INTERVIEW WITH P M AUSTIN, CEO, PAISAPOWER.COM

Chennaibest speaks to P.M. Austin, CEO of PaisaPower.com. The Company has entered its second year of operation.It has announced a battery of new initiatives, in an attempt to make PaisaPower, India's first web-enabled, vendor-neutral, distribution company for personal finance products and services.

Initially we started off with loans and other personal finance services. But we were primarily offering only product-centred services. Subsequently we did a customer satisfaction survey across some 11,500 users, and we realised that we have to convert ourselves into a customer-centred company. We realised that we had to operate on economies of scope rather than economies of scale. We have to base our business on the number of customers. That's when we decided that we have to sell everything to every customer. Make PaisaPower a one-stop-shop for all money management services. Give the customer the convenience of both online and offline transactions. What we are planning to bring is the concept of a market space. For example, Xerox describes itself as a "document management company"; Toyota says, its in the" personal mobility business". We would like to describe PaisaPower as your "life long money management services" company. We are planning to start the auto site, where typically you can buy the car, get a car loan, as well as get insurance for the car. This entire transaction means something like Rs 15 lakhs, if the customer goes to three different people. But when he comes to us, the transaction cost shrinks and we are able to pass on some benefits to the customer. Similarly for our property site, we plan to offer all the services including property search, getting a home loan, getting insurance etc. So what we are doing is stringing together related needs to address one need.

Apart from this we are launching our Tamil site on 14th April 2001. We have already voice-enabled PaisaPower, customers need not log in to access information from PaisaPower, all they have to do is dial the numbers, and they will have a digital voice answering their queries.

We are also planning to get into finance for Small and Medium Enterprises (SMEs). Its a 3 million market. They are all net savvy, that is, internet penetration is high among this group. And so far, there are no companies that cater to this segment's needs online. We are also planning to get into short term finance, bill discounting; everything that the SMEs would need. As far as our insurance services are concerned, we have tied-up with the Life Insurance Corporation to sell its product and will also be tying up with a General Insurance Company for non-life segments.

Individuals, SMEs...Individuals are basically IT professionals, we make corporate presentations to IT Companies. We do not advertise. 80% of our customers are IT professionals, and the rest of course are the SMEs.

For this service there is no need for a key board. You are only going to use a browser without a keyboard. Internet is growing in small towns. There is a lot of untapped potential there. In these areas, Internet will happen only in the local language. Internet through cable is shortly going to become a reality. When internet reaches homes, what you have in hand is a huge market which is not comfortable with English. Also, our services are only transaction based. We have not transferred the database into the local languages. Anyway there are no numbers in the Tamil language, we are only going to use numerals for the transactions. Also, there is no Tamil equivalent for certain technical terms. For example, for EMI, you have to type in EMI, even though you are using the Tamil browser. So its basically going to be bilingual. So we see a huge potential there. The idea is to be there, when internet happens in a major way. Atleast by then, we would have learnt all the lessons.

As I said earlier, simply giving referrals to the car dealer or property dealer does not work. One referral will probably fetch you Rs 500/-, but if you offer all the services, right from selling the car on the site to arranging for loan to getting an insurance, it makes a lot of sense. Critical mass is most important here. We already have an in-house team working on these initiatives and the marginal cost of entering into all the other businesses is pretty low. We were anyway networking with the Financial Institutions and banks for loans, personal finance etc. We will tell them, "we were anyway doing loans for you, now we would like to extend our services for the other products as well". The customer will see a lot of sense in doing business with us. In India, even a simple banking transaction can be so tiresome. Most banks are terribly crowded, there are no parking spaces outside most banks, walking in the traffic, can be a harrowing experience, going through the whole transaction itself leaves you exasperated. People will find that doing transactions online is very convenient. And one more advantage is, once we have processed your papers for a particular purpose, it is recorded with us. You do not have to go through the same experience, in case there is some other service you want to avail of, the paper work is already done. To that extent it hastens the process.

A significant portion of the transactions will be done online and some of it will be done offline. The site displays the various schemes available, if a customer shows an interest in any of the schemes, we send our personnel to do the transaction. Wherever technology permits, we will use online transactions. In the process, the cost per transaction becomes lower than if we use conventional methods. So our marginal cost decreases. We have multiple products and we have multiple ways of delivery. In financial services, the major cost is the distribution cost. We want to become distribution partners for all the banks and financial services in the long run.

We are present in Chennai, Bangalore, Hyderabad, Delhi, Mumbai, Pune...apart from that we are well connected by a network of brokers, sub-brokers and franchisees to reach the financial products and services to other markets in India.

The plan has changed from what it was previously. I wish we were physically present in small towns. We did not spend too much money on advertisements, that is something I think we got right. We should probably have launched our other services a bit earlier.

India is certainly ready, its the companies that are not ready. Transactions are not happening in a major way because we are not making it easier for people to use them. Look at the way the cybercafes have taken off. Indians are very smart people, we learn very fast.

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