending option very well now particularly india i think india is one of the largest market for uh micro financing services so in 2018 i think the rest of the asia was already 36 percent and i think in 2022 it will already be touching around 45 or so 43 44 45 percentage um i think coming back to india uh some of the examples are um this uh lending card which actually raised 87 million dollar in uh uh alternative investment for a microfinancing opportunity right so you you get a salary and you can probably take a loan against your salary or you can withdraw some advance against your uh pay slip or you get uh uh basically an offering from lending card where you can take a small loan at a better interest rate um now if you take a very very small loan your credit score is not good you may pay a higher interest rate compared to going to a bank but you will definitely get access to money is possible right some of them charge 13 to 12 14 compared to maybe eight to nine percent but they're they're we are talking about small financing in a small period of time right uh technically a bank bank is not offering that today or even avail finance which got 17 million dollar micro lender um even the salary advanced startup early salary i think it is doing very well there are now many uh company in the space of salary advance all right you take a advance against your paycheck and when so pay uh check comes in hit your account the company will draw the money that you took in advance many of us need advanced right uh for meeting some need buying a car for a marriage or anything like that um rupee i think somebody also talked about repeat right pass it back online lender um uh i'm not following rupees so closely so i don't know where they are today but i think that is another area where you lend money against an asset or a collateral or some kind of an asset in your uh company or in your institution or in your office or infrastructure that they will probably take other enclaves um i think china i have covered but uh one company that if you are interested in uh finance right you should follow is and financial um um i think it is it is alibaba uh offering uh which uh i think in 2018 19 they rank as one of the most valuable financial services from 150 billion dollar valuation this was like three years back before pandemic uh now i don't know where they stand but i'm sure that with the virtualization and digital adoption in china um they would have really grown even bigger and i think in the next five to ten years india is also going to see some of the ants of our own very soon uh because um if you look at traditional banks right like jp morgan icbc icbc the chinese bank or bank of america wells fargo uh they are also one of the big institution service provider and they're innovating fast but they cannot innovate as fast as someone like an and financial or a rupee or a lending card or a zero da or a ptm all right because uh they don't have the pay uh the the what you call the baggage or the traditional infrastructure they they started with technology first right so they can rapidly evolve and grow and ant is a very good example alipay was actually i think as fabulous i worked in china when i was in one of my previous organization for some time i i traveled to beijing and i've seen the power of alipay wechat and other things in india also i think i covered this already like payroll most employees probably will get their paycheck in uh digital wallet instead of bank account i was talking about africa right and i told you i will cover africa a bit like look at countries like kenya tanzania uganda um and even um the the east and west african countries zimbabwe or um burkina faso which is a franco country like all of them have used a mobile wallet really really well they adopted it really well because they get their paycheck in the wallet they take they pay their loan they take their uh emi uh the transact and everything is done there because there was no bank penetration very wide and deep uh second thing is uh a very important example is uh your spending habit and or bad habits right so typically if someone is is uh is a drunkard right and they take their money and they go and spend on the payday or on on alcohol and come back home with nothing left that is there is a risk for the women and for the children and for the kids right although they belong in india i think this is one of the very big challenge uh if you look at people who work in the tier one tier 2 city many of the people they face this challenge that on the pay day my husband actually spent 50 of his paycheck on either gambling or um drinking right before they even come to home and and then i have to uh and manage with whatever is left think about they don't get that cash in their hand they get their pay in their wallet and the wallet is locked uh in terms of how it is it can be used for transaction maybe there is a dual otp on on which it has to be used and what otp is given to the husband one is given to the wife for example i don't know i'm just thinking loud right then of course it will help us to regulate that a bit uh because if you have cash in the hand you will be motivated to spend it fast if you don't have it in the hand you can't do much right you can't gamble uh honestly now people can innovate and say you pay through through paytm on qr code people can always innov

2022-04-08 10:07

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