Led by veteran banker KV Kamath, Reliance Group-owned Jio Financial Services (JFS) is chalking out a startup business plan backed by artificial intelligence (AI) and a digital focus to compete effectively on costs as a late-comer in the business. Officials close to the matter said Jio will use technology and data to tap a huge chunk of middle-class and low middle-class consumers in urban markets and hinterlands with existing Reliance centres and Jio World Centres as touch points.
The financial entity is banking on Kamath’s huge past experience in setting up ICICI and will work on a blueprint similar to that of Jio’s telecom business. “Kamath has been given an empty canvas to make his own plan backed by talent, technology and capital. And the only difference between setting up a financial services business years back and doing that today is that we have a wealth of data with us backed by technology to make informed decisions,” said a company insider.
Jio has already announced a tie-up with investment giant BlackRock to launch an asset management company – a space where Bajaj itself is a relatively new entrant. Jio Financial Services will have separate business verticals each headed by a CEO. BlackRock’s CEO Larry Fink is understood to have discussed the plan with Mukesh Ambani and Kamath on his last visit to India a few weeks ago. Hitesh Sethia, CEO of Jio Financial Services is also a former ICICI Bank talent with 22 years of experience with domestic and international experience in corporate banking. Group CHRO Manish Singh is also a former ICICI hand.
A separate tech team is fine-tuning AI to match investors and their risk appetite and suggest investment products accordingly. “We have a consumer data mine with us. Jio will also take a lot of technology intelligence from BlackRock, officials said. We have already begun using bots in some of our other businesses but how deeper can we use AI is work in progress,” an official close to the development said. Jio Financial Services did not comment.
“Consumer finance is far more evolved because of data which is now freely available. Earlier if you wanted to build a consumer finance business you needed to build a physical distribution network of your own. Now the combination of technology and data makes disruption more easy. Lenders can look at customers very differently than a few years ago. Because of the account aggregator and Aadhaar framework the data which previously was only with banks is now with other companies which can be a game changer,” said a partner with a top consultancy firm. Reliance has also chosen to avoid an expensive acquisition-led plan except possibly JV partners to avoid legacy issues, sources said.
It expects higher consumption and digitalisation to fuel growth by a smartphone-led, online usage of commerce and services. It will offer personal loans through the MyJio app in Mumbai and consumer durable loans across 300 stores. It plans to launch business and merchant loans for self-employed individuals, sole proprietors and small business entities, auto loans, home loans and loans against shares.
Experts say with its deep pockets, Reliance can leverage strong partnerships and use the best of tech to cut costs but eventually financial services is about attracting the best talent and ensuring effective risk management.
