Episode 010: Creating Frictionless No-app Journey For Fintech Companies

In today’s episode of the Gupshup Conversational Messaging Podcast, Beerud and Srini welcome guest Pratekk Agarwaal, an experienced financial advisor of FinTech companies.  They discuss how the integration of messaging to FinTech services is an absolute win not only for the brands, but more importantly, for the consumers. 

Customers’ Habits Evolved

Customers are long done with downloading dozens of apps that serve different purposes. Their needs and habits have changed to being able to do all online activities at once, including finance, regardless if it’s through WhatsApp, or anything they use for messaging. Therefore, FinTech services, being one of the most powerful industries in the digitised era, needs to move forward along with its consumers. 

“Since 10 years ago, there have been multiple things which have changed and everything which had to have a physical presence is now converted, or it's now changed into a digital way.” - Pratekk Agarwaal

Who Stands Out

As FinTech has grown massively, many brands appeared left and right, with varied things to offer to customers. Some would offer great user interface or great user experience, while some would entice customers with great interest rates. For Pratekk, when the competition is tight, that’s where customer experience comes into play, as the brand that offers the most seamless and satisfying experience gains the highest customer loyalty. 

“We are now wanting to build and start asking for where it's more personalized and it's focused on customer experience, and it's transactional level banking.”  - Pratekk Agarwaal

What Satisfies Customers

It’s an absolute win for FinTech to offer their services through a messaging app instead of going through the complex, not to mention expensive, the process of building a separate app. From the customers’ perspective, on the other hand, these apps are painful, time-consuming, and outdated. Pratekk believes that the integration of conversational messaging in FinTech services is what would bring customers exactly what they need, which would have countless returns for the brands. Less complex processes means more customers will buy insurance, open a savings account, get a personal loan, etc. 

“I think the moment we start introducing these features, and people start using them, you will see an immediate adoption and immediate movement from app to appless FinTech.”  - Pratekk Agarwaal

Bio:

Pratekk Agarwaal is a passionate intrapreneur and Fintech expert with over 18 years of multi-industry expertise in setting up successful businesses from scratch to scale with focus on the financial services domain. He held key positions with leading Fintech and NBFCs like Bajaj Finserv/Bajaj Finance, Fullerton, Selfin, IndoStar Capital, ftcash, and BharatPe. 

Beerud is the co-founder and CEO of Gupshup, the world's leading platform for cloud messaging and conversational experiences. It is used by over 100K+ customers and developers and handles over 6 billion messages per month. He previously founded and led Elance (now Upwork, a publicly listed company), the pioneer of online freelancing and the gig economy.

Srinivas has over 2 decades of experience in running marketing for high-growth technology companies and managing corporate marketing, product marketing and demand generation. Prior to Gupshup, he held marketing leadership positions with Qubole, Pluralsight, Mobileum and Tejas Networks.

Resources:

Gupshup.io

Transcript

SUMMARY KEYWORDS

app, fintech, consumers, journeys, messaging, services, conversational, conversations, ecosystem, kyc, customers, interact, people, fintech companies, banks, upi, download, india, offer, whatsapp

00:01

Listen to insights on how conversational messaging is changing the way businesses and their customers engage. Join gupshup CEO Varun and VP for marketing srini, and an array of guests for conversations about conversations. This is the gupshup conversational messaging podcast.

00:25

Hello, and welcome to another episode of the conversational messaging podcast. As always, it is Srini here and we wrote from Gupshup joining us to talk about conversational messaging in general, but in particular about how it's transforming another industry and today we're going to focus on FinTech. And we've always promised to bring in experts from the industry to come and join us to, to enlighten us really, and the audience on what's happening in a particular industry. So I want to welcome to the show fatigue protocol. So pratique is the short description of pratiques profile is that he's a expert on all things finance. A slightly longer description of his profile is that he's an advisor, trusted advisor to many FinTech companies, banks, nbfcs. And he and prior to that, and he's also an investor. Prior to that, he was the Chief Business Officer at Pirate Bay, and a few other financial institutions. So welcome to the show. Pratik, thank you so much for me for having me over. pleasure. Thank you. So maybe perfect can start off maybe I'll put you on the spot a little bit. So given that we're talking about FinTech so the first question is, Can you talk to us a little bit about why FinTech is relevant today, and why it sort of came into place and why it has grown and is growing so rapidly, because banking, financial services, these are very traditional industries that all of us have been using for hundreds of years now in different formats. So what is the role that FinTech is playing today, specifically, in terms of transforming these financial services experiences, if you will.

02:01

So I think if I go back 12 years back, right when I was in Fullerton, India, we used to meet people we used to collect physical ky C's, customers used to come to branches, banks, if they had to communicate, they used to write letters, entire three, four cities, and drop it into a box at a branch. Right, and welcome calls used to be made from a call center and emails were the only medium, right physical letters or emails. So 12 years back, where we didn't have author we didn't have, you know, any new age ways to underwrite or reach out to the customer. So that was those days, right. Whereas seven years back, when I was with Bajaj we were the first ones to actually launch the EMI card, right, which was a card where you have a pre approved credit limit, you went to physical stores, and you could buy yourself a consumer durable, right and get approved within seconds. Right. So that was seven years back. And since 10 years, if you see, we have, I mean, 12 years back, we didn't have even an author or anything, we used to kind of collect physical copies and do physical visits to, you know, validate if the customer staying at the same place from then to now we have actually come a long way where we have an Aadhaar. We have our card, we have, you know, the KYC, we have online bank statement analyzer, we don't need to physically sign we can do our digital signatures through Aadhaar again, right and most recently is the UPI, which has kind of completely revolutionize the payment ecosystem. Right? So since 10 years, there have been multiple things which have changed and everything which had to have a physical presence is now converted, or it's now changed into a digital way. Right? And that's the change. And as you know, right, Indians are typically very adaptable. They just love new things. They try it out. I typically call it a Jew guard. Right? So yeah, they are very fast learners, right. And the moment all these things came into play, right, they quickly acquired all this knowledge and quickly wanted to experience right if you see the data is free last five years, and you have mobile phone penetration, you have UPI, you have bank accounts, you have purfeerst kind of companies who have got bank statement analyzers, right. So all of these has changed. And I would say this has changed and people have even appreciated and adapted because of the VC money flowing in as well. If you see India remains at the cusp of the FinTech revolution, right? over 70% of the investment, which is come is probably into Korea payments business. You call it a to pay tm phone pay pine labs raise a pay per pay to name a few. Right and mushrooming over 20,000 startups in which 10,000 plus are only FinTech related So I think all of these changes have actually revolutionized the FinTech ecosystem has given an accelerator, right. And this complete change has got people to understand what they need, how fast can they replace their existing old ways of working? Right? How can they not go to a branch? How can they operate everything over a mobile phone? Or digitally over web? Right? And yeah, that's been the journey. Thanks for the So Bill,

05:28

but I think spoke about the transition or transformation of financial processes from physical to digital media, and he spoke about web and mobile apps. But within digital media itself, there is another transformation taking place. And we always talk about the, you know, the era of the websites and the era of the apps. And now we're talking about the era of conversations and the era of messaging, being the primary app. So do you see FinTech also moving in this direction of going beyond the app? And sort of living in the messaging ecosystem?

05:59

Yeah, I mean, look, there's a general trend across multiple industries, right? where previously businesses would build mobile apps, right. But the problem is that there are millions of mobile apps most of us use, you know, have no more than a few dozen downloaded on our device, right? Because how many restaurant apps and mobile apps and airline apps and you know, Store apps? Are you going to actually have on a device? Right? Very few, even though these are brands that we do interact with? Right? So instead, what's happening is, you know, messaging is emerging as the mechanism for businesses to engage with customers, right? Because consumers are saying, look, can't I just chat with businesses as easily as I can chat with friends. And businesses are also saying, you know, that we need to get consumers to download our app, right, which is a huge barrier, because people often don't like to download multiple apps. But instead, if we just want to be able to get a transaction done, and if we can do it without needing an app, so much the better, right, because you can reach more users do more transactions, and so on. So I think at least in theory, I would expect you know, the same would apply to fintax. Right? So we'd love to get your thoughts on, you know, does it make sense in the FinTech space? You know, what are they? How are they thinking about how to deliver that sort of digital experience?

07:22

Thanks. So I think people have started using the FinTech the way it was, you know, introduced to them, which is the old traditional way, you know, as you said, apps were the things and websites were the things and they what they created was eventually moving from a bank branch to a laptop, right. And last four years have been where people have completely trained themselves with the online journeys, they have started understanding the difference between for what five things I need to go to a branch and for what 15 things, I can do it over a call, or over an internet right, and all the web versions or the journeys have actually come back to an app. So last four years, I would say the FinTech has exploded immensely where, you know, multiple fintechs have actually started offering apps, journeys, multiple journeys within the same. And now I think we are at a position where, you know, we can't accommodate more apps, right? We can't have apps built for just single journeys, right. And there is a differentiation now, which people want, people are done with downloading multiple apps for multiple brands for multiple companies, whereas the journey remains the same, right? And I would also like to say that this change has because of WhatsApp, right, Whatsapp is one of the common language common app, which is used by everybody. It is used by a 10 year old child as well as a 19 year old senior citizen. So this conversation is kind of common, and now people want to move out of the app out of interactions over you know, a web versions, and they prefer having all of these over conversations. So I think, you know, the future is about conversations where they would pick up brands based on conversations. If suppose I want to interact with my insurance company, I want to interact with my banker, I want to interact with my arm, I would not want to log in to a laptop, I would not want to log in or download a bank app just for that conversation. Because that is pretty static. Can I do this over a WhatsApp communication? Can I do this over a conversational messaging? I think that is where people are now moving. So I think everything which we did, and top five things of our conversations with our bankers is going to move in next six months to conversations and you could just Over chats, over clicks, you could expect to book a cab. You could which you're already doing. You could get yourself alone, you could book yourself a car, or get real time he statements, right, because API's five years back and API's today have completely changed the way we bank.

10:19

Yeah, I think I mean, you should talk a little bit about the explosion of FinTech companies and FinTech services in India, right. I mean, there's just so much happening. So what's what's really going on? And then is there so many new services pop up? You know, how is a consumer expected to make sense of it? I mean, are they going to have multiple lending apps and multiple savings apps and multiple investing apps, and, and so on, right? So predict what's really going on in the FinTech space? Why do we have such a, such an explosion of services and investments and so on what's happening?

10:57

I think FinTech is completely just happened at the right time. If you see the last seven years, there has been so much of investment in the Indian ecosystem, and more than 70% of investment is in the FinTech space, you know, these companies, the investments have primarily been in the payment space in the lending space in the credit ecosystem. And because of this investment, right, I think the behavioral changes happened previously, the Indian consumers were all used to cash, right, the transactions used to happen 75% 80% more in cash, right. And this is all changed in last seven years. With ATM coming in with wallets coming in, with UPI coming in. And QR codes pasted across every kirana shop every small and huge amount of debit cards, credit cards, right, john accounts. So I think, overall, if you see it's not just one thing, which has changed the ecosystem, it's actually you know, last five years, which started with Aadhaar. Then came the India stack, then came the UPI, and catching on to each of these, right, there were multiple fintechs, who came in with some amazing solutions. You talk about doing the KYC, you talk about scanning, you know, any qR with one app, right? You talk about npci, onboarding about 200. Banks, right, which made it seamless. So all of these actually accelerated the FinTech ecosystem, not only from the startup ecosystem side, but also from the traditional banking as well as from the government. So I think, you know, all of these happen just at the right time for the world's largest democracy. And I think Indians are very adapting, they just adapt to things very fast, right, with cheap data available, you know, and everybody having access to mobile phones, these 1000s of apps made it possible.

12:59

So I think that's super exciting. And, you know, that leads me to the question of what happens when there are so many apps, what is a consumer to do? Right, because let's say in the US, typically, one financial service organization will provide all the services under a single umbrella. Right. But what you have right now, is really, you know, there's there's dozens of lending apps, there's dozens of investing apps, there's dozens of banking apps, right? And dozens of sort of wallets and Credit Card Services. And really, a consumer has to pick and choose one or two of each of these. And it just really creates a very complex way to manage it. Right?

13:48

Yeah, yeah, you're absolutely right. I think the market is entirely different from the US Indian ecosystem is probably you know, I would say that everybody in Indian ecosystem looks at a hook, you know, wants to be known for one thing, and they start off with one thing. So if you see there are dozens, as you rightly said, right? There are dozens of apps, which offer you personal finance, for example, right? Within personal finance, somebody would have a great UI UX, somebody will offer you a seamless experience, somebody would give you the best rate. And in India, I think everybody comes for numbers, right? And India being a very price sensitive market, right. And again, cheap data available, right? People don't mind switching apps for a better experience. And that is kind of, you know, giving a tough time to all the entrepreneurs and you know, the offerings that the best one out of the lot actually takes away, you know, the gig. So this, I would say this, every day somebody is launching something new and downloading an app and mushrooming Entrepreneurs mushrooming startups, you know, everybody is wanting to build something of their own, eventually everybody will want to offer a host of services. But that initial one service they want to master and they want to offer that to the consumers. And this is where, you know, the customer experience comes into play. And over a period of time, you will see, only the top three to four will be the winners and remaining will either get acquired, or I or get shot.

15:29

So that's a super interesting point, right? So growth is key, right? You grow or you die. Now, the funny thing is, in trying to grow, they are picking a customer experience format that actually limits their own growth, right, some of these FinTech services, they put they invest a lot of energy in building a fantastic app. Except that, you know, it is super expensive to build an app, it's super expensive to get a user to download an app. And it's yet more expensive to retain an active user even after they've downloaded. Right? Yes, and therefore, somebody may have best lending rate, they might have the best, you know, service. But if the consumer doesn't have enough storage on device, if the consumer is not ready to download the app, because they're not convinced because they haven't even interacted with the brand, for the download the app, they just don't do it. And that limits growth, right? So you'd think it would be just simpler and better to engage with more customers to engage with the sort of the top of the funnel, right these prospective customers and start interacting with them, getting them pre qualified very quickly, getting them to transact very quickly. And if you can do that, without needing an app, just through messaging, right, through a messaging app with the consumer already has, that they already use 50 times a day, you know, one that makes it a lot easier and simpler to drive greater growth?

17:07

Absolutely, absolutely. I think I've been an operator for most of my life, you know, for over 15 years. So when I remember the days when we used to get an app released every one month or every two months, right, and every journey used to take about three months to build a right. And that journey was used just one time for that consumer. So I think building an app was always challenging. And now with, you know, less talent available, it's becoming more challenging, because the scale is increase, almost 10 times, and the talent is the same. So what is the best, next best thing to do? The next best thing to do is to find alternative ways to offer the same experience. And I believe so in India, experience is something where people pay for, right, while it's a press sign the price sensitive market, you would see people paying for that experience if you're able to build that trust, right. And that is the phase we are all going through right now, where consumers are tired of downloading an app, you know, they're tired of doing just one thing over one app, and carrying two to three mobile phones and hundreds of apps. So I think the next word consumers are looking at this somewhere, they could interact with the brand directly. And it is more on a transactional level rather than an app level. Right? So if you want to transact just once, right, why should you download an app? Right? Is there a better way to interact with the brand? Right? For an example, if I want to apply? You know, I want to check out five different insurance policies, right? Why should I download five different apps? Can I just send one request to one mobile number or some conversation, right, which gives me all the five comparisons? And is there a way where I can authenticate myself and I will get the pricing? I will get all the details with just a few taps, right? Why in every journey, I have to enter those five standard details of my KYC to enter a financial services ecosystem. So I think this is where we are now wanting to build and we are now wanting to start asking for where it's more personalized. It's focused on customer experience. And it's transactional level banking.

19:36

So I think let's dig into some specifics. Can you give some examples of what some FinTech companies are doing in terms of leveraging conversational experiences for specific journeys? Like let's pick, you know, maybe one or two journeys and sort of describe it in detail. Can you do that? Yeah, sure.

19:56

Let's talk about the journeys, which I think the quick wins, right? Where the consumers are pretty advanced, they mature, they have handled, they are interacting. So something like a credit card application, right, or let's talk about five years back five years back, if you wanted to make a credit card application, you had to actually fill up a three page form, right? submit your ky C's sign on everything and give a physical copy and wait for 21 days to get the credit card proof. All right, and another place to get your physical credit card today, you know, with companies like one card and unique card, you can just download an app, do an online KYC, get your bureau score checked, and you get your instant approval within less than five minutes. And the card is shipped to you in next three days time. So the journeys from about 45 days is reduced to less than seven days. And further this journey would be where where I'm interacting with a bank, I do authentication and I have access, I'm able to access any of the products. So one is the credit cards. The second is the loans. Right? As I said 25% of people in India today have bureau scores. Right? But what about the remaining 75%? Are we saying that remaining 75% will never have access to the banking ecosystem? I think that's not true because there are a number of fintechs who are working on underwriting these remaining 75% with alternative data, right? This data is primarily related to their calls related to the apps they use, what kind of transaction messages they get into your messages, right and some more bit of geo tagging data. Is this data enough for lending, I would say that's not enough. But this data point is good enough to start a buy now pay later kind of product or good credit line kind of product. So the remaining 75%. And this 25% I think conversational messaging is just the right way where they can interact, they can submit their KYC is by physically just taking a picture entering that other number, verifying their OTP on the phone, right and get access to a pre approved loan, which is just a small amount it can be just as small as 500 rupees and as high as 20,000 rupees. But this is a huge space where where FinTech is now moving towards and FinTech companies are spending time money in acquiring these customers. And once you start acquiring these customers, they become an acquisition channels. And once you have these customers who you have taken special, a smaller exposures, you can always give them a higher loan amount in future. So I think that is where you know, the FinTech is moving towards in the bfsi ecosystem.

23:00

And by the way, we've seen a few other companies. So one of the largest FinTech providers of credit card and related information services. It's one of the unicorns that's funded, they make heavy use of WhatsApp, to engage with their customers to send them notifications about, you know, late payments and payments to you, and so on. And other reports about expenses. And such, we have other kinds of journeys as well. For example, collection journeys, you know, when an EMI payment is due, it gives consumers the option of either paying right away, or rescheduling the EMI into multiple components with different possibilities. These are assisted journeys, that takes the consumer through various different options, then they use it for lead gen, even to let's say, sell a personal loan, pre qualifier loan, right based on their credit risk history, their income levels and things like that, to find sort of the right savings or investment product from among the many choices, right? So isn't a true critique that I think typically with FinTech and financial services in general, there's a lot of complexity, right, buying an insurance product, a savings account, a personal loan, or any of these credit cards and so on. There's a lot of fine print, there's a lot of complexity. And the buying decision can be a little tricky. And I think these are places where a conversation experience and guided assisted conversation experience can sort of help the consumer navigate all the decision points and all the things that they have to do. Right. Yeah, I

24:39

think this will definitely change the way and I think one more important point is that why? Probably you know, it never came down to a conversation messaging in the past. Reason being that the banks always focused on certain ticket size. Banks always had a very high OPEX if they had to lend to somebody they needed. Those branches they know needed those people which got the cost very high, right. And hence, they always ignored or financially, it was not possible for them to cater to this entire mass, right of what has happened with FinTech is you are able to interact onboard a customer and identify that customer at a much lower cost now, and this has further got, you know, the conversational messaging activated, where you can further acquire a customer at just 10% of the cost, even what your peers are doing it. So I think conversational messaging not only reduces your cost, but because you have a very less OPEX, you can acquire more customers. And because you can acquire more customers, you can actually start offering more services to them, right?

25:51

By so let's say, Where do we go from here? What does the future look like as the number of FinTech services grow? And as consumers are faced with navigating these many choices? What's the best approach? Do you see, you know, more apps getting launched out there? Or do you see a lot of these migrating to conversational experiences,

26:12

I think the apps will definitely be there, because India is a large market. And every two years, the bottom layer is getting used to certain ways of working and they move to the second best layer. So somebody who is using ussd phone or not a smartphone, right? In two years, he will move to a smartphone, a smartphone user will use to a better phone. So I think the entire five layers if you bucket eyes India into right, every two to three years, the last layer is moving to the second last layer, you know ecosystem. And that is giving access, opening up a huge base every two, three years. And because you have new customers who are coming in, so the app will stay, the web will stay. However, all the evolved customer kind of finding it difficult to converse over the app, there are finding it difficult to download every conversation and the future is where these consumers will now start moving to conversations like WhatsApp or messaging, which is much more simpler and easier. This is again a behavioral change. So it won't happen overnight. But it is a step towards movement. Once the moment we start offering them on WhatsApp. And they start getting used to conversing on WhatsApp, engaging with the bankers engaging with the bfsi ecosystem, right and pulling their credit bureaus scores, getting their insurance policies, getting their loan statements paying their bills. I mean, the life gets so much easier with this, right? So I think the moment we start introducing these features, and people start using it, you will see an immediate adaption and immediate movement from app to app plus FinTech. And I think future is all about giving them a taste, because nobody so far has, you know, introduced this right in the ecosystem. People can't relate to something like this can happen. So it will take some time. But yes, I think we are on the right path. Yeah.

28:21

So I agree, we are seeing these trends. And we are seeing a lot of FinTech companies adopting these messaging services. So you know, then the next wave of Neo banks and FinTech companies, and you know, quick lend, you know, buy now pay later services and so on, are going to be working with consumers, you know, it's coming soon to a messaging app near you. Make consumers life easier. And I think any FinTech entrepreneur that's focused on building they should certainly explore and consider leveraging conversational experiences, sort of the apalis experience, right? They have to think out of the app out of the box, if you will, to see what's the fastest way to acquire customers to engage them. And to build services. Like we said, right, you either grow or you die. And the best way or the fastest way to grow is to eliminate any friction points or any barriers to your own growth, right and forcing a user to download your app before they've even seen it or experienced your service is one of those friction points, right? And leveraging messaging is a much easier, simpler way to read users to engage them to get them on boarded and to transact. Right. So anyway, I think that's all we had any final thoughts for tea before we close out?

29:47

I think this is going to be so first we talked about the first piece where you know, it was completely a branch banking, right from branch banking, it moved to you know, a web banking or banking from home, right? And some bit of it was taken over by call centers and RMS and things right. The last wave was all about digitization. It was all about, you know, digital transactions and online interaction, online approvals, right. And I think this current way, what we talked about, which is more of messaging, conversation, banking, and everything on conversations, this is going to change the future of entire banking ecosystem and FinTech ecosystem, where it will not only you know, people will just offer a service, but all those interactions will happen over a medium of messaging. I don't need to go to a PTM app to pay my mobile phone bill, can I get a one dynamic payment link on to my phone to just pay my bill? Real time? Right? Why do I have to, you know, interact with my RM over over a call. So I think this entire phone banking, or web banking will all move to conversations. So I think what I'm trying to say is that conversation messaging will be the fourth game changer, it would be the fourth biggest behavioral change in the FinTech ecosystem of India. And if we are able to offer a right experience with the right info, right? I don't think so anybody in future would be building these journeys within the app apps would be only for a very secure transaction, where you might want to just go into debt for a specific transaction. But everything else will happen over over probably something like a WhatsApp journey, or a conversational messaging where the window opens up, you complete the transaction you exit and that's it. All right, Trini. We want to

31:57

thank you so much, but it can be rude as always. So, for any FinTech companies listening to this podcast, if you haven't already, please consider conversational messaging as the next step or evolution in your customer experience, journey. And if you're a consumer of FinTech services, do ask for this from your providers so that we can accelerate this journey together. Thank you once again, to our listeners for tuning in. And we'll be back next week with another industry and another interesting innovation that composition messaging is thank you so much for your time today can be again thanks for me.