Weapons of Mass Inclusion – A DeepTalk with Srikrishnan H, MD & CEO – Jio Payments Bank


good evening welcome to the newest
edition of deep talk as you guys know this is the talisman initiative that we
started last month and in this initiative we talk about wicked problems
that are currently facing businesses and technology and invite eminent leaders
from business and technology to come and talk about how technology and beep
technology is solving these problems these wicked problems one such we get
problem of course is Financial Inclusion it’s a thorny issue that you can have
been trying to solve for 30 40 years and still remains largely unsolved and no
better person then h3 Krishnan so you to my right who is the CEO and MD of geo
payments Bank who’s currently grappling and tackling with this problem to bring
in the National inclusion through the must in any form of passed inclusion
so therefore the talk today is weapons of mass confusion welcome stream to this
deep talk Thank You Sandra and that’s wonderful to have you here writing
people on the attending this show may not actually know that she has a very
eminent an interesting background in the last thirty years of his journey as the
banker even though the korea banker he has been
I think part to the founding team of two banks HDFC and es back he has been an
entrepreneur to three times including Vienna and Clerval if so in men in many
senses he’s kind of got the big corporate and the startup juices flowing
in through his veins I would say that in some sense that’s very rare to see in a
professional banker but he has absorbed it all and I think the thing that’s
interesting to me is you know as we get started on the street that if you look
at your entire journey as a banker you must have seen so many way through the
college you come and go right and be good if you can walk us through your
journey of how technology evolution has happened in banking and do you think
today’s destructions are unique or are just part of an incremental change that
we save over time that’s interesting Jonathan odo kind of do not take back a
little bit on the memory lane so if you look through the 80s which is when you
know we all started getting into automation and banking and the primary
objective was definitely back in automation operational efficiencies and
then or a decade after that there were significant investments which were made
but all of them again you know more kind of automate the back-end processes
and not necessarily customer centric process there one the last about let’s
say 10 12 years the there is a significant shift that has happened well
all the tech investment that are happening is one you know related to the
customer focus the customer experience the second is that all the investments
that are being made is in the form of devices and the front end axles the
third is the telecom and the overall connectivity issues which are getting
stored in the process what also happens is that if you go back to let’s say the
journey within the banking applications that got automated obviously at that
point of time high value transactions and the low on volumes was the easier
catch so obviously you know large free finance connections large clearing back
offices of checks and so on so forth although this way paper-based processes
but at least the data entry and the data reconciliation and those kind of areas
definitely weather focus but thereafter once the banks started reaping the
benefits of this automation which is the back end obviously they wanted to kind
of improve and make sure that you know the cost efficiency is also you know
freedom from overall business rather than looking at it only from the back
end so the banks also did both globally as well less in India started exposing
the api’s and nowadays you know all of these new initiatives like the open
banking and all of those terms are coming through but really what happened
was that you know all sides of the banking poor they dealt with the large
corporates the SME is underrated the Kalamata group as well as the smaller
you know Vijay you know shorts and establishments all of them also started
their own ways of automating so there was lots of integration that was this
one so once the banks started exposing the api’s then backend integration
whether into here P system to the large perfect or whether it is the SMEs who
had their own back-end automation we tally or area their office
computing systems now all of those started getting
you know in the hohoho stores connectivity as well as you know file
transfers secure and more importantly on a real-time you know I am the online
business what it meant is that straight through processing 24 by 7 availability
and making sure that a bank is not available only when they want the bank
is available anytime anywhere the concepts came at that point of time in
the mid-90s you know in India this new wave will to the ad ins which was small
the progressive buying the private sector banks the hdl-c which we were all
part of and then of course you know the other lines also came in now ATM was a
big you know even and the main objective of those banks that part of time to
migrate the high cost and extends into low cost by getting them into the
alien’s so branch managers used to be given targets to say that you know what
is your counter transaction volume how do you reduce it month on one and making
sure that you actually transfer this volume near as ATM so the proximity ATMs
then a would be related to off-site ATMs as a concept then given the big event
the big wave which is the mobile phone the mobile phone and the smartphone that
came in obviously helped in access anywhere but again for limited bogus
transactions because not all features were provided but that growth actually
happened much faster the pace at which you know turned out to be an opportunity
to move bank was much faster than even the internet Bank so over a period of
time globally what it settled down to the large corporates
access on the browser the Mitchells corporates use both the mobile as well
as the browser the retail mostly use the mobile and the proliferation the
penetration in terms of mobile banking ethic backing banks still spend
year-on-year about 20% more on technology but the real you know
investments are going through to the front end now compared to the back end
and that is a big difference for the backend systems in the state test and
story they are all there in place so there isn’t a need for them to kind of
over all that which it happen maybe but the continued upgradation process
but the real feature that you know comes in the form of experience to the front
end happens through this in this wing that are happening and this is where we
believe that you know the evolution has been what it is resulted to the consumer
is that there were some transaction we choose to take base which have now
become minutes there are some which were like minutes which are like now the
fintechs came in and there’s something that we cannot take that off so the
FinTech came as a challenger but then they remind the Challenger because the
bank’s definitely had a much more base which was more sustainable but different
takes to some of the low-hanging food easily convertible very easily to
unbundle from the commercial banks and then started doing there for a period of
time that’s a good wave where the FinTech started challenging but they
also started collaborating so they started collaborating with the banks and
making sure that you know they are you know this new concept of cooperation
comes in rather than competing so that way trend so over the last about let’s
say 30 years the Indian experience we have been leapfrogging
rather than having to kind of follow it sequence by sequence so it’s not a
frame-by-frame my improvement will be actually pleased wrong again as the new
town which is being used this pole vault is not really flowing correct but if
you’ll I think that’s a great exposition of the last 30 years of how technology
is evolved from inside out you know starting with enzymes will be working
outside and I think your knowledge of technology we learn a few things from
you being a banker then you must you technology seems quite quite extends I
have a very common to say that my CIO the metrics for his performance is
basically how much of technology that I speak I so if I fail then he fails
wonderful talk about alignment of corporate objectives so you can depict
it upon mobile technology has grown much faster than anybody expected and it’s a
global trend between China and Asia that’s true now if you look at mobile
technology and mobile phones in India and the link between that and financial
inclusion but if a little deeper because I can given your current role as
geofence Bank a lot of bets are being put on the idea that this is the new way
of banking and the new way of getting inclusion which historically banking
hasn’t achieved we talked about geo but meanwhile let me talk about the
infrastructure that will be set up in the country and I’m sure that you know
everyone has got about the India stack the jam and you know the kind of success
you know that has been achieved by about the gender you know all settled then
there are over 35 crore accounts at a people and these are transactionally
active fraction is like you know really there now why is it there that’s a very
very important element it is not that you know the amounts were forced upon
people for the direct benefit transfers it is also a fact that you know there is
some linkage that happened which is between the general and the alpha now
then the mobile came so that is how the jam jar Trinity you know really kind of
came into play now over a period of time when the other link will happen and when
the credits started happening more through the direct benefit transfers
obviously the next you know thing that had to happen was the mobile access now
geo obviously has done a huge thing by penetrating into the lowest strata of
the society by powering over 98 99 percent of India’s population and
perhaps almost all the villages you know that are getting covered through the
mobile axis now within that mobile access there are two different ways one
has to use it only as a phone but then use it for other services which include
content media entertainment as well as natural that’s where we have a plain the
adoption has been unprecedented the usage of data obviously you know in
something that we can be very proud about because as India again
pole-vaulted to being number two data consumption country in the world now
this is happen put the Geo you know area now this obviously makes us all proud
and the fact that inclusion is part of the agenda and the fact that you
know the unbanned completely underbanked are getting access and this is
sophisticated banking actual otherwise denied to such you know segments of the
society so this is democratizing banking democratizing connectivity democratizing
the fact that you know the segment with your deprived of such access are indeed
getting provided now this leads to the next question that you know are these
done to Britain model or is it you know only digital so obviously majority of but there is also a brick-and-mortar
factor but the rhythm at man you know motor factor is coming down in terms of
the overall usage but there are still you know some section those what we call
it the assisted models in current so that actually eats the question of you
know branch banking because I think the branch banking has been the primary
distribution methodology pressure distribution with Dungey you know the
more branches has been the mandate given to by its the 30 years but now with
technology proliferating much faster than branches can and then I posed
definitely have to meet two orders of magnitude higher distribution when
buying branches to you so do you think non banking is officially coming to an
end is it going to die I think knowing that you know bank branch banking is
dying is a little too harsh from my perspective there is a section of for
the users particularly Millennials almost let’s say about 30 35 percent of
the population who prefer to do this digital now this is an evolution partly
because of the fact that you know the behavioral change this is something that
are being seen having said that when this Millennials transact through mobile
is and then you know they transact you know not to the physical modes there is
definitely a section of you know the users and banking in our customers who
still prefer the physical so the tone fidgeter is something that you know
which is definitely the way that it is currently and will continue to be the
native now the on the inclusion side commercial
banks through their charter have tried this in the past and they have tried the
inclusion but until the government put ingenue agenda now the inclusion part
was not really achieved even after that the mobile penetration actually kicked
off the you know real inclusion you know idea rather than actually the banks
doing right this is where the new way of banking everything related to digital
invisible banking where they are offering the services from is not really
you know the matter it is actually you know what is being offered and how it is
being offered I think you know it is the more sensible way of doing so obviously
over a period of time I don’t have to tell you that you know costs have come
down telecom connectivity costs are much much you know economic currently so all
of these things have contributed to the success so each of the charters which is
the commercial bank with their branches the digital banks with a charter have a
role to play I would believe that you know the Citadel which is in fact
physical infrastructure is there to stay but maximizing the physical
infrastructure I think you know is a very key thing now you have invested
into a large physical brick and mortar branch but you are offering only
financial services I think they need to look through beyond banking you need to
look at you know some kind of digital assistant services whether it is
ticketing or whether it is non financial transactions to maximize on the
distribution so distribution is there but on the other side how do you
maximize your revenues and the offerings based on each of those physical one the
other is that you know lot of this easy access transactions are all done through
a push Megan’s which is like self and or a chat board
or any of this kind of taken a mean you know solutions whereby the customers
need not actually contact a brand for getting a balance in their or let’s say
that you know whether the credit does happen if you really look through the in
in the past there is should be a queue standing outside this
the PSU buying branches just to update the passbook and to make sure that find
out whether they credit the salary or wages are common there is only
transaction that used to happen now no longer you know you they exist so that
is the change but having said that I think you know both are here to stay at
least for the immediate them little million I think you’ve been you said
elsewhere that you know you know people are getting the bank in their pockets so
you know I all that noted me actually move into something that I’ve been
thinking for a while which is you know I mean the kind of penetration that we
have in China for FinTech and the international services through the phone
I mean whether it’s messaging applications offering gaming services or
whether it is blending the innovation quotient seems to be much higher I’d
love to hear your thoughts on what you think is going on there that’s so
conducive to such innovation and do you think it’s like better use of deep
technology better you know public-private partnership better
government support or is it just something that can be simple together
and then are you applying some of the lessons yourself in your current price
know China if you really look through the you know computational work that
they have done they are challenging any of the Western countries you know in the
investments they no doubt so the fact that you know internet penetration
infrastructure related to you know internet and connectivity and the fact
that the government regulations were is very supportive those were you know
definitely there and the basics for you know why China you know succeeded in
that and if you really do payment users okay and this is something unprecedented
in the world and no can corner every nook and corner of China they succeeded
in making sure that you know it is all through tech innovation and it is you
know all through a to the users so this is definitely a great learning
now where they actually made a difference was that is insurance is
investments a little lending these are the three definitely you know areas
where I think you know a large amount of penetration that happen and large
adoption that now it’s we are able to kind of you know look through and look
through this in a different way where we need to look at not just about let’s say
financial services it is to look through from India digital infrastructure India
regulatory infrastructure India ecommerce and retail infrastructure
converging it into banking so the end of the day if you do now what we are going
through is a convergence of banking telecom ecommerce works physical as well
as the online marketplaces and everything related to the internet and
connectivity so that way we are very well poised and we need to also give
credit to the radiators in India because if you look through the past and on the
turbulent that happened as well in the world the Indian banking system has been
rock-solid one that is definitely you know attributable to the you know and
the Government of India which is pushing digitization and you know all kinds of
incentives are being offered and making sure that you know increasing digital
penetration have been a target for government departments so they’re not
the government you know business law it’s government business the corporate
business in the tax it’s everything related to SMEs and them
the retail so that way it’s it’s all run proliferation you know an opportunity
that you know be in India chasing the learnings from China obviously I think
you know the integration related to you know how ecommerce and lending or how
ecommerce and protection and how you make sure that you know the logistics
related to Delhi resist and making those things I think you know we we need to
definitely take a couple notes there and the kind of technology that we have I
think that you know we’d be definitely by borrowing wait that’s good to hear
that’s the statement of confidence love that I come back to you later
again but you know China is kind of the potential attention problem using
mobility sounds like general acceptance you know knowledge we all have let’s
move for a minute to this whole you know the architecture of ideal
you know I think in India you know I mean there’s a feeling that you know the
fingerprint is the new identity that can be used biometrics are they was based on
that they’re having challenges in India including constitutional challenges to
the courts and having depending on who you ask
progress or setbacks even you know eky Singh a big issue for your organisation
as well so given all that you think do you have any views on what the right
ways to look at you know identity in this world that you can make full simple
we can get the National inclusion to go faster based on certain kinds of use of
identifiers so I’m sure suddenly is a very key end right so other biometric
and the kind of success that you know your idea is not about not only for the
ten poles but also for the banking sector everything to nominal they no
doubt about it but what happens is that in financial
services if you look through the other enable payment system right now process
is more than about you know ten you know Caicos now that’s a lot you know when it
comes through this so which means that you know people are no longer having the
fear to ransack through such boats so which means that the initial ice
breaking is already happened now we need to kind of really ramp up now if you
don’t through the handles now the other identity and things that
we have you pay is one which is you know handle in the financial services side
but really speaking you need to look at it from overall infrastructure how do
you link the other the pan I think there is a lot of you know work that is
already gone so from other linking to the pan and to the bank account is
something that is already happen again okay now come to GSP bond at least for
the small businesses and the large businesses now every one of this are
linked to the GST so which means that you know if you look through from a
digital infrastructure and the connectivity this is established based
on each of the rise in things it is all there now the common ID has to come to
whether it is a mobile number which is the ID or whether it is the UPA you know
handle as the ID is something that you know will emerge very soon
technologies have to kind of support blockchain and then AI based you know
back-end which is like making sure that the identity is actually not an entry
point for you to get into the financial network that is something which we
overcome that is the next wave that will happen whereby if other is not the
common national ID then there has to be definitely an opportunity for the
privatization for a you know ID to be provided across all Indians and across
all of their banking and financial services in speaking languages I am sure
that you have heard about this which is the data aggregate aggregate a constant
yeah the new wave which is coming to those
licenses which have been given which are primarily aimed at customer owning the
data customer giving the consent to the data right and making sure that the
consent the rules for the appropriate purposes and not for anything which is
like illegal and not authorized now there are some learnings which are
coming through from the Western world standards but those standards will come
in the digital loss will support them but this new way of institutions which
are being set up for the aggregation will definitely become very very
prominent because if customer want the data the customer constants so this is
actually the fourth pillar which is coming up so the consent architecture
combined with the US while you know Jannetty and this is our bank account
pan and your GST you know Linda so then I think you know is very powerful and
this goes back to the question that you asked about China I don’t think that you
know it will happen so systemically in China it is for us to kind of make sure
that we all execute it as players in the chain all of us need to definitely want
to you and I think this is our endeavored to make it fantastic so you
refer to blockchain and AI mln passing I’m just curious to know in your journey
now that you know it seems to so many versions of technology where you see the
best applications of blockchain and AI machine learning in today’s context it’s
too early to say you know which of the applications or which are the use cases
are in adopting those technologies I think over a period of time the benefits
of blockchain and making sure that all this investment that are being made
what could kind of be the payback is getting the diamonds right now
low-hanging fruits like for instance remittances or anything related to
inward foreign foreign exchange inward remittances and so on or on some of the
areas where these blocked Ledger’s and you know making sure that either goes on
a sustainable basis you know you have the record you have the ability to kind
of track back to this week not having to kind of invest into two mainframes
they’re like the olden days what is a big chain that is happening now a lot of
this what we call as sustainable in you know in turn let’s say move dependent
transactions like take a cart reference the corporate hat has multiple sides
toward the supply side to the selling side so the my end itself right but
which of those sites are actually going to be useful from blockchain technology
and how do the banks take of the best foot forward to matter integrate in the
first place I don’t think you know there is enough
evidence to prove that you know we are already there having said that there are
also some very hairy constraints related to each of those because everyone
relates nowadays blockchain to cryptocurrency and to for the whole
alternate currency mechanism that are everything in the world now a lot of
countries including India I don’t think are comfortable when it comes to the
regulatory part on you know each of those so-called
you know alternative currencies because I think you know this lot of risks
associated with that and I do not think that you know there is a clear answer so
from that perspective John to know the linkage but the Hayes will get cleared
soon I think the technology is here is if the technology you need to say I
think on almost every institution that they want we’ll find ways and to kind of
get the best use case yeah very good so in fact I was thinking that you know
I was new year ago we saw a bunch of bands coming together consortium to use
blockchain for 15 and I mean after their more examples are clearly examples like
that in trade finance where I think a blockchain is solution this like
information money transfer you got about seems very appropriate perhaps over you
in many ways so many stakeholders complex transactions multi-party
transactions non overlapping jurisdictions they all seem like exactly
the same point what we talked earlier the colonization when in the branches
and the banks started automating which way the areas that got automated first
this is the whole same transaction that what we did and then they went into the
you know the retail and with the last point here what happens is that you know
the entire industry already tasted the last yeah so which means that you know
for the blockchain in the newer technologies to actually reach them you
know the front-end and group and of each the last mile is not going to take time
so then the second time or the third time we do the same thing you have to be
much faster than so one question that also cross my mind when you talk about a
I will really guess that you know as you go into this mass inclusion model which
is what you’re trying to do now and I think you know old women scale is the
game here right getting very people we don’t believe the people on board
effectively international fusion many of these really the most of these
people bus majority of these people won’t have any equivalent submersibles
for any rating right so you’ve been lending into this world when this rate
is one of those you mentioned along with insurance as an important lubricant for
national inclusion do you see a missionary playing a role in figuring
out great bonus for people because without that whole lending system
doesn’t work unless you can really predict well you know how people repay
etcetera so fundamentally the inclusion part that we talked about that is the
first step to this because if you get the digital transactions into the
banking system which otherwise is currently revising its
then you have one the first level of the one so which means that Europe I already
created cash to bank now the cash to bang leads to the next level which is in
the form of ascertaining what kind of roles are happening for what type of
compliments the retail over the essay means today if you look through a
longtail merchant now the longtail merchant so far has been having about 80
to 90 percent of perhaps even more cash transactions for a period of time you
believe that it will become 50 50 and over and digital will become more which
is overtaking the cash which means that we have actually brought that particular
merchant who has no problem because with GST even otherwise always Fame and
eighty person of those payments are going through this network which means
that there is no I didn’t of cash it is just that we did not have an
infrastructure for the merchant so actually you know produce the data
related to his commit now with digital and the integration that is happening
and the link it is between all those four that we talked about the last line
model as many merchants now has the data to prove to the bank that you know here
is my flow here is evident in the form of my bank account building balances and
I need credit so the credit worthiness and to make sure that inclusion if you
know it’s not like just for banking and for payment transaction there is
actually making them credit worthy that is I think you know the next big you
know even that is take clips and which will actually open up the whole
opportunity because liquidity is there in the market and obviously if you are
able to lend to the last mile in a very controlled way and just making sure that
the flows are also within the system then I think it’s an excellent
opportunity and the next stage of banking that we would be so let me ask
you a question not as a banker but as the entrepreneur because you’ve been
through those journeys before so if you look at I mean in this audience we have
the bunch of people I’m sure who are aspiring entrepreneurs or already on you
know starting to get on better startups if you had advice somebody constitutes a
I mean so much is happening in small finding bindings fails right and
technology and banking are intersecting in unprecedented ways because of all
these trends what are the 20 ideas that you think where action will be I mean
could you share some wisdom on life and here’s one article and opportunity will
be in this space in the next three to five years the pension services don’t
them you know tech ambulance together propagate ideas to say that because know
what are the problems that are there in the leader and what is the you know what
is the bottom of the pyramid right I mean that’s the mass infusion game so
see capital a is known for his statement that they spot you at the bottom of the
pyramid don’t people have tried to find the portion have not been successful
there’s in some sense a challenging country but clearly you believe there is
a portion and that’s the business model but you’re questioning now where you
think this you know people are looking for the large masses of people well
where should we meet opportunities me you know as a concept I think you know
very very relevant yeah yeah let me you know start by saying that you know it is
absolutely you know thing because I don’t think that you know we have really
gone down that path take insurance you know a penetration in India its Cindy
Liggett mutual fund penetration in the endgame
similarly Perry Perry why because the cost of acquisition is so high now
reaching the masses and making sure that it is awareness you know making sure
that you know outlining the risks and the so-called disclaimers which you see
in our is not a right now so which means that you know there is obviously a huge
opportunity when it comes to insurance and into investments which is in the
form of needle lending is also you know a huge opportunity now Hoover is you
know wanting to try this and wanting to try this outside of the banking umbrella
obviously need to integrate you asked me to you know you know some of this young
as sparing entrepreneurs who are there today participating to me ideas are very
good problem-solving is very fast and agile when it comes to a smaller kind of
structure that they are but then they need to solve and scale it up for a
larger in a presence how does that happen unless you are institutionally
back unless you are collaborating with a larger player you’ll not be able this is
exactly what you know we are propagating to say that we are promoting a lot of
this fintechs and the rest of the other startup organizations come and
collaborate with us I’m making sure that you know your business is you know
running on your own but on the other side you are having a base which is
unprecedented like you know the debate system so this is where I think you know
really love futures now the last you know piece on this is that anyone who
touches based on the current infrastructure which is being digital
infrastructure which is in the form of regulations or digital law from the
government or any of this it is as I said earlier the generality and the
architecture I think you know there is a way out
because you are doing this legally you’re solving a problem legally and
you’re making sure that you have the ability to scale it up through a larger
platform so this I think you know is a good way and whatever the pyramid offers
you the opportunity as far as you know so are you offering any I mean you kind
of mentioned it but I suppose sure that I understood it so if an entrepreneur
starting their idea is something relevant to accelerate a model that you
are running for that we do have what is called a 10x for them and there are you
know demo days and boot camps and okay so they will be find a way to reach out
to you so we can help people reach out if you have any good ideas so let’s do
them sort of do some chat questions that are appearing on the phone screen so
that we can you know keep this moving discussion forward so the area
lots of interesting questions let’s see what I can find
okay so there is Ravi Shankar who says and this will be a lovely question for
you think red meat for payment bank CEO revision places I don’t find any reason
to have a payments bank account regular Bank provides all kind of digital
services why should I sign up for a payment spank what are your thoughts on
that I am NOT here to kind of promote the payment bank models model which is
an opportunity let me answer this differently for all Champa take your day
to day everyday transactions you are part of everyday life what do you do you
you know order something from the next-door awesome you order something
from an egg door restaurant from my name is your pharmacy from a newspaper
vegetable vendor and so on now how do you pay you don’t pay through banking
transactions now you pay for cash I think we are filling up that gap we
are not here to compete with the commercial things
commercial banks I’m not being able to go there despite their existence for
whatever number of years and their attempt to digitize mobile banking which
is offered by commercial banks is not you know what we are aiming to do we are
aiming to kind of make sure that the cash which would draw from the banking
system is actually put back into the banking system in the form of either the
wallet or in the form of payment bank on which facilitates low value everyday
banking in everyday payment I think that is the key so I know you micro
transactions so anything and this is a I mean about ask this question it’s more
of a cheeky question when you think the milk bills will get fully digital you
make payments because that to me is like the ultimate test right now my test for
me is even different I know if you have the confidence to walk out of your home
and walk out the full day for your regular day to day activities including
visit of days of work and back without carrying a wallet and only carrying a
mobile phone so you’ll be able to make all the payments on the way for your
transport for coming going and coming back for paying your bills if you’re
paying of gas and making sure that you’re eating a half moon everything you
know during the day is the pay from above
but that trust and confidence currently doesn’t exist because they think the
mobile phone as well as the one quality and within the wallet they have multiple
cards which I both credit and they would constantly if you are able to virtualize
all of that including your wallet will keep including the cash into that one
particular device is the while I think that confidence has to come and that is
what you know here and see vision is cash debit card credit card all gets
virtualized into the phone which is the tokenization concern you talk about
maybe that will help people understand why do you you know take away that
credit or the debit cards from the commercial banks we will continue I
suppose it is only the mode of payment within the payment bank account or
within a wallet you can virtualize each of them and choose which instrument to
pay you can pay to any of your other bank account also through the ups so
which means that technically you’ve got a link to every one of your payment
instruments through one channel which is one app and that is exactly what we are
you know more opinion so from that side look at it from what you went through a
normal bank account on us so obviously you will soon soon feel the difference
so I think there are lot of people here who are very curious that the main
shutter whether the question that you know PTM is providing a bunch of this
but literally the question is speed IAM is already there what better option with
you go by I already have to wait for bill action from you payments bank to
talk about this so do you feel that India based digital bank can make an
impact in the world what factor would be the key player in this okay so I guess
question is interesting that you know do you see an Indian digital Bank becoming
a global power and how will it do it I would like to qualify this answer a
little bit in a partly because one is only days having said that I will not in
a rule it out why because digital infrastructure when it comes to let’s
say avoidance or mobile infrastructure now the technology that has been put
through is something which is not being right as well and then turned out to be
the largest in a 4G LTE network and now why can’t this be replicated to any
other part of the world I don’t think those answers that my jack but
technically it’s possible so if that is possible you know following the same
principle why can’t it be done even for the banking side right but it’s too
early to kind of you know look through that not only solving a global problem
are we solving an Indian problem I think we are very content we have enough on
our hands to solve the inventory yeah and the fact that you know we are going
to be perfect is an example for the rest of the world that is coming about very
clearly and if whether emerging markets in other parts of the world or some of
the larger you know countries themselves want to kind out of this is something
which is remaining fixed yet I mean I think reasonably optimistic because we
look at such as UPI you know I mean group a now kind of trying to become
more global that’s not evidence that we are you know growing our muscles right
of course I think you know the rate of growth is
unprecedented but the amount of transaction which is still not power is
enormous right so which is providing an
opportunity here yeah but this is perhaps the fastest you know adoption
that has happen anywhere in the world even including you behavior yeah okay
it’s an interesting question from a tool and he says citizens are serious
concerns about sharing personal data like finger scan etc as done for geo SIM
cards using cardboard how can your sure that it is not
captured by Cayman bank advanced escape secure I mean I think let me paraphrase
a question of it a benefit so here with privacy concerns are rising and we have
GDP are and all of that stuff happening globally India so smoothly privacy so
the balance between you know servicing the consumer for that mean information
right if your service a consumer by turning more information about the
consumer but then with that information coming into the hands of the mounting
system you know this more conveniently in protecting this and
clearly the world of Google and Facebook especially Facebook this is so much bad
press about you know inability to protect consumer data right so what do
you think will be the balance and how will be kind of manage it in India what
do you think can look like Santa no I think you know we’ll have to clearly
differentiate between what has happened in the Google or Facebook example I do
not think that you know we are even you know thinking you know the reason being
that you know the loss here very clearly make sure that whether an other number
is not stored who is another participant cannot store the other number right
touch of year like why the cars for is you know doing this has to store it in a
prescribed format which is again global you know accepted into a single
difference so I do not see any reason for giving away information the third is
a philosophy that you know we are building in India who owns the data who
the owner of the data consumer is owner of the data we are only friendly dating
that we used for multiple kind of use cases to give it back to the condo I do
not think that you know that data is being used for or manipulated for any
other purpose so that is exactly the difference between one the other models
you know the range that you suggest because I am NOT here to even talk about
that but on the other set of keys from an Indian perspective I do not think
that you know there is any serious attempt to do that one the second is the
generality in terms of you know what are we trying to solve what we’re trying to
solve is a again you know it might sound a little repetitive but the fact that
today cache is predominant in a radial signal and this is almost like you know
eighty-five to ninety percent of retail rate the sketch and if you are able to
convert them to digital I think you know we have a huge success number to any
other part of this the somebody said that you know nests about 1.5 percent
economic growth that can be unlocked additional by just having some of the
friction remove because payment friction is so high it is the you know obviously
you know hold enough about the government coming in very heavily on MDR
and zero and ER waving David card India to do some of my
opinions on what are these essentially these are all what are getting kind of
you know the the merchants or any other participants the digital chain I’m
getting deprived of value so obviously when all of these things come in you
will have to kind of view at par settlements to you know the merchants
and to the forest so that is where I think you know there is a difference and
the approach that you know India is taking a different okay so I think we
good is an audio questions I think knavish we’re always waiting patiently
on the audio line so let’s go ahead and get Naga sure this question go ahead not
sure should we meet finished or shall we move another question okay so we just go
to a chat question that that might be useful in this point okay okay so I
think this question I’m sure is a broader question of the power of this
segment itself I think this question was expecting this question sooner or later
you know after the paperback license we given out by RBI obviously some of the
banks have not taken off when they returned the licenses
I think people believe that your bank is the one that has really working on sides
to make this model a great success so what is your view of you know the
business model that you know business model one lakh rupees and this bag is a
constraint but do you think is a constraint and I think you can actually
that’s an advantage to have a business model that has certain features which
are these bunch of the features I think you know I mean I’m not talking this on
behalf of let’s say the regulator sure the fact of the matter today is there
were a set of guidelines which were done with a very you know serious and good
index first purposely and the intent has to be proved now if you
believe that we are you know getting constrain limited by that then why if
you prove that then we can go back to the radiator I don’t think that you know
it is would be improved one the second is that you know payment banks have come
in for a particular charter now the way that the license is given you know if
you look through the RBA the numbers that we are given this way for different
kinds of commercial enterprises covering telecom retail then some on the asset
side and so on and then the post office I think they did a commenter will come
into the making sure that every one of this is tried out and this is an
experiment now the ecosystem benefits that have to be part of the payment bank
for paying back any time in business is not something where on a standalone
basis is certain now the payment bank if it is not leveraged in the ecosystem of
the parent then you know they don’t have a problem so it is a question of how you
are leveraging the ecosystem each one’s business model I am NOT here to kind of
look through why you know the other business models they gave back or
whatever but the fact of the matter is that if you you know you have to be part
of a larger because I think you know the answer to this entire guideline land
they so I have actually I think that you know each of these lines were given two
segments and sectors which have to promise of I reach I think maybe my
model was built to the idea of a national inclusion and it was given to
people or entities which had the promise of I each in various ways I mean the
post reversible example right and then so as telecom companies so now I think
what is happened is I mean people have gotten stuck in this idea that they will
buy it for regional products but you really creative and say that in the
whole mass inclusion challenge of finishing don’t challenge problem is not
that the number products follow me you don’t have reach so if you build your
background product information in this segment it may not be such a great idea
but if builder a distribution innovation you might solve it I think you got it
right you know the solution is the video challenge distribution is solved by the
connectivity and last mile you know on the lowest rate of
the population were already on the digital framework so it is only adding
more services so if in India the YouTube downloads became the highest in the
world and nobody went there and the promoter
YouTube obviously video download happen because content was available people you
know the data use infinity and you think this dramatically improve and likewise
whether it is other videos or other kind of digital methods and that today
between FM radio and watching a video which one do you think is more partner
video right of course yeah yeah Julie today I think we have to send some
people for that okay so you have VD on what you like if it is become a frequent
question about the statement so we’ll come back with II hope you can hear us
yes can you hear me can you hear me yes we can okay so my question was about the
emerging economies and what kind of challenges and opportunities that they
provide in payment banking do you think we could look at like Brazil Indonesia
and you know economics are going to be coming in very and they’re the new
complete completely greenfield areas and just wanted to know your views here
obviously very good question times ready for brain is Brazil take that as an
example there are some success stories of credit card companies who have gone
ahead and issued credit cards and become you know success the reason is that you
know all that they promoted was one credit cards with rewards and programs
which were you know not seen at all in that one right now what does it mean
that mean that rewards are nothing new credit cards are nothing new the same
product it’s just that you have been able to reach out to probably you know
the large masses and that’s what you were talking about in the earlier part
of the colonization to say that you don’t have to differentiate products you
this need to kind of take those products and reach out to the last one and then
exactly what is happening and so everything
is a you know great opportunity and it’s an example we can take you from couple
of this learnings now mobile payments in the Philippines right money transfers
you know from migrant workers you know who are moved from Philippines to other
parts of the world and limiting salivates back home which is for the
families right now these are all some private companies which again have
combined with the telcos there is not one single model in the world where a
telco on a bank had come together to kind of make it happen but having said
that this are clearly some visible signs that are coming too and we believe that
India is a great opportunity and emerging markets couple of drownings and
successes that happen are very very they go to a question that’s from new bottom
I don’t know the data behind is myself but I this sport what has been said that
transmittal you have levy dependent if you percent levy on the transactions do
you think this is actually going to happen with you do you think in taxes
Tommy really entitled to answer that I have no visibility or any anything that
you know that Internet transactions if I understand convenient today is a very so
what are the online sites where you don’t have to go on wait in queues and
the saving that you have are indeed getting late
and people are happy to pay for service so I am not sure whether the same but if
it is then conveniently in India it exists at least but it’s not a normal
job okay so I think the module again but this is geo payment Bank which will
identity of citizens for occasion I’d already so so let me come back to
something that’s been on my mind for some time and I think this came for the
question that it was asking that you know if you look at an old map that you
guys building and I know the by the way reason
you’re not getting too deep into geo payment binders because the bank is
realistic more if I’m if I’m right they’re running massive trials like
trials around the country and put that’s what I call in my trials so so without
diverging any understands more related issues risk Ullaeus that the roadmap
that you’re building right is it doesn’t have an international dimension not as
business we are you know that you will focus on it will be somewhere but
serviced we will follow geo wherever there let me come back to something that
in the world of venture capital I mean the FinTech payment companies have been
heavily funded by you know prevention of e funds and and every name will order
this business of you know sort of cash tax incentives know that right you think
that the game is coming to an end or do you think that’s kind of gonna continue
for some time again you know this is not a question that I definitely want to you
know answer not practice you know but having said that you know this is
basically how much is the cost for accusation how much is the cost for a
behavior that you want to pay and it’s it’s their money is it
you play it pretty safe down the middle I would say but these are the these are
the people that are actually competing in this space so but yeah so do you
think that much of this is happened in the urban Indian this phil tech
revolution then open the opening that you are looking at is the non urban
India which is from using undersell look at the retail trade what is being done
through the digital formats is hardly some 10 to 15 percent of the 85 percent
still remains in the rural so which is exactly the point now if you believe
that you know we’ll have to do the round starting from there and then convoy with
the other nodes under looks or experience valuation
whereas retail looks for a basic problem to be solved connectivity basic signal
then so do you have you ever done a matter on how big is the snd they would
you leave the long period I put a long till earlier in the conversation long
tail of merchants I think put on the last merchants to get this thing solved
I so look at it this way take the fossa distribution network in
India the number of cost in a machines that are there whichever way ready to
you know would be about three to three million plus now out of that if you look
through the number of merchants who have if you take the multiple dominant within
a merchant you take the larger formats and then if you take for instance the
larger supermarket chain and review the number of merchants then the number of
merchants would come to less than a million right so between that for a
country of this size you have a million merchants who are actually you know
having a fascination yeah so there is opportunity the second is that you know
digitization of payments even if you look through all of whatever has been
done through cards there were in credit and so on they were gone 80% to 85% of
the usage is only for ATM networks it is not for making things right so which
means that even if you have yet whatever you know millions millions of credit
cards in any cases million of users and this is exactly the case that it was
earlier on the number of Internet users in India now suddenly the Internet users
come become you know so widely unpopular so credit card and not you know bonded
with mean that you know the credit delivery mechanisms have been slower
compared to the you know pace that mean internet access has been provided so
that is an opportunity so this is exactly what we believe that you know a
lot which is the 85% is to be powered rather than focusing and fighting with
the same 15 so that actually up to my last question on this because I know
this is give me some clarity on the model so you know we saw for a long time
that the microfinance world was reactive right there
banks were giving money to microfinance companies as capital because banks just
kind of float the hands and knew that they could not service the small
borrower why the microfinance companies were just out there servicing the small
borrowers right now look at your structure as a bank I mean you have a
joint venture in structure or invention or at least I know SBI is a big investor
in the captive good right so do you think that this is a sign that large
banks are essentially saying that you need mine’s like payment lines geo kind
of binds to just reach the last mind because essentially back to saying that
we’ve tried and we come to the last mile ourselves and therefore let’s actually
use the distribution capability of massively scalable payments Bank which
operates two mobile telephones and that’s how we reach the masses through
our products so they’re saying that you have brought an expert in on it smoothly
experts and you guys be the distribution experts and we will draw our products
through you the PSU banks and not only talk about State Bank of India PNC Bank
have the products the reach is not they distribute is not a payment banks have
the BC model the BCS are in fact from the payer so the parents any
distribution touch point obviously becomes a BC point for us and when we
are able to offer all the products which we have in our stack now we are you know
obviously reaching out foreign to the entities in the same kind of slow if you
are able to offer product which we cannot manufacture and it is actually
one of our partner Bank happens we are JV partner obviously they will be very
happy to do so this is the intent the intent is to make sure that you know all
the products which otherwise payment banks are limited you know and cannot
offer and also credit Delhi remic and it’s and making sure that you know all
of whatever for instance in the European Bank is a PC to stay back with in town
we can use the physical infrastructure as well for the dispute so this is you
know where the model is so by that logic can be ABC for multiple ones no there is
some delay resistance but then you’ve got the biggest I’m doing it so I guess
in some sense you have to take yeah this is one last question that I
that’s coming up here if I look at it do you think data analytics back that big
data a IML technology helps in pulling customer attention use geo payments
banking okay I guess simplify the question I mean if you look at the
entire portfolio of Gio’s juhayman banks that internal technology at Purdue I can
you just highlight one interesting deep tech problem that you’re solving through
analytics so you have some really smart people working on that what would that
broad area be I think behaviorally you know a lot of things are getting solved
one is that you know if let’s say that this technique for installation based
you know services because of the geophone ability to detect where you are
and if on a Friday every Friday there is a behavior that grew bunch of people who
are working in my business area go to a particular mall and you need to offer
some relevant coupons or some promotions to say that last Friday I have seen him
and the previous Friday has given what can I offer some relevant you know
location-based kind of coupons to say that on that particular Friday evening
between 6 to 8 and offer this coupon and promotions with one of the merchants day
ok so this is what is called relevant you know push so these are all you know
marketing contextual relevance again and making sure that you know the
partnership but in this case if you look through this merchants on their own and
the longtail merchants on their own would never be able to kind of get
access to offering such promotions so these are otherwise offered only by the
larger body so this is basically again you know bringing them into this field
and making sure that you know they also have a fair share of how to do the
business under this most digitally digitally fashionable being thank you so
much free I think an out of time thank you so much for joining us today and
taking the trouble is much appreciated and thank you for supporting this
initiative deep talk and look for having you again at some points in the future
thank you and Good luck Santanu and team

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