'Develop a vision to solve a bigger problem'

An interview with Varun Sridhar, Chief Executive Officer of Paytm Money, India’s biggest digital wealth management platform, in Kathmandu. Photo: Business360

Varun Sridhar

CEO, Paytm Money

Varun Sridhar, the Chief Executive Officer of Paytm Money, India’s biggest digital wealth management platform, states that his life is all about living in ‘the now’ and improving his happiness quotient. “Happiness at work is very important for me. Every morning when I wake up, I ask myself whether I am happy with my work because I believe that positive results are an outcome of a happy soul”.

A banker all his life, Sridhar has worked with Deutsche Bank in India and BNP Paribas in Europe. He was based in Europe prior to joining Paytm Money and in 2016, he decided to return home recognising the immense opportunities India offered. Sridhar is recognised as a professional who does not fear to dream big and neither to work hard to realise those dreams.

Recently in Kathmandu as a speaker for the Ted Talk organised by TEDx DurbarMarg, Business 360 caught up with Sridhar to learn about Paytm Money and the prevalent trends of fintech companies. Excerpts:

Could you tell us about the exponential growth of Paytm Money?

Paytm Money, which was founded about three years ago, is a startup and a 100% subsidiary of Paytm, India’s leading digital payments and financial services company. We started off wanting to do wealth management and the mission was how to get 100 million Indians to manage their money better… their wealth better. Currently, we are among the top three fintech distributors in India. Today, we do direct mutual funds and are one of India’s top five distributors. We then launched equity brokerage about a year ago and in this sector, we are ranked 13th in India at the moment. We are also involved with the National Pension Scheme. Moreover, we have a Wealth community where you can learn through videos and interact with others. Similarly, on the app, we have Paytm Wealth Academy which is basically our education business where a user can pay and learn how to invest, trade, and manage their money. So Paytm Money is all of these put together. We are the super app of wealth management.

What exactly is wealth creation?

It is actually very simple. Businesses earn every quarter but normal people earn every month and when we earn every month, we also spend every month. All our lives, we work for two things – money and happiness. When we talk about wealth, we are always thinking of ways in which we can invest in a disciplined way and save regularly. But once you have done that the question is how do you make your money work harder so that even when you are sleeping your money is working. Even when you are enjoying your happiness in life, your money should be working for you. So that’s what we try to educate on the platform – how do you save regularly, how do you invest with care so that you are not taking too many risks. Any person should be taking risks as per their liking. And the last thing we try to teach people is to have a goal because in the end you earn wealth because you have a goal. So how do you do goal-based saving? We try to put all these together for millions of Indians on one app.

Paytm Money was launched about three years back, what contributed to its phenomenal rise?

There are three main reasons behind the rapid growth of Paytm Money. The number one reason is technology – we are a technology company and we believe that everything has to be solved using the same. Technology is the key driver of the future so we always think of how we can automate, how we can code something so that human intervention is not required. When human intervention is not required, users find it very easy to use an app. The second reason is our product simplicity. We have made it very simple and easy for everyone, whether they have one rupee or millions of rupees. All customers come on one app and do the same transaction. And that is the balance of what we call product innovation. I think the third reason is always our mission. Paytm has stood for doing the right things, making sure that India changes, ensuring that society benefits. So, all three things put together — our tech-driven innovation, cost efficiency and mission ensures our pricing is very good. We have always had a mission that India should do well because if the country does well then automatically we will do well.

With the rise of financial digital platforms, will traditional types of investment companies die out?

I think both will exist but the transformation has to happen. At least what I see in India is that consumers are adopting technology faster than ever. No consumer is saying I will agree to get a lower experience. What they are saying is they want the experience and they want it more. For example, fintech or digital companies have to challenge themselves on how they give the human experience on their app. As consumers, we still like to talk to humans. We still want to interact. Companies which were historically non-technology or non-digital now face the challenge of transforming themselves. I think a lot of them, which I am very happy to see, are taking up the challenge. They want to build an app, adopt technology and invest in it. There are a few companies which still don’t do it. What I can say is that those who do invest will succeed and do very well. Those who don’t will have to choose either to become a large player or become a boutique. Eventually, I think there is space for everybody in a country like India – it is large, and the market is huge. But if you don’t adapt to technology eventually, technology and consumers will win. So, it’s a question of when and how you adapt. But I think you have enough space for everybody right now.

When we talk about the digital space, the issue of cybersecurity comes up. What should a consumer be aware of?

Cybersecurity and data privacy are two very important elements in the digital world. I think for every company now it is the holy grail that you have to say ‘this is important’. And the moment you classify it as important you do many things. For example, we do three things. It starts with corporate governance. So, all the way from the board to the CEO to the last person; it is important to have rules and regulations that are followed and audited. Once that is done, then the next step is the objective of making sure that your standards continue to improve. I think you have to always be on the edge and innovate. And the third thing is educating consumers. A lot of learning and awareness are required. Many times, the problem is not with the platform because we can secure ourselves. However, if the consumers give their OTPs, share their passwords or some vital information, then it is very difficult. I think these are three important things for cybersecurity and data privacy. We need to respect that aspect. The day you remember that and implement it, the better it will be.

“When we talk about wealth, we are always thinking of ways in which we can invest in a disciplined way and save regularly. But once you have done that the question is how do you make your money work harder so that even when you are sleeping your money is working. Even when you are enjoying your happiness in life, your money should be working for you.”

Is there certain demography that Paytm Money specifically caters to?

Between all of Paytm Money’s businesses, we have more than five million users. As we are a large-scale business, we get different types of consumers. We have customers from over 99% of the pin codes in India. In a country as large as India we have one customer everywhere. We largely get younger customers and first-time investors. A lot of youngsters come to us because it is digital, it’s cool, and it’s technology driven. But of late, we have also started getting more mature users. Men constitute about 85% of our customers. But as a company of Paytm’s scale, we welcome everybody. We get a fairly distributed audience.

What are the three basics that a first-time investor has to be aware of before making an investment?

I always tell people that you must learn to drive before you actually go out and drive a car. Even those who go out and swim in the ocean, practice a lot in a swimming pool first. I think in life everybody wants to learn before they do anything. But when it comes to finance, a lot of people directly jump into it. So, personally, I always tell people about three golden rules. The first rule is to learn before you invest. Invest in education because learning gives you a lifetime benefit in investment. The second thing I tell people is to invest time in understanding the product that you want to invest in. If you spend so much time buying a car or for that matter even a soap, why would you listen to somebody else and invest? Don’t jump immediately into investing simply based on a friend’s recommendation. You need to ask questions, get the details and know the risks. The third thing is asset allocation. You should always do that. Don’t put all your eggs in one basket. Decide what’s your risk appetite, that is your willingness to bear financial risk with respect to investments. Knowing your risk appetite, allows you to do better asset allocation.

How do you view the rise of fintech companies in Nepal too?

I think it is a great moment for Nepal. The reason for that is you can see success in India, and in other neighbouring countries. You can see how the world is changing. I think fintech companies in Nepal have a huge benefit from the experience of others. It is very good to be inspired. There is nothing wrong in saying this is happening in India, I can see it, why don’t I use it in Nepal. So, getting inspiration from outside is a good thing for fintech companies, startups and entrepreneurs in Nepal. The second thing is to dream big. Fintech succeeds when you disrupt. For disruption, you need critical mass and for that, you need to dream big. For instance, if the solution you are working on is only 100,000 people it is not sustainable for the long term or scalable. But if you plan on addressing 50% to 60% of the population of Nepal, if you have the feeling that you want every Nepali to invest whether they live in Nepal or abroad, then you develop a vision to solve a bigger problem. So, it should be the willingness to solve a big problem rather than a small one. The third thing is to embrace technology. I think a lot of Nepali fintech companies have to make technology their advantage. Advantage has to emerge from innovation and innovation in today’s world is moving to technology. So how you get data advantage is very important. I would also urge Nepali fintech entrepreneurs to go out and get funding while they work on being profitable as a company in the long run. The benefit of the long run change is huge and the financial benefit is also huge. But to get the benefit you have to run a marathon. Now to run a marathon you have to train yourself to run the long race. The last thing is to embrace young people. Nepal has great talent. Young people are hungry so make them part of the core team. A 24-year-old does not need a 10-year of experience to be part of the startup team.

Any advice for startups in Nepal?

I think startup success boils down to funding and profitability. It also boils down to good governance and to the country supporting it. Because at the end of the day, startups rise and then fall and then rise again. I think that is part of the cycle. My only recommendation is to keep at it. Learn how to survive and survival is an instinct.

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