It has been a little less than two months since the launch of Fino Payments Bank and Rishi Gupta, the bank’s Managing Director and CEO, sounds pleased with the way the transition has turned out. Just back from a trip to the interior parts of Bihar where Fino has a presence, Rishi says he is encouraged by the increase in banking habits in these un-banked parts of rural India.
This is partly due to the government push for Jan Dhan accounts, quick adoption of GST by merchants and, ironically, the fear in some quarters that there could be another round of demonetisation, he adds. That’s encouraging more customers to keep cash in the bank and providing a good stimulus for fledgling payments bank such as Fino.
Rishi said that his focus would be to ensure that customers open more of their primary accounts with Fino, rather than treat it as a secondary banking account. The customer segment that Fino is targeting is typically a person with an income of between ₹10,000 and ₹40,000 a month and cover low-income households and workers such as drivers, peons and shopkeepers.
Such customers value speed of service since they would lose income if they spent much time in bank branches. The quickness in opening accounts (in just four minutes), on-boarding them, and providing a debit card across the counter are proving to be a hit with customers, Rishi said.
Realising that customers can sometimes forget their long account number or Aadhaar number, there is provision for them to identify themselves by their mobile phone number and then transact after due authentication.
A recent survey of customer perceptions revealed that customers want proximity of service, are often intimidated by the documentation involved in the banking process, and desire to be treated with respect. Rishi said that all of Fino’s activities were being designed to address these three fundamental concerns of customers.
Currently, about fifty lakh customers are being served by Fino Payments Bank through remittances, lending products, bank accounts, bill payments and recharge. Rishi said that the bank aims to take this to five crore transacting customers in the next five years.
Not all of them may be ‘owned’ by the bank and some of them may be retained as transacting customers from whom it will collect a fee while it will also try and build a banking relationship with others.
Asked about cost-savings because of digital focus, Rishi said that there were initial costs which were high while setting up operations but the benefits would soon flow.
He pointed out that the bank operated branches with an average size of 300 square feet as against about 1,500 sq ft required by commercial banks. Salary costs were also lower, he pointed out.
For example, a branch manager would earn about ₹20,000 a month at Fino while it could be higher elsewhere. The flat hierarchy and the absence of legacy systems would help keep costs under control, he said. Ninety per cent of the staff are on the field and only 10 per cent in the corporate office handling administration and operations, he added.