Month: August 2022

The Know Your Customer (KYC) policy is a mandatory framework for the financial ecosystem used for the customer identification process. To comply with international regulations, Know Your Customer procedures need to be implemented in the first stage of any business relationship when enrolling a new customer. Primitively, KYC was an in-person inspection process but with time and increasing demand, regulatory bodies and financial institutions together had to conceive ways of innovating the said facet to ensure an enhanced customer experience. e-KYC was introduced to serve this very reason in conjunction with easing and shortening time-consuming processes. Video KYC, recently approved by RBI, is a new technique to verify your customers through video. The entire process is video-driven and contactless giving customers the option of completing the process remotely. Video-based Customer Identification Process (V-CIP) was launched to go entirely paperless. The verifier authenticates the documents and does a liveliness check along with establishing the location of the person virtually, unlike the traditional KYC method. Indian Bank is the first in India to welcome this transformation. They allow customers to open a bank account with them from anywhere by incorporating V-CIP into their web-based platforms. To begin with, they have implemented this strategy for customers opening a savings account only. By providing standard documents and ensuring they have video and audio facilities on their gadgets, customers will have the ease of opening an account, receiving cheques book, plastic cards, etc. without having to step out. Similarly, IDBI Bank also announced the launch of periodic KYC updates through V-CIP. With the increasing demand for ease of service, more banks are resorting to such innovations and technologies. 5 Indian companies that successfully deployed Video KYC solutions 1. Kotak 2. SBI Card 3. ICICI 4. Yes Bank 5. Capital Float Does the future seem beneficial? With India’s top banks welcoming this innovation, the question arises- Is this a beneficial proposition in the long run? 1. From a customer’s point of view, V-CIP will ensure ease while onboarding. Customers who reside in rural areas can easily associate with banks through their mobile phones, also propagating financial inclusion. 2. Interactions and customer proof can be stored in the cloud for future references without the hassle of maintaining paper files. 3. Video KYC will allow real-time customer verification using facial matching, automated data extraction and machine learning techniques which will enhance customer recognition. 4. Artificial Intelligence propagated analysis and products will allow wider and deeper penetration options. Certain touchpoints like onboarding of HNI clients will always require human intervention but to a large extent adoption of video KYC will allow financial institutions to reduce their branches thereby providing them the option to invest in a better customer experience.

India’s Finance Minister Nirmala Sitharaman presented the Union Budget 2022-23 in Parliament on the 1st of February, 2022 where she disclosed key highlights of India’s plans toward being a financially inclusive country. The focal concern has always been financial inclusion since it is directly related to the growth of an economy. The Budget 2022 speaks largely of how the Government of India plans to empower the underserved by introducing 75 digital banks in 75 districts by scheduling commercial banks to encourage digital payments in areas otherwise not equipped enough to facilitate it. Moreover, the fabrication of the Digital Rupee through blockchain technology will further the cause of financial inclusion owing to elements like widespread acceptability, a robust backup, risk containment for financial institutions, etc. With India’s anticipated growth highest among all major economies, it is time to further the growth by keeping digitization at the forefront since the goal is to complement macro-growth with micro-all-inclusive welfare. Interestingly, to implement and ensure that these commercial banks can set up and run seamlessly, 100% of 1.5 lakh post offices will come into the core banking system, a noteworthy decision by the government of India. The system of post offices is widespread in rural India and leveraging their services will benefit the cause in many ways. The intervention of the government will streamline the process, safeguard all stakeholders involved and impanel more points of service than private entities can. With an 800+ Mn rural population and a growth rate of 17.64% in the last decade, 68.84% of India’s total population reside in rural areas and empowering them through rural inclusion is the need of the hour. Farmers, laborers, women and senior citizens are the most underserved segment of the society with little or no financial assistance and literacy. Source: https://www.macrotrends.net/countries/IND/india/rural-population The Flip-side While the government has been lauded for certain aspects of the Budget 2022, a surcharge on long-term capital gains at 15% and income tax on digital assets at 30% quivers the acceptability of certain investment options like cryptocurrency. Moreover, although the government has vowed a stable and predictable tax regime, citizens are divided over the outcome. Conclusion The Budget 2022 has potential if implemented with a proper amalgamation of traditional and new age banks as the long-term goal is and must be a financial landscape that is beneficial across sections of the economy.

The year 2019 and forward witnessed an impact never anticipated or felt before globally. It sent out waves of disruption for individuals, society, businesses and the economies across the globe. Where a majority of individuals, businesses and economies grappled, a few thrived therein. A specific domain that witnessed a transformation has been the insurance industry. As economies recover from the pandemic, insurance companies will face challenges but also experience newer opportunities in the medium to long term. Source: https://www.journal.riverpublishers.com/index.php/JGEU/article/view/2890/2099 The above graphs show that Motor Insurance that falls under General Insurance dominated the market in the pre-Covid era which deflated to 29.02% post-Covid-19. The sector has seen a dip due to a halt in the purchase of new vehicles since and after Covid-19 struck. On the other hand, the health insurance sector has seen a boost in purchases since Covid-19 has changed perceptions drastically and helped people realize the importance of health insurance. Source: https://www.journal.riverpublishers.com/index.php/JGEU/article/view/2890/2099 The pandemic has also turned the tables for several leading insurance companies like Reliance General, Bajaj Allianz, Shriram General, etc. While late acceptance and adoption of changes may have been a reason for their falter, other insurance companies like ICICI Lombard, Bharti AXA and Tata AIG saw positive growth in the market. Domain-specific insurance study- General Insurance The impact on general insurance providers has varied depending upon the products it offered. While travel, event, trade credit, motor, etc. have experienced more loss than profit owing to restrictions and revised regulations, it has allowed GI insurers to analyze and understand the change in perception and devise customer-centric offerings that have completely digitized their platform and journey. From a business continuity perspective, there have been large volumes of claims initiated but insurers must consider potential exclusions in government policies to assess legitimate claims. Moreover, the volatility in the overall financial market has not converted the same impact in the general insurance sector as yet. Life & Pensions With the pandemic’s impact on the overall economy around the globe, the spending power has reduced significantly since the outset of Covid-19. Life insurance has not seen the kind of increase it had anticipated owing to Covid-19 due to its coverage policies which held an age limit. Pensions on the other hand have witnessed a significant drop in interest rates thereby reduction in their market value. Health Insurance Health insurance policies have seen a mixed impact due to different coverage policies. A lot of policies do not cover basic Covid-19 treatment while many have a hard cap on the amount that can be insured along with an age limit. Moreover, the increasing trend in mutations and infections has discouraged insurers to devise plans that cover Covid-19 owing to the possibility that it may be a loss-making proposition for them in the long run. Government and private businesses are offering better rebates and credits to citizens and employees, respectively, than insurance companies. Reinsurance Reinsurers The reinsurers will be impacted the same way as insurers in terms of potential growth and risk associated with it. It may more or less differ on demographic but the larger picture will remain the same. On the Life and Pensions front, the mortality rate will determine the growth of the business whereas, on the General Insurance front, the coverage policy, government regulations and changing dynamics of ongoing events will determine the growth. Conclusion Since the outset of the pandemic, insurance companies have actively adopted a complete digital journey which has led to crucial changes in operations like data storage and management. This has compelled insurers to be more proactive and transparent while the competition and government regulations have paved the way for more customer-centric policies.

The general concept of financial technology is the adoption of products and services by companies that are fully digitized and online in the financial sector. Financial technology has evolved into a more specific, focussed and strategic role owing to its wider objective, i.e., catering to the financial needs of the underserved; the core target segment left unserved by traditional institutions. Thus, the intention to contribute to the said segment will eventually achieve the larger goal of ‘financial inclusion’. The Global Findex Database sheds light on how the adoption of financial services has increased over a period of time, across target segments in India. As of 2021, the Reserve Bank of India has announced an FI-Index for the period ending March 2021 has increased to 53.9 as against 43.4 for the period ending March 2017. Along with the introduction of innovative and digital-first products and services by upstarts, government intervention through the creation and operationalization of Fintech policies, the launch of initiatives and assistance to MSMEs has also played a critical role in financial inclusion. A brief study; Niyogin Fintech Limited By creating a sustainable ecosystem, Niyogin is ensuring a significant impact in empowering the underserved segment.   Serving the Underserved Niyogin is reaching out to the 800 Mn+ underserved segments by devising products, services and strategies to penetrate the deepest rural India. Network Effects Reaching the last mile of financially underserved segments has significant cost implications. To strategically combat this challenge, Niyogin acquired iServeU in the year 2020. To enhance its reach to the rural population, Niyogin envisaged bringing banks to rural India with the help of Kirana stores and by acquiring iServeU, the low-income segments can make transactions, enquire bank balances and avail micro-loans, etc. through their Aadhaar Card. Financial Literacy India is the second-largest country in the world with a literacy rate of 80% yet, only 24% of the said population is financially literate. The first step towards empowering the population is by providing financial literacy. By impaneling Kirana stores in rural India, Niyogin boosts financial literacy by informing and providing individuals financial assistance. With a significant boost in onboarding rural individuals, Niyogin is achieving the vision to empower through financial technology. Strategic Alliances One of the ways of lowering Customer Acquisition Cost (CAC) is by developing strategic alliances with other financial institutions to offer a digital-first and seamless product and service stack. Niyogin has allied with Chqbook, iServeU, etc to leverage the reach these partners have and offer financial assistance to a larger populace. Comprehensive Financial Services Niyogin offers small-ticket size need-based personal loans, working capital loans to MSMEs, loans against property, loans against security and wealth management to meet the financial requirements of the population. For instance, individuals can avail personal loans ranging anywhere from 20,000-2,00,000 with a flexible repayment tenure. Its comprehensive product stack ushers a significant stride in financial inclusion. Niyogin Fintech Limited; with a vision to empower India is catering to various segments with an asset-light architectural platform that leverages open source technology thereby shifting maximum benefits to its alliances, partners and customers.

The amalgamation of Finance and Technology has given birth to Fintech. Needless to say, technology is the backbone of the Fintech business. Whether product delivery, customer experience or service as a whole, technology is an intrinsic part of Fintechs. Niyogin, built differently and making a difference, offers credit modules, a wealth tech platform, rural tech, full-stack, API and SDK capable financial services infrastructure platform that powers all distribution/customer-facing businesses. Through this approach, Niyogin powers local MSMEs and other enterprise platforms to do more with their current distribution infrastructure. How is Niyogin creating value through technology? End-to-end automation Being an early-stage unique platform, Niyogin has heavily leveraged technology to create a fully automated, customer-centric platform. Its onboarding, service offering, customer experience, etc are fully digital with minimal human intervention. It allows Niyogin to serve a larger customer base giving a significant boost to its market reach without incurring additional customer acquisition costs. The Loan Origination System The loan origination system journey is a seamless and digitized process. The partnership-led model allows Niyogin to pick the right set of customers to offer financial assistance. The system automatically checks the credit scores and documents of a customer thereby limiting risk and human intervention. Operational Activities Niyogin as a platform follows a customer-centric approach where the utmost importance is given to customer journey and experience. Hence, the operational activities are followed in a manner that ensures customers are offered their services within a given TAT. For instance, loans are disbursed within 72 hours since it is logged into the system. The entire process of customer onboarding to checks to disbursal is completed within the said time frame and technology has enabled this agility in function. Scoring Mechanisms Niyogin transitioned from offering generalized credit to transaction-led credit. All the partners onboarded are on either one of the two platforms. This gives Niyogin access to their transaction data and cash flow control as partners generate income on Niyogin’s platform. This enables a better assessment of an individual’s creditworthiness as well as the ability to digitally collect information in the transaction flow. Marketing Tactics Niyogin has built an entire online communication journey wherein partners and customers are informed of its products and services digitally. By creating a planned journey that begins with contacting the unserved, Niyogin ensures a strong product/service marketing module that gives utmost priority to customer engagement. Risk Analysis and Prevention With the help of credit scores, the Niyogin platform’s algorithms analyze the risk quotient of a customer by producing a risk probability report. This report gives a complete understanding of how a customer may default and the risk capacity Niyogin can undertake for a particular client. This not only helps in decision-making but also in fraud prevention. Niyogin is driving innovation through technology and building economic infrastructure for MSMEs. Technology is the driver for its core product offering i.e., the open tech platform vision to drive financial services adoption and inclusion. There are two specific areas of investments in technology- the product capability investments and the technology platform and infrastructure. Niyogin has made significant investments in both these areas. The platform is being built with the objective and capability to offer the entire banking services stack consumable as full-stack, API and SDK depending on the partner’s technology evolution and choice. This would make Niyogin a unique tech financial services infrastructure platform that powers all distribution/customer-facing businesses. For this, Niyogin works closely with various leading technology companies across multiple domains financial institutions, payment networks, and banks. We expect technology investments to remain elevated!

A financially empowered India; a vision several Fintechs hold albeit only a handful is vigorously working towards it. Niyogin, a unique early-stage public listed company is striving to empower millions of aspiring individuals and small businesses to transform their dreams into realities through an ecosystem of products, partnerships and exceptional customer experience – all powered by technology. An amalgamation of technology with a focussed mission; Niyogin has strategically built a product and service stack that has the potential to serve a wide range of customers. Its existence is a natural extension of being a facilitator for a new and empowered tomorrow by building a leading ‘Neobank’ platform infrastructure company with the right mix of products. Niyogin has a customer-centric approach, one that is dedicated to servicing MSMEs and 800 Mn+ rural Indians through technology. It is a holistic platform that delivers solutions for credit, financial inclusion, investments and SaaS services, working in conjunction with a partner-led model that gives affordable access to millions of potential customers. The system to date has been wherein the ‘haves’ of the society dominate while the ‘have-nots’ are often exclusionary and try to make ends meet. Niyogin is devising products and services that are more inclusive and can benefit the maximum number of people. The constant and thoughtful innovation is paving the way to include the excluded. Having a socially inclusive business that is designed to deliver products and services for all, Niyogin has developed a financial platform that empowers and allows its partners to generate income and provide service/product access to customers across India. It follows a unique, one-of-its-kind partnership model that allows them to touch base with a huge market while enabling income generation and customer acquisition for the partners. Niyogin acquired Moneyfront and iServeU in the year 2019 and 2020, respectively to widen their canvas of offerings. Initially, Niyogin’s line of business included several credit modules but with the thirst to empower the society surrounding them, they acquired companies with similar goals. IServeU focuses on Rural Tech and offers a platform that aims to financially empower the 800 Mn+ rural population of India. With noteworthy services like Aadhaar Enabled Payment System, Direct Money Transfer, MicroATM, etc, Niyogin’s subsidiary, iServeU, envisages building an inclusive India. On the other hand, Moneyfront, a robo-advisory asset management platform offers financial advice to individuals and companies. With limited human intervention and affordable advisory services, Moneyfront aims at another story of building financial literacy in India. Niyogin Powering Partners Niyogin’s service layer also includes API integration and SDK integration that helps business correspondents, Kirana stores and financial intermediaries to touch base with rural and urban consumers. While the urban populace has a variety of service providers to choose from, the rural segment is often left underserved and hence, needs the most empowerment. Niyogin’s platform build is not unique in its design but also in its approach- through its partnership model, it drives income augmentation for partners while serving end customers a chance to realize their dreams with best-in-class products and services – A way to empower India!

Financial analysis is the assessment of viability, stability and long-term profitability of a business or a project. The reports are prepared using ratios and other techniques obtained from financial statements and other significant reports. Financial analysis indicates the financial health, performance and prospects of a business. With the help of historical data and projections, financial analysts prepare indicators that highlight essential financial apex. Stated are 5 main uses of financial analysis- Analysis of current position- Financial analysis helps determine the current financial position of a company. A strong financial stance means better savings, investments and prospects for a business. It does not only reflect the potential of a business at present but also builds a strong ground for the future. Analysis of financial statements- Financial statement is mainly assessed to make good investment decisions. Businesses who want to invest in other businesses analyze financial statements to ascertain SWOT and make decisions accordingly. Analysis of prospects- By evaluating a company’s income statement, balance sheet, cash flow statement, etc., financial analysts assist businesses in planning their future. Market and economic trends often help in estimating the future potential. Ratio analysis- Ratio analysis is an indicator of performance for a business in comparison to other businesses. It is an industry-hold indicator. Companies arrive at a ratio by calculating liquidity ratio, debt ratio, turnover ratio, etc. It helps business owners to align their investment, expenditure and savings strategies. Making investment decisions- Financial consultants evaluate the investment plans and strategies of a business periodically and recommend options that may prove to be more viable in the long run. By appraising the strengths and weaknesses of a given prospect, analysts arrive at ratios that must be considered. Most common ratio metrics for analysis- Balance sheet: This includes asset turnover, quick ratio, receivables turnover, days to sales, debt to assets, and equity debt. Income statement: This includes gross profit margin, operating profit margin, net profit margin, tax ratio efficiency, and interest coverage. Cash flow: This includes cash and earnings before interest, taxes, depreciation, and amortization (EBITDA). These metrics may be shown on a per-share basis. Comprehensive: This includes return on assets (ROA) and returns on equity (ROE), along with DuPont analysis. Financial analysis should establish a proper basis for comparison to determine if a business’s performance is aligned with appropriate industry benchmarks. For instance, a 10% growth for a business may sound good but if market competitors are growing at a 25% rate, the owner must re-evaluate and make liquidity changes, to begin with. With changing times and the introduction of technology, financial analysis is more technology-driven with minimal human intervention. Companies like Moneyfront offer robo-financial advisors who calculate and offer a complete company analysis at a reasonable fee structure which otherwise, was a costly affair.