Fino Payments Bank started operations in June 2017, providing banking services to mass market customers, who are largely rural-based. In FY24, the bank facilitated 2.11 bn transactions valued at Rs3.58 trillion, registering a healthy growth in transaction volume and value over the previous year. The bank has a customer base of over 12 million and an extensive distribution network comprising over 1.8 mn merchants across the country. Such an ecosystem requires robust back-end support to facilitate the completion of various tasks with quicker TAT, accuracy and efficiency without compromising on quality and compliance.
BACK OFFICE UPSHIFTS
Says Rishi Gupta, MD & CEO: “During the last 2 years, Fino Payments Bank embarked on a project to automate all key back-office processes to streamline operations aimed at improving quality of services, response time, systemic controls, adherence to the regulatory guidelines.”
End to end account opening: The bank deployed Window Service (WS) to automate some of the most routine and repetitive computer-based tasks and processes pertaining to verification of account opening documents. With 90% of the checking done by WS, the time taken to approve or reject each case reduced drastically thereby improving the TAT, productivity and efficiency of each team member.
Transaction reconciliation: The bank automated 3-way reconciliation for various banking products (IMPS, UPI, AEPS, NFS, MATM, and RuPay). Automation of the reconciliation process led to handling 10X volume, reducing manual efforts and increasing efficiency.
Merchant / agent onboarding (BC Banking): Automating agent onboarding process reduced manual intervention and improved onboarding TAT and controls.
Merchant unblocking via Aadhaar finger print: Automating merchant unblocking process using Aadhaar fingerprint authentication, ensured secure and efficient unblocking.
Chargeback-processing: The bank automated chargeback representment process that facilitated faster response time and reduced risk. It also automated emails for partner P2M chargeback-intimation.
Beneficiary name validation: The bank automated validation of beneficiary names for inward transactions in NEFT and RTGS, which led to better control in payment processing and strengthened adherence to compliance. Other processes that were automated include commission pay out for agents / merchants and return information processing for BC agents. All these automation initiatives reduced manual efforts, enhanced efficiency, accuracy, and speed in various banking processes.
BRAND UPSHIFTS
“As a bank servicing the under-served and un-served segments largely residing in remote rural areas, Fino Payments Bank’s value proposition and core promise to the customer needed to be clear and simple. After all, it made banking simple, convenient and hassle-free, says Rishi. Over the years these attributes are clearly and consistently communicated through messages that are strongly identified with brand Fino.
Fikar Not: No need to worry when you bank with Fino. Transactions are safe & secure.
Fino Hamesha: Open from morning till late evening, banking points are always available for customers to transact at their convenience.
Gully Gully Fino: It is present in customers’ neighbourhood through an extensive merchant network of over 1.8 million points.
Har Din Fino: The bank facilitates everyday small value transactions, both on physical and digital platforms.
Celebrity and Sports Associations: Collaborations with actor Pankaj Tripathi and the Rajasthan Royals cricket team elevated Fino’s brand status and helped engage with a young digitally savvy customer segment. The associations led to a 50% reduction in acquisition costs, a 150% increase in monthly active users of the FinoPay app, and a 15% rise in app conversion rates.
Digital Marketing and Channels: Investing in digital channels, especially WhatsApp, enhanced engagement level with merchants, positively impacting both top and mid-funnel journeys. Digital marketing efforts not only expanded Fino’s reach but also reduced costs by over 50%. The bank saw substantial growth in website traffic, mobile app installations and engagement.
DIVERSIFICATION INITIATIVES
Since inception in 2017, Fino Payments Bank has been continuously exploring new opportunities for sustainable business growth. The strategic shift from branch led to asset light merchant model in the very first year of operation allowed Fino to create an extensive distribution network that continuous to pay rich dividends. Many initiatives have been taken since then. During the last 2 years diversification efforts have been at the forefront of Fino’s business model.
Moving from Transaction to Ownership business: As a transactions-led bank, initially the bank was focused on garnering more foot falls or walk-in customers of other banks at its merchant points i.e. distribution network to facilitate money transfer, cash withdrawal etc. It realized, if the walk-in customers become its own customers, they can be offered more products and services by building trust. After gaining a hold on transactions, Fino Bank moved to ownership of customers as part of its Transaction, Acquisition and Monetization strategy. This approach has been instrumental in Fino adding 3+ million new customers every year, taking the total customer base to 12.6 mn as on 30 September 2024.
Cash Management Services (CMS): Business entities operating in rural areas where cash usage is predominant, need efficient cash management services. Collection agents of respective partners can deposit the cash collected from customers at Fino’s points located in the vicinity. The bank helps digitize the cash by remitting it to the client’s bank account thereby reducing the risks associated with cash. This started off with NBFC and MFI clients, but now Fino has a diversified set of clients from across industry sectors such e-commerce, logistics, cab aggregators and other retail partners. Currently NBFCs & MFIs constitute ~55% as compared to ~90% two years ago.
Building UPI Stack: Till March 2022, Fino Bank was focusing on its physical channel for growth, with digital contribution being negligible. With digital presenting a huge opportunity, it invested heavily on technology infrastructure, particularly UPI capabilities, to cater to the growing aspirations of customers. “As on 30 September 2024, digital business contributed nearly 17% to the total Q2 FY25 revenue of Rs4.55 bn, demonstrating the bank’s pivot from physical to digital,” avers Rishi.
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