 "Zeta Co-Founder and CTO LR Ramki Gaddipati and Co-Founder and CEO Bhavin Turakia")
Zeta co-founder and CTO Ramki Gaddipati (left) and co-founder and CEO Bhavin Turakia
Zeta, a provider of next-generation banking technology to financial institutions around the world, is launching its digital credit-as-a-service offering as part of its strategy to democratize credit.
The SoftBank-backed Zeta service is backed by a credit line from the National Payments Corporation of India's Unified Payments Interface (UPI) scheme.
Zeta estimates that the system's transaction volume will exceed $1 trillion by 2030. Zeta aims to capture 50% of this market opportunity with an end-to-end solution that can help banks devise and quickly deploy multi-form credit products.
“India is a highly underpenetrated market when it comes to credit. There are more than 800 million credit-eligible adults in the country, but less than 30 percent of them are underserved in terms of their credit needs. ,” Zeta co-founder and CEO Babin Turakia said in an interview. .
“With UPI, we believe there is an opportunity to meaningfully increase this penetration rate. This will help India's credit reach around $1 trillion in annual spending by 2030, with more than half, or 5,000,000 We believe $1 billion in spending will be operationalized on Zeta's digital credit-as-a-service platform.
There is a unique dichotomy in India's financial landscape today.
TransUnion CIBIL reported that more than 160 million Indians remain underserved by traditional credit channels. At the same time, banks pre-approve millions of customers for credit but are unable to efficiently distribute loans to those customers.
Unlike traditional loans, credit products powered by UPI's Line of Credit offer on-demand access through the PSP payment app, leveraging a fully digital native experience to help consumers pay exactly what they need, when they need it. can be rented to.
Ramki Gadipati, co-founder and chief technology officer of Zeta, termed UPI's credit line a “superhighway of credit distribution” and said this is an opportunity to change the landscape of credit inclusion in India. He said UPI's credit line is completely changing the way banks find, access and cost personal loans. He said the introduction of Zeta will enable banks to serve the credit needs of millions of customers in this fully real-time, digitally native ecosystem.
“So far, we were just selling software as a service to banks, providing them with the technology they needed to issue credit products, UPI products and loans,” Gadipati said in an interview. “We currently offer a digital credit-as-a-service service that allows banks to devise product concepts, underwriting policies, and due diligence processes. The rest of the service is acquired from Zeta. Bank relationships can be completely managed on the system, which ensures banks get a fast start without having to implement a new set of products and portfolios. You can focus on your management approach and we will take care of the rest.”
Gadipati emphasized the need for the banking ecosystem to prepare for hockey-stick growth in UPI credit lines, similar to what India experienced when it first launched UPI. He issued a warning about banks' readiness for credit lines on UPI volumes, saying, “We have seen that UPI volumes are putting a strain on the core banking system. But we expect to see similar volumes in the near future, which requires a population-scale banking infrastructure that can handle hundreds of millions of credit accounts. We pre-engineered a solution for this from day one. .”
With a vision to democratize access to banking, Zeta has built one of the strongest teams in banking technology over the past decade, with a global investment of 360 million yen to build next-generation banking platforms. He said he spent more than $100.
Digital Credit as a Service offers a complete service and technology stack powered by Zeta's cloud-native, next-generation core banking and payments platform. This allows banks to manage everything from deposits to collections digitally.
Zeta's Digital Credit as a Service includes a wide range of product blueprints (EMI loans, commercial loans, agricultural loans, etc.). It also includes out-of-the-box functionality for operational, compliance, and regulatory reporting. There is also process consulting support for integrating UPI credit lines with your existing banking system. We also have end-to-end program management to guide banks through every step of the process.
The company says the service completely reimagines credit distribution as a modern, digitally native journey that can coexist with banks' existing products and systems. Disruption to ongoing systems and processes is minimal.
Zeta was founded in 2015 by serial entrepreneurs Bhavin Turakia and Ramki Gaddipati. Zeta aims to disrupt the global banking technology sector by replacing 40-year-old banking and payments technology platforms with modern systems that are flexible and scalable.
Zeta is already powering millions of payment cards from the world's largest card issuers in six countries. Currently, we are rapidly expanding into the US card processing market.
First published: May 10, 2024 | 6:12am IST
