How ET Money became India’s most successful FinTech firm?

The FinTech sector is booming in India by leaps and bounds. The thriving FinTech ecosystem has witnessed a plethora of sub-segments including Personal Finance Management, Payments, Lending, and Regulation Technology, etc. The sector is currently valued at $31 billion and is expected to grow to $84 billion by 2025, at a CAGR of 22%.

 

ET Money which claims to be the fastest-growing FinTech Company of India has seen a 5x growth in user base, 15x growth in the number of transactions and an 11x growth in transaction value.

 

The popular personal finance app is working on a single mission: To simplify the financial journey of retail consumers. An important part of this mission is ET Money COO- Santosh Navlani, who has shared his key insights with Analytics Steps.

 

An entrepreneur and start-up specialist, Navlani has excelled in all functions required in building a business - right from ideation, business and product strategy, product development, customer development, marketing and CRM.

 

 

The tale of the Indian fintech sector transformation

 

Navlani points out that the financial landscape in India has been the biggest consumer of IT services for decades. IT consulting firms like TCS, Infosys or Wipro have always dominated this sector.

 

Companies providing financial services are operational heavy. In the early 90s or the late 2000s, the effort of the financial sector in India was to make financial services more operationally efficient.

 

The first ATM which came into existence in India was in 1987 which marked the beginning of this transformation. It was considered a marvel of tech innovation in the Indian market as people did not have to go to distant bank branches to withdraw money. Soon, the number of ATM’s spread like wildfire across cities and towns in India.

 

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The focus was constantly on making the user experience more efficient. Whether it was done for improving User Experience (UX) or to make business more profitable cannot be ascertained. The fact of the matter is that it certainly made life easier for the customer.

 

Another major change that took place in the late 2000s was when online retail firms like Flipkart & Amazon became a part of the fintech industry in India, it provided a customer with an opportunity to order products online and pay for them without using physical cash. Though people were apprehensive of the online payment technology at first, they later adapted to it.

 

In the early 2010s, several mobile applications also came into the picture - One could order pizza sitting in the comfort of the living room, recharge their phones, or book a flight ticket all of which can be done through online transactions.

 

 

The government’s support in the rise of ET Money

 

On the evening of 8th November 2016, India’s PM Narendra Modi announced overnight demonetization of Rs 500 and Rs 1,000 Indian currency. This move changed the Indian fintech sector once and for all. People switched to online payment mode almost overnight.

 

Aadhaar card played an important role in being a primary identity proof while improved smartphones & cheaper internet helped in making the entire switch to online smooth. An Aadhar enabled e-KYC option allowed fintech platforms to bring customers overboard without any physical documents.

 

E-Nach & E-Mandate helped in providing necessary services facilitating the financial intermediary aspects of ET Money. Leveraging Aadhar to provide credentials proved to be an integral game-changer.

 

“ETMoney capitalized on all of these developments to tailor its bouquet of services. Back in 2010, opening a Demat account took a lot of time. A person had to wait an average of two weeks to open a Demat account, in today’s date a Demat account can be made within 48 hours.”

 

As of now, Aadhaar card architect Nandan Nilekani is coming up with Sahamati - an account aggregator model which will enable small individuals and businessmen to share their financial data with a third party based on their consent.

 

To date, there is no framework for individuals to share their data which are stored in islands like banks, healthcare or telecoms.

 

“When the Sahmati scheme will roll out, it will allow a mechanism for people to share their financial details with financial intermediaries such as ET Money. Given the set of services provided by ET Money, it would be very helpful. This will allow us to create financial plans without requiring pages of information. It will be a powerful consumer tool.”

 

 

The ETMoney success story so far

 

Launched in 2015, Smartspends was backed by Times Internet and later rebranded itself as ETMoney in 2016. The team’s goal was to create a mobile-first home to address the personal finance needs of the people.

 

In the past four and a half years, it has helped people in taking those very important financial decisions. 

 

“Finance, in general, is a complex and monotonous topic for many, people do not want to delve into it, we at ET Money have taken this problem head-on, we help to break down the complex part of finance to our customers in simple terms.”

 

ET Money provides several services including Personal Finance Management and Direct Mutual Funds. It categorizes all your spending, bills and accounts, and provides regular insights into money through graphs and charts.

 

The app also provides an opportunity for you to track and manage your mutual funds' investments, earn interest rates from fixed deposits through zero commission Direct Mutual funds. It caters to short-term loans, insurance policies, credit scores amongst various other services. Its Smart Deposit service is also very popular as it provides better returns than idle money in a bank account.

 

ET Money Business Plan and its target customer group

 

ET Money migrated from a regular to a direct business plan, given the number of customers focusing on direct plans. The platform provides multiple products on one app such as mutual funds, spend-tracking, term life insurance, fixed deposits and cards.

 

“We involve ourselves with a customer’s life journey. We have seen that a customer who invests in SIPs continues to use the app. The projected lifespan for them to use our platform is 10 years plus. The long duration is what makes the business plan attractive. 

 

Term life insurance, health insurance, are the two life-long products- these two products help us to monetize our business. In today’s date, Covid-19 has taught us the importance of health insurance in a person’s life.”

 

ETMoney also provides investment options through NPS (National Pension Scheme) accounts and also generates revenue through products which people buy on their platform.

 

“All our products are based on long-term planning. We plan to monetize further by providing value-added services to our customers.”

 

ETMoney believes in a mobile-first approach when it comes to a target audience. 

 

“ET Money does not focus on any niche target audience per se. We target anyone who values time, looks for convenience, a better lifestyle and has a smartphone.”

 

 

The present and the future of ET Money

 

“What demonetization was to online payments, coronavirus is to digital services. Yes, indeed, the virus has negatively affected the Indian economy; however, it is a boon for financial services.”

 

Nowadays, people are more comfortable using digital services. A lot of people who were relying on personal advisors to invest money have shifted online. In the past year since the outbreak of the coronavirus, people have invested more in mutual funds, and the trend has picked up pace.

 

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During the pandemic, people are spending less than what they used to do. For example, all the money which was spent in commuting to the office, weekend outing or apparel shopping is now being saved in digital financial instruments.

 

Navlani says, “Our business has increased many folds in the past one year.” He is also optimistic about the post-pandemic future.

 

“The current shift to the digital ecosystem is going to become a habit. Earlier, I was a stickler for credit cards. Now I find payment through UPI more convenient. I believe that in the next year, 50-70 per cent of the population will stick with digital services."