Technology has made it possible for everything to come home. Startups like Swiggy, Zomato, and Uber Eats deliver food while the likes of Flipkart and Amazon deliver all kinds of goods to customers’ doorsteps. And now, Gurugram-based FIA Technology, a socio-fintech startup, is taking financial institutions and their products to people’s homes.
With the Indian government and financial institutions doing their best to turn the country’s cash economy into a cashless one, FIA Technology is using its digital expertise and knowhow to help banks and financial institutions accelerate financial digitalisation.
Founded in 2012 with a mission of social and economic inclusion, livelihood empowerment, and poverty alleviation, FIA Technology is a financial products digital distribution platform trying to accelerate the digitisation of financial transactions in reaching unserved geographies efficiently and profitably.
FIA was bootstrapped by Seema Prem and Sameer Mathur. While Sameer moved away from the startup after a couple of years, Seema has been leading the firm and its mission since then. An electronics engineer, she did her MBA from XLRI, Jamshedpur, and subsequently worked for IGATE (now Capgemini) before doing her fellowship at MIT. Her study on low income households, especially in emerging countries, piqued her interest in starting a fintech firm in India.
After her fellowship, Seema returned to India and pursued her dream of working for financial inclusion through her startup. It took about six months and plenty of hard work to get results: they landed SBI as their first banking customer. And there was no looking back.
How the platform works
In its endeavour to enable financial inclusion, FIA has created branch networks in all states of India and across 656 districts. It has 22,000 centres manned by local micro entrepreneurs in villages and small towns.
FIA is also an aggregator (it aggregates the products of various banks and financial institutions on its platform) for rural customers.
Seema notes, “Banks had shifted to a bank-led technology model. So, we built a platform over their technology to ensure that activities and transactions are conducted in a seamless manner.”
She adds, “One kind of challenge that we see in financial inclusion sector is that values of transactions are very small, but volumes are very high. We have fraud detection engines that pick out these fraudulent transactions. That is what gives us an edge over our competition. Our real-time intuitive platform is able to catch these early warning signals, and ensure that we keep risks very low.”
FIA leverages technologies like AI and data analytics to create algorithms and help financial institutions keep their risks low. It has also created an alternative saving score for people to make credit available to a large number of customers who have been kept out of credit system for various reasons.
Seema says, “There are lot of credit-investible people in the country. Though most of them don’t have a Cibil score, we have come up with an alternative score based on their savings and expenditure patterns. This score tells the bank whom to lend to, the amount that can be lent, and the probability of default”.
The fintech startup also has a persona robotic engine to advise local agents on suitable financial products for every customer.
“The customers who we deal with are at the bottom of the pyramid, having seasonal income and have low literacy levels. The persona engine is a step towards recommending a solution that fits in with their life goals. The completely paperless enrolment process for registering for mutual funds makes it very convenient for the masses to invest in a complex product with just a few clicks,” she says.
“We provide a complete suite of products designed specifically for this segment. By leveraging our existing distribution pipe, there is only a marginal increase in costs, which enables high levels of efficiencies in the model. We provide both traditional fixed establishment centres and emerging digital platforms with a solution encompassing banking, last-mile digitisation, customer enrolment and servicing, e-payments, and distribution management,” Seema says.
The startup currently has 22 financial institutions as its clients including the likes of SBI, Bank of Baroda, YES Bank, and others.
FIA has more than 250 community partners to support its outreach programmes, create awareness, and monitor its agents. It has 150-plus employees on the rolls as of now.
Competition, funding, and the future
FIA competes with domestic remittance companies and digital mutual fund aggregators, payment banks, and companies like Zerodha, Oxigen, Fino, and others.
However, Seema says that one thing makes them stand out. “Our market is very different, as our focus is rural India and low income households.”
The startup has received a grant worth half a million dollars from World Bank and Millennium Alliance. And while the financial sector is struggling with a liquidity crisis, FIA Technology claims to be profitable since inception.
Speaking about the future, Seema says, “Our goal is to design, develop, and execute a digital credit scoring model for credit-invisible consumers excluded from access to formal institutional credit. We also want to design an innovative wealth creation solution for the bottom-of-the-pyramid customers for digital savings and investment in low-risk, market-linked products. And finally, we want to deepen financial inclusion across South Asia.”
(Edited by Teja Lele Desai)