"In conversation with..." is a series from Kapronasia featuring conversations with some of Asia's most interesting fintech players and companies. To keep up with the series, please subscribe to our newsletter. If you have an interesting story and want to be part of the conversation, This email address is being protected from spambots. You need JavaScript enabled to view it..

This edition of In conversation with is done in collaboration with Fintech Connect Asia, which was held from October 11th - 13th in Singapore.

For those who may not know you,  can you share a little bit about your background and your role at Jio?

Thank you, it is very nice to be on this panel. My name is Jagdish Narayanan. I am the Chief Information Officer at Jio Payments Bank. I have been in the BFSI space, working with banks and FinTech for almost three decades now. I worked with large multinational banks like Citi, Barclays, and Bank of America, for a long time. For the last six to seven years, I moved to the more India-based FinTech, next-gen kind of entities, which are the payment banks and the typical payments providers, given the fact that there has been a digital payments explosion going on in India for the last few years.

As part of this journey, I've had the opportunity to work with two large payment banks: Aditya Birla Payments Bank, and now, Jio Payments Bank for about four and a half years. It's exciting to be part of this FinTech revolution, witnessing the transition of the country’s economic system, from paper-based payments and physical transactions-based banking to the digitized cash-free device, plastic-free, sort of payments, free of everything. It’s an extraordinary transition and it’s wonderful to be part of this journey.

Although you are a digital-first payments bank, the organization is targeting to have 70,000 outlets over the next couple of years. In an environment where many banks are looking to shrink their branch network, how did the organization narrow in on the strategy and how critical is it future of the bank?

The way we are looking at it, it’s not the classical brick-and-mortar branches that the other banks have. Obviously, that’s dying out and that’s petering out now as we speak. It's more so for the underbanked sectors of the country. There is a need for some sort of handholding, a support system through a physical touchpoint. So, it’s not a full-scale bank, more of an outlet that provides that touchpoint that could address problems customers face, for example, trouble getting onto the digital space, using the application, etc. This will enable them to get started on their journeys with greater ease.

The great thing about going digital is that it takes away all the constraints of location and time, there's also an unfortunate side to it that fraudulent security breaches, transactions, etc., also rise almost at the same speed. And that worries and scares everyone every now and then when they hear or see something going wrong. So, they just need someone or someplace to go and be assured as to how they can do the transactions digitally without fear of any sort of breaches or fraud. It's more to provide that kind of support through a very minimalist setting, in contrast to a full-scale operating branch as a bank typically has. It’s more of that a strategy to bring the populace onto the digital space and lead them completely digital. That’s really the whole premise behind this construct.

How does Jio stay relevant for the customers when they have all these other options, whether it’s just basic UPI or some of the platforms that leverage UPI like Google Pay? How do you differentiate and maintain that differentiation?

Like you said, the India Stack is fundamentally a democratization of financial services. Prior to UPI, if you had a bank account with a particular bank, you had to use that bank's channel, that bank's mobile app, or that bank's internet banking solution to transact with that bank, even if you were doing it digitally. With UPI, it does not matter if you hold an account with one bank or multiple banks, you could just connect them to third-party applications (Google Pay, Amazon Pay, Jio Pay, etc.) to do your payments. The choice of third-party application would be dictated by whichever offers better customer experience, service, ease of use, etc.

You're not tied down to the same channel that that bank provides. So that has put a tremendous amount of flexibility in the hands of the customer. At the same time, it has forced all players in the space to completely revamp and rethink their strategy. Of course, we are no different from the others. With Reliance Group being part of the entire system, we are working on how these use cases for end customers can be stitched together in which the customer has extreme flexibility to use any other products, regardless of whether the product is serviced by Jio Payments Bank. 

It is entirely possible with UPI and AEPS, an Aadhaar-enabled payment system. If you need to withdraw cash, you can go to any outlet, not a bank. You can just go to an outlet, even in the most remote part of the country, and use the biometric fingerprint to withdraw or deposit cash from any bank that is AEPS enabled. You don’t need a physical device nor a mobile phone. You just need your fingerprint. The same is for UPI from a digital perspective. All of these have brought about the democratization of financial services. You are no longer tied to the channels, touchpoints, or services that your bank provides.

And that is the opportunity and the competition space. I am not limited by the products that I create as a bank. I can also collaborate with other banks in the system to provide that sort of infrastructure of interoperability between banks, offering flexibility to customers. That’s a strategy that we are talking about. Most players are adopting it nowadays if they have the technological capabilities. It is just like the construct of open banking; it is completely decentralized and open. That’s exactly what we are trying to move towards.

You brought up the relationship that Jio has with Reliance. Can you talk a little bit about how important that relationship with Reliance is, and what synergies and new opportunities that relationship enables?

As a bank, we are governed by the compliance, rules, and regulations of the country. From a banking perspective, there’s complete ringfencing, arm’s length, and everything of that sort. We can understand how businesses work across different business groups, how transactions and payments differ, as well as the needs and requirements of different businesses. This helps us structure our products better, by understanding what needs to go out to the end customer for all the different payment products that we can offer. So that’s how we are leveraging the relationship and at the same time, making sure that we are completely compliant with regulatory boundaries. 

What are the primary value propositions of Jio now and how do you see that changing in the future?

There is a large margin ecosystem within the group with different kinds of merchant payments, which is where the daily payments are. It’s like, I wake up in the morning and I do a whole lot of payments. From getting a newspaper or a pack of milk, all the way down to my daily commute and everything that happens that day. And the idea is really, how many of those use cases can we be part of? Not just as a payment bank, but also as a larger group that provides an integrated experience, a single engagement for daily needs. It becomes a lot easier and beneficial from a customer’s perspective. They get better incentives and better rewards. It is like taking all the payment products and guiding them along with the underlying use cases.

Nobody would make a payment for the sake of doing a payment. You make a payment in exchange for a service. So how do we pitch that payment and the service or product that the customer is availing of in a seamless manner? This brings me to a classic example.

In the past, we had to walk into a bank branch to do any transaction. And what the banks did after was to question, “why do we need the customers to walk into our branch for everything? Can I go to the customer and do transactions where the customer is?” And they started offering doorstep banking facilities to many customers. Fast forward to today, we have mobile phones. We have bank applications on our phones. How often do we open the application? Perhaps once a week or less. And we just go there when we need to do something. But can the bank go to where the customers are all the time, digitally? Assume that customers are mostly on Whatsapp, Facebook, Linkedin, etc., can the bank go there? And by doing so, the bank is with the customer all the time, as opposed to once a week.

So that’s really the broad strategy that we’re trying so that we can get customers close to the bank all the time. Whatever they think of, whatever they need to do anything, they have it right there. They don’t have to go anywhere else. And of course, this availability of services around the clock is assumed to be a given, especially for financial services and payments.

Another example is if someone calls you in the middle of the night and says, “I have an emergency and I need money right now. Can you transfer it to me?” I must transfer it to them right then. And the transaction should work at that time. It just can’t fail. This contrasts with “oh, I need to buy an insurance policy now at midnight.” Most of the time, if it fails, I could just do it the next morning. So, the likelihood that I absolutely need the service, the more we need it to work regardless of the time of day, and the likelihood is very high for payments. And that is the next big thing, the availability of services all the time and the reliability, and security guaranteed to the customer, make sure that that’s when the customer starts getting comfortable, working, engaging, and transacting with the bank, as far as they possibly can. That’s really the whole thing, target the processes behind it.

One thing that strikes me about your comments is that you didn't mention super app, which is a term that people like to throw around. Was that a conscious decision not to mention super app or your ambition is that big?

Well, we have one already. Anyone that uses the MyJio App will have access to all our products. It is not just for making transactions, but it also has eCommerce, entertainment, and banking products. It has got everything. It was not something that came out as a strategy, but rather it came about as part of the process. MyJio App was born as a super app, and that’s how the whole construct was built. 

What kind of surprised you about India's financial industry development, specifically in the recovery from the pandemic? If we look over the past six months, we've kind of largely come out of it. What about the development of the industry has surprised you or what did you not expect?

One very important thing was that the pandemic forced a lot of people who were possibly "sitting on the fence" to move digitally. It literally forced everyone to move digital and it wasn't just payments. It was everything. It may not have worked as well in every sector and perhaps there are different levels of success everywhere, but in the financial space, it was almost a given that everyone had to move digitally. The speed of digitization had to accelerate a manifold number of times.

There were billions of tiny shops that wouldn’t even think of going digital prior to the pandemic. They were also forced to move digital overnight. They needed digital services, the ability to accept and make digital payments and do the entire transactions digitally, all that stuff. And all the financial service industry had to do was make sure that they can service all the customers, and we were no different from others.

The explosion was quite traumatic but eventually turned out to be quite good. We had a massive number of government services going digital, which was perhaps unimaginable prior to the pandemic. Everything is now digital. Underlining financial services, the payments, and all the money movements had to happen in a digital manner, which meant that the back office, the settlements, and the interbank, all that infrastructure had to change.

The scale-up was of the orders of crazy levels of magnitude. It was unimaginable. It was not just an incremental upscaling. It was just exploding into a different orbit altogether and making sure security is not compromised. The other important thing is that the regulators had been extremely careful and very supportive, but at the same time, very strict. We wanted to make sure that all strata of society are by default enabled for every product that every financial station launches. For example, starting from the fact that it's not okay to assume that every single person has a smartphone. Smartphones have benefited dramatically, but there is still a substantial number of people without them. So how do we enable these products on feature forms? There are even applications that Jio Bank of India has mandated to support physically challenged people to use digital services.

So, whether it’s the visually impaired or any other differently abled people, the applications need to support all of them to be able to use digital services. That’s a mandate from the central bank for any products that are run by any banks. So, it’s that level of inclusion that got accelerated by the pandemic, which is a great thing. Of course, it was also a massive challenge getting our technology together, which we are still grappling with it, but I think that is a great opportunity that has been presented to us.

Looking forward to the future, what keeps you up at night either personally or professionally about the financial industry? What worries you about the future? 

Every day there's something new coming up and that's just extraordinary. That's amazing. There's nothing like, "oh, I've done it." You just thought you did something, but that was yesterday. Today's a different day. So, the next idea is already there. We must keep going at it and building upon it. That's the greatest opportunity. Of course, sometimes I also think that things are moving too fast.

Are we paying enough attention to make sure that the security and compliances are all adequately addressed? Yes, there are a lot of central banks that are extremely particular about that aspect. They've got visual payment security guidelines that are ahead of most of the other countries in the world. They're literally where the bank mobile application is mandated to keep checking periodically. If you have other apps on your phone that are potentially malware apps and immediately want the customer, you know what? I just find some other malware on your phone that could potentially trouble or mess with your financial data. Do you really want to go with that app or not?

It is that level of security that is mandated by central banks. So, we're addressing all of that. There are always going to be areas of concern, fraud, etc. Obviously, we need to adopt technologies to be able to prevent those situations because digital frauds can be much harder to pick up and fix than physical frauds, because physically, the fraudster is perhaps in and around the place, but digitally, the fraudster can potentially be millions of miles away from when the fraud is happening. So yes, we need to look at it very, very carefully.

When we come back for FinTech Connect in 2027, say five years from now, which hopefully will be physical again, what do you think that will surprise us about the development of the industry? 

I think it'll be more of how the whole industry gets connected. I still cannot fathom an industry where there is a separate e-commerce industry and a payments industry in a separate bank. It must be connected. All your services must be integrated, and financial service just underpins all those other products and services that you interact with daily. That is when we say that we've got a much smoother and more seamless movement of all the products and services. And that's where I see the work heading over the next few years.