[TechSparks 2020] Why fintechs must innovate constantly and quickly to help SMBs grow

Author Jim Collins in his book Good to Great outlined seven characteristics that helped companies transition from just “good” to truly “great.” In a chapter, he detailed how leveraging technology can accelerate growth, bring innovation, and serve the business better.

This holds true for every business, but particularly for small and medium-sized businesses (SMBs), the backbone of India’s economy. A 2019 Zinnov report said that approximately 50 million SMBs contribute to 40 percent of India’s GDP and provide employment to over 180 million people. The market is massive for every technology provider who wants to work with SMBs.

At TechSparks 2020, YourStory's flagship event and India's largest and most influential startup-tech conference, the business chiefs of full-stack financial solutions company Razorpay and global content delivery network, cybersecurity, and cloud service company Akamai delved into how Razorpay scaled up its technology for SMBs to use.

Fintech unicorn Razorpay made a mark in the payments industry by focusing on customer experience. The payment gateway helped merchants sign up through payment links and pages in an instant, without worrying about technology. The startup made the customer experience intuitive and increased payment options to help businesses serve their consumers better. The idea was to innovate and make money movement seamless for merchants and enable financial inclusion at scale.

Rahul Kothari, CBO of Razorpay, said, “Innovation is there at every step of the customer journey, and in our internal functions. The first innovation was getting merchants online. We made onboarding easy and ensured they could use payments instantly. We had auto KYC, and open APIs connected them to multiple payment options.”

He added that it was vital to innovate quickly and be able to see the bigger picture – something that Razorpay is doing. After figuring out payment problems, the fintech startup is now looking at money movements in the B2B industry. The next step? To help merchants manage payments with vendors, deal with money in the bank, make investments, and avail credit.

"We have launched our neo banking services and provide current account APIs to manage payments. We are also providing a few million dollars in loans to small businesses,” Rahul said.

Razorpay uses data to figure out the type of loan given to SMBs. “Our data allows us to understand the SMB better rather than just lend from balance sheets,” he explained.

The idea is to reach out and penetrate Tier II and III India. And for this growth, delivery network companies such as Akamai can help startups such as Razorpay.

Akamai, which is building an ecosystem of partnerships and innovation, has 300 points-of-presence (POPs) to enable startups to provide a good user experience.

What is a POP? Content delivery over the internet can be hampered by congestion, latency, and packet loss, which can happen at any time. This can slow down delivery by interrupting a company’s audience experience. That's when points of presence, where the startup stores and the distributing media, matter. Akamai’s content delivery network is closer to the audience and can effectively bypass common interruptions to provide a consistent, high-quality online media experience to the audience.

It enables the growth of the API world, which in turn helps personalise finance products for merchants. The backbone is an identity store of data, which Akamai manages to keep transactions secure.

Sumant Narayanan, Business Head, India, Akamai, said: “We offer API protection, BOT management, and other tools for companies to scale faster. It’s a huge topic from a cyber-attack perspective.”

He added that it was imperative to ensure safety as “we are seeing an increase in cyber-attacks since the start of COVID-19. We need to make sure there is no downtime in case of API attacks. There has been a surge in DDOS extortion campaigns.” Distributed Denial of Service or DDoS is a type of web attack that attempts to make the targeted computer resource unavailable to its genuine users.

The spread of the pandemic has led to a spurt in ecommerce and a consequent increase in digital payments. The Dussehra and Diwali sales show how Fintech has become the norm in both urban and rural India. NPCI data reveals one billion UPI transactions every month.

“The data is back in users’ hands and can be ported with consumer consent. Compliance is the future and a lot of startups and companies need to re-architect this experience. Companies that manage to find the fine balance of managing data and serving consumers better will win,” Sumant said.

TechSparks - YourStory's annual flagship event - has been India's largest and most important technology, innovation, and entrepreneurship summit for over a decade, bringing together entrepreneurs, policymakers, technologists, investors, mentors, and business leaders for stories, conversations, collaborations, and connections that matter. As TechSparks 2020 goes all virtual and global in its 11th edition, we want to thank you for the tremendous support we've received from all of you throughout our journey and give a huge shoutout to our sponsors of TechSparks 2020.