Towards a more mature innovation ecosystem

Author: Vivek Belgavi, Partner, India FinTech Leader, PwC India

The FinTech revolution, although three years old, continues to usher in exciting and innovative solutions using next generation technology. One of the key developments has been active and extensive collaboration between incumbent banks and FinTechs in order to embed innovative solutions into mainstream banking post hackathons and demo day events. Yes Bank has been at the forefront of this trend. Let’s look at its innovation journey and how PwC collaborated with the bank to drive various innovation themes.

In the course of this journey, Yes Bank launched the second iteration of its Yes FinTech Accelerator Programme and the shortlisted applicants were on-boarded in January 2018. PwC has been associated with Yes Bank as a programme partner. As part of the core team, PwC has been actively working with various stakeholders to convert exciting solutions into strategic use cases and working proofs of concept for the bank. We are involved in end-to-end programme management—right from identifying pain points and business opportunities for the bank and defining shortlisting and success criteria to managing projects to achieve successful proofs of concept with the bank and FinTechs. Together with Yes Bank, we have evaluated 450+ start-ups from across the world and are currently working with seven of them to drive various innovation themes.

Out of the various innovation themes guiding the programme, this article will focus on our efforts to develop key enablers in two areas:

  • Boosting India’s small and medium-sized enterprises (SMEs)
  • Shift to intuitive banking

Boosting India’s SMEs

SMEs have traditionally struggled with attractive credit facilities due to an insufficient number of data points for credit risk assessment. PwC helped Yes Bank to scout and shortlist various new-age FinTechs to automate risk assessment. One of the Fintech firms offers a comprehensive risk assessment framework comprising more than 40 data points, which enables banks to disburse loans based on data and not on collateral. After integrating the solution into mainstream banking, Yes Bank will be able to assess credit seekers more accurately and rely not just on traditional metrics. Moreover, since the offering is available on the cloud, scaling up the solution will be easy.

The Government of India has been actively implementing various initiatives, the Goods and Services Tax (GST) being one of them. The start-up has made an attempt to use the GST filing data of a merchant to assess credit risk and make lending decisions. The strength of this method is that GST-enabled invoices are generated at regular frequencies, thus creating sufficient data points generated to feed the risk engine. Through this feature, Yes Bank aims to become the first in the industry to actively consume GST data for credit decision making.

On the flip side, non-performing assets (NPA) are becoming an increasing cause of concern across business segments. Issues in smooth loan recovery may discourage banks from lending to specific sectors, with the SME segment bearing the brunt. The same FinTech offers a cloud-based solution of ‘asset/skip tracing’. This involves developing advanced analytical solutions by leveraging credible government databases and secondary sources for fraud and NPA prevention and generating early warning signals (EWS). The solution will help Yes Bank to determine stress in loan repayments at an early stage and take the necessary course of action.

Thus, the overall aim is to create a better risk profile and offer sound risk-assessed credit facilities to SME sector.

Shift to intuitive banking

Over the last 2–3 years, the Government of India has laid emphasis on digitising various transactions across customer segments. Digitisation helps to rationalise transaction costs, and, coupled with credit facilities, aids in the all-round development of different industry sectors. The Yes Bank programme aims to contribute to the government’s digitisation efforts. One start-up that is part of this cohort has introduced artificial intelligence (AI) driven chatbots/voicebots in the bank’s mobile app to create a new-age platform for clients. After the go live, the bank’s clients will have a fully functional voicebot through which they can instantly get customer support on various transactional services. The bot can also advise customers on various savings, lending and investment products. This would help Yes Bank engage more closely with their customers and offer customised features to them. Natural language processing (NLP) capabilities will boost intuitive conversations with the client base and help in quicker and satisfactory support.

PwC is assisting Yes Bank in creating an ecosystem of innovative solutions. PwC, along with the bank’s key decision makers, is working actively with FinTechs to help them achieve the relevant success metrics defined for each of them and to prepare them to showcase their products and solutions on the demo day.

PwC regularly partners with clients, FinTechs and various stakeholders, providing them end-to-end support on their innovation journeys and bringing about real transformation.

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