Quicker, faster, safer – that’s what consumers want when it comes to financial transactions. And increasingly their preferred medium is the ubiquitous smartphone. It gives them constant access to their financial service provider, along with an ability to transact with ease and security.
The Indian smartphone market is expected to grow to over 160 million units in 2020, up from 148 million units in 2019, according to Canalys research firm. It is the largest mobile phone market globally, after China and ahead of the US.
This increased mobility has blurred the lines of customer demography, income strata and nature of fiscal transactions in the country. Today, consumers from urban and rural areas use smartphones for complex transactions with equal adeptness.
This increasing dependency on smartphones for financial transactions has resulted in an automatic customer migration to a digital financial world. It was, therefore, a no-brainer that smartphone companies chose to join the digital financial services ecosystem.
Last year, Chinese smartphone manufacturer, Xiaomi, introduced Mi Credit to offer micro finance to its users. Soon after, realme followed suit with the PaySa platform that offers personal loans, screen insurance, free credit report, savings and payments. OPPO will reportedly launch its ‘Kash’ app to offer micro-loans at flexible repayment schedules to its users.
Explaining this trend, Varun Sridhar, Lead, realme PaySa said, “India is amongst the fastest-growing financial services market with huge potential for every player. Today, the smartphone plays a pivotal role in a customer’s financial transaction. We believe we have the first mover’s advantage and with ever-changing technology platforms, we are in a great place to have a holistic view of the customer’s creditworthiness.”
Xiaomi started its financial services journey five years ago in China. Its co-founder, Hong Feng said, "Today, we have over 300 million Mi Fans in our global community. Having understood their consumption behaviour, we aim to build a stronger Mi Finance business globally," adding that he was confident of India becoming the largest market outside of China for financial solutions.
FINDING SPACE IN EVERY POCKET
Given their reach, literally, into the pockets of large swatches of India’s population, smartphone companies are better equipped to underwrite consumers whose actual risk profile is poorly captured. However, since the country is gradually ascending the digitization incline, they need to ease the on-boarding process to enhance customer experience. Fortunately, their tech-first genesis makes this relatively easier – and the attribute is especially handy while running a customer’s credit assessment.
Explaining this, Sridhar said, “Technology being at the core of realme, our devices already use advanced artificial intelligence (AI) tools. We aim to make our products and services relevant and efficient for the customer, powered by AI. Credit assessment is an ongoing journey that will get strengthened with data in the Indian ecosystem. Today, the power of India’s tech stack helps us achieve all those credit journeys that were traditional in the yesteryears to be done in an instant.”
Smartphone companies have demonstrated their ability to innovate in accordance with changing user needs in the mobility domain. Can they replicate this in the financial services domain too