Pillars of a FinTech Ecosystem

Incubators and Accelerators

This is a critical component of the Fintech ecosystem and the role of incubators and accelerators is not just limited to funding but also to strengthen the financial industry and enhance soft skills and financial institutions play a significant role to discover the talent and develop platforms and solutions. Secondly, non-financial institutions focus more on incubators than accelerators and some of the most significant initiatives include PayPal Incubator and Yes Fintech.

Users

The users, comprising of customers in both individuals and organizations, have shown impressive receptivity to the transition of India’s economy being technology-driven and the routine transactions made by cash have given way to cashless transactions and mobile banking’s.

Financial Institutions

With the rapid emergence of the Fintech sector, various Banking Financial Service Institutions are collaborating with Fintech Start-ups on a variety of platforms such as wallets and online client acquisition,



among others and they are proactively mentoring, supporting and investing in innovative start-ups. For example, Bank of India offers a wallet in collaboration with Paymino that is powered by TechProcess.

2.5: Growth Levels

A range of factors have contributed towards the success and development of the Fintech ecosystem in India and with India’s population going digital at a very fast pace, the number of internet users touched 450-465 million in June 2017 and is expected to rise even further and with government’s consistent efforts to promote digital services through ‘Digital India’, there lies no opportunity for existing Fintech Start-ups as well as potential investors.Apart from this, the government’s push towards financial inclusion for India’s population is a critical factor as well and the launch of ‘Jan Dhan Yojana’ scheme aims to provide a bank account to every citizen. The Fintech start-ups can capitalise on such opportunities by offering simplified



and efficient transaction services. The government’s biometric identification database, Aadhar, contains information of over 1 billion Indian citizens; that is likely to minimise the effort required for first-level verification of the customers and furthermore, to provide an impetus to cashless transactions, the government has introduced tax rebates for traders accepting more than 50% as electronic payments.

About

CapitaWorld is an unique Fund Raising Platform, which is created as a one stop solution for the financial requirements of not only Fund Seekers (Individual/Business), but also for Fund Providers (Banks/NBFC’s/High net worth individuals etc.) and Service Providers (CA/CFA/CFP/ CPA/Investment Bankers, other financial professionals etc.). CapitaWorld is smart, intelligent and automated digital financial platform.

How would Banks and NBFCs benefit from CapitaWorld

• All Authenticated Retail Proposals directly at the Desk of the Banker (with EKYC, Credit Bureau Check)
• All Authenticated Corporate (MSME) Proposals directly with the Banker
• Pool of proposals with direct Central Team Access (can be extended to Branch level integration aswell)
• All Data available Upfront
• Data can be provided in necessary forms/ formats duly filled up
• Preliminary filtering and assessment/ scoring done
• Artificial Intelligence driven recommendation engine
• Future Technology Drive systems with Machine Learning Algorithms
• Complete Transparency in the process and direct connect to the customers
• Total ease in Acceptance/ Rejection of proposal

The Concept of CapitaWorld

Explanation

1. There are two types of fund seekers i.e Corporates and Retail. Retail fund seekers apply for seeking fund for Home loan, Car loan, Personal loan, Loan against Property, etc. Corporate Fund seekers apply for seeking fund for Working Capital, Term loan, unsecured loan, etc. The fund seekers then need to register with the CapitaWorld platform.
2. Once the registration is successful, the fund seekers may fill an application for the kind of loan he/she wish to avail. Often fund seekers need to visit various banks, stand in queues and submit various documents. CapitaWorld has introduced a concept of “One Form” wherein data points of various Banks and NBFCs are combined into one single form. The fund seekers have to upload all their documents thus saving their time, money and energy

i. Social Media Profile

Generally bankers check 3 pages of Google to ensure that nothing wrong, explicit or criminal record is written against the fund seeker. CapitaWorld checks up to 30 pages of Google for more clarity and reliability and submits it to the banker.

ii. CW SME Scoring

For SMEs, there is no international scoring and rating agency. FIITCH, an international agency is entering India through CapitaWorld. The corporates fund seekers will automatically be evaluated and their scoring will be sent to the bankers.

iii. Credit Score

CapitaWorld generates credit score of an individual fund seeker and submits it to the banker. Generally, the more number a time a person checks his credit score, it gets reduced. But with CapitaWorld, it remains constant.

iv. Corporate Data Auto fill:

The corporate fund seekers have an option to auto fill their data from Ministry of Corporate Affairs. Out of 500 data points available at Ministry of Corporate Affairs, CapitaWorld’s one form auto fill’s 70 data points which results into filling 60% of form automatically.

v. E-KYC and Biometric Authentication

CapitaWorld’s research and development team have come up with the testing of e-kyc and biometric authentication wherein with the help of biometric of a fund seeker, his data will be auto filled.

vi. Profanity Check:

CapitaWorld has installed software on their portal wherein if more than 60% of body parts is shown in any pictures or documents which are uploaded by fund seeker, then it raises an alarm that something is wrong. This is done in order to avoid any explicit content or pornographic material to be uploaded on When fund provider (Banks and NBFCs) registers with CapitaWorld, they have to upload certain criteria through on the basis of which they will accept loan proposals. So once a fund seeker completes filling of



one form, a teaser is prepared and it is automatically segregated and sent to various fund providers on the basis of their given criteria.

If more than or equal to 50% of the criteria matches then the proposal’s trailer is directly sent to fund providers inbox or else it is sent to their connections tab. If fund provider likes that proposal then he accepts it and fund seeker gets a notification about the same. Fund seeker gets an option to choose three fund providers and once he/she chooses the accepted fund provider then the whole proposal is visible to the fund provider.

On acceptance from both the fund seeker and fund provider, CapitaWorld gives an option of videoconferencing wherein fund seeker and fund provider can easily connect and negotiate the deal. CapitaWorld has also installed software for pulse detection, face detection, behavioural analysis, sentimental analysis etc. through videoconferencing. All the said features are applied to the fund seeker when he/she is answering the questions asked by fund provider through videoconferencing. A detailed analysis report is then sent to banker in order to take decisions. Once a fund provider is satisfied with the fund provider, decision is taken. After submission of few offline documents, loan is disbursed and the process for that loan gets completed.

Project Snapshot

A project snapshot is basically a one-page summary of client’s financial position, their current requirements of loan and the purpose for which a company requires loan. This is an initial document sent to banks and on the basis of this, it is decided whether the company will get funding or no.

A preformat of project snapshot looks like

Project Snapshot
Entity Name :		xxx
Constitution :		Private Limited
Industry:		xxxx
Financials
				Rs in Lakhs
Financial Year	2014-15	2015-16	2016-17	2017-18
Status	Audited	Audited	Audited	Provisional (Till 31st Dec, 2017)
Particulars
Revenue from Operations	2180.36	2189.97	2027.54	1676.51
Net Profit	19.18	5.28	-66.98	10.59
EBITDA	100	90.01	36.87	123.79
EBIT	65.19	42.58	-20.27	67.79
Current Assests	741.72	734.97	450	705.69
Current Liabilities	345	220.56	707.31	600.51
Current Ratio	2.15	3.33	0.64	1.18
Long Term Debt	500	550	30	200.44
Equity	102.46	102.46	102.46	102.46
Debt-Equity Ratio	4.88	5.37	0.29	1.96
LTB	504.38	565.48	31.09	200.44
STB	160.63	116.12	579.45	416.83
Loan Proposal -Takeover + Topup
Particular	Type of Loan	O/s as on date	Total value (Approx)
Cash Credit with ICICI Bank	Funded
WCDL with HDFC Bank	Funded
Letter of Credit with HDFC Bank	Non Funded
Bank Guarantee with Axis Bank	Non Funded
Derivative with Axis Bank	Non Funded
Channel Finance with Aditya Birla Finance	Funded
Total Amount
Collateral Details
Particulars		Total Value
Current Asset (Primary Security)		705.69
Plant and Machinery (Primary Security)		282.27
Movable Asset of Company		397.12
Land and Building		124.11
Founder 1
Founder 2
Founder 3
Total Amount

Conclusion

There are a plethora of FinTech startups emerging in India, across all segments in financial services. The pace at which FinTechs are emerging; there is no denying the fact that our country has enormous entrepreneurial potential. There are roughly 1500 FinTech startups, big and small, operating in India, and out of these, almost half were setup in the past two years.

The FinTech revolution is being further encouraged by the initiatives of the government and regulatory bodies which are ready to go the extra mile to enable innovation in financial services a reality. Big banks and other financial institutions are also looking to actively collaborate with startups for their mutual benefit. Having a structured program for engaging with FinTech startups can almost act like an outsourced R&D function for the financial institutions.

This shows that India is on the verge of financial revolution. The total investment that the FinTech industry has witnessed in has boomed in 2015-17. There is still considerable momentum in the industry and we will continue to see this trend continuing hereafter. Though a majority of successful startups as of now have been in the payments space, moving forward we foresee a number of them coming up in other segments as well. But particularly in alternate lending, wealth management and insurance.

It is clear to me that good customer service is vital. It is aware that satisfied customers return to the business and ensure that healthy profits are made. They also help to build a good reputation. For example, Portakabin uses market research and different types of data to ensure it gets a clear message about what customers do and don't like. It knows that if customers receive good service, ‘this time, next time, every time’, then they are more likely to return.

Also following are the results of the parameters on which CapitaWorld was being judged:

Scale	Parameters
		Speed	Confidentiality	Stability	Creativity	Impact
	High	CAPITA WORLD	CAPITA WORLD	CAPITA WORLD	CAPITA WORLD	CAPITA WORLD
	Medium
	Low

 

So based on the results, I can say that CapitaWorld is doing reasonably good and have lot of potential to grow in the coming years.

References and Bibliography

• http://businesscasestudies.co.uk/portakabin/the-importance-of-excellent-customer- service/conclusion.html
• http://www.powerdsa.com
• https://www.capgemini.com/au-en/wp-content/uploads/sites/9/2017/08/the_fintech_ advantage.pdf
• https://www.cfapubs.org/doi/abs/10.2470/rfbr.v3.n4.1?s_cid=ppc_RF_Google_Search_FinTechan dRegTech&
• https://www.i-scoop.eu/fintech/
• https://www.indiafilings.com/cma-report-preparation
• https://www.nisg.org/knowledge/244
• https://smallb.sidbi.in/%20/plan-new-entrepreneurship%20/guidelines-preparing-detailed-project- report
• http://www.cic.gc.ca/english/helpcentre/answer.asp?qnum=978&top=6
• https://www.investopedia.com/terms/d/duediligence.asp
• http://nhbsgroup.com/site/
• https://www.capitaworld.com/