We Aim To Create 1 Mn Jobs By 2025: Seema Prem, FIA Global

What vision you had in mind when establishing FIA Global in 2012?

FIA Global is an impact FinTech. So we are redefining the way financial services are distributed to low income customers in South Asia. To put it simply, we try and make financial inclusion simple for people, especially for people from poorly educated settings, and low socio-economic background. So our focus is largely the base of the pyramid. I was a student in MIT and was working on a project there. And something struck me, which is that half the world is unbanked. So, that got me thinking how to solve this problem of financial exclusion? Also, I realised that world over, one of the largest section of unbanked people belong to India. So, that gave me the encouragement to come back to India and start FIA global in 2012 and we were able to break even in year one, but that was largely because we got some grant support from World Bank and the Millennium Alliance consortium. Currently, we have 30,000 banking outlets, and we serve around 75 million customers, across 730 districts, out of 766 districts in the country, including all states and union territories. 

How do you make people in remote and rural areas aware of FinTech?

When we set up this platform, we realised it actually works as a neobank but neobank is a fully digital platform. And if you want to reach this target segment, which is where the opportunity is, you can't do it on a fully digital platform. So, we needed to have an assisted new banking model, which means we have a network of banking agents across the country, who we use to advise customers on the products that they need. So once you have a basic bank account, which comes under the champion umbrella, then it's about educating them on loan needs, their wealth management requirements, and on their financial security requirements, which are insurance products. 

I understand in this massive era of digital transformation, everybody's talking about digital, but one doesn't realise the cost of digitalisation - it tends to exclude people. Secondly, the fact digital also comes at a cost like a smart phone and internet connectivity, which a lot of rural customers may not be able to afford. Also, a lot of the products that you're selling are complex push products. So, whether its wealth management or even insurance, you need to educate customers on that. And which is where our banking agents play a major role. Our agents act as financial advisors, who guides customers on the right products. 

What are the main challenges you have encountered so far in catering to the rural market?

Yes, the journey has been challenging. You have to have a platform, which is actually custom-designed for the needs of the customer. Now, they are not saving in a debt fund, they are saving for their life goals. So, once you realise that at the product stage itself, you have to work with your partners to design products, which actually meets the needs of the customer through technology and product design. Here, we can never discount the element of touch from this. People in rural market trust their banker and their banking agent, and they are the best people to guide them on their journey towards financial security and resilience. 

The advantage we have is we already have a base of 75 million customers who come for doing regular transactions. So, that keeps the cost of customer acquisition low. And we are able to leverage on our base of customers that we have.

Can you provide insights into any of your region specific projects?

One of the projects that we’re working on - where we have support by the World Bank - is deepening financial inclusion in (ASEAN). And they have a very specific focus on the farmer producer organizations with specific emphasis on fisheries. So here we are looking at providing an entire bouquet of products, including opening of bank account, making them comfortable with doing transactions, and giving them loans; it leads to the doubling of farmers’ income. Then provide them the entire suite of wealth management and insurance products. So that is an area that we are currently focusing on, working with farmer producer or organisation, especially the fisheries. 

What role do you think is AI based risk analytics playing in ensuring secure and reliable financial services for individuals, especially in rural and remote regions? 

So, I can give you an example here like we deal with tiny transactions. Customers deposit money, withdraw money, and transfer money. So, there's a huge reliability and trust on that agent who's actually conducting these transactions, right? Now, in this entire model, the agent takes complete liability for the cash, which he handles. What happens is that because of the trust, it can sometime lead to abuse, which means that the customer comes to deposit money, the agent says he has deposited the money, but he has actually not done it. And he does not give a receipt saying that, “Oh, the printer is not working. Come tomorrow.” So the biggest challenge is how to ensure that the agent does not commit fraud and minimise fraud. And that's where investment in artificial intelligence (AI) actually pays off.  So, with the help of AI, we look at the pattern of transactions which are coming in. For example, if suddenly the transactions of an agent come down by 20 to 40 per cent, it can either mean he is not working or he's not depositing the money into the customer's account. So pattern detection models. The other is to look at whether the agent is actually splitting transactions and doing wrong grouping of transactions, which you can do by analyzing transactions. We've been able to bring down such cases from 18% to about 2.16% with the help of AI. 

How do you envision expanding your digital banking outreach to other countries?

We provide outward remittance services to Nepal, and we've recently started in Bangladesh. We have just started opening bank accounts in Bangladesh, so the numbers are not significant right now. South Asia is definitely a predominant market for us at the moment. 

How does your company incorporate corporate social responsibility into its digital banking initiatives, especially in reaching and serving the masses in remote areas?

As an organization, we have goals where social impact is one of the key goals. My goal is to have more than 25 per cent of my agents to be women banking agents. About 18 per cent of our agents were women during pandemic but we saw a reduction in that workforce. 

Our goals are clearly laid out on the wall in our conference room. It says by 2025, 1 million jobs come through lending to the credit invisible, USD 10 billion in savings of people and 100 million customers. We are at about 75 million customers right now. And likewise, we want to ensure that we touch 1 million jobs by providing loans to micro enterprises as well as to individuals, and support them. To run the business, they will hire individuals or employees under them, which will lead to about 1 million jobs.