Fino Brochure

www.fino.co.inFinancial Inclusion Network & Operations Limited

Financial Inclusion Network & Operations Limited

Financial Inclusion Network and Operations Limited (FINO) is an

entity promoted by leading Indian Banks, Insurance companies, VCs

and IFC with a mandate to enable branchless banking.

It was founded in July 2006 with the target of reaching 25 million

unbanked and under- banked households at the bottom of the

pyramid by 2011. In little over four years FINO has already achieved

its target of 25 million customers, which constitute 33% of the “below

poverty line” (BPL) population in India, and continues to add 50,000

customers on a daily basis.

FINO solution is anchored around using hand-held devices to

perform field operations and use of finger-prints to validate the

customer. FINO offers its technology to Banks, Microfinance

Institutions, Government entities and Insurance companies; either

on license or ASP hosted basis.

FINO also offers services to originate and service the customers for

these financial institutions through its nationwide network of agents

at end customer’s doorstep.

Financial Inclusion

Product Design

Core Banking System

MFI

Loan Disbursal

Loan Repayment

Credit Scoring

Government

Electronic Benefit

Transfers

Identity Management

Branchless Banking

Product Design

Core Banking System

Enterprise

Bill Payment Solutions

Salary Transfers

Insurance

Technology Solutions

Cashless

Paperless

Introduction

Target customer segments

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Customer base

Agent network

States covered

Districts covered

Gram Panchayats (cluster of villages) covered

Partner banks

Government entities

Insurance companies

25+ million

10,000+

21 (out of a total of 28)

293 (out of a total of 626)

5,884 (out of a total of 265,000)

20

9

4

Villages covered 50,000 (out of a total of 638,365)

Foot print

Awards

Among several awards won by FINO, the most distinguished has been the recent award by FT-IFC as being the company making the most impact on base of pyramid customers globally.

FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10 FY 2010-11

168,000

1,000,000

5,000,000

13,000,000

28,000,000

Customer Growth

(Figs for FY 2010-11 as on Feb 25,2011)

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FINO Offering-Service and Technology

Customer acquisition:FINO applications acquire micro customers in the field using simple processes and minimal of infrastructure. FINO also offers services for rapid acquisition of micro customers and currently acquires customers at the rate of 50,000 per day.

Customer management system: FINO has developed back-end systems to host large customer information and carry out analytics to enable multi-product sale for the micro customer base.

Core banking system: FINO’s core banking system has the capability to host customers for all retail products and give a single view of the customer. The system currently hosts over 3 million accounts for 10 entities.

Central switch:FINO has architected a central switch which can be used for integrating various front end channels such as branches, self-serve devices, hand-held devices and mobiles used to service micro-customers. FINO’s switch currently supports 25 million customers across over 20 entities and handles 3.5 million transactions per month.

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A bank led model which ensures that all products are offered to customers unlike single model products (largely cash-out or remittance) that are available globally.

A dedicated technology and field force to acquire unbanked customers ensuring customer identity requirements as per the prevailing regulations are met.

Field force which is focused on servicing the low value customer base. This is the sole business and FINO has perfected the techniques to serve this “micro customer”.

Self developed technology for low value, high volume customers supporting the full bouquet of products at the same time integrating with the main-stream banking systems.

Uniqueness

FINO offers services which are Scalable Reliable Low cost FINO platform can support full bouquet of products to retail

customers

Value proposition

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Innovations

Micro Deposit Machine: FINO has developed a Micro Deposit Machine (MDM) in partnership with NCR. MDM is a low cost machine that enables cash deposits making it financially viable and suits the 'anytime banking' requirement of the target population. A similar cash dispensing solution is being tested in labs currently.

Mobile Information and Transaction: FINO recently launched a mobile enabled banking solution designed especially for micro customers. Using this solution, FINO’s agents and customers can both utilize their mobile phones to access banking facilities. Also acts as an enrolment and transaction device which can be used by FINO agents.

Field Management System : FINO’s Field Management System is a mobile based system developed to manage the large distributed field force and maintain two way communication.

End to end process of Financial inclusion for Union Bank of India ranging from Customer Enrollment, Card Issuance, Product Development to Customer Servicing, spread across more than 70 districts across 12 states in India

Customers enrolled and issued smart cards to enable biometric authenticated secure transactions through handheld POT machine

Customer accounts opened in FINO Micro Core Banking System (CBS ) and customer data hosted at FINO data center

Various banking products offered by UBI on FINO platform such as Savings, Remittances, Overdraft facility, Recurring Deposit and Loans (Both Individual and Group)

Dedicated network of 5,500 agents to service the customers and promote financial literacy ably supported by strong backend team

4.7 million UBI customers serviced on the FINO platform as on Jan, 2011

Reaching out to the remote villages with banking services in a hilly terrain Only 20% of Nepalese population has access to financial services

Customers issued smart card to enable biometric authenticated secure transactions through handheld POT machine

Increased customer base for Everest Bank by reaching out to the remotest villages of Nepal through branchless banking

Promotion of financial literacy through the agent network

Built a business case for remittance from abroad through the agent network

Projects

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Financial Inclusion, Union Bank of India (UBI)

Everest Bank, Nepal

Disbursement of daily wages to the rural workers

FINO manages the enrollment and the payment of the wages to the worker’s through its smart card technology

9 Million beneficiaries on FINO’s platformas on Jan 2011 and US$110 M disbursed on the project in this fiscal year alone

Ease in administering the system due to less paper work

Improved transparency and accountability of the system

Increased customer base for banks and opportunity to upsell products to the customers

Disbursement of funds for the milk poured by various dairy workers to their dairy co-operatives integrated under NDDB Extending credit to meet the needs of the milk pourers

Enrollment of the milk pourers by opening a bank account for them and disbursement of funds to the workers through its biometric smart card technology

Provision for cattle and consumption loans; and collection on these loans done using mobile phone

120k customers on the system as on Jan 2011

US$40 Million disbursed on FINO platform

Loans disbursed: US$1.3 Million

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National Rural Employment Guarantee Act (NREGA)

National Dairy Development Board (NDDB)

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Introducing cashless health micro insurance for families below poverty line

Past similar initiatives initiated by state and national level health insurance schemes had failed

FINO manages end to end process from enrollment to claim process for insured families through smart cards

9.5 M beneficiaries on FINO’s platform as on Jan 2011

Insurance value is US$ 659 per annum per household

Reduction in cost of delivery through use of smart cards and technology

Potential for the Government to setup a PDS and other welfare schemes through the same channel

Generation of large volume of data which can be analyzed for policy decision making

Rashtriya Swasthya Bima Yojna (National Micro Insurance Scheme)

The scale witnessed by FINO is unprecedented and is largely due to its robust and cost effective systems. The quick scale up has also resulted in development of significant domain expertise. The combination of the two is enabling FINO to offer both to other entities operating in similar space with similar challenges.

BUSINESS PLANNING

Regulatory Environment Analysis

Market And Customer Analysis

Business Planning

System design

CORE TECHNOLOGY

FINO Platform (Licence / ASP)

Customer Acquisition and

Transaction Systems

Channel Managment Systems

Backend Systems / CBS

FIELD DELIVERY DESIGN

Knowledge Building

Personnel Management

Cash Management

Field Operations Diagnostics

FIELD SERVICES

Front Office Services

Technology

Manpower and services

Support and help-desk

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(Field services will be managed by the client organisation in their home country. FINO will play advisory role in designing of field services)

Offerings

Consulting Team

Consulting Scope

The make up of a Project Lead, Senior Consultant and Associates/ Analysts.

The Project Lead is a professional with 10+ years of industry experience of which at least 5 years is consulting experience in leading assignments for global clients.

A Senior Consultant has 5+ years of industry experience with domain expertise in micro banking business models, technology, regulations, policy research, micro banking and branchless banking technology.

An Associate/ Analyst provides hands on support to the client and has at least 3 years of industry experience; is an expert in Financial modeling and has research affiliations with development and research organizations.

The scope of consulting covers:

a. Market Analysis- This is carried out after extensive secondary and primary research; and data analysis.

b. Business Model- This leads to the anchor product and the recommended channel, while also estimating projected revenue and costs

c. Technology architecture- This details the proposed Back-end, Front-end and System integration.

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FINO provides end- to- end solution for entities wanting to scale up their branchless banking operations. Its solutions service the main business requirements such as customer acquisition, offering multiple financial products, transactions, channel management and backend hosting.

These solutions are scalable, robust and cost effective; which has been suitably demonstrated by FINO through its large customer base. Also, these solutions can be easily aligned with the entity's operational processes.

Acquisition Transaction

Laptop Mobile

ATM/MDM

POT PC-POS MOBILE

Channel

Member Management System(MMS)

TerminalManagementSystem(TMS)

CardManagement

System(CaMS)

CashManagementSystem(CMS)

Backend

Core Banking System (CBS) Data Warehouse & BI


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Technology architecture

Acquisition of customers can be done through an enrollment application, which captures customer's demographic and biometric details. This application can be operated on a laptop or a mobile phone depending on the field conditions. The data captured is used for duplication checks, card personalization and account opening in the backend.

Customers are issued a biometric enabled smart card that displays customer's photograph and demographic details (optional). These details can be printed either in the field or in a centralized off- site location. These cards are capable of hosting upto 8 different products thereby allowing the bank to offer its customers a complete suite of products.

Accounts can be operated by the customers through handheld POT devices, mobile phones, ATM or a Micro Deposit Machine. The POT devices can work in an offline and online mode subject to availability of connectivity, both PSTN and GPRS. The Bank's agent can also service customers through a mobile phone instead of a POT thereby allowing flexibility in field operations. Besides having an ATM solution, FINO has also developed a Micro Deposit Machine (MDM) to allow cash deposits at merchant locations in remote locations. The backend is integrated with all these delivery media and provides seamless working.

Backend system comprises of the Core Banking System that can support CASA, Loan, RD and OD products. The solution is light weight and tailor made for the Micro Finance sector as it supports individual and group lending methodologies. The other main component of the backend system is the Data Warehouse which can consolidate data from the different systems and also be integrated with other secondary systems running in the bank.


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Technology functionality

Technology Solutions

The core of this business is effective Field Management as that's where most risks exist due to the remoteness of the customers. FINO has utilized its significant field experience to develop very relevant solutions to manage various field aspects of operations.

· The Member Management System (MMS) is a web based system to manage the complete life cycle of agents commencing with their enrollment to exit.

· The Terminal Management System (TMS) enables transaction device for being remotely loaded or updated with applications and for Maintenance.

· The Card Management System (CaMS) manages the card lifecycle (Issuance / Hot-listing/Re-issuance/Replacement); Card Personalization (Chip and Mag-stripe encoding, Fascia printing); integrated with Key Management System based on 3-DES (Symmetric Cryptography); and supports multiple vendors and types of cards.

· The Cash Management System (CMS) parameterizes the Point of Transaction (POT) limit (amount to be handled, number of transactions etc.) and manages the net cash with the agent (Cash In less Cash Out).


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1) Licensing model

Software is licensed to the customer for a one time software license fee and Annual maintenance fee is charged for maintaining the software

Software development effort required to customize the software (if required) charged at man-month rate.

Back-end operations are run by the client

2) ASP/ SaaS

In this model FINO sets-up the backend for the customer which is charged for

The customer does not need to buy any software licenses and does not need to setup any backend infrastructure The backend operations are run by FINO at their data centre in India

If the software is to be customized then the software development effort required to customize the software is charged at a per man-month rate

Initial study by FINO team Local conditions Client business requirements Regulatory environment

Backend work to be done by FINO team

Customisation, if required and possible

Training of the client implementation team

Roll out

Handholding and stabilisation (this could be handled by local partner or an outsourced agency)

Withdrawal of the FINO team

Technology Pricing

Technology Implementation

Tarun Bharat, Plot No. 38/39, Sector – 30, Near Keshav Kunj, Sanpada (West), Navi Mumbai – 400 705, India

Board: +91-22-41613466 | Fax: +91-22-41613684

[email protected]

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