Role of Fintech in Accelerating Financial Inclusion: How Rupeek is Democratising Access to Gold-backed Credit

20% of the Indian population is still unbanked, implying enormous untapped economic potential. Fintech companies can play a key role in boosting financial inclusion by leveraging the existing financial ecosystem and emerging technologies to make banking simpler, more accessible, and cost-effective for millions of unbanked and underbanked Indians. 

The government has already laid the groundwork for the fintech industry to provide flexible and innovative digital banking with regulations like the Unified Payment Interface (UPI), Aadhaar, and open application programming interfaces (APIs).

Fintech companies are innovative, nimble, and have lower operational costs than traditional banks. Here’s how they can lead the way:

India has the second-highest active internet user population in the world. Growing internet penetration and online banking capabilities enable fintech companies to penetrate remote areas where physical bank branches cannot be set up. By providing access to even basic products or services, like savings instruments or financing, fintech companies enable people in remote areas or low-income, unbanked individuals to save, grow their money, and take advantage of government programmes and assistance.

Unlike traditional banks, fintech companies require minimal paperwork to lend. This makes borrowing from them much simpler and faster. Fintech companies also use AI for risk assessment of customers with limited to no credit histories; assessments based on indicators like income and spending patterns. This gives small-ticket borrowers and local businesses access to microfinancing services for important purchases and capital investment.

Mostly, compliance needs and obligations — like capitalisation, identity verification, or consumer grievance redressal — are lighter for fintech companies than their traditional counterparts. For instance, the Reserve Bank of India (RBI) allowed fintech companies eAadhaar verification and video know your customer (KYC) to promote digitisation and lower customer acquisition costs.

Fintech companies can rapidly roll out new features and products by testing new innovations in secure sandboxes while checking for adherence to government regulations and data security. This enables fintech companies to provide innovative products and services in a faster yet secure manner.

Fintech innovations enable fast, secure digital payment modes. The use of AI enables fintech companies to instantly verify and transfer digital payments. Online payment modes provide more flexibility, convenience, and ease, increasing access to essential goods and services for all. For example, consumers can book LPG cylinders online or pay utility bills from the comfort of their homes.

India has one of the highest levels of physical asset ownership, mainly in the form of gold and real estate. About $1.5 trillion worth of gold is held privately by Indian households. Yet, most of the loans Indians take are unsecured, particularly from informal sources. This makes borrowing more expensive, possibly limiting low-mid income groups' credit penetration.

We recognised this gap and started a gold loan service. We partner with large public, private, and foreign capital providers – all of which are brought onto one integrated platform. On the distribution front, we wanted to have as wide a network as possible. So, disbursal happens through brick-and-mortar branches, at customer doorsteps, and online.

Since we are dealing with a valuable physical asset – gold – earning customer trust becomes very important to encourage them to use our services. To make the process secure and convenient, our agents safely pick up and return the gold to its owner. The gold is deposited at trusted partner banks for maximum security during the loan duration.

To ensure the ball is never dropped, we use Salesforce Service Cloud to enable collaboration and communication between internal and external stakeholders throughout the lending process. We have streamlined crucial processes to extend our services as far and wide as possible. Some of these are mentioned below:

• Customers can seek answers or raise service requests through the Rupeek app, call centre, emails, or a recently launched chat feature that is Service Cloud-enabled
• From online support and field agents to back-office teams which track loan payment, all teams are unified around a single source of truth, increasing efficiency and productivity.
• Having a unified customer view also allows our employees to process and close customer requests on a single call, freeing up the time to serve more customers from anywhere.

While we make access to gold-backed credit easy and fast, we have clearly set negotiable and non-negotiable factors to drive responsible borrowing. This keeps people from falling into debt traps, without limiting their access to credit when needed. Our commitment to solving India’s unique credit needs by harnessing the power of disruptive technology will only become stronger in the coming years, and parallelly make absolute financial inclusion a reality.