MUMBAI: Having started working with MFIs as a technology provider, Fino has gradually evolved—financial inclusion services are now its cornerstone. With most Indians lacking access to quality financial services, Fino’s MD Rishi Gupta believes that this space will be the bread and butter for the firm, and all payments banks
Rishi Gupta, MD, Fino Payments Bank, likens banking to a marathon as opposed to a 100-meter sprint.
A squash player himself, Gupta sees uncanny parallels between sports and businesses. The obvious being hard work, and the need to be active amid physical hardship. There’s another—potent psychological strategies that opponents use to stay within the optimal performance zone, and deter or distract competitors. It is variously called sledging in cricket, trash talk in basketball or chirping in ice hockey. “Sportsman ka kya hota hai, he doesn’t get distracted, but is focused on the game. Likewise, in business, amid disruptions (new platforms or services) and distractions (from competitors), we have to stay true to customer focus,” Gupta explains.
A chartered accountant by education, Gupta is the numbers guy, and looks at every business proposition through the ‘break-even’ prism. He often gets obsessive with spreadsheets, has done more calculations than Casio, data and figures stick to him like glue, and make him unhappy or upset at times.
He may be dabbling with products in financial inclusion, but Gupta makes it amply clear that profitability is fundamental. In fact, at the time of its launch in July, Fino had put on record that it strives to be the first profitable payments bank. “I was a bania, come from a business family and numbers is all I’m focused on, but don’t lose focus on customer service,” he admits candidly.
If the mission to serve the under-banked is sincere, so is the commitment to make money. Gupta is adamant that his company—or any company—can and should pursue profits and a higher purpose (contribution to society) simultaneously. This, in many respects, is perhaps Fino’s unique selling point.
Fino was started in 2006, when ICICI Bank looked beyond the branch business. In its formative years, it worked with MFIs as a technology supplier, but gradually evolved into services with financial inclusion becoming its cornerstone. It was one of the first firms to issue biometric-based smart cards (issued over 60-70 million cards and was the country’s largest issuer until UIDAI scored over), facilitated direct benefit transfer and micro insurance products.
Finally, in 2015 when the RBI issued it the payments bank licence, Fino, as an entity working with banks, transformed into a bank. Currently, the holding company has two divisions — payments bank and Business Correspondent (BC) business that facilitates micro finance and MSME lending. It counts ICICI Group, BPCL, Blackstone among its investors. “We took a deep dive to see what the focus should be for the next 10 years,” Gupta says. Some of Fino’s activities largely involved one-time income (like issuing smart cards) that it gradually let go. It wound up its international business, as continuing it would have been an avoidable distraction. In essence, it decided to tap the big, fat Indian opportunity in financial services lying at the bottom of the pyramid.
Though approximately 75 per cent Indians have bank accounts, thanks to Jan Dhan, not all have access to good quality services. This, Gupta believes, will be the bread and butter for Fino or all payments banks. From the customer’s viewpoint, Fino doesn’t intend to be everywhere, though its tagline reads: For everyone, everywhere and every time. What this means is, its target base is narrowed down to households with an annual income of `1.5 lakh to `6 lakh. “We want to be the D-mart of banking. We want to focus on a particular segment,” says Gupta.
As per McKinsey, there are over 40 crore such households in India or one-third of the country’s population. The value may not be high here, but the volume and need is. It’s the very segment that other payments banks, wallet firms and BCs are targeting too. But Gupta claims the difference between them and Fino is that others are into transactional banking, and Fino into relationship banking.Transactional banking hardly makes money and we can see wallet companies and others struggling with earnings. Relationship banking goes beyond transactions, like say paying a utility bill. Fino, for instance, is attempting to floor the customer with superior service.
Take a kirana store owner, who may have to spend a couple of hours for a normal banking transaction, where as Fino provides door-step banking. Also, none of the other payments banks offers current bank account like Fino or sell insurance products. It facilitates account opening, including debit card issue and pin generation, within 6-8 minutes. Fino started operations with 5-6 million existing customers, but hopes to amass over 50-60 million in the next 4-5 years. Currently, it runs 422 branches, which will grow to over 1,000 in three to four years.Hailing from Delhi, Gupta is now settled in Mumbai for the past 11 years. Within two months after moving here, Gupta bought a house. “Living in a rented house gives you a transitory feeling. Own house makes one feel, ‘yeh tho apna hi hai”. It seems Gupta is applying the same logic to Fino, embedding banking to its fintech base from the very beginning.