Contributed by: Manish Chandak
CFA Society India, Pune organized a Speaker session on “How Fintech will Disrupt the Future” with Mr. Kunal Bajaj on 8th December 2017. Kunal is Founder & CEO of Clearfunds. Clearfunds is an online investment advisor which lets investors buy mutual funds in India at a low, flat fee, not a fat fee. Kunal has 18 years of experience in Investment Banking domain and has also worked with Goldman Sachs, Credit Suisse, J.P. Morgan and CLSA.
Kunal began the session with a caveat that technology will ensure that all products and services which can be commoditized will be commoditized. Hence if traditional brick and mortar industries want to stay in business, they need to customize and differentiate their product offerings. Otherwise, their business will be disrupted and commoditized by technology. How Jeff Bezos of Amazon has disrupted and commoditized traditional retailers by providing products and services at wafer-thin margins. He talked about how 15-20 years back Craigslist and Yahoo used to provide directory services by listing various services like ridesharing, dating, rental on their sites. Now all those services got unbundled as various start-ups attacked different parts or services of Craigslist. This is called Unbundling of Craigslist and has spawned many unicorns.
He felt that banking and financial services industry (which includes banks, personal financial management, insurance, payment, asset management) across the globe is yet to get disrupted in real sense. Since disruption in financial services industry is long overdue, we might see unbundling of their product and services sooner rather than later. FinTech companies are slowly chipping away various pieces of the financial services industry. FinTech companies are leveraging technology to disintermediate the traditional financial services companies and provide better services for both consumers and businesses at dramatically lower cost and at a faster pace. FinTech companies are agile and nimble-footed whereas legacy systems burden traditional banks. It is only a matter of time before we will see an emergence of fintech “unicorns” — private companies worth over $1 billion.
In the Indian context, he talked about how Fintech companies are riding the India Stack ecosystem (includes Aadhaar, UPI, digital document storage and elocker) and how this will help in achieving India’s financial inclusion goals. He compared this transition to mobile vs Landline moment. The session was followed by Q&A session. Apart from Fintech, he also answered queries about Clearfunds, India Stack ecosystem, Bitcoin, and Blockchain.