Study of online financial services aggregator

Abstract

The objective of this CCS study is to conduct detailed industry analysis for non-wallet based financial services companies such as loan, insurance aggregators, P2P lenders, SME lenders, etc and derive strategic insights. Today, the industry is thriving on innovative business models with the aim to serve unbanked customer segments and increase the quality of service to banked customers. Unbanked customers usually refer to the large population of entrepreneurs, small scale businesses who either do not have a bank account or CIBIL score and find it difficult to access financial products and services at affordable costs. Methodology:- The study is based on both primary and secondary research of different companies in this space. We have broadly looked at three financial products namely Loans, Insurance and Credit Cards. For Insurance products we have studied the web aggregators such as BankBazaar, PolicyBazaar, etc. For Loan products we have three different business models – Online aggregator of commercial banks’ loan products such as LoanBazaar, P2P lenders such as Faircent and unsecured SME lender such as Capital Float, which lend against receivables. Also, some research was done with bank employees to understand how proper utilization of foreclosure data could be a potential game changer for web aggregators and online lenders. Industry Overview: Given the increasing Internet penetration in Indian market, online financial aggregator business is witnessing a surge and is emerging as an important banking channel. Online portals provide consumers an easy access to number of financial products such as credit cards, debit cards, insurance, mutual funds, loans etc. by different service provider. Though the industry is rapidly growing in India, it is still a small chunk of the financial sector in India. The sector accounts for just 1% of insurance market and 3% of loans and credit card market1 . The Indian market is quite fragmented in aggregation sector and has only a few major players such as Bankbazaar.com, FundsIndia.com and Policybazaar.com. The key idea behind the introduction of web aggregators was to bring transparency to the customers who have been cheated once in their lifetime. They simplify the discovery and comparison of products for the customer and allow him to be able to make an informed decision on his own and not being fooled by the agent.