Implementation of tech-led models facilitated easier access to formal credit for MSME customers: Hardika Shah, Founder & CEO, Kinara Capital

Hardika Shah

Mobile banking and digital payments have already transformed the way how people make use of financial services, especially those who previously lacked access to traditional banking services, shares Hardika Shah, Founder & Chief Executive Officer, Kinara Capital with Srajan Agarwal of Elets News Network (ENN).

How do you build an IT architecture that can adapt to a fast-moving environment?

We are proponents of continuous architecture methodology. In a short amount of time, we consumerised and revamped our end-to-end lending tech with our multilingual myKinara App. Taking an agile approach, we were able to introduce the core product with subsequent additions and introductions, enabling co- lending partnerships in the backend, and other modifications to keep improving the app experience.

In general, I believe that IT architecture should be designed in a modular manner using various design patterns such as microservices, micro frontend and backend to frontend because it allows for easy integration, enhancements, support, and maintenance of individual components without impacting the entire system. This also provides a high level of scalability and resilience in the event of a sudden increase in user or data traffic, as well as failures.

There should be a high degree of adaptability to accommodate various workloads and technologies, as well as the ability to integrate with other systems and services. There is also a need for monitoring and feedback mechanisms to be built to provide real-time data on system performance and usage.

The tech transformation journey towards modern architecture is helping us swiftly build and deploy new products, significantly reducing maintenance and support efforts, and offering flexibility and scalability that could lower overall development costs.

As a CTO, how will you stay abreast of current trends in technology?

I make it a point to read industry publications and blogs. Conferences and industry events also give insights about the latest development and best practices. Staying connected with thought leaders in the tech industry through online communities and networks also helps. At Kinara, there is an open culture of learning and ideation, where every individual is welcomed to bring new inputs to the table, so I also learn from my team through experimenting with new technologies.

Could you share your thoughts about technological developments that the financial services industry should adopt to scale up financial inclusion?

Mobile banking and digital payments have already transformed the way people make use of financial services, especially those who previously lacked access to traditional banking services. Data-led, AI/ML-based decisioning models have been adapted by fintech companies like Kinara Capital to expand the reach of financial services and drive inclusion to the underserved last-mile customer. The implementation of tech-led models has facilitated easier and faster access to formal credit for MSME customers.

Incorporating features specific to the needs of the last-miler user base, like vernacular access and simplification in terms of user interface will make it easy to understand and operate. To support tech adoption, there also needs to be a focus on integration and customer support to guide new- to-tech users through the process initially.

Wider adoption of these tech tools and support mechanisms can redefine the future of the financial services industry, furthering inclusion and significantly enlarging the overall customer base. Interoperability is a crucial factor at this stage. By enabling the interoperability of different systems and platforms, the industry can facilitate the sharing of data and information among different stakeholders, which can help in improving the delivery of financial services to those outside the ambit of formal financing. Risk management is also a major component, as the new-to-tech customer is the most vulnerable, and both industry bodies and service providers are responsible for ensuring data and capital security for them.

What culture change do you suggest for companies that want to embrace the full power of AI?

Having a robust and clean data collection process is a must. For the best results from AI, you must start with the best possible and extensive amount of data that you can feed into it. Without proper data, you will only get half-baked results. By implementing data-driven decision-making, companies can ensure that their AI models are making predictions that are accurate and unbiased.

Another crucial aspect is keeping all the stakeholders aligned and educated about the advantages that it can bring to them. Since these projects often involve various departments and stakeholders, it’s important to foster collaboration and cooperation to ensure that everyone is working towards the same goals. As AI has the power to impact society in a significant way, it’s important to build a culture of ethics and responsibility, in order to ensure that the AI systems are aligned with the company’s values and the society’s well-being.

The other top priority will be to invest in people and skills, and building the right teams and encouraging a culture of experimentation and learning. Employees must be equipped with the know-how of how to implement AI projects, above all leverage the insights and, drive the mission that the company has set for itself.

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