Personal Finance space is slowly but surely getting the attention it deserves. I have chronicled some of the efforts in this space and you can also see all the posts under the personal finance websites category
Another hot start up in the personal finance space is BankBazaar. They provide an interactive online platform that helps the user procure loans. The entire loan seeking process takes place online and can be completed in 15 minutes flat, while the process of comparing interest rates across banks can be possible within 2 minutes.
They offer instant interest rate quotes that matches the applicant's credit profile. Even before he shares his contact information, he would know the loan amount, tenure and interest rates he is eligible for and all this in just 2 minutes before he begins his loan application process, which is also completely online, with no phone calls needed. BankBazaar claims that this kind of personalized interest rate comparison is the first of its kind in the world.
I am waiting for them for rolling out all the remaining financial products which include insurance, credit cards, all other loan products including LAP, business and education loans.
I also had the opportunity to ask Adhil Shetty, CEO, a few questions on the opportunities and the challenges of working in this space.
Q1. What do you think is the size of the market?
Adhil: In 2007-08, retail lending in India was over 140K crores, and general insurance premium collected was over 90K crores. A significant portion of this retail loan and insurance distribution can be channeled online- Bankers in India believe that a fourth of total disbursements can be channeled online over the next 24 months leveraging web 2.0 technologies. Given the trend that one is increasingly booking flight tickets online, paying electricity bills online and even finding their respective life partners online, I am convinced that the benefits of instantly competing real time loan offers online will find acceptance among the Indian audience.
Q2. What are the challenges in the Indian online scene?
Adhil: Building awareness of our innovative and differentiated product amongst Consumers is a key challenge. We offer a far superior customer experience from the low-value loan aggregation platforms that are in vogue today. Here is how loan aggregation platforms work: they merely generate leads for banks i.e. they sell users' contact information to bank agents. These agents then call the customer and try to market their product. So customers still need to provide their detailed information to each of these agents individually to receive customized quotes, they still need to bargain with each of these banks and they still have trouble comparing the complex offers they are being given. The www.BankBazaar.com model adds significantly higher value to the consumer as it offers an end-to-end solution i.e. the consumer gets to do everything online, right from getting customized rate quotes, comparing the offers and applying online directly to the bank.
Q3.What are your marketing strategies?
Adhil: BankBazaar.com is using online marketing strategies to build awareness of the site among the online population. We also believe in the power of word-of-mouth recommendations. Once the customers experience our offering, we are confident that they will find it attractive, especially as we make it easy for them by saving time and money.
Thank you, Adhil and all the best! I'll be awaiting the roll out for insurance, credit cards, all other loan products including LAP, business and education loans.
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