Leverage digital habits to simplify customer experience: Manish Shah

Manish Shah, CEO of Godrej Housing Finance, has seen the financial services industry for more than two decades filled with diverse experiences, from multinationals like Citi to public sector banks like Bank of Baroda. As CEO and Managing Director of Godrej Housing Finance, Shah is building a startup within the Godrej Group. In this interview to EnterpriseStory, he spells out the challenges and opportunities of his new assignment amid the pandemic.

Since the pandemic hit India, what are the big shifts you are seeing in financial services?

Clearly, a lot is happening. Within financial services, there is lending, and other lines of businesses. But it's been nothing short of dramatic. And we'll see several changes that will outlast the pandemic—just how we transact, how we do business, and how we serve customers.

Businesses that are focused on retail consumers are bound to undergo long-lasting change. The one good thing that will come out of this phase is it has hastened the speed of digital acceptance from customer segments that weren’t digitally on yet.

Take our case, for example. A year and a half ago, we weren't trying to solve a problem of delivering a product without ever meeting the customer. It just wasn't a problem to solve because the assumption was that the customer would visit a site to choose a home, not once but multiple times. Traditional wisdom is you (must) be where your customer is. The assumption was that you will meet him or her a couple of times. The processes and products were designed with that assumption in mind.

Suddenly, we have to now design products where ‘not meeting the customer’ is not just a nice-to-have. It's a need-to-have. So every industry has been forced to make such changes that will be long lasting. We've needed to change our processes, change our thinking, and some of this will stay with us even after the pandemic. And we'd be well advised to stick with it.

What transpired for Godrej Housing Finance specifically?

The past year has been the sum total of our existence. After the launch of Godrej Housing Finance in November, our first goal was to test our offerings.

Like any startup, we wanted to serve a thousand customers and learn from there, demonstrate that the offering that we had was good enough because we are not a new category. 

We are a new company in a category that already has some very strong and reputed players. And we are going up against them.

So, the first goal was to serve a thousand customers. And between November 2020 and March 2021, we saw acceptance. We were able to get 1,400 sanctions, and about 900 disbursals. The first important box to tick was to serve them.

How do you create a differentiated service in this category?

We are in a business where nobody really wants the product for itself. The function of a home loan is to enable the home purchase to happen. From the outside, it looks like a simple commodity product: the cheapest loan is all that matters, and let's just get done with it.

But there is a lot more nuance to it. The primary job of a home loan—especially for a new company like ours—is to enable that home purchase to happen. From a customer lens, I am looking for solutions that enable that home ownership to happen easily. There's a bunch of things that go into that. For example, how is a house affordable for the customer? What is it going to cost to be able to afford a home?

Second, how are we enabling that customer? Most purchases are in the ‘under construction’ stage for people looking to buy a home. For a customer, a house is going to be available three years from today, or two years from today.

In the interim, the buyer will live somewhere. He pays rent when he has an instalment going. So, I've got to make that bridge happen. So, from the whole product construct, can we make it easier for such buyers? Say, affordable down payment, or can we start with smaller EMIs and build up as we go along?

The second is on the delivery side of things, where customers are grappling with a lot right now. More than purely digital, we looked for simplicity and being presence-less. So, we moved a whole bunch of our processes. We launched an electronic sign (eSign). You can do the processes end to end digitally, and get a sanction without ever meeting us. It can be assisted by a Godrej Housing Finance person.

Rather than put the customer through the stress of scanning a whole bunch of documents, we can arrange for it to be collected and couriered.

Delivery involves combining this whole self-serve, digital assistant, and docs pick-up—enabling it in a manner in which the digital element won’t stress customers out.

Last but not the least, thanks to the strength of the Godrej Group's brand, we have the customer’s trust in times like these. It’s been very clear from customers that they need to be able to trust housing finance service providers.

So, it's about building a 10- or 20-year-old relationship with buyers. And customers need to know that a service provider is going to be around to honour its commitments. We noticed that all these things need to come together to win a meaningful slice of the business.

Why did the Godrej group decide to get into housing finance?

It has been two or three years in the making for the Godrej Group, and two years since I have come on board, after which we have been building up to where are today.

There were many factors that were in favour of getting into financial services. World over, financial services is a very large and integral part of businesses. It is no different in India.

We have the strength of the brand combined with the strength of the balance sheet, combined with the presence of ecosystems. It's not enough to have any one of these. But when you combine these, it means something to people. 

In the case of Godrej Housing Finance, the business line fits nicely with what the Godrej brand means to customers, which is time-tested and trusted. There is a high chance that most Indians looking for a house purchase are already a consumer of one Godrej product or the other.

Now, take the strength of the balance sheet because we raise money and lend. So, the strength of the balance sheet is very important, and access to customers. This is often an underrated thing: the ability to get started. Where do you get started? Is there access to ecosystems where you can test your offerings? So the reason for Godrej Group’s foray into housing finance, specifically within financial services, is: Godrej Properties has got a fair amount of learning in this real estate space.

We've got access to customers that we can offer our products to. Mind you, there isn't any preferential access. It isn't like customers aren't free to choose. We have to compete with every other financier for that slice of business. But it's helpful to be able to reach out to these customers as we get started.

As a company, how are you leveraging technology to understand customers or engage with them better?

We've been fortunate to start with a clean slate. So, we haven't had the challenges that legacy technologies or data migration poses. 

As a startup, the opportunity is very clear. For instance, we had to quickly design the process to be ready for buyers being presence-less. It's not enough to say we have got this ability for you to fill a form online to call ourself ‘digital’. The customer has got to be able to come in, apply digitally if she wants to, or be able to call and speak to another salesperson.

So, we've built something called a ‘verified sanction’, with which we could go over a customer’s documents if they upload or share their screen. So, customers can get an instant sanction in 15 minutes.

Originally, it was designed for customers to be at the site, while they are seeing a home. And we had to give an instant sanction, which is a reasonably accurate estimate of the price at which they can get the house. With the platform, that is as easily done remote. And customers don't have to be there in person.

Then, we moved to saying that the original process allowed to authenticate customers. With startup partnerships, we would assess a customer’s income. We’d authenticate customers, and then take the process offline to sign loan documents and collect the other papers.

When COVID 2.0 happened, we had to take that online. We converted our whole loan documentation process to a simple OTP-based eSign process. Again, we are leveraging existing habits. Customers are already used to some of these things, like the way they register for vaccines on CoWIN. They do it using Aadhaar authentication to be able to eSign the document.

This ability to move processes is hugely tech-driven. And because, this is all open API, we can plug and play, and partner with any startup that is doing interesting work.

So, we've got partnerships with startups that are doing better work than we would ever do. From a data architecture perspective, we have built the lake as we got started.

Even as we started, we looked at micro-clusters of customers to price. We marry credit score, income and a couple of other things like LTV (lifetime value) and serviceability. And we have a more nuanced grid that allows us to make far more clusters than the traditional lender would do.

It gets a little more complex, but that's where we use the architecture to do this smarter. At this point, the objective is being ready. Making sure that all of our data is captured. All our interactions are captured, and we're able to then do more and more, and build layers upon layers of these as we go along.

As the CEO of a corporate startup, what have the challenges been?

We have had this one family of challenges, which has just been COVID induced. Almost three-fourths of our entire team has been hired digitally.

More than 130 of the 180 people in Godrej Housing Finance joined after the first lockdown. They got hired virtually and inducted virtually. Depending on when they joined, they went months without visiting office.

Just integrating people after bringing them on board was a big challenge—to create that employee experience while working from home. And none of us are trained for this. So, there were a family of challenges related to COVID-19.

Another challenge we've had to deal with is that the whole Work From Home or Work From Anywhere has been a bit lopsided. While it's easier to get administrative, head office, and senior management positions to work from home, what are we doing for the frontline person? When the second wave came, we had to make last mile interactions possible from home. 

We're very fortunate to have the strength of the group and the brand in a very large market. But from a customer’s point of view, we are a startup in a 123-year-old company. When we use this successfully, we bring the best of both worlds to the customer.

At the end of the day, product design can be copied. And while it is a large market, there are some good players here. But while being part of a large setup, can we behave small—get feedback through quickly?

As a startup, we ensure everybody is free to speak their mind. We have something called ‘I speak for the customer’. It pushes us to stay agile. In a traditional setup, when something is not working out, a person would let his or her boss know, and then someone in a review would talk about that problem. We want our colleagues to be able to bring it up the very same day they see the problem.

What made you take up the role of leading Godrej Housing Finance?

I love startups. I love the space. I thoroughly enjoy it. It was ingrained—Citibank in the late 90s was a startup in many ways.

The prospect of a startup in a 123-year-old setup is a fabulous opportunity. Using the strength of the brand and what it can do to build a customer franchise. That got me really excited. 

There are some very real gaps in how consumers are served in different pockets. And we will start with addressing the home-buying challenge. There are quite a few opportunities for us to build.

I thoroughly enjoy bringing teams together, picking people, and bringing a bunch of people who are diverse. So, in our first hundred team-members, we had people from 50 different organisations. I thoroughly loved the whole bringing together of people from different backgrounds, walks of life, different companies, and different upbringings. And to be able to come together and build something like this.

As a professional, what is the one trait you have or have honed that serves you well?

I think the ability to adapt. I've been fortunate—whether it was in an MNC setup, a startup or in the PSU space—to look at different ecosystems, adapt and look at the things needed to be successful in those ecosystems. And to take that and get it to translate to customer value, different team sizes, different combinations, different customer segments.

So if you ask me for the one thing, I'd say it is this ability to adapt and be agile about how you're going to go about building it. There is always lots of room for improvement, but that ability has held me in good stead.