Financial services firm FIA Global plans to create a million jobs by 2024-25

We have found that women business correspondents are more active than men business correspondents. "Hence, it is imperative to have women as business correspondents, and government's support in this regard would be beneficial," says Seema Prem, co-founder & CEO, FIA Global, in an exclusive interview with Bizz Buzz

I was born into an Army family and my childhood was spent in some of the most inaccessible terrains in India. Growing up, I witnessed inequalities around me that I resolved to reduce. After my engineering and business degrees, I joined the team, which launched mobile services in South India, and saw first-hand the technology led transformation of the masses. While pursuing a fellowship from MIT's Sloan School of Management, I realized that around half the world is unbanked, and this problem can be addressed through digital services offered on the mobile

FIA Global partners with financial institutions to set up banking outlets across the country, these outlets function as a mini bank branch and are equipped with a laptop, biometric device and printer. Through the internet, the banking outlet is connected in real-time with the banks' core banking solution. The unbanked can walk in and do basic financial transactions in real-time

How can women be encouraged to become business correspondents of banks?

We have found that women business correspondents are more active than men business correspondents. Celebrating the contribution of women business correspondents within their communities, and engaging with the local Panchayats to encourage women to become business correspondents would go a long way in getting women to take-up this activity. Another aspect is that the business correspondents, especially the women, usually don't have a transport of their own, which affects their ability to work. It is imperative to have women as business correspondents, and government's support in this regard would be beneficial.

What made you start FIA Global? What has been your journey like?

I was born into an Army family and my childhood was spent in some of the most inaccessible terrains in India. Growing up, I witnessed inequalities around me that I resolved to reduce. After my engineering and business degrees, I joined the team which launched mobile services in South India, and saw first-hand the technology led transformation of the masses. While pursuing a fellowship from MIT's Sloan School of Management, I realized that around half the world is unbanked, and this problem can be addressed through digital services offered on the mobile.

I co-founded FIA Global in 2012, to connect the last mile customer by providing assisted digital banking services. Since inception, we have setup 30,000 banking outlets through which we serve 45 million customers, and handle $3 billion in financial transactions annually. There have been several challenges, and opportunities, along the way. For instance, in 2016, we realized that we have moved into the realm of big data and we would need to adapt our IT systems to it. We took on the challenge, and invested in building AI capabilities. This has helped keep our systems predictive, real-time and intuitive besides giving us substantial savings in cost, productivity enhancement and a competitive edge.

What is FIA Global doing differently to accelerate financial inclusion?

FIA Global partners with financial institutions to set up banking outlets across the country, these outlets function as a mini bank branch and are equipped with a laptop, biometric device and printer. Through the internet, the banking outlet is connected in real-time with the banks' core banking solution. The unbanked can walk in and do basic financial transactions in real-time.

Given the rapidly changing customer behavior spurred by digitalization, FIA Global is building the largest mobile banking platform, 'Finvesta'. On this platform we are aggregating – and redesigning – more than 20 financial products. These are then offered in an automated and paperless manner, in simple three clicks to ensure ease of operation for the people who have low literacy.

How financially sustainable is banking for the unbanked? How do you fund your operations?

Our main revenue source is the fees that we receive from our banking partners for every transaction that happens in our outlets. Our financial institution partners also offset our marketing costs for conducting financial literacy. Our vast distribution network and growing base of customers enables us to showcase new products to customers, and since our customer acquisition costs increases only marginally, it results in high levels of efficiency. Our existing banking partners also see us as a strategic, outsourced extension of their operations and they enter into multiple agreements which ensure growing revenues for FIA Global, as well as brand loyalty from the end-customers.

Since inception, we have ensured that we turn a profit every year. In the early stages, we received grants of $350,000 from World Bank and the Millennium Alliance. This helped us rapidly scale our business and reach a certain size which ensured sustainability of operations.

Please share examples of how the rural communities and rural economy are benefiting from financial inclusion.

More money in the hands of people locally, and the opportunity to spend locally, has brought many new micro-enterprises into villages, like cloth and building materials merchants. This is giving the local economic activity a boost.

During festivals like Diwali, families used to typically borrow Rs2,000 to Rs4,000 from the local moneylender, 'sahukar', at high interest rates. With a bank account, families tend to save Rs250 to Rs400 every month, they are utilizing this savings, as well as interest from recurring deposit, to spend during festivals, instead of taking a loan.

In addition, FIA Global's agents earn one per cent annual commission on average balance in the bank accounts of the customers they serve, and some agents are able to earn Rs18,000 to Rs20,000 a month.

Please explain your product Finvesta. How did you develop it?

Finvesta is an app, it can be downloaded to access an umbrella of banking services directly. These services include checking and savings accounts; cash withdrawals and deposits; electronic fund transfers; remittances; investments (mutual funds and digital gold); insurance (vehicle, life, accident, livestock); medical insurance (including Covid-19 coverage); working capital, home, and personal loans; electronic receipt of government funding (pensions, Covid cash transfers, student scholarships, maternity payments), bill payments and EMI (equated monthly installment) collections and doorstep cash delivery. The financial inclusion space needed a boost and a driver to accomplish the goal that it has set out for. Finvesta uncovers the essentials for the rural population, it is easy to use and promises to go a long way in deepening financial inclusion.

What does the road ahead look like, for financial inclusion, for digital banking and for FIA Global?

Cost saving digital means are the only instruments we have today that can help us scale and provide universal access. What we need are transformative business models early to cater to those excluded. Digital financial solutions are the only method to reach the under-served. FIA Global's fintech journey is no longer about providing assisted banking services in remote areas, it is now about creating financially independent and empowered individuals.

Currently more than 85 per cent of the accounts of over one billion people are used for just cash transactions. Also, they save too much and invest too little, and health care expenses push many of them into poverty every year. FIA Global plans to address this gap through its app, 'Finvesta', which will offer all financial services on one platform - basic banking services, digital transactions, lending, and protection through investments and insurance. FIA Global's plan for 2024-25 is to create 1million jobs, $10 billion in bank account savings and 100 million customers.