With a focus on small entrepreneurs, ICICI Bank has extended its instant banking platform InstaBiz to micro, small and medium enterprises (MSMEs), marrying digital innovation with data-led processes. The aim is to solve some of the problems that MSMEs face - mainly absence of adequate and timely banking finance and limited capital.
InstaBiz allows MSMEs and entrepreneurs to undertake business-banking transactions digitally, doing away with the need for branch visits. The platform provides access to instant overdraft facility even to non-customers of the bank; instant tax payments; and inward remittances. In all, it offers about 115 services, under five broad categories - general transactions, GST compliance, credit for working capital and business expansion, export-import (Exim) compliance and cross-border solutions.
ICICI Bank is named the winner in the Best Innovation category of Best Banks Awards. InstaBiz is a comprehensive digital platform curated specifically for MSME and self-employed customers to enable them to execute banking transactions instantly. Easy onboarding process and digital execution of services have made the product an industry-first initiative.
"One of our big ideas is to explore how we can create efficiency for our customers. One is internal efficiency and the second is efficiency for customers. If we are able to save time, add capability and competency for customers, they will do well. If our customers do well and if we serve them well, we will get our share of service," says Anup Bagchi, Executive Director, Retail, ICICI Bank.
Any lender giving a loan has to make sure that the customer will be able to return the money, and in time. But unlike earlier, when a lender had to depend on documents provided by the customer from time to time, with availability of data of the existing customer, it is now possible to look at income/salary details and analyse them. In addition to this, data from credit bureaus allows lenders to study credit score movement over a period of time and the person's borrowing and repayment patterns. The trick, however, is in picking up these processes to create a digital model for lending or offering other services. "If a process can be followed manually, it can be done better by digitising it using latest technologies such as artificial intelligence (AI) and machine learning. So, what we are trying to do is basically find out whatever tools are available to us to make it easier for customers to do things better. The purpose of Insta series, of which InstaBiz is a part, is to offer instantaneous service, provide rich customer experience and customer convenience," says Bagchi.
In problem solving, one needs to have insight into what the customer wants, even if the customer is unable to articulate it. For example, if the customer has been coming to the branch for things like cheque clearance for long, he may not think that this process can change soon. In following this process, the client is incurring operating expenses in the form of time and resources. This is where platforms like InstaBiz are coming in handy, and over a million downloads of the app since its inception in July 2019 are proof.
Evolving technology means being able to find solutions that were not available earlier. But for this to be successful, digital infrastructure and technology has to become more affordable. "Over the last three to four years, digital infrastructure has come up, which is not there in the rest of the world," says Bagchi. Aadhaar is an example of this, as is UPI, followed more recently by digi-locker and account aggregation.
"One by one, various kinds of shared infrastructure is coming in. These do not belong to the bank, but to society at large," says Bagchi.
In many states, land data have been digitised. "Sitting here we are able to figure out where the opportunities are, what the customer is saying versus what is happening in reality. If a customer says I am growing three crops, and satellite data is showing he is not doing three but only two, we know what kind of crop he is growing so you can impute his income around that with a large amount of certainty," adds Bagchi. He adds that field investigations may be redundant unless there is a major mismatch between claims and data verified.
Apart from using these information channels, ICICI Bank has developed a partnership model to ascertain further data points, collaborating with different application programme interfaces (APIs). Sandeep Bakhshi, MD and CEO of ICICI Bank, recently told investors that expanding digital capabilities and leveraging partnerships is a key focus area for the bank. "We recently launched India's API portal consisting of 250 APIs, which enables developers, fintechs, corporates and e-commerce start-ups to easily partner with us," said Bhakshi.
The bank has also tied up with big names in different verticals like Amazon, Manchester United and MakeMyTrip to provide cards with benefits. "We are trying to get different sets which are not linked directly to each other. These are customer sets and we are using them to create an underwriting model that gives a higher confidence level. Once this process is set, the loan/overdraft is pre-approved. If a customer wants us do it on InstaBiz, and once he says okay to the rate of interest or the tenure, he gets an SMS stating the money has been credited to his account," says Bagchi.
The fact that AI and machine learning technologies are flourishing has given a boost to the ability of service providers to use customer data fruitfully. With data cost dipping, more and more players are using digital services and leaving digital footprints. "These developments have changed the paradigm. More and more data is being captured. Due to low computation cost, you can now work on more data to develop better insights. And because all other ecosystems are also digital, one can deliver a lot of value online. These are all different things, but interconnected," explains Bagchi. For example, InstaBiz is offering GST-based overdraft facility using the customer's GST payments data. "With GST, things have become more transparent because it is online and the data is accessible. So, such an OD (overdraft) is made available to existing customers in just a few seconds," says Bagchi.
The bank's Insta series is also using evolving technologies like Optical Character Recognition, along with the bank's internally developed Smartform API, to read printed documents and to validate KYC documents.
"If you spend your resources wisely, it increases competitiveness. Then if you stop doing it, it is stupid because the world has moved ahead and you are still stuck here," warns Bagchi.