Sachin Bansal Bets His Flipkart Dollars On Mobile-First Banking
Financial services in India is still in a ‘Web 1.0’ era, Bansal says, arguing that the sector is ripe for tech-driven disruption.
Flipkart co-founder Sachin Bansal, who netted a cool $1 billion by selling his stake in the e-commerce venture to Walmart Inc., is now betting on building out a mobile-first bank for India.
Financial services in India is still working in the “Web 1.0” era, Bansal told BloombergQuint in an interview, arguing that the sector is ripe for technology-driven disruption. “That’s something which was consistently at the back of my mind. Financial services caught my attention because the technology paradigm has changed a lot,” Bansal said.
Bansal’s Navi Technologies acquired non-bank lender Chaitanya India Fin Credit last year. He has now applied for a universal bank licence through that entity under the Reserve Bank of India’s on-tap licensing policy.
If the licence comes through, Bansal plans to do banking differently by bringing his consumer-tech thinking to financial services.
“We are tech-first and will be building a lot of technologies in-house and will be flexible, and will move fast. We will be mobile-first, and then there will be physical outlets, which will be a support to the mobile channel, rather than other way round,” Bansal said.
He sees purely digital banks, which countries like Singapore are experimenting with, as the future of banking even in India. Navi Technologies, he hopes, will be a part of this future.
Tech, which is more Bansal’s strength than banking, may be the powering force behind the venture but the idea is to build out a full-service bank. By opting for a universal bank licence, Bansal has left the door open for services that go well beyond the current day fashion-favourites such as retail and SME lending.
“It’s not just those who don’t have access to finance... We want to focus on the under-served. Even people who are touched by financial services are not served well. Even middle-class customers not part of the financial system fully,” Bansal said. The idea is to use technology to reach customers in a low-cost manner and then simplify experiences and products to make them more accessible, he explained.
While the 38-year-old IIT Delhi graduate is still awaiting a banking licence, he has already started to build out a wider financial services play. He expects to begin digital lending via Chaitanya India soon. In addition, Navi Technologies has acquired DHFL General Insurance. It is also in the process of acquiring Essel Finance Asset Management Co.
Backed By ‘Perpetual Capital’
Bansal may commit as much as $400 million of his own capital into the banking venture, according to people familiar with the matter. He declined to specify the amount of capital he will bring but said that it is "perpetual capital", which is needed to build out a long-gestation venture like a bank.
“The capital I bring is perpetual capital. I realised very early on that you have to think long term in financial services. You can’t do that with capital that’s short term,” Bansal said.
He is also in talks with a mix of global and domestic investors, including International Finance Corp., Bansal said.
Building A Talent Base
Bansal has also started to put together a team of advisers who may be able to bring their banking experience to match his technology smarts. Veteran bankers like Paresh Sukthankar and Nachiket Mor are advising Bansal on his banking plans.
We are looking for a mix of consumer tech professionals, along with those with a pure financial services background, Bansal said. Navi Technologies currently has about 60 employees.
To draw the right talent, Bansal hopes to do what Flipkart did. Give people a sense of ownership and use stock options as a way to ensure those who build out the venture, get a share in its eventual outcome.