Partnerships matter for startups to thrive

'Partnership for Prosperity' is a concept that startups should embrace to succeed and flourish in the competitive business world. It is even truer when aiming to be better positioned in the ever-evolving digital financial landscape.

To be more precise, let's talk about interoperability, which is deemed a linchpin in ensuring that businesses, especially those belonging to the fintech industry, harness the full potential of data, drive innovations, enhance efficiency, and deliver value to their customers, cashing in on effective collaboration.

There are many examples of how valuable partnerships can be a powerful catalyst for both parties to serve their customers, eventually helping themselves and the entire industry prosper.

To begin with, online food and grocery delivery platform Foodpanda, on-demand digital platform Pathao, and ride-sharing service provider Uber, among others, have grown in popularity thanks to their partnerships with telecom operators.

These digital service-centric companies have easily adapted to changing consumer behaviour and improved customer experience with the help of mobile operators. Accordingly, they have introduced products and services tailored to customers' needs.

Let's delve deeper into how interoperability has brought about a revolution in financial inclusion.

In urban areas, our financial inclusion through e-KYC, a groundbreaking innovation by Nagad, was satisfactory, but we observed that many rural people remained excluded from financial inclusion due to not having smartphones. At that time, smartphone penetration was only 30%, and it was not possible to increase this number overnight, given the poor financial conditions of many in villages.

Against all such odds, we did not falter in our firm commitment to serve the underserved. What we did was unimaginable for many – we devised another plan on how to financially connect feature phone users. This time, our game-changing initiative allowed basic phone users to open an MFS account by simply dialling *167# without using a mobile application.

However, for Nagad alone, it was not possible to implement this never-seen-before system. So, we partnered with the Bangladesh Telecommunication Regulatory Commission and telecom operators to onboard all mobile subscribers to our MFS platform.

Under these arrangements, customers can open Nagad accounts instantly by giving consent to their respective telecom operators for sharing four types of information: name, NID number, date of birth, and present address. Nagad verifies the information already shared with the mobile operators and then crosschecks it with the database of the Election Commission.

Such collaboration has been a game-changer for Nagad in bringing people, especially those living in remote areas, under financial inclusion. Our customer acquisition using USSD code *167# accounted for more than half of the total customers we have onboarded to date. This innovation helped us achieve enviable success in customer acquisition, becoming the world's fastest-growing company with a customer base of more than 8 crores, while our daily transactions have reached an average of TK1,300 crores.

In recognition of its remarkable contribution to promoting financial inclusion through groundbreaking innovations, Nagad won the "WITSA Global ICT Excellence Award 2020" as the first Bangladeshi MFS operator.

We knew that customer acquisition in a simplified way was not the only factor that could help transactions gain momentum. So, in keeping with customers' needs, we have introduced diversified products and services at affordable costs and simplified transaction processes as well.

There are at least 30 types of customer information available to mobile operators. This presents enormous potential for digital services providers to further expand their operations, introduce new services, and enhance service deliveries even more.

In today's data-driven world, effective data sharing can also help all industries, especially the digital financial sector, go the extra mile. As we are poised to enter the digital banking era, offering customers all banking services on a digital platform, we need to adopt interoperable systems and technologies to innovate more rapidly.

Keeping data protection at the forefront, we are planning to introduce quite a few services, such as lending, deposits, and "Buy-Now-Pay-Later," for our customers. Capitalising on a vast amount of customer data, we can primarily gain insights into user patterns and assess the reliability of customers before offering them digital banking services.

Nagad MD Tanvir A Mishuk. Sketch: TBS

When partners integrate their technologies and systems, they can jointly develop new solutions or products more efficiently. This accelerates the innovation cycle and can lead to a competitive advantage in the market.

However, we must ensure that customer data remains protected while sharing it with others, which will result in a seamless and improved customer experience.

As our businesses grow, the ability to expand operations while maintaining seamless communication with partners becomes increasingly important. Here, collaborations also come into play, leading to scalability without disruptions. Thus, companies can avoid many expenses as well.

Interoperability is not just effective; it is absolutely essential for fintech companies, in particular. The effective exchange of data across platforms will give them an upper hand in the industry to better serve their customers with changing needs.

The writer is the founder and managing director of mobile financial service provider Nagad.