The rapid digitisation of the Indian banking sector has put fintech services companies in a position of advantage vis-à-vis their global peers. This is encouraging many such technology enterprises to explore business opportunities outside India, especially across the Middle East, South East Asia and Africa.
Industry insiders pointed out that many banks in Europe and North America are also looking to forge deals with Indian banking technology companies in an attempt to match the technology innovations brought in by their Asian peers.
Digital payment players such as Financial Software and Systems (FSS), AGS Transact Technologies, Pine Labs and others are taking instant settlements, digital payments, and advancements in merchant payments to newer geographies. Again, Perfios, i-exceed and others are helping global banks digitise their banking operations, smoothen lending processes and acquire customers online.
The Long March
Indian payment companies have been leading this march outside the nation’s borders. Unified Payments Interface (UPI) and RuPay, two of India’s flagship payment products, have already gone to Singapore and other nations. Pine Labs, one of India’s largest PoS companies, recently partnered with South East Asian fintech platform Fave to expand its business base in that geography.
Another payment entity, Chennai headquartered FSS, is looking to expand its presence in the Middle East and Africa. The company has a presence in every Gulf Cooperation Council country and is venturing into Africa by using South Africa as the gateway.
“In terms of revenue, our target is that we should get 60 percent from India and 40 percent from other countries. That will help stabilise our revenue channels all the year round,” said Nagaraj Mylandla, Chairman, FSS.
Mylandla added that the aim of the top management is to make FSS a global company and reduce the current share of India business from 80 percent to around 60 percent.
“We have invested in creating our own IP and 90 percent of our products are our own. After Infosys and TCS our aim is to become the next big software exporter in the banking domain,” he added.
Big business opportunity
i-exceed, another Bengaluru-based technology company that offers digital banking services, has cast its eyes on the global stage too. The company has set up offices and hired staff in Dubai, the US, and the UK. It has deployed customer engagement, business development and sales teams in countries such as Malaysia and Singapore as well.
“Asian banks have leapfrogged in terms of technology, European banks are still lagging behind, hence we have ample business opportunities in these economies,” said Sundar Sundararajan, executive director at i-exceed.
The technology layers they implement here can be replicated in those geographies.
For Mumbai-based AGS Transact Technologies, the movement outside India started back in 2014 through the acquisition of Singapore-headquartered Novus Technologies. This deal has taken AGS to geographies such as the Philippines, Cambodia, Indonesia and Sri Lanka. Novus is leading financial inclusion programmes in the Philippines, and creating self-service infrastructure in Cambodia and Sri Lanka.
AGS, which offers integrated payment processing for fuel outlets and metro railways in India, has taken similar solutions to other nations, including Sri Lanka and Bhutan. In Bhutan, AGS has helped automate the country’s first fuel retail outlet for Bharat Petroleum Corporation. The company is also in conversations with global fuel retailers and B2B fuel consumers for automated payment solutions and customer identification in the Middle East and North Africa.
Services on offer
Industry insiders pointed out that in terms of digital banking services across payments, instant settlements, core banking solutions and digitised customer onboarding, massive innovation has taken place in India. Now, Indian technology companies have the advantage of taking technology products built on these railroads to countries where there are still a lot of manual systems.
Sundararajan pointed out that video KYC-based onboarding for new bank accounts, followed by authentication through Aadhaar, has made the Indian banking ecosystem among one of the most technology savvy industries in the world. While other countries might not have Aadhaar, they have their own verification systems. Players such as i-exceed are looking to leverage such solutions to deploy their onboarding services at banks.
“Some banks in Europe, the Middle East and Africa have already signed up to use our solutions,” he added. “We are helping them onboard new customers within minutes from days previously.”
First fintechs, then banks
Perfios, another Bengaluru-based startup, is also pushing its business outside India. The company has hired ex-Standard Chartered Bank top executive Pramod Veturi as the chief executive officer for its international business. Veturi, based out of Kuala Lumpur, drives its business globally.
“We have 30 Clients across the ASEAN, Middle East and African regions and have many more business partnerships in the pipeline,” said Veturi.
As in India, the earliest adopters of technology in financial services were fintechs and startups expanding into the financial services domain. While companies such as GoJek and Grab have been the early adopters, many banks in the region are now waking up to the possibility of working with technology companies to simplify and digitise these processes.
“Most of the banks in the South East Asian markets are waking up to these possibilities and they are still playing catch-up with India,” he said.
Being based in India, the approach that Perfios is taking is to build and test solutions in India and then take them abroad for adoption by a wider customer base. Interestingly, geographies such as South East Asia give access to a bunch of markets in one go; for instance deployment of a solution in, say, Singapore, can eventually open market opportunities in Malaysia and Thailand.
Most industry executives agree that the neighbouring regions are still lagging behind in terms of deployment of technology in almost every banking service, which means there are massive greenfield opportunities for Indian companies.
Another important aspect of business is the opportunity to make higher revenue from players outside India. Perfios, for instance, which gets 10 percent of its overall revenue from these markets, is looking to push up the share from its global business to around 50 percent. Veturi believes that deals are more profitable in those markets and, unlike India, the market there is more diverse.
“We are kind of evangelising these solutions in those countries, which is our biggest advantage,” he said.