Adoption of account aggregator will be faster than UPI

Bengaluru-based Digitap provides high-tech advanced artificial intelligence (AI) / machine learning (ML) solutions to new age internet driven businesses for reliable, fast and 100 per cent compliant customer onboarding, automated risk management along with big data enabled services like risk analytics and customised scorecards.

Its proprietary ML algorithms and modules provide one of the best success rates in the market. The adoption of Account Aggregator (AA) ecosystem will be faster than UPI adoption "Since the entire flow and process is modelled against the UPI payment flow to provide some familiarity to the user," says Nageen Kommu, CEO of Digitap, in an exclusive interview with Bizz Buzz.

The AA ecosystem helps the lenders to leverage on digital data acquired with the consent from the customers for providing them a seamless journey and eliminating the need of physical documentation. The startup is working with the largest digital lenders of India. It brings together deep and vibrant experience in fintech product & risk management, management consulting and e-commerce business.

What are your views on the overall AA platform? How do you think it's going to benefit the industry?

Information sharing through AA platform will be the next big movement after UPI adoption in the Data centres played a pivotal role in the progression of digitisation in the banking, financial services and insurance (BFSI) space in India. AA ecosystem will make it easier for users to share their financial information in a fast, secure and reliable manner.

The process is extremely user friendly and the user will have total control regarding what information he wants to share. The adoption of AA ecosystem will be faster than UPI adoption since the entire flow and process is modelled against the UPI payment flow to provide some familiarity to the user.

What was the idea behind Digitap? What is the industry problem being solved by the company?

Digitap is an early stage tech startup, focused on building high-tech AI / ML and compliance related digital solutions for BFSI firms. Our aim is to assist such firms to have a seamless and 100 per cent compliant customer journey with the help of AI/ ML enabled big data support to have better risk management and control frauds.

Currently, the BFSI industry is focusing mainly on bureau data to underwrite customers. Due to this, most BFSI firms are competing for the same set of customers to provide credit as per the bureau score. However, there are close to 400 million Indians who do not have proper access to credit because of low bureau score.

We are providing alternate data sources and scoring models that enable BFSI firms to underwrite these customers and reduce their nonperforming assets (NPAs) by up to 40 per cent by using our tools.

Could you elaborate on the offerings of the company?

We offer solutions to BFSI companies in the areas of digital customer on-boarding and credit underwriting. The onboarding solutions include Aadhaar verification through paperless XML, digi locker and Central KYC (know your customer), optical character recognition and validation of KYC documents, e-signing of online documents and RBI compliant video KYC solution.

On the credit underwriting side, Digitap Alternate Data Rule Engine provides in-depth analytics on a user's financial health and creditworthiness. We take inputs from seven different data sources (bank statement, device data, telecom data, social media information, e-commerce data, employment data and location information), with appropriate permissions from the user.

Basis these inputs, we provide a credit score along with variables related to key financials matrices (for example: income, expenses, liability burden, negative scenarios). This score output is the alternative for bureau scores and the variables assist in building rules based decisioning engines. This helps our clients lend to New-to-credit and riskier customers while keeping a check on bad loans.

How is Digitap different from its competitors?

Our differentiation in underwriting solutions comes from the unique data sources we have identified that will have a significant impact on the credit profile of the customer. Also, once the data sources are identified, our unique selling proposition (USP) is in the scoring models and enabling clients in building customised scoring models that will be more accurate for their customer segment.

Where do you see the company in the next few years?

With data playing a big role in decision-making of the companies (especially in the BFSI space), we believe that there is huge potential for various use cases that derive out of data. We are currently working on expanding the data related use cases to not just credit underwriting, but also for marketing, fraud detection and identity management purposes.

We intend to expand beyond the BFSI sector in India and also target customers internationally. We aim to achieve annual recurring revenue (ARR) of $20-25 million in the next five years.

We see that Digitap is a listed Technology Service Provider (TSP) on Sahamati platform. Could you elaborate on the role played by your company?

AAs are licensed non-bank financial companies (NBFCs) that enable the transfer of customer financial information from one financial institution to the other with the consent of the customer. Digitap is a certified TSP that implements the Financial Information Users (FIU) module, enables the certification of the module and provides analytics over the raw data shared by Financial Information Provider (FIP).

As a TSP, Digitap has connectivity to all AAs. It provides end-to-end solution from a technical standpoint for FIUs with them only dealing with relevant paperwork. We also provide alternatives to AA for bank statement parsing solution through net banking and PDF upload in an integrated solution module.