How this tech startup is learning from its Africa experience to digitise small banks in India

Banking technology startup Techurate aims to digitise small-sized banks through budget-friendly solutions that enable financial inclusion.
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For the last six years, Techurate has been working with financial institutions in Africa to provide them with digital banking infrastructure. The Bengaluru-headquartered banking digital banking technology startup was founded by Harshavardhan Pusala in 2015 with a focus on the African market where it provides an array of solutions with the larger goal of enabling financial inclusion.

The experience in Africa has given the tech startup the confidence to play a similar role in the Indian market which has a considerable proportion of the unbanked population waiting to enter the organised economy.

Techurate now wants to reach out to financial institutions such as cooperative banks and microfinance institutions (MFIs) to onboard them to the digital platform. Harshavardhan, CEO and Managing Director of Techurate tells YourStory that this category of financial institutions generally have a limited scope of operation in terms of customers or geographical reach, and may not have the budget to take up such technological transformation.

“This is an untested market and nobody wants to serve them but we believe that Techurate will be able to provide the right solutions to these kinds of financial institutions,” he adds.

According to reports, around 190 million adults in India still do not have a bank account. Traditionally, the unbanked have largely been brought into the banking umbrella by institutions such as cooperative banks and MFIs.

Sendhil Kumar, COO of Techurate, says, “These financial institutions have huge digital aspirations but do not know how to get there.”

They face various challenges ranging from budget constraints, outdated technology, and the difficulty in finding a reliable technology partner. Harshavardhan also notes that when it comes to capex by banks towards technological upgradation, around 50 percent of the budget just goes into preparation.

“We have the experience of interacting with such financial institutions and can have long-term relationships,” says Harshavardhan.

Learnings from Africa

The core team at Techurate gained experience as banking technology professionals for nearly two decades and had a strong connection with the African market. So, they decided to step into that region first.

Techurate provides a range of digital banking solutions which have a direct impact on the customers when it comes to quick opening of a bank account using just an image or faster disbursal of loans etc.

“If someone wants to really reach out to the unbanked population, they have to simplify the onboarding process for which we have an AI-based solution,” says Harshavardhan.

Today, Techurate’s technology platform has around 12 modules that provide both web and mobile-based banking solutions.

Making an India model

On the similar lines of what they did in Africa, Techurate wants to replicate their learnings in the Indian market to bring in a complete digital model. Under this model, when a potential customer is onboarded, the bank also provides a quick loan but it has to be spent within the merchant network of the financial institution.

The CEO of Techurate believes such a model creates a win-win situation for everybody – banks, customers and merchants. Banks can lend at competitive rates which play to the advantage of customers who get to spend with the merchants who are part of the network. Banks can give out these loans at zero interest rates and earn their revenues through commission from the merchants.

“If this is done well, then it can possibly be the biggest transformational force,” opines Harshavardhan.

Techurate has already partnered with Nagpur Nagrik Sahakari Bank, a 50-year-old financial institution, to bring about its digital transformation. Besides, it is in talks with other financial institutions of similar profile.

“We will be aiming at bringing the entire spectrum of core and digital banking on the tap at affordable prices,” says Harshavardhan.

According to a report by IBEF, as of November 3, 2021 the number of bank accounts opened under the government’s flagship financial inclusion drive — Pradhan Mantri Jan Dhan Yojana reached 43.81 crore which was a three-fold growth when compared to March 2015.

This startup’s business model allows it to get into licensing or subscription-based agreements with its customers. The biggest challenge that Techurate faces in India are the ability to earn the trust of small financial institutions and also provide solutions that are cost-effective. This environment is similar to the African market.

Techurate is a bootstrapped venture with the promoters bringing in the initial funding. The CEO says the company has always been profitable and made profits from the first year of product development.

At present, Techurate has around 24 customers across 15 countries – largely in Africa, with some in Latin America and the Middle East as well. The banking technology market is quite a crowded space with the likes of Infosys, Wipro, TCS, Temenos, Fiserv, Zeta etc.

The startup believes it is at an inflection point for rapid scale-up, with its foray into the Indian market. It has been recording over 50 percent annual growth in terms of revenue and remains profitable. Indications are that Techurate is likely to cross three-digit numbers in terms of revenue in the next fiscal.

“Our learnings in Africa will help us get deeper into the India market,” Harshavardhan signs off.

Edited by Kanishk Singh

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