Project : Launch of Fino Payments Bank

Summary
I managed a project involving the setup & launch of a retail bank in India. The 18-month long project involved the creation of the bank from ideation to final completion. As part of the Project Management Office (PMO Team) I handled regular interactions with both internal & external stakeholders. This involved handling a cross-functional team from Technology, Product Management, Distribution Channel, Human Resources, Legal, Regulatory & other allied departments. In addition to internal stakeholders, I also handled external consultants, implementation partners and strategic partners.
The first task was to develop the project charter which defined the key objectives of the project, project sponsors, key stakeholder list and high level project deliverables.The next step was to create a project schedule with a milestone list of important events.Bank was formed on the four pillars : Customer Segmentation, Product Design & Development, Distribution Channel and Product Partnership.
We did customer segmentation since it was necessary to identify the core customers with limited penetration & huge demand potential for which we will create & tailor our product offering. We conducted 500+ quantitative and 50 qualitative interviews conducted across 10 districts.
One of the key parts of the project execution was the delivery model. We adopted a ‘phy-gital’ model under which we ensured the customers were served digitally but at physical locations.
To augment our revenues, I identified various partnerships & built business cases to use our core strength and bring in high margin revenues wherein our banking agents could cross-sell other third party products.
Overall the project involved more than a 1000 unique individuals who were directly or indirectly involved in the project during the course of project duration. Starting in December 2015 we were able to launch the bank with 410 branches across the rural landscape of the country on 30th June 2017.


Detailed Project
Ideation
The payment banking model is based on the need of delivering affordable banking services to consumers at scale. India is a huge country with more than 1.3 billion people spread across its approx 600 districts. Banking is one of the key services which empowers the people to build a habit of savings and enables access to loans, other financial services. Access to capital to invest in small scale businesses and pay regular expenses is a huge requirement. While the country boasts of almost 1.5 billion banking accounts yet the banking penetration is still limited to urban & semi-urban geographies.

The Reserve Bank of India ( RBI) which is the country’s central bank came out with its guidelines for payment banking model in 2015. Banks which were licensed under this model were expected to augment the existing banking infrastructure by providing ‘no-frills’ banking services to account holders. We applied for the banking license and were among the 11 companies which secured the license in late 2015. All the selected companies were given a conditional license to start and operate the bank by RBI with the objective of providing banking services with a low-cost operating model.

Project Initiation
The senior management team consisting of CXOs and the business heads prepared the initial project scope and created a project management office (PMO) to create the structure and operating model of the bank. I had been part of the company for 2.5 years and had worked in multiple roles across product, business planning & business development roles. I raised my hand to be part of the PMO and joined the team.As a first task I prepared an initial draft for the project charter which was reviewed by the PMO Head and Senior Management team.

Project Planning
The next step was to create a project schedule with a milestone list of important events. I worked with the key stakeholders in identifying the project milestones, key resource requirements and defining the delivery timelines for each milestone. Once the project plan was reviewed and accepted, I held meetings with functional heads to identify the key resources and plan their availability basis the project schedule.With the foundation in place, the team worked on identifying the four pillars which would create our Bank : Customer Segmentation, Product Design & Development, Distribution Channel and Product Partnership

We did customer segmentation since it was necessary to identify the core customers for which we will create & tailor our product offering. We also needed to identify segments with limited penetration and with huge demand potential. We hired an external agency and conducted surveys and focussed interviews. This process was completed in a period of 6 weeks with 500+ quantitative and 50+ qualitative interviews conducted across 10 districts. Key customer segments identified were migrant workers in urban areas (including construction workers, taxi drivers, house maid etc), small retail shop owners in semi-rural and farm workers in rural areas.

The base product in banking is a savings bank account. The task was to design the product to cater to the needs & requirements of our core customer base. This involved making the account opening process simple with use of technology, reducing the overall process time from a few weeks to a few hours. We also reduced the AMB ( average monthly balance) and minimum balance requirements to ensure we met the demands of the income levels of our customers.

One of the key parts of the project execution was the delivery model. Normally banking is a high cost and high-touch model. This means that customers are mainly availing banking services through a physical branch which necessitates a high cost of assets and manpower usage. During the project planning we had identified that we will be empowering people by bringing banking to their fingertips. Though this most likely works in case of urban educated customers with smartphones, it was definitely not ideal for our customer base with limited knowledge of technology and lower education levels. So we adopted a ‘phy-gital’ model under which we ensured the customers were served digitally but at physical locations.

Under this model we created a network of branches in our target locations which served as a hub. Around the hub we had a network of merchant points or agent locations who with their handheld devices (smartphones, tablets etc) would perform basic banking services and ensure a high density of reach within the communities. These agents were small retail shop owners, mobile recharge providers, community leaders etc and they served as spokes.

The final pillar was creating product partnerships to manage the customer need. When RBI created the guidelines for the payments bank, they made the model asset-lite meaning the banks were not allowed to provide loans to the customers. The rationale was to make this entity virtually risk-free. Though this was a very noble thought, the idea highly limited the profitability of the bank. To ensure the operating model was profitable, we decided to leverage our deep reach by entering into product partnerships. I identified various partnerships wherein our banking agents could cross-sell other third party products and I built a business case around it. The partnership model was truly unique and innovative in the sense that it allowed us to use our core strength and bring in high margin revenues.

In the project I was required to manage key stakeholders engagements and ensure everyone was updated about the project progress. We did regular meetings with functional heads from the Product, Technology and Delivery Channel Team. Other key stakeholders included the Regulatory team, Human Resources team, Procurement team and Marketing & Public Relations (PR) team.

Launch
We created the final project report and submitted it to RBI for regulatory approval. The process which began in December 2015 was finally completed in May 2017. We waited patiently for the feedback from RBI and after through evaluation we were authorised by RBI to start operations. Thus after 18 months, the project was finally concluded with the launch of the bank.
https://economictimes.indiatimes.com/small-biz/money/fino-payments-bank-launches-operations/articleshow/59631530.cms?from=mdr