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India’s fintech sector is relatively young, but seeing tremendous growth in recent years - driven by a large market base, a vibrant startup landscape and friendly government policies. Nasscom reported around 400 fintech firms operated in India in 2018 and predicts that the country’s fintech software market alone could touch USD 2.4 billion by 2020, doubling on the current rate of growth. However, even in the sizzling fintech scene, success is not guaranteed. In the crowded marketplace, only those fintech firms providing some kind of unique services see a rising adoption curve, and the rest sink into oblivion.
Bengaluru-based fintech company, Namaste Credit understood this challenge early on. The company seeks to disrupt the SME lending landscape in the country with cutting edge technologies such as artificial intelligence (AI) and machine learning (ML) and in-depth expertise in credit assessment and disbursement.
In an exclusive interaction, Krishnan Parameswaran, Co-Founder and CTO at Namaste Credit, explains the changing role of CIO/CTOs in the budding fintech sector and how the company is using technology to disrupt the fintech space.
With the rise of fintech in India, can you tell us about the changing role of CIO/CTO in financial services sector?
Today, every company is a technology company at its core. This is especially true for financial services landscape that is undergoing a tectonic market shift. This evolving landscape presents the CIO/CTO with the opportunity to expand their role and become a change agent. That’s a big shift from his/her primary role has been to oversee and manage an organization’s IT systems and operations. With the continual adoption and immediacy of digital tools generating more data and insights about consumers and organizations than ever before, coupled with the shift from internal to external IT resources, CIO/CTO's are challenged to solve the inefficiencies in Finance sectors using disruptive and cutting edge technologies. End of day, the big challenge is to deliver simple, faster solutions in order to bring efficiencies to scale.
Please tell us something about Namaste Credit? What emerging technologies are you exploring in your organization?
The company has been founded in 2014 by Lucas Bianchi and Gaurav Anand, two successful Wall Street executives who quit their lucrative careers to move to India to set up Namaste Credit. The company seeks to disrupt the SME lending landscape in India with cutting edge technology and in-depth expertise in credit assessment and disbursement. Today, our employee strength has crossed 150 and we have 14 offices in India, with Bengaluru as headquarter. In our five years of existence, we have a league of over 40 leading banks and NBFCs as part of our online loan marketplace. The company has recently introduced an AI-based video capture tool to simplify document upload process while applying for a loan.
We leverage cutting edge technologies using cloud platforms. We are building our products using open frameworks so that the different systems can interoperate and integrate through APIs, we have used artificial intelligence based algorithms to solve the real problems. We are constantly looking at Cloud and Mobile technologies to bring in this transformation.
What are the biggest challenges faced by fintech on SME loans?
Digitization of SME Loan application are complex, SMEs range from small traders to big SMEs - and the documentation for loans varies by these. So it can start with a few pages to several hundred, which includes KYC, Financials documents. Digitizing these are the biggest problems we have faced. It becomes more difficult as the no of documents and pages increase. The second biggest problem with digitization is quality of digital document. It depends on print quality, scan quality, images quality. In many cases poor quality of these elements create noise in digitized information.
How do you differentiate in the finance sector for lending?
Digitization of SME Loan application is complex; it varies by SMEs’ type of business entity and the kind of loan you are applying for. For example, loan against property versus unsecured loans. An SME lending have to deal with various type of documents and by making a difference in the SME loan segment, we have got an edge over our competition.
How is AI, IoT and big data impacting the sector?
AI, IoT, Blockchain are drastically changing the way financial business functions. It makes the workflow automated. By leveraging AI, we can automatically extract digitized documents and are able to analyze the data using trained models. The sector is getting disrupted very fast. The inefficiencies are getting solved through technology. Digitization also brings visibility, scale, processing power and general reduction in turnaround times. There are other sectors like payments like UPI, Wallets which is offering convenience to end customers. Using big data we can predict increased leverages for companies, improve penetration into tier 2 and tier 3 cities with various financial products like micro finance. In fintech, big data can be used to not only anticipate customer behavior, but also can form a basis for the decision making.
What is the road ahead for the company?
Going ahead, we are building more scalability into our solutions, we want to equip ourselves to the market demands. Our products are used by leading NBFCs and leading banks and the numbers are increasing steadily. We want to take the learning from the market and see where technology can be used to bring greater efficiencies.
What advice do you have for budding CIO/CTOs?
Being in the knowledge industry, it is imperative that we know the technology trends and update ourselves constantly. It is essential to explore various technologies and tools to solve problems more efficiently. Staying focused on goals and working towards the same will certainly achieve results.
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