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India's fintech market is transforming how financial services are delivered, especially for customers in underbanked and rural areas. Technological advancements, such as mobile connectivity and artificial intelligence, are significantly enhancing financial inclusion. Fintech companies are playing a crucial role in lowering barriers to credit access in India.
In this latest episode of the Industry Wired podcast, host Priya Dialani speaks with Anupam Vasdani, Group Chief Financial Officer at True Balance, on the increasing financial inclusion through technology. Here are the key excerpts from the discussion:
The Indian fintech sector is advancing rapidly, presenting both opportunities and immense operational challenges. Scaling up any fintech venture needs effective governance, sound risk management, and financial prudence from the onset. Though innovation helps drive business momentum, it can sustain that momentum with better management systems and capital management practices.
Some of the key aspects of the need for improvement included enhancing governance processes, increasing fundraising capacity, and developing high-quality talent pools in areas such as finance, treasury, compliance, and legal affairs. True Balance had received long-term investments from an impact-driven investor that would improve its capital position in the future.
Customer expectations have changed significantly since the advent of digital technologies. Customers today demand instant decision-making, customization of service offerings, and digital interactions, regardless of sector. Customers expect their credit offers to be processed and delivered within minutes, not days.
Using the company's own artificial intelligence-based credit-scoring algorithms, True Balance customizes lending decisions based on personal customer requirements and behavior. Another vital element in building strong customer relationships is trust. The importance of transparency in communications, clear details about repayments, and fair business practices.
Financial inclusion is central to True Balance's business strategy. It prioritizes reaching out to those with little or no access to conventional financial services, especially in Tier 2, Tier 3, and rural segments.
True Balance caters to customers across all PIN codes in India, including remote locations where access to financial services was previously hard to obtain. By utilizing AI-based alternative scoring methods, the company assesses customers not just on their conventional credit scores but also challenges stereotypes about rural credit seekers, most of whom demonstrate responsible financial behavior.
Innovation and efficiency often seem to conflict with each other. For the future of organizations, it is essential to perform well in both areas together. For fintech businesses, innovation needs to be accompanied by robust operational and testing capabilities.
True Balance tests its products before rolling out new features on a large scale. Its credit models are improved using data and risk controls in place. The compliance, audit, and governance teams are always in close cooperation with product teams to ensure innovation within boundaries. If an organization does not combine innovation with efficiency, it will not grow sustainably.
Entrepreneurs give importance to governance and compliance right from the start. In most cases, startups emphasize growth and innovation while leaving other aspects, such as compliance, until later stages. This is a risky path for the future.
Governance, compliance, and risk management must be incorporated into daily activities. This way, the organization will be able to grow properly, earn investors' trust, and adhere to regulations. If founders join a rapidly growing industry, such as fintech, then the aforementioned measures might give them a competitive edge.
