AI opens doors for India’s small businesses as fintech costs fall, concur experts

Artificial intelligence is fundamentally reshaping India's financial services landscape by slashing the cost of delivering premium services and making wealth management, corporate insurance, and cross-border payment solutions accessible to millions of under-served businesses and individuals for the first time.

This was the biggest takeaway from a panel discussion at TechSparks, YourStory’s flagship event in Bengaluru, where the founders of fintech firms Dezerv, Plum and BRISKPE explained how AI is turning inclusion from a slogan into a workable business model.

The transformation revolves around a persistent challenge in financial services: the high cost of human intermediaries has for long restricted quality financial guidance to ultra-high-net-worth individuals and large corporations, leaving small businesses and emerging wealth creators under-served.

"The challenge is that when you have a certain amount of wealth, you need guidance and assistance on how you can manage it better," said Sandeep Jethwani, Co-founder of Dezerv, a wealth management platform. "The cost of that individual is quite high, and therefore the kind of revenue that you need on a per client basis is also high. Naturally, what has that led to? That has led to a situation where this quality of high-quality handheld wealth management is only available to a certain set of individuals."

With AI, Jethwani said, the costs can drop radically, and thereby access to guidance can improve multifold.

The democratiation is particularly evident in corporate health insurance, where AI is enabling startups with just five to ten employees to access coverage previously available only to companies with thousands of workers.

"Health insurance, especially on the corporate side, was restricted to very large corporates," said Abhishek Poddar, Co-founder and CEO of Plum, a health insurance technology company. "How do you make that kind of experience available to a company that is just starting up as a founder? One of the biggest roadblocks, very similar to wealth, was the advisor, the insurance advisor. These are experienced, expensive people, and hence the unit economics never supported building products for companies that small."

AI is creating efficiency that allows access to a much broader market while maintaining consistency as companies scale, Poddar said. Instead of replacing advisors entirely, AI technology serves as "a supporting mechanism" for the human advisor to deliver improved experience, he added.

In cross-border payments, MSMEs face punishing fees that can devour up to 8% of every transaction. Traditional payment services charge between 2% and 5% for international transfers, with PayPal taking as much as 8% to move money—this means a business receiving $100 gets back just $92.

"The unfortunate part is if you are basically moving $1,000, you're being charged with 2 to 5%," said Sanjay Tripathy, Co-founder and CEO of Briskpe, a cross-border payment startup serving MSMEs.

The high costs stem from labour-intensive manual compliance processes. Banks traditionally require extensive documentation and multiple follow-ups for each transaction, with representatives calling to verify purpose codes and exchange rates. "Everything is manual," Tripathy said. "People have to come with the document, submit the document, and then someone has to say, when the money comes in bank will call you again."

Briskpe's platform uses AI to automate KYC compliance and fraud detection, slashing both time and cost. The system onboards businesses in five minutes and provides virtual accounts in six currencies—a process that typically takes three weeks at traditional banks. By reducing the cost of servicing, Briskpe aims to bring cross-border payment fees closer to the zero-cost model of domestic money transfers, said Tripathy.

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Human factor remains critical

Despite the automation, the three executives emphasised that financial services remain far from being fully autonomous. The primary barrier is the high accuracy threshold required in finance.

"Especially if you are in the financial industry, the bar is really high to go fully autonomous," said Poddar. "You can't expect to launch something with 80%, 90% accuracy. It has to be like a 99.99% accuracy."

In wealth management, Jethwani said, his firm is not using AI to create or rebalance portfolios. "I need deep conviction and explainability of why a certain action is being taken in a portfolio. Today, we do not have that," he said. "I am sure our regulator, SEBI, is also not comfortable with that."

Instead, AI enhances human judgement by capturing client signals and emotions that advisors might miss during conversations. "Every relationship manager is also a human being who is probably as distracted as each one of us is," said Jethwani.

Poddar outlined three frameworks for determining when to use AI: whether the interaction requires intellectual work or empathy, ensuring humans spend 100% of their time with customers rather than on back-office tasks, and matching the level of automation to transaction size and risk.