Mindtree evaluating fintech partnerships for digital payments

Mindtree has been at the forefront of digitisation. Nearly 40 percent of company's revenues are classified as revenues coming in from digital.Speaking to CNBC-TV18, MD & CEO Rostow Ravanan said, going digital has been a phenomenal opportunity for the company. He said in India digitisation is evolving very rapidly given the policy changes and some of the newer technology being deployed like unified payment interface (UPI). Government is encouraging the push towards digital and Ravanan says these technologies will get deployed very rapidly. Large-scale adoption will also be rapid.Even in markets like India and within areas like financial services, the potential for digital is much more than what people are currently planning for, he said.Mindtree is also evaluating partnerships with few interesting players in the financial technology segment. It can be a few billions of dollars worth of opportunity in India across any fronts, said Ravanan.Below is the transcript of Rostow Ravanan’s interview to Reema Tendulkar and Prashant Nair on CNBC-TV18.Reema: Mindtree has been at the forefront of digitisation. Nearly 40 percent of your revenues are classified as revenues coming in from digital. What is the kind of opportunity? Off late, we have seen a lot of transactions taking place electronically. Is that a space that could benefit Mindtree and if you could throw some colour on Mindtree’s digital portfolio and outlook going ahead?A: Digital has been a phenomenal opportunity for us. We diverted to digital about 3-4 years ago and have delivered some great customer services across our four verticals on digital and for a very large as well as medium sized organisations in very different industries. It has made a massive impact to their revenue, their ability to collaborate internally and their ability to understand their customers and create uniquely personalised offerings in their business for their customers, etc. So, across the range of different types of services, we made a lot of impact to our clients on digital.Coming to your question on the opportunity in India. I think it is evolving very rapidly given the policy changes and some of the newer technology being deployed in India like unified payment interface (UPI). We do not have a play in them at the moment, but we are watching it fairly closely and trying to see what is the best way for us to be able to create an opportunity for our clients given some of the trends in India.Reema: So, no digital revenue from the Indian government or any Indian client as of now?A: We do not do any work with government sector at the moment in India, but private sector, we definitely have a fair amount of interesting case studies on digital plus some very interesting early-stage conversations in the pipeline with some of our customers as well. Overall on digital as a trend, specifically with respect to payments, we have not done anything at the moment, but we are watching some of the opportunities there very closely.Prashant: I wanted to ask you whether a lot of what we are hearing on the big opportunities that companies will have in front of them because of the push towards digital. How of that is reality and how much of it is hype because while the infrastructure is there, it is about getting people to use the infrastructure. But that will not mean more business for companies. Would you agree with that?A: Our own experience has been almost the opposite. The reality of digital is actually many times more than the perception as of today across all the sectors, whether it is financial services, whether it is manufacturing, automotive, travel. Across all industries, the reality and the impact of digital, whether for positive for business or negative for business is actually likely to be many times more than what people understand of it at the moment. And that is our own experience with our clients as well.Prashant: I think you are referring to the broad phenomenon of companies embracing digital technologies. My question to your right now is limited to financial technology (Fintech), modes of payment which the government is now trying to push people towards, transact electronically and things like that. Move away from cash. That is essentially my question to you at this point.A: So, even in markets like India and even in areas like financial services, the potential for digital is much more than what people are currently planning for. Even on things like payments, the real disruption will be many times more than what people are looking at. And companies and enterprises are underestimating the speed at which these will get adopted, these will get deployed and these will get used to the extent that within a few days after the demonetisation, street vendors at local markets started accepting digital payments, auto rickshaws started accepting digital payments. The important point to keep in mind is digital technologies will get deployed very rapidly. So, you will reach the tipping point and largescale adoption very rapidly. I am actually surprised on the low penetration, low seriousness given to this whole trend by many of the established players at the moment. I see only very few organisations, even in markets like India actually gearing up and preparing for and leveraging some of these technologies.Reema: Any estimates of how large this Fintech opportunity is in India and secondly, is Mindtree looking at tapping into this opportunity?A: We are evaluating partnerships with some very interesting players in the segment. Obviously, we are technology provider so we do not do the actual business process of accepting deposits or making payments or lending money, etc. at Mindtree level, but we are seeing some very interesting partnership opportunities of people with solutions and therefore taking it and rolling it across a broader segment of customers. It can be a few billions of dollars worth of opportunity in India across any fronts. Cross-selling products, bringing the unbanked into the banking network, making transactions more friction free and therefore, increasing gross domestic product (GDP) for the country. Across many dimensions, this will be a kind of very large impact over the next few years.