My guess is that the percentage that the bank earn from other income will reduce going forward substantially as the applications of chatgpt based applications unfolds.
Axis bank was selling the insurance and other products to some aged people.
Few major experiences in fintech
Fintech has lot of success in personal loan(unsecured lending).
The home loan business is very difficult to scale as underwriting the random property can not be fully automated and hence can not be scaled.
Though they were able to underwrite the builder projects as they can underwrite the builder and its project beforehand. Giving home loans against the property of few builder is risky and in initial stage we can not underwrite a lot of builders. Hence fintech can not disrupt the home loans business and it will take time. In short, home loan needs human interaction.
Fintech are not able to sell the insurance in meaningful quantity. Insurance seems to be push product it seems that need human interaction.
Personal loans and co lending is the thing that they are focusing on. They are very successful in it. They give loans to only 10 to 20 percent of the people that apply for it. Some fintechs are giving 40 cr loan daily and are targeting 100 cr.
As this is a new tech, there are lot of bugs, one bug in calculating the ECL led to increase in ECL by near to 40 to 50 percent when it was actually calculated. Also, the algorithms needs to go through some up and down turns before its prove its effectiveness.
Collections is messy in fintech from what I heard. RBI is very strignent.
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