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