WIONNew Delhi, Delhi, IndiaDec 23, 2016, 06.55 AM
What motivated you to start BankBazaar? Tell us about the journey.
Answer: One of the co-founder Arjun Shetty, was interested in buying a home in India. Getting the home-loan for it was a tiring and tedious process and he faced some of the common frustrations that a consumer faces while searching for the best deal on a Home Loan. There was no clarity on the process, too much documentation, very difficult to compare offers across lenders and above all agents gave wrong information.
Arjun came from a strong technology and banking background and couldn’t understand why this process was so difficult. Arjun ran the world’s single largest online acquisition channel for cards with Amazon in the USA. Frustrated with the entire process of getting a home loan, he along with me and Rati, decided to develop a credit processing platform for Indian banking industry. Hence in 2007, we decided to come back to India and started BankBazaar.com.
Explain your business model to our readers.
Answer: BankBazaar.com gives banking a smarter online platform. It is India’s first multi-brand paperless platform for instant loan and credit card purchase. It is a neutral online marketplace where consumers not only can search, compare but also apply to get end to end service delivery on financial products. Hence, we made sure that this neutral financial marketplace where the choice is completely in the consumers’ hand with no biases. So, we do not charge anything to the consumer. Our revenue model with the banks is that we charge the banks for the validated applications that we provide.
For the consumers who need voice support, there is a facility to drop their phone number and the call center helps them in filling up the forms for them. The website helps them connect with the bank, but customer support and operations team goes beyond that, once the forms get filled, they handholds them till the time of loan disbursal. They provide information to the consumers on the documentation process, status of the application, coordinating with the bank and the consumer etc. and make sure that the consumer gets the right amount of loans and interest rates without much of a hassle.
Tell us a little about your background.
Held decisive positions at Deloitte Touche Tomahatsu’s US East Alliance and Cisco Systems before dived headlong into scripting the BankBazaar story.
How do you see your company in the global ecosystem?
Answer: BankBazaar is expanding internationally, and we have set up our first international office in Singapore. Though it too soon to comment on the establishment but the learning I am excited about is the opportunity to understand market and consumer behaviour in these countries. There is a lot of onus on us to adapt to the requirements of the international markets and focus our attention on developing individual policies targeted at specific markets. Domestically, we are India’s best fintech company for personal finance.
What according to you, is the future of money and the industry?
Answer: Online transactions will gain traction due to the government policies and as many industry leaders have said, majority of the transactions will turn paperless in the next five-10 years. As regulatory policies become favourable and infra builds, the hope is that fintech companies like ours will be able to achieve our vision i.e to democratize finance with 100% paperless platform.
What is the work culture in BankBazaar like? What would you say is the one quality common between all your employees?
Answer: The leaders in each team have successfully created an environment where there is no shortage of opportunity. We have a start-up environment where each one is happy to multitask and is excited about the additional exposure and learning. The idea to let the team learn something new, face challenges against which you can test your skills.
Ownership is the one quality common between all our employees. Working here is akin to working like an entrepreneur i.e. you have your own resources and freedom to experiment to bring out the best results. Off course there are ethical and legal boundary conditions.
What is the biggest hurdle you have faced or are still facing?
Answer: The biggest concern was and still is the consumer mind-set, which still has not completely accepted the online model and remains the primary hurdle. There is still reluctance in making online purchases of the sort that were traditionally referred to a family friend or advisor. This trend is changing though, especially in the Millennial generation onwards. Government support, in the form of policies, digital literacy programmes, etc., can go long way in developing confidence and bringing more people on the online platform. Rapid adoption is also hampered by infrastructure issues. Internet penetration is still not as high as it could be and this affects the choices of many consumers. These infrastructure issues are especially critical in the Tier2 and Tier3 cities, which forms a huge consumer base.
What keeps you going in the lows? What inspires you?
Answer: BankBazaar’s vision is to democratize personal finance by providing 100% paperless platform and the entire team, including me, is fully committed to it. This vision motivates, inspires and make sure work towards achieving it.
What is your definition of a good bank?
What is current penetration of online financial space?
Answer: At present it accounts for 14% of the overall Industry. Looking at the support from the Government and demand due to convenience it provides, we expect it to grow to 27 to 30 percentage. In terms of products, I think ‘share trading’ and ‘wallets’ are experience rapid growth whereas loans and credit cards are at early adopter stage.
A huge chunk of the society is unable to access online banking facilities due to lack of resources. What are they missing out on?
Answer: They are missing out on a much smarter, faster and convenient system of banking.
How important is social media and what role will it play in the future?
Answer: As an online brand, social media plays a very important role for us. It is a platform which helps establish two way communication with customers. TV, print, radio etc. helps in communicating to the masses whereas social media helps in communicated to the targeted audience. To connect with the younger audience, which spend more time on internet then on TV, Social Media becomes and important media to be present on.
This year, we launched all our campaigns only on social media. For example - Father’s Day campaign was a big success on YouTube and Facebook with a superior engagement rate.
Does the current trend of innovation bring more complexity and risks than benefits?
Answer: It is definitely beneficial. There are lot of compelling reasons for both consumers and the industry to innovate and make the process more and more technology based.
Cost Benefits: The reduction in costs can be 2-3% in banking products, and as high as 20-30% for insurance products. This is a significant reduction and ultimately, consumers will gain from this reduced costs.
Removes fraudsters: Technology based platforms ensures that there are digital checkpoints such as Aadhaar-based one-time password (OTP) etc. to reduce the incidence of identity theft, fudged signatures, and fake documents.
Informed decision: Innovative banking solutions help consumers access the right financial product, technology-driven selling gets rid of the scourge of misselling. Digital platforms allow a consumer to control the levers of their product search. They can find products best suited to them in terms of parameters like costs, riders, interest rates and returns.
What does the banking industry need to change to regain the trust after all the disturbance caused by demonetization?
Answer: Demonetization is a great step towards a paperless cashless economy. Transactions online will push white money transactions and people will go to the bank versus to relying on black money transactions which is great for Indian Economy. We expect following changes in the banking industry:
With more than Rs 300K Crore additional deposits to lend which will increase loan volume, banks should reduce interest rates for loans
The expectation is that there will be increased investment in Mutual funds - with black money transactions reducing more people will invest savings in mutual fund versus land.