As the pandemic took over us for the past two years, digital transformation has flourished more than ever since people have stayed in the home all this time and are inclined towards online services. Avanti Finance is a company that completes the entire life cycle of the credit, it has integrated the various digital initiatives that are built around the Aadhaar ecosystem like KYC, fund transfers, e-mandates, UPI, E-Sign, the major innovation is in the way it is envisaged to be used by existing networks on the ground. Analytics insight has engaged in an exclusive interview with Manish Thakkar, Chief Operating Officer, Avanti Finance.
I have been involved with Avanti right from the time it was a concept emerging from the problem statement by the founders to their vision of solving the problem at the population scale. It has been a journey of more than five years since we conceptualised Avanti. Anshu has joined during the first wave of Covid, after having experience with various conventional NBFC and start-up fintech companies with a focus to drive and manage scale through data analytics.
There are multiple innovations that our technology encompasses. While at the bare minimum, it completes the entire life cycle of the credit, it has integrated the various digital initiatives that are built around the Aadhaar ecosystem like KYC, fund transfers, e-mandates, UPI, E-Sign, the major innovation is in the way it is envisaged to be used by existing networks on the ground. As such, the innovation is in the Avanti Business Model where the existing networks on the ground interact with the Avanti Platform to deliver financial services to our users in an assisted mode. The interaction with existing networks on the ground also helps capture alternate data through social interactions which becomes a major input while underwriting for the data dark customers. The Avanti Business Model is also designed to help our users in investing in livelihoods with an aim to create a more sustainable income for them and increase their ability to significantly increase their resilience. The focus of the Avanti Business Model is on financial inclusion which involves not only providing the services to the unserved and underserved users but also ensuring that the quality of the service to those users is at par with what the top 1% of customers of the financial services ecosystem.
ASP: Avanti has developed its own proprietary underwriting engine using advanced machine learning algorithms using traditional data sources and non-traditional data sources especially for the Microfinance segment. Its usage is not limited to underwriting and risk management. It is used across the platform for managing partnerships, onboarding, operations, collections, CRM, impact assessment, growth, reporting, and other areas.
The vision of financial inclusion is not really possible if we do not harness the data from the community. That's why Avanti realised the importance of data at an early stage of the organisation. The platform is designed to assess users and transactions using formal data available from conventional channels (e.g. bureau data), data generated from transactions on the platform, data from social channels (e.g. partner inputs), and over a period of time data that is gathered from various other alternative channels (e.g. telecom data). We are using the different communication channels' data to design and innovate various models of underwriting.
The finance industry is one of the early-adopting industries to use Big data Analytics to solve a range of business problems like Underwriting, Fraud, Collections etc. The next phase of plans for this industry is hyper-personalization of financial products because one shoe size does not fit all approach won't work, with so much competition in the future.
While there is a lot that is happening in all the four areas mentioned, the most powerful impact is going to be felt when the combination of all the four is used extensively in various sectors. Each area adds value to the others resulting in significant efficiencies in the delivery of goods and services to the users and resulting in dramatic user experience and a significant increase in the quality of service to the users. IoT is still at a very early stage in the country with only a few established companies and some start-ups establishing new use cases. With the plenty of new data sources available every day these technologies have a huge potential to supplement data science and analytics further.
We will end the financial year 2021-22 with a 4x growth from the previous years in terms of assets under management and numbers of users serviced. The next 12 months will see us making significant progress in building and maturing our technology platform to build our capacity to operate at a significantly higher scale and service the customer through the entire product journey for the selected financial product. In terms of users, we intend to serve more than 500,000 customers. However, the platform build-up will see us creating a capacity to service 10x users. We are also looking at diversifying our fund sources with partnerships with banks and NBFC, offering multiple financial products (beyond credit), bringing down the costs of operations, and becoming profitable. It is at this scale that we will meaningfully start active machine learning and data analytics. One of the other targets that we have set for ourselves is also to be able to publish APIs for various partners to integrate with us in a seamless manner.
These technologies are first of all reducing human intervention, providing good predictability and fast execution, which helps in reducing the cost of operation of an organisation. It helps to see the patterns in the data that normally we are unable to extract it so this reduces the losses for financial institutions and communication channels like chatbots are able to resolve most of the customer queries that is giving customer satisfaction.
MT: We are confident that technology is going to result in significant benefit to the enterprises and the end-user. However, it also has the potential of excluding users if it is not implemented with the right business model. We are therefore focused on building the Avanti Platform for the excluded and in the context where it can be used by those targeted users.
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