Interview of Ravindra Sudhalkar, CEO, Reliance Home Finance

Ravindra
Sudhalkar

Ravindra Sudhalkar

Chief Executive Officer
Reliance Home Finance

Q1. How is Fintech disrupting conventional financial exchanges when it comes to real estate industry - home loans, project loans etc.?

Fintech is transforming the financial services landscape as we speak. It is challenging traditional business practices across sectors including real estate. Applying for home loan through a brick and mortar branch is a tedious and time-consuming process. Sanctioning a home loan involves lot of paperwork. Fintech has made services related to home loans accessible and have made the processes more efficient, which has helped to reduce the cost of serving the customer. Most banks generally entertain large ticket loans. Fintech firms offer small-ticket size personal loans starting at Rs 15,000 at competitive interest rates. As most transactions occur online and have simple steps which can be easily followed even if the customer is not tech savvy. The same also helps to make the loan approval process more transparent. As the world rapidly turns digital, India cannot lag behind. Indian customers are becoming more tech-savvy, aware and are accordingly seeking products and services which are up to date and are tailor made specific to their needs. It should also be noted that compared to banks Fintech firms clearly have an edge in terms of product delivery and customization.




Q2. How much do banks and financial institutions end up saving up on time and even manpower by tech interventions- can you quantify that. How many transactions are made in a day? (before and after fintech)

Ans. Incorporating technology into their systems can cut operational costs for banks and financial institutions significantly. Conventional jobs like passbook updating, cash deposit, verification of know-your-customer details, salary uploads are increasingly automated now reducing reliance on manual transactions. According to data available in public domain 75% of the cheque book requests are today done by customers online and does not require them to physically visit their bank branch. This obviously has had repercussions on banks jobs. With technology such as artificial intelligence (AI), banks can now halve the number of employees particularly in back-office. According to some reports, nearly a third of the jobs in the banking industry could be lost by 2025 due to automation of financial services. It should also be noted that growth in number of branch offices has also come down as technology provides easier accessibility and penetration. It is difficult to quantify the exact number of transactions completed in a day through use of technology. However, human pace is no match to the meteoric speed offered by AI.

Q3. With payments made via mobile and contactless systems as well as e-banking procedures, do you think a time will come when no one will have to visit the bank?

Ans. It will take much greater effort and time for fintech to build a space in the current banking ecosystem where a majority population is still conservative in financial services, and a vast number still lack financial awareness. While domestic banks have embraced digitization and are offering mobile banking, e-wallets, among others, it will involve a great amount of investment to revamp the infrastructure they have built over the years as well as change the mindset of its customers. However, the process to digitalize financial services space is vigorously moving ahead and it is a distant possibility that someday no one may need to walk inside a bank branch. Pace of opening new bank branches has slowed down.

Q4. How has fintech changed the home loan disbursal process for customer and the bank?

Ans. Home loan disbursal is a tedious process involving loads of paper work, FinTech offers loans with significant reduction in time and enables quick review of one’s eligibility for the loans. It also offers the services at lower cost to the client. Other than that, fintech has made the repayment process easier as the borrower’s bank account details, cards etc. can be linked with the lender. It also offers transparency as is access loan details, payment history, documentation is just a click away.

Q5. What do you think of e-wallets?

Ans. Demonetization encouraged the need among cash-dependent masses to adopt e-payment modes including e-wallets. E-wallet has many advantages, it allows for transparent and secure transaction in money, and one doesn’t need to carry the exact change. The value of the purchase can be transferred to the merchant’s e-wallet which is linked to his phone number. However, there are limitation to the use of wallets in a country where a majority of the population do not have an active bank account. An e-wallet is attached to a bank account, credit card or debit card.

Q6. Flipside if any of fintech and of the contactless system of transaction

There is need for constant innovation to make the system more safe and trustworthy. The system should be more sound proof to avoid leaking/hacking of financial information. It should also be noted that it is not that the country lacks the ability to develop and offer qualitative technology driven financial products, but it does have a very low-level of financial inclusion in small towns and villages across the country. There is also a huge gender disparity in backward regions of the country where women are discouraged from using phones or internet. In such scenario, fintech is an unsound proposition.

Published in Hindustan Times Newspaper