Financial Services Have Ample Revenue Streams, But Trust Remains A Problem: INDMoney’s Ashish Kashyap

At a time when India’s fintech industry is witnessing disruptions due to newer business models, such as peer-to-peer (P2P) lending, buy now pay later (BNPL), digital wallets and digital asset management, the industry players believe they need to focus on building customer trust, protecting their data and building customer-centric products. 

In fact, with the fintech industry maturing, the current focus of a large number of entrepreneurs is on ensuring customer data protection.

Speaking at the second edition of Inc42’s The Makers Summit, Ashish Kashyap, founder of INDMoney, said, “The number of revenue streams possible in financial services is huge, but the difficult problem is trust. Thus, the problem we need to solve is how fast can we get to trust and how fast can we build data intelligence to do that.”

Talking on similar lines, Priya Sharma, cofounder, CFO and COO at ZestMoney, said that entrepreneurs in the fintech industry particularly need to proactively act to protect customers’ data rather than reacting to it when regulators say. Making consumer protection and consumer trust as the core philosophy will ensure that a fintech business is aligned with regulations, and financial businesses can’t exist without regulations, she said.

The major reason why trust in financial business is still an issue is perhaps because business models are not aligned well with customer outcomes or, to simplify, they don’t meet the expectations of customers, Sharma added.

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According to Mukesh Kalra, founder and CEO at ET Money, the lack of trust is not only an issue with fintech startups. Even banks are losing the trust of their customers because of their business models that are either hidden or commission-led or are solely focused on sales, he said. 

Sharma said that when she started her journey with ZestMoney, she realised that consumer credit penetration in India was low due to the financial institutions not taking risks or not having the right tools in terms of underwriting and digital mechanisms for data security and access to customers in order to take that risk.

In order to change this, Sharma said she started digging deeper into each of these issues. Agreeing with Kalra and Kashyap, she said that by understanding how underwriting is done, what type of data gets collected, how that data is used and for what purposes, entrepreneurs also help build trust and do something different in the industry.

Kalra said that the amount of revenue pool that is misaligned with consumers’ interests only in the wealth space is to the tune of INR 52K Cr ($7 Bn), and that’s where there is an opportunity to bring in business model innovations to ensure better outcomes. 

Hence, building customer-centric fintech business models is the key right now, the entrepreneurs said. 

Improving execution speed is another area for building consumers’ trust, Kashyap said, adding that the industry needs to increase its execution speed by 10X. 

The COVID-19 pandemic helped entrepreneurs overcome their fear of automation, and the use of technology has come as a boon for the fintech industry. 

Razorpay founder Shashank Kumar said that many entrepreneurs were sceptical about the use of technology before the onset of the pandemic because of their lack of understanding of advanced tools. However, the pandemic has made them overcome their fear and increased their trust in automation. While this is a positive for the industry, it still has a long way to go, he added.

Going ahead, investech and insuretech will be the key trends in the fintech industry, according to Kashyap. While these segments are currently underpenetrated, they will go up by 4X in the next 2 years, he said.

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