Fintechs entering mainstream business

KARACHI: Fintechs are rapidly entering the mainstream business, which is a good sign. There was a time when every fintech wanted to become a bank, and now all the banks want to act as Fintechs, said Mohammad Yasir Ilyas, global chief executive officer of Hysab Kytab, a technology company that provides digital solutions through a suite of financial management and consumer products.

The State Bank of Pakistan (SBP) has been playing a great role in facilitating and regulating, providing policies and governance to Fintechs. Granting licences to digital banks (neo-banks) can also be seen in view of the same. These neo-banks will have no branches and would be relying heavily on the solutions developed and offered by the Fintechs, he added.

Ilyas has rich working experience in various countries. He has also worked for IKEA Saudi Arabia, OPCO Global Technologies and KPMG in different capacities.

Hysab Kytab is a subsidiary of Jaffer Business Systems (JBS). Its consumer app has over 640,000 plus users from over 160 countries, who have clocked-in over 12 million transactions in Hysab Kytab.

Following are the excerpts of a chit chat with him:

What is the reason behind setting up a fintech on personal financial management?

The personal financial management (PFM) is an innate need of every household. Our mothers use to manage their finances using a diary that evolved into excel sheets for more tech savvy individuals, which further evolved into mobile applications in the form of PFM.

Early on, we realised that the banks will not be able to differentiate or increase their earnings only by offering mobile and internet banking solutions to their customers. For the banks to differentiate and be able to provide hyper-personalised offers to their customers, the banks will need to understand the context of their customers — that is enhancing their customers’ understanding through understanding the needs of each of their individual customer.

To gain this 360 degree view of their customers, the banks were bound to adopt PFM solution and offer as part of their digital banking solution to their customers.

Some of the major KPIs our solution helps the customer banks, included increase in deposits, new accounts, increase in the customers base, account acquisition, NTB portfolio, increase in transacting customers, app engagement and stickiness, etc.

Our solution provide the banks a unique opportunity to increase engagement with the customers, discover cross-selling and upselling opportunities, improve marketing results, increase brand loyalty, while at the same time, help the banks increase their customers base.

I would like to take this opportunity to showcase our major features, define them in simple terms and through the use cases share how our solution features help the banks achieve the above objectives:

Group saving goals

The UI/UX of group saving goals are designed exactly how we create group chats in WhatsApp. The best way to describe it would be through an example. Let’s assume five of my friends and I decide to go to Vegas for vacation next year and we agree that it would cost us $30k. If I have PFM in my bank’s digital banking experience that offers group saving goal as a feature, I will be able to go in my PFM, add my friends from my phone’s contact list and create a group saving goal.

Once the goal has been created, my friends will receive SMS or WhatsApp notification with the details of my saving account and the amount they need to contribute on a monthly basis. My PFM would also send reminder SMS/WhatsApp notification every month, inviting them to deposit their share.

Auto saving bucket

The idea behind this feature is you save every time you spend. This feature would allow the user to choose rounding off the expense amount to the nearest 10^th, 100th or 1000th. For example, as a user if I chose rounding off to the nearest 1000th, and I am spending $1,950 on something as an expense, my checking account will be debited by $2000, of which $1,950 would go towards the expense and $50 will be transferred to my savings account.

In case, I do not have a saving account, the moment I chose any rounding off option, a savings account will be created for me.

Peer comparison

As a user, I will be able to choose my peer group based on my income or expense in a specific category. Once my peer group has been chosen, I will be able to see my performance against my peer group. The app will show me in an anonymous way what kind of the budgets my peer groups are creating, what kind of saving goals my peer group have created, what kind of financial products have helped my peer group, etc. This feature helps the banks improve their engagement with the customers, know more about them and inspires them by showing what other people in their peer group are doing.

PFM statement

This is e-statement reimagined. The traditional monthly statements received from the banks are quite dry with debits and credits. Our PFM allows the bank to use monthly statement as an opportunity to establish meaningful engagement with the customers.

In the PFM statement, the user would see graphical view of their expense broken down by categories, their major transaction of high dollar value, their performance on budgets, their performance on goals, their performance against their peers, they will receive one financial tip/month and lastly the bank would showcase various products that are most relevant to them with details.

With this feature, the bank would expose the customers to various investment options and products that are tailored to that specific customer and helps the bank improve the lives of many people — turning customers into loyal ones and advocates for the banks’ brand.

Alerts and recommendations

The application should be able to send alerts to the users based on their activities with reference to budgets and saving goals.

Similar to how telecommunication companies send alerts to their users on the utilisation of data packages. If you subscribed to 50GB data and you have consumed 25GB, you will receive alerts saying you have consumed 50 per cent of your data package.

Likewise, the application should be able to assess the financial transaction and be able to match the bank’s offering. The application should be able to display the bank’s offerings as recommendations against the customers’ financial transaction so that the customer feels my bank knows me and is sending me targeted offers.

What motivated you to return to Pakistan?

It is the love for the country that made me do that. I am a US citizen who was living a very comfortable life in the Middle East working for IKEA and earning seven times more salary than what I was going to make in Pakistan.

In my last position, I was working as the country consumer navigation manager, looking after Saudi Arabia and Bahrain at the country level. My decision to return to Pakistan was rooted in my desire to do something for our beloved country.

Living abroad, I realised that Shan Masala was the only true global brand that Pakistan was able to produce; however, there was not a single technology that was made in Pakistan and went global.

Despite having one of the best software developers in Pakistan, our IT industry was focusing on exporting the raw material (development hours) rather than a finished product. Hence, I joined Hysab Kytab in January 2019 and turned it into a brand that is now recognised by the global players and very soon we will have our customers’ base across the globe.

So, to answer your question, moving back to Pakistan is not a logical but an emotional decision for me. In the current economic situation being someone who happens to be a US citizenship, it is very easy for me to move back to the US and enjoy a good life. However, I do not see myself giving up — rather I see us contributing to improvement of Pakistani economy through export of our PFM.

How much market you have captured in Pakistan?

We are the most preferred PFM provider in Pakistan. All the four banks who wanted to offer PFM solutions to their customers chose Hysab Kytab as the preferred PFM providers.

These include Habib Bank Limited (HBL), Askari Bank, Bank Al Habib Limited (BAHL) and the Bank of Punjab (BoP). We are also in talks with other major banks in Pakistan and very close to signing contracts with them.

We hope to maintain the position of number 1 PFM provider in Pakistan and develop more products to help our customers deliver targeted offers to their customers.

What are your plans to expand services in foreign countries?

As I shared earlier, our goal is to become a global brand. This required us to partner with leading global banking solution providers and augment our solution with their core and digital banking solution as a pre-integrated solution.

This was part of my scale/inorganic growth strategy. So far, we have been able to do great on this front, as well. We have developed a channel partner network of 12+ sales and implementation partners network across the globe (present in MEA, APAC, Europe, and Americas regions).

We are Pakistan’s first fintech solution to be made available on Temenos marketplace (Temenos Exchange). Temenos Exchange acts as an accelerator for the fintechs and software developers, helping them develop, validate and monetise new banking solutions. The esteemed privilege to be on Temenos Exchange means Hysab Kytab can write once and sell its solution across a vast banking audience of more than 3,000 banks in 150 countries collectively serving the banking needs of 1.2 billion people worldwide.

Being a winner, what are your future plans to explore member economies of APICTA?

We had already developed a good partner network in the APEC, MEA, Europe and Americas regions. APICTA awards will definitely add more to the credibility of our brand Hysab Kytab and help us gain more transactions with our partners and customer banks. I met some interesting companies at APICTA with whom we had already started our engagement and I hope we will be able to do great business globally through them.

How do you see the importance of participating in the APICTA Awards?

To support and promote “Made in Pakistan” brand, I believe it is imperative for the Pakistani companies to participate and compete in such events and showcase our strengths. Through our participation and victories in these events, we are able to promote Pakistan positively. More than ever before Pakistan needs good press — may it be the field of sports or business. Hence, all the good companies and brands in Pakistan must participate and win the competitions in these events.

What are your views about the APICTA Award held in Pakistan and its message to the world?

It was an amazing event and I am very thankful to the organisers for doing such a remarkable job. Special thanks to P@SHA for hosting such a successful event.

What is your message to APICTA members, foreign investors and IT companies about Pakistan’s business climate?

Pakistan is a land of untapped potential. We have best resources in every field. With the world being able to embrace work from anywhere concept, all leading economies can keep their cost down, while benefiting from best brains and skillful people in Pakistan. At the same time, Pakistan is a country of 220 million people. It’s a big market for the companies from other countries to tap into.

What is your advice to Pakistani companies regarding the participation in APICTA, innovation and overall business?

I strongly advise Pakistani companies to participate in similar events. This would not only help us improve the image of Pakistan but also help develop the relationships with the professionals and companies from other countries. The future is all about collaboration. These events provide opportunities to find companies to collaborate with the increase your reach.