Where is fintech headed? Seven start-ups chart their course

Financial technology, or fintech as it is better known, began with nimbler start-ups first disrupting banks with their innovative approaches and later evolved with the latter also building partnerships with the banks to strengthen the entire financial services ecosystem. As part of the Mint Fintech Summit held on 23 June in Mumbai, we invited seven such small and nimble companies—that deal with a range of disruptive technologies including artificial intelligence (AI), machine learning and blockchain implemention—to give us a glimpse of where fintech is headed. Here are brief profiles (listed alphabetically) of these trailblazers:

Atyati Technologies: Mobile delivery

Bengaluru-based Atyati Technologies Pvt. Ltd, is a technology platform provider for the rural banking sector in India. Founded in 2006, the company’s technology solutions have been designed to enable the delivery of services in untapped markets using multiple devices such as mobile phones, netbooks, tablets, thermal printers, pin pad devices, cards and biometric scanners.

In May 2012, business process outsourcing firm, Genpact Ltd, acquired Atyati. In September 2016, Metdist Group company Geosansar Mauritius bought Atyati from Genpact. Atyati currently serves 19 banks across the country with over 12,000 points of service offering multiple products including savings accounts, loans, deposits and schemes such as the Pradhan Mantri Jeevan Jyoti Bima Yojana.

“Our application leverages secure identity and the entire payment infrastructure provided by Aadhaar and the National Payments Corporation of India (NPCI) ecosystem,” said Prakash Prabhu, the company’s chief executive officer (CEO).

“One feature that differentiates us is our model of providing end-to-end operations. The management team consists of people from the technology domain (erstwhile i-flex Solutions) and the operations domain (Genpact) to ensure a handle on end-to-end servicing and not just technology,” he added.

The company’s long-term vision is to have more services and products—custom lending products, insurance, e-tailing, etc.—across more geographies and more points of service, besides achieving quality-of-service levels in remote areas that are on a par with those in the metros.

FinBox: Banking on apps

This fintech aims to increase the revenue of lenders by increasing the number of customers on their books by reducing the cost of acquiring and servicing the loan—which it essentially does by building software tools such as application programming interfaces (APIs) and software development kits (SDKs).

According to Rajat Deshpande, CEO and co-founder of Moshpit Technologies Pvt. Ltd, which brands its solutions as FinBox, “Applications such as wealth management apps, personal finance management apps, insurance and financial products distribution apps and digital lending apps use FinBox tools to enhance their user experience and reduce cost.” He describes FinBox as a business-to-business (B2B) technology firm that does not compete with other fintech companies but collaborates with them.

“We are a technology-focused player, which keeps us agile and our model asset-light and less risky,” he added. Launched in December 2016, FinBox currently has six team members.

Going forward, however, it has ambitious plans for growth. “In the future, we see FinBox as a full stack fintech API platform providing access to payment APIs for B2B start-ups, blockchain implementation, underwriting and light-weight decision systems and personal finance management APIs,” Deshpande said.

Deshpande hopes FinBox will be the “backbone” that will be used “to create fintech experiences in India and Asia Pacific”.

FlexiLoans: Data-driven

The goal of FlexiLoans, the fintech platform run by Mumbai-based FlexiLoans Technologies Pvt. Ltd, is to provide working capital financing to small- and medium-sized businesses in India that are currently underserved by traditional institutional channels due to lack of collateral or inadequate credit history. “We provide unsecured loans to these segments by using alternative, data-based risk scoring models to assess the borrower risk,” said Abhishek Kothari, a co-founder of the company.

Founded by four alumni from the Indian School of Business, FlexiLoans currently employs 60 people and has the backing of some well-known names as investors and mentors—including Sanjay Nayar, CEO of Kohlberg Kravis Roberts (KKR) and Co. India, Vikram Sud (former head of operations and technology for Citigroup Inc. in Asia Pacific) and Anil Jaggia, the chief operating officer at Avendus Capital Pvt Ltd.

Kothari believes that a “strong focus” on data and technology has helped his company in all his online customer acquisitions at FlexiLoans. A variety of data sources are used to score, filter and assess the applications received through the platform, according to Kothari. Outlining his company’s vision, Kothari said, “In three-five years, we will be a brand synonymous with pure digital lending using machine learning and artificial intelligence techniques that give real-time approvals and economic viability on micro-value loans.”

FundExpert: Robo adviser

Gumption Labs Software Solutions Pvt. Ltd, which launched FundExpert’s automated investing platform in 2016, wants to make monitoring investments “super-easy, using algorithms”. The Bengaluru-based company, which also runs TradersCockpit.com—a do-it-yourself equity advisory platform—has built a proof of concept that was “tested out successfully with Barclays Wealth”, according to co-founder Anuraag Saboo.

The company is now extending its marketing efforts for FundExpert, which “auto-manages the portfolio” for passive investors, using mutual funds as the primary investment medium. “We believe in completely automating the entire investment journey for the user. And unlike other platforms, we do not deploy any in-house human expert for advising users—everything is completely automated,” insisted Saboo.

Besides addressing the common investor questions of where and how much to invest, FundExpert aims to be a “complete robo-advisory”, tackling three more critical financial questions a user has: when to invest, when to redeem, and when to re-invest.

“The answers will be personalized for each user keeping in mind his existing investment history and applicable tax laws,” said Saboo. Besides, he added, the solution is also available as an application programming interface/software development kit (API/SDK) for existing wealth management platforms as well as mobile wallets.

IndianMoney.com: Financial guidance

“Unlike any other fintech platform where you have abundant information which consumes time and requires certain skills, our platform offers consumers with ready-to-consume capsules,” said C.S. Sudheer, CEO of IndianMoney.com (Suvision Holdings Pvt. Ltd), which he founded nine years ago with “just one computer and an internet connection” in a friend’s office.

Today, IndianMoney.com boasts of being “India’s largest financial education company”, with over 200 employees, serving 80,000 financial intermediaries and 3 million consumers. The company focuses on providing “free, unbiased financial guidance” to the common man over a phone call.

“When everyone in the market is gung-ho about going digital—and we are also geared to be there—we believe that human touch is essential in personal finance in India (and Bharat) owing to poor financial literacy,” said Sudheer.

Hailing from an agricultural family in Thirthahalli, Karnataka, Sudheer was inspired to start this initiative when he met an auto driver who lost his life savings in an insurance policy “mis-sold to him by a reputed insurance company”.

On his future plans, Sudheer said, “At present, we are educating 14,000 people per day on the phone call and we aim to increase it to 100,000 people per day over the next three years through both voice and chat bots. In five years down the line, we aim to hit a target where 2% of Indian financial services are fulfilled by IndianMoney.com.”

KrypC: Blockchain riders

This fintech provides blockchain technology solutions to various organizations to enable them “to utilize blockchain features such as privacy, security and trust”, among others. Blockchain is a secure, distributed online ledger system and the underlying technology behind crypto-currencies such as bitcoin.

“Blockchain is still in the exploratory stage today and one of the main challenges is to integrate it with legacy data, often requiring lot of investments in coding, skills and even doing a proof of concept,” said Varun Nagarajan, head of business development, KrypC.

The company addresses these challenges by building a platform through which businesses, including financial institutions, can quickly implement a blockchain solution—with virtually “a near-zero development effort”.

KrypC helps organizations to interact with legacy systems without the need for replacing them through its tool called KrypCore. The tool allows businesses to just “drag and drop certain components” and quickly map out a blockchain solution for a particular process or business need, according to Nagarajan. The idea is to enable them to test out blockchain for their respective use cases swiftly and with relatively lower investments compared to a situation where they do it entirely on their own.

Currently bootstrapped (own funds), KrypC employs over 30 people, has an entity in the UK and is in the process of setting up a US office, according to the company’s website.

Turtlemint: Insuring its future

There is a symbolic meaning behind the name, Turtlemint, of this Mumbai-based fintech: with ‘turtle’ shell signifying safety and ‘mint’ indicating money. Touted as India’s first online-offline insurance platform, Turtlemint is building a pan-India network of offline partners and, according to co-founder and CEO Dhirendra Mahyavanshi, has been “a pioneer” in the online insurance aggregation domain with offerings like ‘match score’, ‘policy recommender’, ‘renew in a snap’, etc.

“Our approach has helped us scale up our business to 6,000-plus policies per month in a capital-efficient manner,” he added. While Mahyavanshi has previously worked with Quikr and ICICI Lombard, the other two co-founders—Anand Prabhudesai and Kunal Shah—cut their teeth on firms like Yahoo, eBay and Deloitte.

Mahyavanshi cited a few things that differentiate the fintech from others in the space: a feature-rich technology platform that helps Turtlemint partners digitize their business; an ecosystem to diversify their portfolio of offerings; and training and post-sales operational support. He said Turtlemint’s vision is to be “the No. 1 insurance distribution platform which caters to all insurance servicing needs of a digital partner”. In the next three-five years, the firm plans to expand to over 100 tier-2 and tier-3 cities and build a 10,000-strong digital partner network.