If creditworthiness were a wheel, trust every turn at the FE Best Banks to throw up surprises. Take the case of fintechs — they may have a paltry share of the credit market in India but have made a dent in the payments space with user-friendly apps, particularly Juspay Technologies and Policybazaar.com, the jury’s top picks in the category.
ICICI Bank too offers an ‘app-side’, if you will, with homegrown digital loan strategies making transactions simpler for its customers with our App of the Year, Pockets. Again, recognising non-banking financial companies (NBFCs) as key lenders to the last mile, this edition of FE Best Banks has picked Ujjivan Financial Services, now the darling of foreign investors and also a small finance bank. Even Kotak Mahindra Bank’s conventional savings account sits pretty offering a 6% interest rate for deposits of over Rs 1 lakh, and a lot more — our best savings bank product.
For starters, Juspay Technologies may not have an app to its name but it facilitates mobile transactions for e-commerce, counting big names among its clients. It has also partnered National Payments Corporation of India (NPCI) to develop the BHIM app. In fact, co-founder Vimal Kumar believes Juspay to be more than a payments company with a high bar for value creation.
“There are lots of gaps in the market with 90% of the problems relating to second-hand authentication… We have just made a beginning towards resolving them.”
Our other winner in the fintech space, insurance comparison website Policybazaar.com, has grown at 100% a year and is readying for an initial public offering by the end of 2018. The company has forged ahead in the online space by focusing on the largely untapped market for voluntary protection products, such as life and health insurance. The company is also targeting population beyond Tier I and Tier II cities. “We are looking at low-cost medical (insurance), a low-cost accident cover, a low-cost critical illness cover and a low-cost life cover,” said founder and CEO Yashish Dahiya.
The jury’s pick among mobile banking applications of the year — ICICI Bank’s Pockets — has been downloaded by 5 million users within a year of its launch. Tellingly, 80% of these customers had no prior banking relationship with the lender. After all, a Pockets wallet account can be opened in only a few seconds and can be upgraded later to a full-fledged bank account. “The idea was to give the customer the service of a full-fledged bank instantly, as also a non-banking experience to enable transactions that are fairly frequent, such as gifting, movies and bill-splitting… We felt this would really work for a generation that is becoming increasingly mobile-centric,” said Abonty Banerjee, former head-digital channels, ICICI Bank.
In the NBFC space, Ujjivan Financial Services, the jury felt, has upped the ante by serving the unserved and the underserved in a viable manner. The microfinance institution (MFI) has done so by customising its offerings to the last mile. “Customers look for good service, access through multiple channels and don’t like minimum balance requirements or penalties,” said Samit Ghosh, founder and managing director, Ujjivan Financial Services, adding that a raft of products has been developed by the MFI bearing in mind such customer-friendly orientation.
Even the humble savings bank account exudes a magnetic appeal with Kotak Mahindra Bank’s acquisition of droves of new savings account holders, thanks to some top-class service and a 6% interest rate for deposits of over Rs 1 lakh. Not surprisingly, its savings account deposit base has grown at a CAGR of over 40% to Rs 40,000 crore. “The 6% rate definitely gives our frontline that extra tool in the armour when we approach our customer… Once the customer gets interested, the features within the product are good enough for him to be convinced,” said Virat Diwanji, EVP and head, branch banking, Kotak Mahindra Bank.
As fintechs continue to fill the gap that has long existed between lenders and borrowers and banks innovate with existing products and digital purses, picking the best is never easy. Thankfully, the five-member august panel comprising former Tata Consultancy Services chairman S Ramadorai and his team — R Shankar Raman, CFO, Larsen & Toubro; B Mahapatra, former executive director, RBI; Leo Puri, managing director, UTI Asset Management; and Sharad Sharma, founder, iSpirt — bring a wealth of experience and insights that make hard choices look easy. That’s enough to keep the wheels turning even in this edition of FE Best Banks.