Assessing the business models and the sustainability of hundreds of fintechs can be very challenging, especially in the absence of reliable information and data.
India’s most prestigious financial sector awards — FE Best Banks awards — will be presented in the country’s financial capital on Monday. It will be celebration time for banks, non-banking financial companies (NBFCs), small finance banks and fintechs. Romesh Sobti, CEO and MD, IndusInd Bank, will carry home the Lifetime Achievement Award, while Sanjiv Bajaj, MD and CEO, Bajaj Finserv, will walk away with the Banker of the Year award for 2017-18.
The winners have been chosen by a high-powered jury chaired by S Ramadorai, former chairman, Tata Consultancy Services (TCS), and a team comprising R Shankar Raman, director & CFO, Larsen & Toubro, Leo Puri, former managing director, UTI Asset Management, Biswamohan Mahapatra, former executive director, Reserve Bank of India, and Sharad Sharma, founder, Ispirt. Helping with some detailed research and number work was a team from EY.
A jury’s task is never easy because even in the midst of their troubles, lenders have managed to spot niches where they could move in and innovate to come up with dozens of new products, especially digital offerings. Numbers don’t always tell the whole story but at a time when demand for credit may have been somewhat sluggish, lenders have been cashing in on technological advancements to run their businesses. Thanks to these initiatives, they have sustained loan growth and profitability. The winners in the category of banks are HDFC Bank, Indian Bank and HSBC. NBFCs, too, have done well for themselves with Bajaj Finance stealing the show.
With every lender launching a plethora of products, it is never easy to assess which ones are the best. But the number of new customers can be a good indication. State Bank of India will walk away with the award for the best home loan product – long tenors. The lowest rate and other facilities ensured it outclassed the products of other lenders. Kotak Mahindra Bank won the award for the best savings bank product for the second straight year. With an interest rate of 6%, the bank’s savings deposits have grown at a compounded 38-40% over the last seven years.
Axis Bank, which has two fintech subsidiaries, was declared the best digital bank for the second year in a row. A substantial chunk of the lender’s MSME and personal loans are sourced online and the lender aims to completely digitalise such loans in 18 months. The year 2017-18 was annus mirabilis for NPCI with the launch of BHIM and the on-boarding of Google Pay and Paytm. Later in August, UPI 2.0 was launched. For the stunning success of UPI, NPCI — the jury felt — merited an award. Assessing the business models and the sustainability of hundreds of fintechs can be very challenging, especially in the absence of reliable information and data.
What looks like a promising idea today may no longer be a viable business tomorrow, given there’s no dearth of competition and also because technological advancements are so rapid and game-changing.
Among the fintechs, RazorPay, CreditVidya, LoanFrame and Acko General Insurance were chosen for the initiatives they have taken in their respective areas and for the promise they hold out.