Self-reliance, sustainability, sagacious: Intellect’s Arun Jain shares his mantra for Fintech’s success

India's fintech sector has undergone a remarkable transformation in the last few decades, largely driven by the power of new-age technology, problem solving innovations and inflow of private investment that offers a plethora of financial products and services to the customers across all the categories.

Some Indian fintech companies like Paytm, Upstox, Groww, Phonepe and others serve individual domestic customers, while others like Intellect Design Arena create advanced technology solutions for banking and insurance clients globally.

“The fintech landscape of India consists two main elements — one, financial services meant for Indian users and second, fintech built products in India, which serve banks in other countries like Middle East, the United States, Europe, etc., said Arun Jain, Chairman and Managing Director of Intellect Design Arena in an interaction with the LiveMint.

He highlighted the fintech opportunities in India, particularly focusing on last-mile distribution of services, while emphasizing the need for fintech solutions at the grassroot level, highlighting the importance of smaller, sustainable fintechs that cater to local needs.

Cautioning against the short-term focus of some startups, Arun Jain advocated for purpose-led companies with longer life cycles. 

He critiques the investor-led ecosystem that promotes quick profits over sustainable growth.  “Intellect, has not taken external funding and is self-sufficient, prioritizing long-term alignment of interests over short-term gains.”

Jain-led Intellect Design distinguishes itself as a tech firm rather than just being a fintech. Their focus lies in developing banking products and technologies, which they have successfully sold to 250 customers across 57 countries. The company aims at exporting technology and generating licensing revenue similar to global giants like Microsoft and Oracle.

Intellect Banking offers a range of financial products, including core banking, lending, wealth management, and insurance solutions, said Jain. Among their offerings, Global Transaction Banking stands out as a prominent product, particularly valued by banks for fee-based services. Their suite of products also includes cash management and payment solutions, he said. 

The main challenge we face is distribution. While we have top-notch technology, reaching markets like South America, Japan, and Korea poses logistical hurdles as we can't establish our presence everywhere. Therefore, we're focusing on building a distribution network. Overcoming this distribution challenge will be a key focus for the next two years, Jain added. 

Speaking about funding debacle, the Intellect Design MD said, “The recent market bubble has led to unrealistic expectations. Sustainability is the key amid investment fluctuations. People are now concerned over long-term viability.”

"Building a successful enterprise takes time, yet many approach it with a short-term mindset. This rush to sell off companies undermines their potential. Industries and investors must evolve gradually," he said. 

Jain said that they don't need external funding as Intellect generates sufficient cash, with ₹700 crore in reserves. While adverse situations can arise, but it has ample assets to mitigate risks. 

"However, the decision to accept funding depends on alignment with long-term goals. Investors often prioritize short-term gains, whereas our focus is on building a sustainable institution over the next 20-25 years," he said.

It is worth-mentioning that India's fledgling fintech companies witnessed a 57% drop in funding in Q1 2024 amid Paytm fiasco. However, India still stands at third spot in terms of funding raised for the FinTech sector in the first quarter of the current calendar year.