Recently we got an opportunity to talk with Mobile Financial service industry expert Mr. Sridhar Obilisetty who is the co-founder / CEO at mFino and has a more than 25 years of experience in capitalizing on large market opportunities and building game changing companies. He has strong technology innovation and leadership experience. During his profession, Sridhar worked as Venture Investor, Chief Technology Officer, Chief Software Architect and CEO.
He pioneered many break-through solutions and played significant roles in building companies that delivered extensive customer & shareholder value. Sridhar holds various technology patents. He built many industry-first solutions in the fields of Distributed Computing, Online Banking, Electronic Commerce, Personalization, XML based Edge Computing, Interactive TV and Mobile Operating Systems.
It was great experience talking with Sridhar where he shared his experience about mobile financial services and its future. Here is the detailed outline of my interview with Sridhar Obilisetty.
Jignesh: Hello Sridhar, can you please share few words about you?
Sridhar: Hello ! I started my career at Go Corporation (acquired by AT&T; NYSE: T), building the industry’s first smart operating system. I built the industry’s first distributed web application server and played a key role in deploying high performance online banking applications for major money centre banks such as Bank of America (NYSE: BAC), Citibank (NYSE: C), Banco Santander and web store fronts for leading financial institutions such as Thomas Cook (NasdaqGS: TCG), Liberty Financials. I have always been fascinated with analyzing market trends, identifying new market opportunities, technology innovation and assembling great teams to build disruptive solutions that can unlock unprecedented Customer and shareholder value.
I co-founded mFino in 2009 to create a game-changing Company that provides basic financial identity and value-added services to any consumer or merchant with a mobile phone, whether they are banked or unbanked, and whether they are on the top or at the bottom of the pyramid. We worked with mobile network operators and financial institutions in building an advanced mobile financial services platform that powers one of the largest mobile money deployments with 6 million subscribers, 5000 merchants and 15000 agents. I am passionate about using the power of 6 billion mobile phones in the world to reach 2.6 billion who are unbanked and others who are under-served by traditional banking and electronic payment options. Our vision is to empower merchants, retail networks in emerging markets to boost offline sales using mobile wallet based customer tracking, behavioral targeting and revenue enhancement tools.
Jignesh: According to you what are the most important trends in mobile financial services at the moment?
Sridhar: This is an exciting time for mobile financial services. When we first started, there was still debate about how mobile phones would be used and whether financial services would make the list of popular uses. Now, it is clear that mobile is a major driving force in a wide variety of services and business models, and that financial services are front and center. So, when I think of the important trends in mobile financial services, I think of the following:
- Omni-channel: People are omni-channel by nature. For instance, with a travel ticket, you might book it online, call an agent to check some details, get an alert on your mobile and present the ticket at the gate on your phone. Each step in this example involves a different channel that has its own strength. Even transferring money has its different channels, from transferring by mobile to getting cash from an Agent or ATM. As a vendor, if you only provide a single channel, then you are not solving the entire problem, and your customer adoption will be low. If you are providing multiple channels but they are not connected, then the experience will be poor and adoption will fall. As a service provider, then, having an integrated omni-channel solution provides a more attractive customer solution. Every channel is linked, allowing customers to use the best channel for that step knowing that each handoff will be seamless.
- Agility: With business moving at the speed of the Internet, companies realize that the long deployment cycles and expensive armies of coders that came with the previous generation of software can be a recipe for disaster. This formula led to long deployment cycles that delivered solutions long after customers expected their needs to be addressed, and well after the market leaders solved it. As a result, vendors have been looking for a solution that would enable businesses to stay ahead of their customers’ needs.
Some have created simplified solutions in the cloud that may not represent the entire requirement. Others have created API-driven platforms that rely on easy-to-learn web skills that net custom code that the company must maintain. mFino, on the other hand, has created a solution based on a web-based coding language called AFEL (Advanced Fintech Expression Language) that is easy to use, yet delivers complex deployments without the complex deployment hurdles. Because it is built on a powerful and proven platform that is designed to be flexible, there is little chance of leaving the upgrade path or having to support the solution without the backing of the platform vendor.
Jignesh: What are the driving forces for growth of mobile financial services and how do you expect the mobile money market to expand over the coming year?
Sridhar: There are actually a few drivers for mobile financial services growth.
- One is financial inclusion. That is, the need to ensure that more citizens of the world have access to the financial system and all the benefits that go with it. A growing number of counties and organizations around the world have this goal, and it has fueled new regulations and the adoption of mobile money solutions that have turned millions of phones around the world into digital wallets.
- The second is the need for banks to provide greater reach and better customer service at a lower cost than traditional channels. Branches and ATMs increase a bank’s delivery costs and make whole regions in the world economically difficult for banks to serve. Mobile decreases the cost of reaching customers while providing a 24×7 channel that increases access and convenience. As solutions behind these needs become more proven, the early adopters give way to the mainstream market and adoption will increasingly accelerate.
The bottom line is that mobile financial services is the best compliment to each of these market forces. With so many mobile phones out there, it is the most effective way to reach consumers far and near. And, without the need for physical locations, much of the cost equation has been removed.
Jignesh: Security is top of mind with consumers these days when it comes to mobile payments. What are MFS companies doing to address consumer concern around security?
Sridhar: Security is always in the back (and front) of the mind of a fintech entrepreneur. Even though mobile financial services is generally more secure than traditional systems, because mobile is new, occurs over public networks and because the volume of transactions is higher than the physical equivalent, mobile is held to a higher standard. Current security solutions include username and passwords to ensure that the right access is provided to the right people, encryption for moving data from the consumer to other locations, stored data encryption to ensure data is not taken while at rest, mPINs as an extra layer of authorization and two-factor authentication as an additional identity check of the mobile money user. Advanced solutions include maker-check or tiered approval capabilities where more than one person, each with a different role, is required to approve a specific transaction.
Additional security needs to be provided to ensure that users are not allowed to conduct specific transactions that are not safe for a specific channel. For instance, SMS is not an encrypted channel so care must be taken when sending information using SMS. There are also regulatory requirements such as KYC and AML that are more risk-based, and are required by today’s fintech providers. Beyond these solutions, there has to be proper use and trust. Ensuring that consumers know how to use their mobile wallet can prevent many security issues and consequently build their trust in that solution. Part of this is making the solution intuitive so that users can easily figure out what to do next, while another part is providing status so users know where they are in the process, and part is providing actual help screens to explain to users how to perform specific actions.
Jignesh: According to you mobile wallet is simply just a method of payment or it also incorporates value added services to the customers?
Sridhar: The answer depends on where we are in the adoption cycle. Mobile wallets started out as solutions to an operation problem. How do we enable the unbanked to conduct digital transactions on their mobile device of choice? The initial question was whether this type of solution would work and could solve the problem. Mobile wallets could and did solve that problem.
The next level solution is about improving the customer experience and the effectiveness of service providers providing mobile money solutions. That is, can we make mobile wallets more intuitive to increase their usage, and can we increase the profitability of service providers?
The next level solution is more than incremental improvements to UI and the reduction of steps involved in making a transaction. It may include other capabilities such as mobile commerce, NFC, loyalty management and more. These solutions are additional services that can generate their own revenue streams for the service provider while also building overall adoption, usage and retention.
Jignesh: What do you think are can be done for mobile money in rural areas?
Sridhar: In some ways, mobile is tailored made for rural areas, and in some ways not. It is tailor made in that it provides an infrastructure-light solution based on the mobile phone that can reach anyone with a mobile device free from the hurdles, both cost and timing, that brick and mortar solutions face. It is not tailor made in that not everyone with a mobile phone is tech savvy. Not everyone with a mobile phone will want to use it for financial transactions all the time.
Part of the solution is to extend trusted channels to meet the concerns of the rural customer. Agents, for instance can offer a wide array of mobile services, even conducting transactions on behalf of the user. And, post offices can deliver financial service products right to the customers’ door, in effect acting like an Agent that makes house calls. These are just a couple of the solutions that can bring mobile money to rural areas and increase acceptance/ adoption.
Jignesh: What are the most successful functions introduced by mFino for MFS and what determines success?
Sridhar: mFino has been a pioneer all along the way. We were the first to provide a truly omni-channel solution: smart phone, USSD, STK, SMS, tablet, ATM, Call Center and Agent. Our goal was to put the service provider into the driver seat and allow them to make decisions based off of market needs and free from vendor limitations. This has been an important force in each of our deployments. We also introduced a platform designed from the ground up for the mobile financial services market. This platform removed common service provider concerns such as scalability and reliability from the equation. Introducing AFELplayed a crucial part.
It made it easier to customize the mFino solution and get to market more quickly. This enabled service providers to spend fewer resources on deployment and place a greater emphasis on serving and supporting their customers. For these and other functions that we have launched into the market place, success is based on adoption by telcos, bank and merchant customers (are they using it?) and their customer adoption. Beyond that we get into effectiveness. Do our capabilities improve the customer experience, improve customer adoption and ultimately improve the profitability of our customers?
Jignesh: According to you what type of innovations or improvements are still needed in mobile money areas and in MFS?
Sridhar: For many vendors out there, fintech is still an operations game. That is, they are still focusing their brain power on delivering mobile financial services to a mobile phone. And, while there are many improvements that can happen on the delivery side, in the macro sense, that problem has already been solved. We know that we can deliver solutions in most any geography and customer base effectively and at scale.
Analytics and big data can play a big role in this by helping system operators to better understand how to transform occasional users into frequent users, and frequent users into everyday users. Analytics and big data can provide a closed loop where the system analyzes customer behavior and trends and then automatically puts action plans in place to drive the desired behavior. And by automatically doing this, the service provider does not have to hire large numbers of people and can react more quickly based on on-the-fly customer intelligence and action.
Jignesh: Few words for our readers.
Sridhar: Mobile money has a bright future ahead of it.
According to the World Bank, the world’s “unbanked” population shrank by 20 percent between 2011 and 2014. While this is not all attributable to software platforms like mFino, they were certainly an important driver. This data is an important sign that mobile money works to empower the unbanked and make it more efficient for new and existing financial services providers. The value proposition is there. But, the real excitement comes from what is next. It’s not just about depositing money, cashing out and transferring money. We have an opportunity to remove the hurdles in making daily purchases and paying bills. We can give merchants the tools they need to keep their customers in highly competitive markets. We can remove paper, time and cost from the equation making the result even better for everyone involved. Mobile money is on its way to transforming financial services.
You can find more information about Sridhar by visiting his LinkedIn profile: Sridhar Obilisetty
Sridhar is a recognized industry expert in the area of Fintech, Digital Transformation, Banking and Payments. He has more than 25years of successful track record in building technology solutions and capitalizing on large market opportunities. Sridhar is an Ethereum Expert and Blockchain Investor. He has deep domain expertise in Distributed Ledger Technology (DLT), Smart Contracts and all the Foundational technologies that form the basis for Blockchain and Cryptocurrency ecosystem. His work in Artificial Intelligence, Machine Learning, Neural Networks, Data Science and Autonomous, Self-Driving Banking Platforms has been of great interest to Financial Institutions globally. Sridhar’s concept of BaaS (Banking-as-a-Service) and it’s technology blue print has been fully whetted out and is being deployed by large financial institutions as part of their digital bank spin-offs across various geographies.
As a veteran Silicon Valley Enterprise Software Executive, Sridhar worked with large Financial Institutions, Mobile Operators, Retailers and several Fortune 1000 Companies in building core technology solutions and launching their Digital Transformation initiatives. He travelled extensively to Indonesia, India, Vietnam, Myanmar, Cambodia, Malaysia, Sri Lanka, Nigeria, Ghana, Kenya, Rwanda, Uganda, Senegal, Guatemala, Brazil, Colombia, Mexico among many other Countries and has demonstrated success in building solutions at scale for Global Markets. Sridhar received several awards for his work in the area of Fintech, Digital Banking and Payments. During his tenure as a CEO, Venture Investor, Chief Technology Officer, and Chief Software Architect,Sridhar pioneered numerous break-through solutions and played pivotal roles in building companies that delivered immense customer & shareholder value. Sridhar holds MSc Tech (Master’s Degree) in Computer Science from BITS Pilani, India.He holds several technology patents. Sridhar built many industry-first solutions in the fields of Distributed Computing, Online Banking, Electronic Commerce, Personalization, XML based Edge Computing, Interactive TV,Mobile Operating Systems and delivered high water market value of more than USD $25 billion.He currently serves as the CEO for mFino