[Exclusive Interview] This Tech Startup Has Enabled 100 Fintech Companies To Reduce NPA By Leveraging ML/AI Tech

Recently, we interacted with Mr. Nageen Kommu, Founder & CEO, Digitap – a fast growing tech startup that provides high tech advanced AI / ML solutions to new age internet driven businesses for reliable, fast and 100% compliant Customer Onboarding, Automated Risk Management along with Big Data enabled services like Risk Analytics and Customized Scorecards.

Mr. Nageen Kommu, Founder & CEO, Digitap

Here are the interview highlights:

1. Elaborate on the journey of Digitap since inception inclusive of the crucial milestones.

Digitap was founded in 2019, when the BFSI sector was disrupted with various challenges of recognizing genuine customers and meeting the unprecedented influx of new customers. But the story dates back to when I was working at Dribl, a start-up I had co-founded in 2017. My fascination with Artificial Intelligence (AI) and Machine Learning (ML) was at its peak as these technologies were still being introduced into markets. To analyze enormous data sets and suggest intelligent decisions that resulted in positive impact, it was a science I needed to explore in its entirety. 

After a thorough deep-dive, I was able to identify the fintech industry as an ideal space to leverage these advancements due to existing gaps and opportunities. That inspired Digitap, our early-stage tech start-up. We initially focused on developing digital customer onboarding solutions and later expanded into creating advanced credit underwriting solutions. Leveraging diverse data sources like bank statements, telecom records, e-commerce data, and device information, we pioneered alternate data-driven approaches. 

One of the crucial milestones for the brand is to be listed as a certified Technology Service Provider (TSP) on Sahamati platform that implements the Financial Information Users (FIU) module, enables the certification of the module and provides analytics over and above the raw data shared by Financial Information Provider (FIP). Since then, Digitap has helped over 100 fintechs in reducing their Non-Performing Assets (NPAs) by assisting them with its scoring model.

2. Could you provide more information about Digitap’s product offerings for financial institutions? 

Our initial product stack was built on the premise of solving the financial sector’s pressing challenges. Once we were in the market, we saw an opportunity to diversify. And so we grew from bridging industry gaps to enhancing other financial solutions. Currently, Digitap’s primary product offers alternative data sourcing models for credit underwriting to financial institutions. What sets us apart is the unique data sources we’ve identified as it creates a significant impact on the credit profile of the customer. This scoring model is customizable for firms based on the customer segment. The main objective of such an offering is to minimize fraud and improve risk management. Furthermore, we also provide onboarding products such as KYC solutions, RBI compliant video KYC, Optical Character Recognition (OCR) and document validation. 

3. Digitap is a listed Technology Service Provider (TSP) on Sahamati, what has been the experience like? How can it leverage the Account Aggregator framework?

As a recognized TSP on the Sahamati platform, it marks a significant achievement for our organization. We not only have the capability to verify the module but also enhance its value by offering advanced analytics alongside the raw data provided by the Financial Information Provider (FIP). Digitap maintains close connections with all Account Aggregators (AA) in the ecosystem, ensuring our primary objective to deliver a comprehensive technical solution to Financial Information Users (FIUs), is streamlined seamlessly. 

By leveraging the AA framework, Digitap offers its customers a seamless and convenient way to access and manage their users/potential customers’ financial information from multiple sources in one place. This empowers users to have a comprehensive view of their financial health and make informed decisions.

Additionally, as a TSP on Sahamati, we have the opportunity to collaborate with various financial institutions, lenders, and other service providers. This collaboration allows us to create more personalized and tailored financial solutions for our customers. 

4. In the context of Digitap’s collaboration with key digital lenders, what are your thoughts on the recent tightening of policy by Google on personal loan apps?

Google’s stricter rules for digital lending applications is a step towards protecting users from potentially predatory lending practices. By implementing more stringent guidelines and transparency requirements, Google aims to create a safer environment for users seeking financial services.

However, it’s important to recognize that these policy changes may increase compliance costs for digital lenders. As a result, we may see more digital lenders opting to apply for an NBFC license. This move could enable them to meet the regulatory requirements and continue offering their services on the Google Play Store. 

Furthermore, the tightening of policy by Google could also lead to a trend where larger fintech companies explore the acquisition of NBFCs. By acquiring established NBFCs, these fintechs can streamline their compliance processes, leverage existing infrastructure, and continue serving customers on the Google Play Store without disruption.

As Digitap continues to collaborate with key digital lenders, our priority is to navigate these policy changes effectively. We will work closely with our partners to ensure compliance with the new guidelines while maintaining a seamless user experience. Additionally, we will closely monitor industry trends and explore strategic partnerships or initiatives that can help digital lenders manage compliance costs and operational challenges.

5. As a bootstrapped startup, what are Digitap’s plans and top priorities for 2023-24?

One of our key focuses in the coming months is to develop and deploy various AI and ML models that will empower our clients to cross-sell and up-sell a wide range of products to their end customers. These models will enable our clients to analyze customer behavior, preferences, and transaction history, allowing them to offer personalized recommendations and targeted marketing campaigns. Additionally, we are exploring the application of AI and ML in fraud detection and identity management, aiming to enhance security measures and protect our clients’ businesses and customers.

In order to achieve our growth targets, we are actively working on expanding our global footprint and engaging with customers on a broader scale. We currently have partnerships with more than 120 financial institutions, and our goal is to increase this number to 250+ within the next two years. 

In line with our growth objectives, we have further set a target of reaching an Annual Recurring Revenue (ARR) of $20-25 million in the upcoming years. This will involve a combination of acquiring new clients, increasing our service offerings, and nurturing existing client relationships.