CxO of the Week: Mahima Garg, Chief Risk Officer, slice

Mahima Garg, CRO, slice, graduated from IIT Bombay in 2008 and did a short stint at a startup. Her career started with Capital One in 2010 and spent 8 years becoming a Senior Business Manager. She developed strategies and led data science initiatives to expand the company’s Canadian credit card business. Upon her return to India in 2016, the fintech start-up ecosystem was vibrant and booming, which sparked some interest.

In 2018, she met Rajan, along with a few other founding members of slice. The idea of slice brought on a fun challenge in terms of risk analysis with GenZ and millennials as target customers. So, she took upon the challenge and joined slice in 2018 as the Chief Risk Officer.

With CiOL, Mahima outlines how the Fintech industry has evolved. From banks to Digital payments solutions, we have come a long way and there's still a long way to go. Mahima, an expert in the field, talks about the challenges and how slice is overcoming them. Excerpts:

What are your roles in slice? What are your immediate goals for the company?

Slice is a payments solution designed for the youth, and the company’s vision is to challenge the existing, traditional banking & finance norms which rule us today. My role at slice is to develop and execute credit risk strategies that enable & propel business growth while keeping the NPA within the threshold. I’m responsible for deploying effective underwriting models and credit strategies and building our data analytics team to help serve our young customers more efficiently and effortlessly.

Starting, we were operating at a much smaller scale. In the past 3 years, we have expanded to 30 cities, have an approved customer base of 3,00,000 customers, with a reduced credit risk of 1%. These milestones have validated our model and strengthened our belief to continue challenging the archaic rules that govern the way we bank & pay.

The FinTech sector has benefitted from the COVID-19 pandemic. What is the future of credit-based businesses post-pandemic?

Future of credit-based solutions

Digital adoption:

• With lockdowns and social distancing measures in place, many traditional financial & banking practices could not work.
• For example, sending an associate to a customer to collect documents for verification was simply not possible. The pandemic prompted the massive innovation & adoption of digital payments in the Indian ecosystem, with more people relying on digital payment solutions to buy groceries, pay their bills, etc. The pandemic essentially acted as a big boost for the fintech sector, too, which already had a digitized onboarding infrastructure in place.
• Even amongst youngsters, especially with the intuitiveness and convenient use of digital payment solutions, we’re seeing a trend where they now prefer online transactions over cash payments.

Hyper-personalization of credit & financial solutions:

• As more people move towards digital payments, the segment would need to evolve & keep up with consumers’ needs & expectations.
• For example: With this shift towards digital payments, people would naturally want to consolidate all their expenses.
• Hence, payment solutions that offer hyper-personalization, like - insights into spending habits - are something that consumers, especially youngsters, are looking for.

Fast, simple, & intuitive solutions:

• The credit & payments space is undoubtedly seeing a significant boost. During the pandemic, more people used credit to pay their bills, their rent, etc.
• Furthermore, banks are actively partnering with fintech companies to overhaul their SOPs to cater to the changing customer expectations.
• A few years ago, people may have been okay with waiting 10 days to get approval for a credit card and another 5 to receive it. Now, the customers’ expectations are instant.
• With fintech companies speeding up these processes through technology, there is a huge opportunity for growth in the credit space.

Will DeepTech like Big Data boost the Fintech industry?

Absolutely! We’re already venturing into a world where financial services are just a touch away. It is now possible to transfer money, apply for loans, get credit, and get verifications done right from your smartphone, without ever having to visit a bank. Technologies like Big Data, Artificial Intelligence, and Machine Learning are essentially the engine of the fintech industry, allowing fintech companies to stay agile and adaptable in an ever-changing market space.

Fintechs leverage AI and Big Data to create detailed user profiles and analyse consumer data such as demographics, purchasing habits, and financial history to create risk profiles of consumers, which enables companies to screen and assess the consumer’s financial appetite before onboarding. It also allows companies to offer personalized products and services/suggest the best deals to them. In today’s day and age, customization is the top expectation. Consumers want deals and offer that suit their lifestyles, insights into their spending habits, and seamless support, and Deep Tech enables those functions seamlessly.

Furthermore, big data significantly helps in the fight against fraudulent activity. Companies are actively deploying AI models to develop robust fraud detection systems to spot any suspicious transactions and alert consumers of security threats instantaneously. Advancements in DeepTech will undoubtedly propel the fintech industry forward and make digital banking more intuitive and effortless, which will benefit the consumers at large.

Only recently MobiKwik came under the radar of leaking user data on the Dark Web. Even if it wasn't true, people still are at risk. How does the ever-evolving technology mitigate risks in the industry?

It is common knowledge that data management is serious business, especially in an industry that relies on user data to function. In the credit and payments space, data collection is necessary to help customers with credit, but companies must use the data judiciously and ethically. It should always be to help the consumers.

When it comes to cyber-attacks and data breaches, companies must, at all costs, protect their customers and stakeholders and be upfront about the situation to build and maintain trust. The primary objective must always be to have strict policies and security measures in place, for the best way to mitigate a data breach is to not let it happen in the first place. With hundreds, if not thousands of new threats being created by cybercriminals every day, companies must always stay up to date with their OS and security patches to fix any vulnerabilities. It’s also always a good idea to configure internet firewalls and enforce strict user account security.

However, as data security advances, so do criminal exploits. If a security breach does happen, the priority for any company should be to allocate resources to provide a rapid response and soften the blow. First and foremost, check websites and online sources for misplaced information and request search engines and website owners to take down any vulnerable data that they may have obtained from compromised sources.

What is the role of the Government in creating a motivating environment for companies like slice?

The government and regulators have actively been pushing digital payments forward in the country. The setting up of Account Aggregators, New Umbrella Entities, NPCI, and Aadhar XML-based checks plays a key role in creating a robust digital payments ecosystem in India and makes it easier for fintech companies to take advantage of these means to improve financial inclusion.

Also, with the increase in the FDI limit in insurance from 49% to 74%, the fintech industry would get a much-needed boost along with a platform to innovate and expand at a global level.

Has the Union Budget faired your expectation?

The allocation of Rs 1,500 crores for the development and acceleration of digital payments in the country, and the stimulus packages for SMEs, MSMEs, and startups are excellent initiatives by the government and are greatly appreciated. In terms of expectations, I feel like they have set up the right provisions for all these initiatives.