Fino Payments Bank is actively pursuing to capitalize on the opportunities arising out of increasing digitalization of India’s economy. The first 5 years of the bank’s journey since inception in 2017 (Fino1.0) were focused on creating physical infrastructure. Today, it has one of the largest financial services distribution networks in the country. Major Ashish Ahuja, COO, updates: “We have around 1.4 million digitally enabled points covering 94% of the districts, predominantly in rural areas. These points do over 360 million transactions annually, providing paperless, Aadhaar-based eKYC / video KYC and assisted digital services. As customer aspirations grow, our digital initiatives complement Fino’s extensive phygital network in providing customers’ choice of platform to access banking & transact.”
D2C Strategy
For Fino Bank, fully digital means engaging with a new set of digitally savvy and aspirational customers, the young millennials. For this, in addition to expanding its phygital network, the bank is also strengthening its direct to customer (D2C) channel, mobile banking app ‘FinoPay’. The most significant initiative in Fino2.0 journey is the digital savings account service launched in December 2022, which is getting encouraging response. Fino’s D2C strategy aims to acquire tech savvy young customers, provide personalized services and cross sell to make Fino Bank a part of their everyday banking. FinoPay app offers money transfer, bill payments, partner offerings such as insurance, digital gold, loans and sweep account facility.
Ahuja explains: “The improved FinoPay app offers over 60 features. Going forward we will include more offerings such as mutual funds, FDs, etc. The newly launched digital savings account has already seen more than 50,000 new customers being on-boarded through FinoPay app. On an average more than 0.35 million unique customers download FinoPay app every month and transact.”
UPI Usage
Fino Bank’s digital foray is in line with its objective of offering multi-product, multi-platform and multi-location services to its customers. Riding on rising UPI usage, digital’s contribution has increased from 10% of total throughput of Rs1.87 trillion in FY22 to 20% of the total Rs2.55 trillion throughput in FY23. Fuel, gas, utility services, grocery, travel etc, are the services used to make payments.
In terms of volume, UPI transactions on Fino platform accounted for 1% of the total over 8 billion UPI transactions in the month of March 2023. Ahuja elaborates: “Interestingly, of the 7.5 mn bank CASA base, more than 30% are active on digital payments, especially using UPI to make small payments. Remarkably, more than 45% of the digitally active customers are women!”
In terms of geographic presence, North, West and Central India states are traditionally strong for Fino. The bank is now focusing on expanding footprint in East, North-East and South. Most of the customers are low-income households, small business owners, farming community, industrial workers, etc, with male and female customers accounting for 65% and 35% respectively of the total CASA base. Ahuja adds: “Interestingly, majority of the digital account customers are from Fino’s traditional geographies. This indicates customers’ gradually adoption to digital banking, courtesy smartphone penetration and aspirations of the younger tech-savvy generation.
Fraud Analytics
As a transaction focused bank, Fino Bank has utilized machine learning capabilities in areas of fraud analytics. To safeguard business critical data and sensitive customer transaction information, the bank has deployed robust data protection and cyber security tools with round the clock monitoring mechanism. Further, the bank uses analytics to improve cross sell opportunities. Ahuja points out: “We have built an in-house ML model to identify a pattern of UPI transactions that helped 75% reduction in false positives, i.e. CASA customers who were earlier wrongly identified as fraud, thus also improving CX. The use of text analytics in particular has helped us tap and convert most of the potential leads into business opportunity.”
Tech Stack, CX
Fino Bank is in early stages of defining the goals for the digital journey but prima facie, its objectives are to have a smooth online banking experience, self-customer on-boarding journey, more fintech partnerships and an exciting rewards journey for customers. Customer acquisition is the bank’s key focus area and it has built a base of over 7.5 million customers as of March 2023. Ahuja reveals: “In totality, our target of digital transformation is to improve business functions, ensure cost effectiveness, better performance, improve CX and increase profits. Going forward, our focus will be on strengthening tech stack to meet our customer acquisition targets; to ensure more customers use digital platforms to open new accounts, transact and be financially secure, increase profitability and create value for all stakeholders.”
