Early life experiences have the power to shape who one becomes as an adult. They also structure our thoughts, beliefs, desires and life-purpose. Seema Prem’s early childhood experiences also had a significant impact on her and eventually paved way for her ambitions. Seema is a social entrepreneur of repute and CEO & co-founder of FIA Technologies, a social venture aimed at improving financial inclusion in the remotest areas. The firm partners with financial institutions and governments to setup banking outlets in remote areas.
The seed of FIA’s idea was sown in Seema’s mind early on in life. Born into an Army family and influenced by her childhood experiences, Seema spent time in some of the most inaccessible terrains in India. She was determined to work towards reducing the inequities that she witnessed in these terrains. Her love for Maths made her take up Engineering and subsequently a Business degree. In her first job, she was part of the team which launched mobile services in South India. This was her first-hand experience of the democratizing power of technology-led transformation for the masses. Having played a significant role along with the team that pioneered India’s telecom revolution, had a lasting impact on Seema.
This spurred the desire to solve some of the world’s most pressing challenges which prompted her to pursue a fellowship from MIT. Working on a financial exclusion project at MIT, the sheer opportunity for transformation presented itself. Realizing the huge opportunity to leverage her experience, she pitched the idea in the MIT100K entrepreneurship contest.
The idea was adjudged Runners up and this gave Seema the confidence to start FIA. FIA is a culmination of her desire for social inclusivity, the freedom to experiment with cutting edge technology like AI and combining it with her love for travel.
In an in-depth conversation Seema tells us about the various initiatives being driven by FIA along with highlighting the grass root level changes brought about by the company.
Tell us about the various projects that FIA has been working on. What initiatives are being taken to address the inequities she witnessed?
Our main business is assisted banking services. We partner with financial institutions to set up banking outlets across the country. The banking outlets are manned by micro-entrepreneurs from the local communities who are appointed by FIA after a rigorous vetting process. These outlets function as a mini bank branch and are equipped with a laptop, biometric device, and a printer. Through internet connectivity, the banking outlet is connected real-time with the bank’s core banking solution. The unbanked can walk in and do basic financial transactions, real-time. Since the system is enabled through a biometric, it’s completely secure. Before starting banking operations, the banking agent is given a digital wallet which he has to fund. When he collects deposits from customers, his wallet reduces and when it reaches zero, he cannot collect anymore deposits. When he gives cash to customers, his wallet increases.
The pandemic has changed the way traditional banking is done. Given the rapidly changing customer behaviour towards owning their financial transactions, which has been spurred by the pandemic, FIA is building the largest mobile banking platform called FINTAP. On this platform we are aggregating more than 20+ financial services. These products are complex in nature and are difficult to be understood or adopted in its current form by our customer segment who are not so well educated, are from low-income group and have limited access to mobility. We first work on redesigning the product making it bite-sized. These are then offered in an automated and paperless manner, often in simple 1-2-3 clicks to ensure faster adoption. For e.g.: - our customers save too much and invest very little leading to negative real returns. They either save in fixed deposits or in illiquid instruments like real estate and gold. We have also worked with a fund house to redesign mutual funds keeping the needs of the poor at the core with tiny instalments as low as 100 Rs. is made permissible. Additionally, there are services like, variable instalments depending on cash flows and paperless enrolment has been made accessible.
What measures is the firm taking to fight poverty and improve people's lives?
During the pandemic, FIA centers were essential links which continued to provide uninterrupted banking services, so that the rural economy could continue to function with minimal disruptions. Our centers banked more than 2 million people (mostly women), disseminated vital COVID information to 30,000+ villages and distributed $20 million as covid cash relief to people who needed it the most.
We have over 50 Million customers who bank with us today,a decade since starting of our operations. For us and our customers, this is not just a number, it is a way out of poverty and way to a better life. FIA has helped pave way towards financial security.
Give us an instance whereFIA’s efforts significantly benefited rural residents.
FIA’s model for inclusion of dairy farmers combined with state-of-the-art technology and vast distribution network to digitally transform the dairy value chain. FIA setup digital dairy ecosystem for 260 villages through more than 100 banking outlets.
FIA worked for inclusion of dairy farmers who have more avenues for credit, on-time and accurate payments, lesser variability in service standards and access to other financial service and products thus minimizing exploitation of marginal farmers. The advantages to Dairy cooperative included, transparency and visibility across the supply chain, eliminating leakages in cash disbursement, lower cost for distribution of funds and therefore cost/price leadership. The advantages to the bank include a transacting customer base with predictability in revenue. FIA banked ~200,000 dairy farmers /families and sanctioned through partner banks ~ US$480,000 in loans leading to procurement of highly productive breeds which led to better yield. The above initiatives ledto increased assets (livestock), doubling of farmers income and also increased earnings (by 40%) for banking agents.
What are the underlying principles that underpin the organization's culture, which have guided its journey thus far and are thus key to FIA's success?
One of the biggest assets that FIA has created is its team and customer-centricity that is the focus area for each one. FIA has an amazing team of diverse people from India and Nepal who have tackled some of the most pressing developmental challenges. The core team brings to the table experience and expertise required to work in the social sector. We are fortunate to have a team that not just subscribes to our values, but also believes in our vision and purpose to create lasting change in the lives of people who need it the most. Every team member has repeatedly demonstrated the ability to go the distance to put our customers ahead of everything. The team also has responded with maturity and purpose to various dynamic situations including geo-political, economic, health and social.
What are the significant initiatives made for women's empowerment as the recipient of the UN-NITI Aayog Women Transforming India award?
FIA being led by a woman entrepreneur recognizes the transformative aspects of financial inclusion on women.
Some of the initiatives made by FIA are:
How do you intend to help tackle the challenge that is poverty? Tell us about FIA’s plan of action to reach an even larger audience.
In India, none of the players are focused on specific segments and lack the strategic positioning required to combat social taboos, low literacy and demand side barriers associated with banking for women. Current players have their expertise in respective areas of products, and fail to address a wide spectrum of complex financial need of women customers in a low income household. FIA has built a profitable and sustainable AI based neo-banking model that is powered by a community based participatory network of women entrepreneurs, has driven a focused approach with a bouquet of varied products.
FIA has incorporated innovative practices and technology intervention at various junctures of the value chain which confer a tremendous competitive advantage. The key differentiators include:
• Customer Management: Customer-centricity is the DNA of the organization. Right from the start, FIA took bold, innovative steps to develop long-term and short-term strategies to achieve tangible improvements in customer outcome spanning across access (largest rural network in India, fastest growing outward remittance platform to Nepal), adoption (ensure rapid enrolment of customers into banking for quickly reaching economics of scale – 50 million customers) and usage (progressively gravitate customers towards meaningful financial inclusion). We have also encouraged women-led banking centers which we knew would result in a more inclusive enrolment. FIA has one of the highest % of women run centers (16% against an industry average of 8%) which has led to more women, elderly children’s and minority accounts getting opened. A focus on women entrepreneurs ensure ease of connect with women members of family and builds trust. Women banking agents are also more risk balanced with more empathy towards an unbanked customer’s complete financial needs, besides banking. FIA banking agents help in creating awareness about financial literacy, besides providing life sustaining financial services to the last mile. FIA’s app designed using low-literacy iconography meant that anyone could use it without going thru extensive training
• Collaboration: FIA believes in the power of collaboration, in working with a diverse group of businesses, government, individuals and communities while harnessing the power of people and technology. This enabled us with getting access to complementary competencies, backward-forward linkages and helped us penetrate difficult and newer markets. FIA tied up with thousands of local entrepreneurs, to act as change agents, enabling us to scale globally in a very short time frame. Our community based participatory model ensures faster scale and high level of acceptance within a community - a challenge for most in countries like India and Nepal, where diversity is the way of life. We have one of the largest tie-ups with financial service providers (50+), donor organizations and government with multi-year recurring contracts which leads to increased stickiness and brand loyalty. Through our large and varied partnership, FIA acts as a one stop shop for all financial needs of customers which uniquely differentiates us from competition. Our relentless focus on innovative practices across the value chain (risk, customer support, agent performance) has earned our clients respect and business
• Technology: Our comprehensive AI & mobility-based platform integrates a multi-level distribution framework that delivers digital financial services in a scalable and efficient manner. By incorporating human-centric design in our development process, we build tools and apps that can be used by millions regardless of their education or income levels. For e.g.: Being a low-cost producer for our mutual fund investment solutions, we were able to keep our prices very low. This was possible by innovating across the value chain and ensuring a completely automated, paperless app-based solution which factored the heterogeneity of the rural poor while designing solutions based on their real-life goals. When we launched the product, our pricing was competitive at under $1 for enrolment. The nnual maintenance charge per customer account was also waived off. This strategy enabled us to penetrate the rural market segment quickly since our target customers could not afford the high subscription charges of our main competitor.
• Product Portfolio: Digitizing the local ecosystem is not just about banking but a complete suite of payment services to drive digital transactions. The non-linearity of our business model is one of our greatest strengths, one which gives us a distinct competitive edge. FIA’s extensive distribution network and installed base of 35 million customers significantly lowers customer acquisition costs as multiple products can be distributed by the same agent with only a marginal increase in cost of selling. Our relentless focus on automation and use of AI to ensure predictive operations has also helped us reduce costs across the value chain. These put together help us offer better pricing to our customers and yield strong cost positions vis-à-vis our competitors.