Tech is an enabler for banks to make financial products available to all: Perfios CEO

For Sabyasachi Goswami, CEO of Perfios, it doesn't matter if a consumer goes to a traditional bank, a fintech institution or non-banking financial companies (NBFCs), the end goal of banking is to make financial products available to all.

At TechSparks 2024 Mumbai, the Perfios chief asserted that banks in India will continue to operate in different forms or shapes as technology is blurring the line between banks and fintechs.

“There will be newer technologies which will be used as an enabler to make financial products available to the last person who is not able to use the financial products in the way that they would want it to be used,” he said.

He highlighted that many people living in Tier III and IV towns and villages don't prefer to engage with banks and would rather approach local moneylenders or their friends when they need to borrow.

"From that perspective, I think technology can play a great part and that is what banks are looking at—how they can use technology to make that possible at lower [costs] and in efficient ways,” he said in a fireside chat with Shradha Sharma, Founder and CEO of YourStory.

Goswami noted that it is not possible to scale traditional mechanisms of banking without the costs ballooning. This is why many banks are using technologies—not to disrupt their core operations but to create newer segments and customers whom they haven't been able to service.

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Focus on growth

One of the main factors that helped Perfios scale and capture market share is the belief that its products need to be segment-, industry- and geography-agnostic, Goswami said.

The business-to-business (B2B) company—focused on offering fintech solutions—turned profitable in FY23, posting a net profit of Rs 7.8 crore against a loss of Rs 16.8 crore in the previous financial year.

At TechSparks Delhi last year, Goswami revealed that the company planned to go public in the next 18-24 years. He now highlighted that any potential listing plans will depend on whether the company is able to hit its goals of sustainable growth and profitability.

“As a company, our focus has always been on a few things. To constantly build innovative, disruptive products. Second, how do we grow our business on different things—one is product strategy, second is the geography that we want to expand ourselves to, and third, are there adjacent areas where we can build something where a lot of problems remain unsolved,” he explained.

The Perfios CEO added that an IPO (initial public offering) could be a natural progression of the company and that it was not running after a public listing.

The value of trust

Talking in detail about what has helped Perfios build a profitable and sustainable business, Goswami said that “the first factor to build trust is actions speak better than words.”

“The products that you build—starting from the design phase to the delivery phase and thereafter living to it—has to have the security component built-in,” he said, adding that he has never believed in “growth at any cost”.

Emphasising that one should not get carried away just by the allure of technology, the Perfios chief said that it is crucial to understand the needs of customers and have the required domain expertise. This will help build a strong fintech company, whether it is a B2B or a B2C business.

The fintech industry has seen several twists and turns in terms of the regulatory framework and occasional raps by the Reserve Bank of India over the last few years. However, Goswami said that regulations have always been around. 

“While the regulations and the regulator have given a free hand… it’s like a parent giving a free hand to the kid but when you see that the kid is choosing the wrong direction, you need to course correct and bring your kid to the right side. That’s what a regulator’s task is,” he explained.

He added that a regulator’s first task is to work for the benefit of Indians. “I don’t think anything is being changed drastically. It is just being reinforced again,” he commented. 

He also lauded Finance Minister Nirmala Sitharaman’s recommendation of monthly meetings between the RBI and fintech startups, which can serve as an opportunity to have a forum where one can voice out their concerns.

"There is an appreciation that technology innovation needs to continue, disruption in the banking and finance space, [and] new players have to come up," he noted.