Back in the 1980s, it was quite unusual for trained engineers to enter the start-up space. But V.R. Govindarajan did things differently. By 2008, he had co-founded and sold IT product engineering firm Aztecsoft to MindTree and teamed up with Debasish Chakraborty to explore a new opportunity. A year later, the duo started Perfios Software Solutions and built a web-based personal finance management tool for retail consumers.
Bengaluru-based Perfios automated financial data aggregation from an entire range of disparate data sources - banks, credit and debit cards, mutual funds, insurers, loan providers and more - to provide a 360-degree view of one's finances. But individuals were not willing to pay, and there were niggling doubts regarding privacy and data security. As the B2C part of the business did not take off, the duo approached banks and non-banking financial companies (NBFCs). The idea was to leverage the same technology and data platform to help them streamline the lending process.
The company soon had its first customers, a bank and an NBFC. At the time, retail and small business loans called for time-consuming paperwork, crippling speed, efficiency and customer satisfaction. The entire exercise used to take around 10-15 days for a retail loan and over a month for a business loan. In contrast, Perfios introduced a seamless, automated platform that aggregates and analyses financial data such as bank statements and business financials, conducts e-verifications and does fraud checking. This, in turn, has enabled financial services players to make better credit decisions faster and improve overall customer experience. Today, Perfios can read data of 250-plus financial institutions while its key clients include the ICICI Group, Kotak Mahindra Bank, HDFC Bank, Bajaj Finserv, the Tata Group and the Aditya Birla Group, as well as mutual funds and insurance companies.
The company will soon cater to new verticals as there have been enquiries from recruitment portals, healthcare firms and even matrimony services. "We never thought of servicing these industries," admits Govindarajan, CEO of Perfios. But there is always scope to reimagine financial services in a digital world, innovate and win. That the fintech company has topped the value-added services (VAS) category in the latest Business Today-KPMG Study, is another proof of its winning culture
Perfios has developed a bank statement analyser, currently its biggest revenue earner, which takes a deep dive into all kinds of bank statements as well as income and financial statements of companies. The system can read and analyse 1,500-plus statement formats and 50-plus asset classes, including loans, credits, equities, Public Provident Fund, pension and more, and can prepare relevant reports. Statements are analysed to get an insight into cheque bouncing, recurring expenses and potential fraud triggers. "We give the decision in less than a minute," says Govindarajan and he is not exaggerating.
The company also offers a money manager solution that provides a 360-degree view of one's personal finance by aggregating and analysing various asset classes. Typically, high net worth individuals or asset management companies (AMCs) use the product. Another product called the Dashboard provides a single view of all corporate accounts. This is especially suitable for AMCs as they deal with hundreds of bank accounts or even thousands.
Perfios offers software as a service (SaaS) and leverages a pay-per-use revenue model. But it may soon sell its products to as many banks as possible.
The company's products are likely to be more 'marketable' as it has adequately dealt with all security concerns. "We have built all our designs and architecture around security and privacy," says Govindarajan. The firm also works with global cybersecurity player Paladian, and the latter tests its security-worthiness every quarter. Perfios has tied up with the US-based Trust Guard as well. "It certifies our system every night and runs 46,000 tests on our application and data centres," says Govindarajan. The company is further audited by the Big Four (EY, KPMG, Deloitte and PwC) who conduct it on the banks' behalf.
Many say fintech companies will grow redundant as banks can replicate their products. Others point out that much of the financial data is getting standardised and digitised, leaving little scope for third-party offerings. But a large-scale project across banks will involve huge costs and teething technical issues. "Banks have realised that it won't be possible to innovate everything at their end or replicate what is already there in the market," observes Govindarajan. "Even then, we need to be paranoid about competition. It pushes us to continue innovating."