From standing in queues in a bank for depositing and withdrawing money to now sitting in the comfort of your house and managing all your transactions online, digital banking has revolutionised the banking experience for the users. It has helped in addressing all concerns such as the time-taking processes like fund transfer, mortgage loans and more, to meet the needs of the tech-savvy and busy consumers of today.
Riding on this wave of digital banking, most of the banks in India today are leveraging technology to bring the entire banking experience to the customer on their smartphones. According to IBEF, rural India is also witnessing this revolution, which saw the teledensity or the combined mobile and internet penetration reach 59.38% in January 2019. While that indicates that more than half the addressable rural market has the connectivity for digital banking, adoption of digital banking tools and services is still rather limited.
But banking has been transformed in the urban context due to smartphones and the ease of internet connectivity. For fintech companies, the urban market is the main source of revenue, but the big growth opportunity would lie in serving the unbanked and non-digital banking users in Tier 2, 3 and 4 cities, and rural areas. Providing customised and quality fintech services to these millions of users is the critical success factor for all digital banking and fintech platforms, which are currently scaling up to address this market opportunity.
When bringing onboard new users and scaling up, the focus for startups shifts from developing features to developing the backend infrastructure for data storage and processing. The biggest shift in this regard is the way in which startups have adopted cloud services to maintain a consistent quality of service, no matter the number of users.
On-demand access to server infrastructure without major investments have made cloud services a go-to choice for startups, especially for fintech firms. Apart from the easy implementation and adaptation, cloud computing offers plenty of benefits such as consistent services, cost-effectiveness and more.
Owing to the increased interest of startups on the cloud infrastructure, cloud companies such as DigitalOcean are offering flexible and customisable storage and server solutions for startup customers, so as to increase their own client base.
For startups, this makes their operations seamless, reduces the overheads and spending in the tech platform in the long run, and frees up crucial resources to focus on the core product and vision. For fintech startups such as Cointab, the need for a cloud provider is more crucial than ever, as it looks to target the hundreds of millions of unbanked customers. And as it looked to ramp up its user base, Cointab chose DigitalOcean as its cloud partner to make its tech platform more efficient and ready for scaling up.
Founded in 2015 by Vinit Maniar, Gaurav Bansal and Arul Sundarraj, Cointab sets itself apart owing to the ease of the transactions and management of the features in the app. The app is enabling consumers to use banking services across more than 140 institutions in India. Cointab claims it is optimised for 2G network and one of its Unique Selling Points is that it functions seamlessly even on low-cost phones in remote areas.
From fund transfers to donating money and checking their employee provident fund balance and more, it enables users to conduct and maintain all transactions and activities. The app has a multilingual interface to avoid any language barrier in the use of technology and to improve lives.
“In India, people have bank accounts but most people still prefer banking using physical channels due to the lengthy onboarding process for internet/mobile banking and complex IT systems,” said Maniar explaining the inception of the startup.
Having faced these challenges personally as well as witnessing their friends and family struggle with the same, the founders decided to create a simple app which enables users to bank digitally and manage money with ease.
Inc42 caught up with Maniar recently to understand the journey of Cointab and how it is revolutionising the banking experience for users.
Inc42: Which are some of the most popular features on the Cointab app that have driven the growth?
Vinit: Customers use our app for performing banking and financial transactions such as checking account balances, transferring money to friends and family, paying credit card bills and more. Our digital diary, which lets users track of all their expenses and transactions, is also among the most preferred features of Cointab.
Inc42: How many languages does the app support? What are these languages and could you elaborate on the percentage of users of these languages?
Vinit: Our app supports 12 Indian languages so users can easily understand digital banking in their own languages and transact as and when required. These are all the major languages such as Hindi, English, Punjabi, Bengali and more.
Up to 85% of our users prefer English, while 7.5% use Hindi and 7.5% use other languages.
Inc42: What are some of the initiatives you have taken to improve financial literacy for the regional language users?
Vinit: We have created a lot of video content on our website in multiple languages which helps users understand how to take advantage of digital banking. Our easy to understand content teaches users how to carry out digital transactions and stay on top of their bank accounts.
Moving forward we plan to create more content on financial literacy so as to help users improve their financial lives. This means we are getting ready to support a lot more users and scale up our services for this.
Inc42: Does this mean you will be relying on cloud services for this scaling-up phase? At what stage in a startup’s journey do you think migrating to a cloud partner becomes important?
Vinit: For startups, it is important to focus on growing their core business. Server infrastructure is something that can be scaled with the help of a cloud partner so it is prudent to go with them from day one. We started our journey using DigitalOcean’s services and have been using them for the last 4 years now.
Inc42: Cloud technology is revolutionising things across operations for companies in the scaling-phase. Tell us how you have used cloud storage and data processing for fintech?
Vinit: As we scale up and focus on providing more banking and financial services to a growing user base, we know we’ll be able to scale our infrastructure using cloud-based services. Having someone to take care of your server infrastructure is extremely crucial for digital-first companies. They are a partner that helps us manage our server infrastructure with relative ease.
Inc42: What has the impact been in your tech spending after working with DigitalOcean? Has it helped you become more cost-efficient from a tech point of view?
Vinit: DigitalOcean’s services are not only best-in-class but also cost-effective. For the same price, with DigitalOcean we get more computing power as compared to other providers. Hence it becomes extremely cost-efficient for us for scaling our infrastructure.
As we started on the public cloud, we don’t have a benchmark to compare the cost of private vs public cloud. But if we were to go for a private cloud, it would certainly cost more and would not give us the freedom to provision infrastructure at a click of a button.
Inc42: What helped you choose DigitalOcean as a cloud provider as opposed to any other competing solution?
Vinit: DigitalOcean servers are extremely performant and reduce our tech costs.
While starting Cointab, we did a trial run on DigitalOcean’s services and found them to be extremely good. Their control panel and APIs are also easy to use which helps in managing the day-to-day operations.
We use a lot of DigitalOcean’s products but the most important ones are their servers and storage. Their Droplet (server) and Block storage products enable us to scale our infrastructure as and when required without any volume commitment.
In addition, they provide fabulous content to help our admins configure new systems and services easily. Plus, they have an amazing team of support executives who help in resolving issues.
Inc42: Explain some of the security measures in place for your users in terms of protecting the transactional and banking data.
Vinit: As our app is based on BHIM UPI platform, users can only add bank accounts which are linked to their mobile numbers. This acts as the first factor of authentication wherein you can only add accounts if you are in physical possession of the SIM card which is linked to those accounts. In addition, users have to generate a BHIM UPI PIN using their debit card credentials which acts as the second factor of authentication during transactions. As for our systems, we use the best global security practices to safeguard our infrastructure. We also undergo a thorough security audit by CERT-IN empanelled auditor on a regular basis.
Inc42: Can you throw some light on your expansion plans, with respect to new geographies, products or services?
Vinit: As a first step to help people improve their financial lives, we wanted to help users bank easily. Now that we have built an extremely easy to use app for digital banking, we are working on adding financial services to help users secure their lives and build wealth.
This article is part of the Inc42 and DigitalOcean ongoing series — “Conversations On Cloud: Driving The New Wave Of Disruption”. As part of the series, we present you the stories of startups that are leveraging cloud computing to create digital disruptions.