Finhaat set its sights on reaching more rural households with its unique model of distribution
CXOToday has engaged in an exclusive interview with Vinod Singh, Chief Executive Officer & Co-Founder, Finhaat,
Question 1. Please share a brief about the journey of Finhaat so far.
Answer: Finhaat is a financial product delivery platform created for the emerging middle-class and lower-income segments, primarily based in the rural, tier 3 & 4 cities of India. With its unique assisted digital model, Finhaat seeks to bring together the product partner (financial product provider), and the distribution channel (partner institutions with the reach) to the target population that is underserved. The Start-up has set off this process by offering insurance products first; through its Insurance Broking Platform – Finhaat Insurance Broking Pvt Ltd. The products being offered across Health, Life, and Motor categories are structured to ensure that they are suitable, affordable, and cater to the specific requirement of the segments. The assisted digital model also allows the start-up to service the offerings through the product life-cycle (from onboarding to accessing benefits) by leveraging technology and the presence of partner institutions on the ground. (The start-up has reached almost 60 percent of all Pin-codes all over India with approx. 60 percent of its customers being women)
Question 2. How has Finhaat planned to target its audience with a very broad annual income spectrum i.e., (1-20 LPA)?:
Answer: Finhaat works in a defined geography, building its platform to deliver services for the population present in rural and semi-urban areas. Our product and distribution strategy is mainly built on the core philosophy of assisted digital with the following thought process:
1. Households with INR 1-3lacs p.a. of Income: This category consists of more than 15crs of households in India, presenting with a big base but limited capacity to pay. What they need are products that are affordable, well-directed to their needs and that complement the present government schemes to ensure maximum benefit can be delivered to them. Finhaat will mainly focus on this segment through existing Institutions by getting the right innovative product and fully digital service journey for this population. One of the key areas of focus for us for this segment will be ensuring that the support is available post-product sales mainly during claims and that’s where we have built an end-to-end digital journey around claims for all the curated products we bring for this segment.
2. Household with INR 3-5Lacs p.a. of Income: This is emerging India and placed at a unique economic juncture. This is the place where asset ownership starts increasing the need for simple Insurance products like 2-wheeler Insurance, Shop Insurance, etc. starts. Again, this segment has a limited capacity to pay, and hence there is a need for specifically targeted products with strong post-sales service mechanisms. In this case, we will continue to leverage our rural institution partnership to mainly focus on bringing curated products as explained above and cross-sell simple retail Insurance products like 2-wheeler Insurance, etc.
3. Household with INR 5-20Lacs p.a. of Income: This segment needs more engagement for risk mitigation strategy and hence a distribution network that can engage on a wider range of products and services. Apart from partnering with specific Institutions that have engaged in this segment, we will also be building our own Individual financial partners (IFPs) to target this segment and deliver the right products on a complete digital distribution model.
2. Household with INR 3-5Lacs p.a. of Income: This is emerging India and placed at a unique economic juncture. This is the place where asset ownership starts increasing the need for simple Insurance products like 2-wheeler Insurance, Shop Insurance, etc. starts. Again, this segment has a limited capacity to pay, and hence there is a need for specifically targeted products with strong post-sales service mechanisms. In this case, we will continue to leverage our rural institution partnership to mainly focus on bringing curated products as explained above and cross-sell simple retail Insurance products like 2-wheeler Insurance, etc.
3. Household with INR 5-20Lacs p.a. of Income: This segment needs more engagement for risk mitigation strategy and hence a distribution network that can engage on a wider range of products and services. Apart from partnering with specific Institutions that have engaged in this segment, we will also be building our own Individual financial partners (IFPs) to target this segment and deliver the right products on a complete digital distribution model.
Question 3. How is Finhaat accomplishing rural distribution and innovations on the technology front?
Answer: Finhaat’s key focus is to cover the full lifecycle of the product by leveraging technology. One of the areas where we work extensively is to build curated products and digitize the journey end to end. Once we have curated product for a particular partner institution and segment, we work on the following:
1. Sales Journey: Finhaat digitizes the end-to-end sales journey for clients to ensure that we are able to solve the real-time access of policies even for bespoke products that are made for a specific institution. Also, understanding that every partner Institution has its own structure and process, Finhaat has built its system to be flexible that has the capability to mimic the organization’s structure in terms of approvals and closing sales.
2. Post-sales services and claims: We strongly believe that for these initial sales to become a habit, clients need to see smooth Post sales support and claims. Finhaat digitizes the whole claim process for its curated products to ensure that access to these services through our institutional partners is easy and frictionless.
Question 4. How is Finhaat reaching the rural areas with its uniquely designed Assisted Digital Platform and Low Ticket Size products?
Answer: Rural distribution of financial products and specifically Insurance has 3 key challenges:
1. Products built for urban areas are generally pushed into rural with price points & benefit reduction
2. Lack of post-sales support
2. Lack of post-sales support
3. Lack of trusted one-stop solution for Rural population
Finhaat targets to solve all these three problems through:
1. Its curated product platform that is built to cater to the very specific needs of the target segment
2. Digitise the sales and post-sales support to ensure that we are able to provide a paperless journey through the product life cycle
3. Distribution through ties up with institutions that have a presence in these areas and providing the right product and digital platform to ensure that we are able to provide assistance at each level of the product journey
Question 5. Do you think of fintech as an innovation, the future of money, or a mode of bringing social change, and how is the brand contributing to the same?
Answer: Fintech is definitely a future for Innovation with the right distribution focus. In any Fintech, one needs to understand the difference between a Push product and a pull product for the segment and hence design their product journey. Finhaat is looking forward to creating the right solutions to deliver a far better product experience for its end clients which will lead to behavior change over a period of time.
Question 6. Briefly describe the latest trends in the fintech industry, its scope, and current scenario.
Answer: Any financial transaction has multiple layers and every layer has to work together for a frictionless experience. The latest technology breakthrough around payments, documentation, or even the way the system responds to a request has helped in making these layers frictionless and, hence, offering a great push to the entire fintech industry
Question 7. Please share Finhaat‘s future expansion plans.
Answer: Presently Finhaat caters to more than 40 Institutions covering more than 15 lacs lives across 60pct of the pin codes of India through our products in FY23. In FY24, Finhaat the key focus area for growth will mainly be three-fold:
1. First, Focus on increasing the Curated product suite through the right product building,
2. Secondly, increase penetration through multiple partner tie-ups and enable our partners to offer the right product and experience to their clients and
3. Thirdly, reach out to more than 65lacs lives in FY24.
Question 8. What were the biggest challenges Finhaat faced with huge competition in the fintech industry, and how is the brand strategizing to stay socially relevant and different from other fintech firms?
Answer: The area in which Finhaat operates presently has very low penetration. We welcome the right competition here as this is a new area that is being built and there is a scope for multiple players to contribute significantly in this area to build a strong product suite in the future. Presently we differentiate from our competition with our key focus on targeting the life cycle of the product and not just sales effort. Today, there are very limited platforms that are building curated products and even in this space, the key focus area is to digitize the sales. Finhaat focuses on curated products with fully digitized life cycle management of the product.
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