CxO of the Week: Lalit Mehta, Co Founder & CEO, Decimal Technologies

Lalit founded Decimal Technologies in 2009 when the concept of digital transformation in the BFSI sector was in its infancy. Under his leadership, the company enabled early adopters in the Indian banking ecosystem to implement digital technologies and thereby helping them to become leaders in new-age banking today. At Decimal Technologies, Lalit’s role encompasses conceptualizing new products and offerings, own key client relationships, giving direction and shaping the future roadmap for the company. He has built a path for Decimal where it can keep reinventing every few years and stay ahead of the curve.

Lalit has been instrumental in the design and delivery of some of the best know Digital Implementations in Indian Banking and Financial Services Lalit has over two decades of experience leading innovation in the fields of finance and technology.  He is also a serial entrepreneur who has founded another company in identity and access management viz., Mobico Comodo, in addition to one in the education space called The Olive Schools. Interestingly, Lalit has also worked in the automotive space and was a part of his family car dealership business before he found his calling in finance.

Read Lalit talk about the FinTech industry and its future in the latest edition of CxO of the Week.

Has Covid-19 accelerated the transition to digital for the lending/banking industry? What will the new normal be in the overall financial and banking industry?

When it comes to our financial system adopting digital ways, the transition in India was already happening, although, at a slower pace. With the pandemic and ensuing need to move every operation, across sectors, to digital channels, the pace of this transition just increased.  The lockdown enabled a faster adoption of digital ways, and traditional finance institutions had to collaborate with digital partners to render their services smoothly to their existing customers and acquire new ones.

A recent study by Mckinsey that surveyed global consumer sentiment during the COVID crisis indicated that during the initial phase, the first month or so, of the global lockdown, we vaulted almost 5 years forward in terms of digital adoption, especially the banking sector. The study further showed that 75% of consumers who were first-time digital adopters would continue using these methods even after normalcy returns.

With social distancing become the normal way of life now, many business owners, shopkeepers and vendors prefer cashless transactions now. This only shows that there would be a huge adoption of digital ways and a new normal in place, not just for the banking industry but across many other sectors as well. We will see this trend of digital financial services, right from lending processes, to digital payments and customer acquisition spreading in both urban and rural communities.

Did pandemic force us to move to digital lending?

To an extent, yes, although, the need for digitalisation in lending has always existed. Only the need was never felt more than today. With physical distancing and contactless transactions being the need of the hour to fight the virus and to keep ourselves safe, migrating towards digital means is the way forward. Even in a general sense, the traditional lending space has always faced multiple challenges, such as being highly manual in nature, requiring a high amount of physical documentation, and unstructured processes also increasing the time factor, causing a slowdown in disbursal rates. Often, SME borrowers and those in small towns and cities would withdraw their applications due to the lengthy process and turn to informal means of credit.

All this can be streamlined via digital solutions -- Cloud-based-lending is one such solution. It can digitise the entire process of customer on-boarding to loan disbursement, eliminate manual work almost entirely, and save precious time leading to increased efficiency and customer satisfaction, and higher disbursal rates. We, at Decimal Technologies, have been working with multiple Banks and Direct Sales Agents across India, to enable digital lending through our platform  – Saarathi. It is a Digital Lending Platform for channels that connects thousands of channels with 35+ lenders to process digital Loan Files.

What is the future of FinTech? What are some key things that you suggest, that any FinTech should focus on?

India as a market is yet to achieve complete financial maturity. Many avenues are yet to be explored to their full potential, which makes the future of Fintech in India certainly bright and we have only just begun.

There will be tremendous growth vertically as well as horizontally; which means the majority of financial services that are still done traditionally by most people will gradually move towards digital. For example, SME lending in India, though very crucial, has faced a lack of credit flow due to various challenges posed by the traditional method. Here, integrating AI, cloud-based technologies and data analytics will help smoothen out these challenges immensely, resulting in higher disbursal rates and necessary funding required to support the backbone of our country (SMEs).

Then, horizontally, there’s always a scope for innovation and disruptive ideas that can be brought to the fore and help India mature as a financial market. The digitally native younger population of India is further increasing the need for digital financial services and government and private companies are taking note of this, to cater to this segment.

Some of the things that, I believe, the FinTech industry must collectively focus on hereon is to deliver customised products for the Tier 2 and Tier 3 markets. This can be done by building multilingual, smart and customised APIs tailor-made for each business/customer in that region and well suited to use, locally. Currently, Fintech firms act more like enablers for traditional finance institutions; although, with an uptick in funding and favourable policy support by governments, Fintech firms can even offer traditional services as their own products without any physical interaction.

We are seeing that happen in the case of digital lending.  With the Internet and mobile penetration now reaching even the remotest corners of the country, the overall industry can strive to facilitate holistic financial inclusion of all our citizens and businesses, and provide financial services seamlessly all on one smartphone.

What according to you is increasing the gap in the market and the core financial service providers like banks?

I believe the gaps in the market are caused by limitations that traditional financial institutions face, such as geographical boundaries, could be domestic or international, simple payments via traditional methods that used to take days to process, before Fintech players started offering seamless P2P payment solutions, saving time and improving customer experience.

India being a majorly young, and fast-becoming tech-savvy nation, for traditional banks to serve these new-age customers- young busy professionals with limited time, is an opportunity to embrace emerging technologies. With slow processes, waiting in queues at physical banks for simple transactions is a serious drawback and could hurt customer experience, especially, in the current times. Traditional Banks would also have fixed sources of revenue like various deposits, lending etc., which means less opportunity for innovative products and monetisation. Fintech and banks can work together to overcome some of these challenges with their numerous product offerings, leveraging their respective expertise and experience.

The Indian banking and financial system have historically been using technology conservatively, but that too is changing now. We’re now seeing traditional banks and institutions, collaborating with Fintech players to bridge the lack of internal adoption of various technology platforms, such as using hybrid or cloud-based services, Artificial intelligence and Blockchain to improve security and overall customer experience.

If we were to look at lending specifically, deploying AI and Cloud-based products can hugely reduce existing gaps faced by traditional institutions and even improve the penetration of formal credit in semi-urban communities, which remain underserved.

Tell us about your other social ventures.

At Decimal, we are always looking for opportunities to help and support the community around us, gender equality and social upliftment being close to us. As of today, we have dedicated teams set up for handling various social causes such as the ‘Dream Girl Foundation’- a not for profit body that works for the upliftment and betterment of girls, even boys in many cases, by providing education, shelter and clothing across India. Our teams also assisted The Earth Saviours Foundation, an internationally recognised NGO in Gurgaon. Additionally, our team has helped the people of Kerala, by raising a substantial amount of funds for them and donating them, when the worst flood of the century hit them back in 2018.

Personally, I have been part of a few groups that are involved in organizing help for COVID patients. We worked on ways to validate information through technology intervention as we saw that validated information was one key demand. As part of our family social venture, we run a K-12 school in a small town called Fatehabad. The objective of the school is to offer a city-like education in that area at an affordable cost and prepare students and parents to be ready for the world that students are expected to face post-education. Providing the right exposure and experiential education are important parts of the paradigm and pedagogy.

What’s your mantra to become successful in life and what would you like to give back to society?

The first thing I would suggest is to understand success for yourself and to not mindlessly run after what is not part of your vision. Being aware of what keeps you motivated and brings out the best in you helps define success for oneself.

If I were to name a mantra, I would suggest everybody adequately nourish the mind and the body, which results in a better version of yourself at work and one’s personal life. I take a special effort to stay upbeat and keep myself informed of all major happenings in our society. I also pay attention to staying connected with people that matter to me, including my colleagues- current and former, to maintain a strong and reliable network.