White label Human ATMs a.k.a Business Correspondents

We should look at our inherent strengths to solve some of our pressing needs. As a country, there are a few things pretty peculiar about India. Take for instance, the sheer size of some of its problems. Some of our 'problems' are as large as a few other countries' entire populations put together. Herein lies the opportunity as well. We are also, a massive sea of humanity yearning to serve its unmet needs and earn our rightful place under the sun. Technology has a huge role to play as well; not at loggerheads but complementary.

October last year, Abhishek (Eko) and Ignacio (ex BMGF) published a post on IFMR blog titled 'Extending the third-party aggregator model from ATMs to Business Correspondents'. This was a revolutionary thought and got picked up by the Nachiket Mor committee on Comprehensive Financial Services for Small Business and Low Income Households. The report was released by RBI recently and has generated quite a few discussions for its take on how retail banking needs to evolve in India.

Just to set the context, Business Correspondents (BCs) are firms or individuals who provide banking services to customers on behalf of a bank. The RBI established the BC model sometime in 2006 to solve the financial inclusion needs of this country. The BC provides the last mile access, reaching where a bank could physically and economically not reach through traditional means. BCs are currently tightly coupled to a particular bank. The BC would feature the brand of its bank, offer products of its bank and liaise with the branches of its bank only. However, interoperability in transactions is conceptually promoted and to an extent implemented. The BC is therefore a human ATM (and more, since the BC can do much more than an ATM can) and the community banker/ an agent of the bank.

Most implementations of the BC network by the banks have only attempted to comply to RBI/ finance ministry mandates for financial inclusion and have been restricted to 'Open X accounts in Y villages' or 'Disburse X rupees of government benefits to Y people'. Most of these initiatives have therefore been seen as cost-centres and as regulatory obligations by the banks and rarely have these been viewed as profit-centres or even as viable business units.

After spending many years in mere obligatory compliances and having spent significant amounts of money to fuel these endeavours, a few banks like the State Bank of India and the ICICI Bank have realized the need to turn this model around. Someone in these banks has rightly put his/ her foot down and said that the whole movement needs to be viable, sustainable and scalable to have any real and meaningful impact.

A few BCs themselves have seen that they could not sustain with a fundamentally non-viable business model. Eko, for instance, has been a BC which has used technology to ensure that its costs were razor thin, invested in ensuring a great user experience and has innovated on the products along with the banks. In short, it is in the best interests of a BC also to ensure that more and more customers, transactions and products flow through their channel and that most of these activities generate enough revenues to sustain them and their partners in the value-chain.

White label ATMs are a relatively new phenomenon for India where a third-party owns and operates a network of ATMs under its own brand and not necessarily for/ by a particular bank. The Tatas and The Muthoot Group have already started setting up their WLATMs in India.

Lets assume that a typical ATM machine costs Rs. 10 lac to deploy, maybe cost a Rs. 1 lac to maintain (rental, electricity) annually. Also, the average life of an ATM would be 5 years. So 5 years on, we must budget for some amount to replace atleast some parts of this machine, lets say this is just Rs. 5 lac. Assume that the ATM earns Rs. 8 per transaction. Ignoring the cash management costs, and security costs (which would be significant) and any other overheads; to break-even, every ATM needs to process approximately 140 transactions per day, every day for the next 5 years.

Also, of course, to set up a network of say a 10,000 ATMs, the capital expenditure is going to be significant (Rs. 10,00,000 x 10,000) and that capital comes at some cost.

Again, the following articles provide some context: A recent article in Times of India pegs a deficit of 19,000 odd ATMs for the public sector banks India compared to the targets set. Also, interesting is this article which quotes officials from SBI, which operates the largest ATM network in India, saying that its ATM operations were loss making.

Now, technology moves ahead way faster than banking can. Mobile banking/ commerce is slowly but steadily getting popular. The RBI has also published that it envisions a less-cash (though not a cashless) society in the near future. For all we know, physical cash might actually become much less relevant in the next 5 to 10 years. Perhaps mobiles will take over where cards have not? While this seems implausible, take a look around; if 10 years ago, someone had told me that almost every economically active individual in India would have a mobile phone, I would have laughed. Video conferencing/ tele-presence used to be stuff from science fiction! My mobile phone has more processing power today than the all the computers in my school lab put together. I am not implying that ATMs would become irrelevant anytime soon- indeed these machines would themselves evolve in ways we may not anticipate today, but they are definitely under time pressure.

With access to one tenth the capital required for ATMs, we could set up a human ATM network that is a hundred times larger. Consider a human ATM network that uses mobile phones/ mPoS as access devices. Add to it the fact that it would not need to overheads that a normal ATM would need, including power, rental etc. Also significant is the fact that much leaner and efficient cash management systems could get deployed here. The result would be a low-Opex and very low-Capex network of banking agents who would not only do cash-in/ cash-out but also educate, solicit and facilitate enrolment to a range of financial products. Also, these costs are nothing but investments in people; in agents who are entrepreneurs. Any improvement in their livelihood would only have a positive rub-off in the community that they serve and the nation at large.

The white label BC model, would achieve a sort of decoupling for the banks where banks would be freed up from having a operationally heavy involvement in these activities. Having endorsements from multiple banks or the central bank itself would create an environment of trust as a legitimate banking channel even for existing customers across different banks and thus more footfalls. This could result in better returns for the agents involved and could lead to a viable and sustainable financial ecosystem designed for outreach and customer convenience.

This model is not without its short-comings though. Managing a huge network of agents is no easy task. Selecting and appointing them is no cakewalk either. Also, people, as they say, are more vulnerable to break-downs than machines are. Each of these risks can arguably be mitigated through appropriate processes, technologies and audit mechanisms.

Prevalent perception is that while technology makes things more efficient, it also causes banking to lose the human touch. Perhaps it is prudent to seek a middle ground here, especially as this also involves introducing hitherto unbanked people to a formal financial system. A little hand-holding and human touch should be welcome, right? Eager to see how this concept plays out.

The Story of Tatkal Remittance- Eko

On 17^th September 2013, Eko completed six years of its existence as a registered company. While it took over a year to move from a 'pilot' project which started by the end of 2007 to a live one, it was not till late 2009 that Eko discovered a real pain-point its customers faced, and in the process, its (current) primary revenue source. This is the story of Tatkal(Hindi. tatka:l, meaning: instant, right then and there).

Eko went live with the State Bank of India (SBI) through an inaugural transaction at Sumit Gupta's medicine shop in Uttam Nagar on 23rd February 2009.

Invitation to inauguration of the first Eko CSP for SBI

Mugdha's invitation, Barry sir (Retd. Vice Admiral Venkat Bharatan was the CEO of the Section 25 company Eko Aspire Foundation then)

At that point in time, our platform was offline and used to sync up to SBI through transaction dumps and handoff reports sent at the end of day. SBI had been working with ALW (A Little World), a very early participant in the Business Correspondent model promulgated by the central bank. ALW's front end agent device was then an NFC enabled phone and each customer had a card. SBI's Financial Inclusion switch provider Yalamanchili  (YCS) had already created an ISO8583 based transaction interface which was to be used to transfer the card transactions captured by ALW to SBI's Core BankingSystem.

There were a few things that were simply revolutionary about Eko:

1. Eko had a transaction system that simply worked on almost any simple mobile phone; no need for expensive smart cards or NFC enabled devices or add-on devices. Even a Nokia 1100 would do just fine for both the customer and the agent.

2. Eko was based on the pre-paid model. It was the first Business Correspondent who first put funds into the BC account with the bank on day zero and then did customer transactions against and upto the amount pre-funded. Pre-funding was prevalent in the telecom recharge sphere, but Eko had applied it on the BC model. This model de-risked the bank and to an extent even Eko from collection and settlement risk. This is today a norm in the BC world.

3. Eko devised an ingenious strong 2 factor authentication system that used a paper based technique. The system was called OkeKey (we are now using the second generation OkeKey system). This system also acted like an OTP (One Time Password) and ensured that the PIN did not travel in clear text even over an unsecured transport like SMS. Simple, cost-effective, quick and therefore for us, it represented an economically viable method to take secure transactions to every mobile phone that was out there.

We used to interact with a few really visionary people at SBI. First and foremost, Mr. S Mukhopadhyay, who was then GM-Outreach. For innovation to work, someone has to give a chance to the innovator to atleast showcase. Mr. Mukhopadhayay gave us a chance and we are thankful to him for that. Mr. L P Rai was then the DGM Technology for Rural Business and Mr. S S Jain who was the Chief Manager Technology for Rural Business. Without these people, Eko story would definitely not have been what it is today. I am sure my colleagues Mansi and Abhinav who used interact a lot more with them would agree.

Coming back to the interface that SBI had exposed through YCS. It was designed for card based transactions and therefore for proximate transactions (where the participants in the transaction have to be next to each other by design). Eko on the other hand had no such restrictions: as long as two people had a mobile number (or any other unique identifier), they could simply transact. So, to ensure that we could communicate in the same 'card' language, we designed a wrapper that would simply translate Eko's transaction parameters to what was required by the card based system and vice-versa. The aim then was to just ensure that the customer accounts opened at Eko's outlets would be online real-time and we will not have to do any end of day batch jobs for this.

So, in late 2009, the RB-DAU (Rural Banking - Dedicated Accounting Unit) team at SBI comprising of Mr. Shivaji More, Mr. Anil Trimakhe and Mrs. Shubha Shejale, along with the YCS team sitting there sent us the specs for the online transaction integration. This was basically a list of transaction formats describing what fields were required for each and the response formats containing success and failure indicators. Apart from this there was a process designed to migrate customers from our platform called SimpliBank to theirs through batch files- there was no programming interface exposed to us to do this real-time.

One among these transactions was a pair called FTWithdrawal and FTDeposit. It was essentially designed to power ALW's Fund Transfer system where a customer could come to an agent, keep his/ her card, indicate the recipient account holder's account details, provide authentication and the transaction would enable money to be transferred from the account holder's card to any existing account in SBI. This was also termed 'Tatkal'. This tatkal had little or no traction at that time.

Meanwhile, the then DMD, Mr. Diwakar Gupta and Mr. S. Mukhopadhay wondered if the BC model could solve a problem that was unique to the public sector banks, through its use of technology. The problem that the bank faced in its urban branches was that of over-crowding, congestion and therefore the quality and RoI of service. Abhishek, our CEO believed he had an answer there.

Abhishek always maintained that there was a remittance story that we needed to pursue although at that point in time, it was not clear to any of us how exactly this would play out. An earlier assumption was that we would need to open agents and through them customer accounts on both sides of a remittance corridor (like Delhi-Bihar). Then, a person in Delhi will use an agent to load money into his/ her account and then the customer could send money home to a relative in Bihar. The relative in Bihar could visit an Eko agent there and withdraw a required amount. We did pursue this agenda for quite some time. However, we soon realized that setting up both the ends of the remittance pipe was a huge exercise. It would take a significantly large base of agents on the sending and receiving size, a significantly greater effort to educate people on both the sides and consequently significantly deep pockets to be able to pull this off.

The integration took a long time: almost a whole year! Considering that we had to get the leased line in place, do the integration, development, get a number of permissions from a lot of 'departments', UAT, et al. The initial phase only consisted of migrating the customers to the CBS. Harish had helped a lot in getting some of the permissions and the leased line in place.

In June 2010, we sent out a process document that described 'remittance to core' to Mr. L P Rai and his team after a lot of review by Anand and Abhinav at Eko. Mr. Rai liked what he saw and made some suggestions in the process and transaction that have made this product hugely successful and he eventually drove its implementation. We had made a curious twist to the 'Tatkal' tale (ref: 4 paragraphs above) and that led to the birth of 'Tatkal remittance' as we know of today. This product and its clones and variations have today become one of the primary revenue sources for many BCs apart from Eko. What we did was to map the pre-funded account of Eko the BC to a virtual card. Then we did a fund transfer transaction where the FT withdrawal was made from the BC account and the FT deposit leg was made to any existing account on the CBS.

Thanks to the effort put in by our engineering team (which was then a part of another contractor Anduril technologies), we made the first test transaction on our staging platform on 23rd June 2010. After a bit of code hacking (one of those rare moments at Eko where I personally wrote code), we were able to successfully put this on production on 26th June. Matteo dialed the first ever production Tatkal transaction from Eko's Nokia 1200 phone (pic attached) and the transaction amount was Rs. 27 (we deliberately chose an odd number ;).

First tatkal end-to-end

The beauty of the whole system was its sheer simplicity, the ability to make a real-time credit into any of the existing 200 million or so accounts of the State Bank of India (rightfully called the banker to every Indian) and the fact that all that the agent (also called the CSP- Customer Service Point) required was a simple basic mobile phone. Unlike the corridor based remittance that we were earlier trying to pursue, the receiving end of the pipe had already been put in place by the bank and its existing BCs. All we had to do was to serve the source locations of migrants- essentially, urban financial inclusion. In the process, what we also achieved was decongestion of hundreds of bank branches. Customers who had to earlier forfeit their day’s work to travel to the branch, wait for hours in a queue there (most branches work only for a few hours of the day, say 10 AM to 3 PM), now had a great option – an Eko counter at the neighborhood grocery store. Unlike the branch, the store was conveniently open even after their work hours, there was no queue and the customers were at ease in a familiar environment.  The customer handed over cash to the agent along with the recipient’s account number, the agent dialled in the transaction and the money moved in real-time to its destination followed by confirmation messages on their mobile phones. This was Tatkal as we had redefined it.

Tatkal flow

The system ran on a trial basis for a month or so and then it went full steam. The rest is now a part of the history of remittances in India. In the first 10 days, we hit a remittance volume of Rs. 1 crore and by the end of August it touched 5 cr. In the entire year before, we would not have done these volumes! The only marketing we did was to tell a few of our CSPs "Don't tell anyone!". Actually! Today Eko, through its platform SimpliBank has handled over Rs. 6,000 crore (6 billion rupees) in cumulative transaction volumes (all included). We still hold the distinction that almost all of these transactions were done using mobile phones. Not only that; today, there are atleast 5 other companies in India doing more or less the same thing.

While there are a hundred challenges before Eko today and we may only have a few answers as yet, the experience of having gone through the grind, having figured atleast some things out, having built something that real customers really needed, being able to earn a revenue out of it, having done all that on the foundation of technoogy innovation and having seeded an entire industry on its precepts, that has been quite a journey!

Eko CodeSprint 2012

Dear all,

We are searching for some kick-ass developers who have fallen in love with the fine art of coding AND for folks who have kick-ass devs as their friends!

If (YOU are the cool dev dude/ dudette)
{

Fire up your browser right-away and jump on to www.interviewstreet.com/challange/. Register for our global talent hunt/ EKO-CODESPRINT scheduled on the 14th July.


We're sure you have a hundred questions in your mind right now. We will try to answer a few right away:


Do I need to have a computer science degree?
Nope (not that we have anything against a fancy degree). But you do need to be one of the best coders out there.


I am an Erlang guy. Suits you?
Sure! But most of our work is currently done in Java/ C/ C++/ PHP/ Perl. We believe that real coders are multilingual and fast learners in any case ;)


I only speak Elbonian (http://en.wikipedia.org/wiki/Dilbert#Elbonia). I can also do sign language. I barely translated this on some online tool. Me too? 
Unfortunately, none of us are fluent in Elbonian or sign language. We will need you to be pretty fluent in plain old English; reading, writing and speaking.


Anything else you want to bore us with?
Yes. One more thingy- we need you to be dexterous with MS Office and its likes/ clones/ substitutes.

}
else
{

Fikar not! Put your friends network to some good use and you stand to win yourself a brand new iPad (that you can then rightfully show-off in case one of your cool buddies makes in to team Eko.
Just do the following right away: LIKE our Facebook page www.facebook.com/ekoindia and join event https://www.facebook.com/events/394510847252792/


Now to answer some of your questions:
1. Now, I have a thousand good friends on my buddy list. I stand a good chance at winning the iPad right?
Right. But please remember that if your friend does get selected and joins Eko, he needs to have mentioned your name on the application form (and of course, you should have 'Liked our Facebook page :)
2. I live in Elbonia. Could you please ship my iPad there (assuming that I win it)
Sorry. Unfortunately we can only buy and ship your iPad to a valid address in India :(

}


Simple. Right? So what are you waiting for? The last date is 31th July 2012!

Tailpiece:

You must be wondering "what/ who the hell is Eko?". So here goes:

Eko (www.eko.co.in) provides branchless banking solutions to the unbanked and under banked population using next door shops. We are creating a network of Human ATMs, which will change the way financial services are offered. We have handled over a billion rupees in the last year and a half and have served over two million customers.

If you have the DNA to jump of the cliff and try something new, if you want to compete with the best in the world, if you want freedom to do your job then Eko is the company for you because we intend to create this team by hiring the best and giving them the canvas to change the world!

On mediated usage

The developing world, as the term seems to suggest; is at a stage that the developed world had crossed (or in some cases, even entirely skipped) being in at some point in time. I believe, mediated usage is a stage that most human interactions pass through initially.

Lets start from a simple but overkill-ish example. Ever heard of Bill Gates? The influential figure whose contributions range from the technology world to global policy world. Once upon a time, even he was a little baby in a diaper who could barely say 'ga-ga' and had to be fed, cleaned, clothed and taught by someone. The point I am trying to make is that doing things on our own, is not as natural or as normal as it seems. Self-transaction (of any kind) is a stage of evolution that is built upon multiple previous and related instances of mediated transactions. While mediated usage is like experiencing things using basic arithmetic, self-usage is more like calculus. In ones arrogance of context and experience, solving a differential equation might seem 'obvious' and 'simple'; try imagining what you'd have made of it as a fourth grader (if you were a calculus prodigy, sorry, this example does not apply to you). There is a certain threshold that one needs to cross before being able to be autonomous.

Let me now move to another example. Vending machines. Modern vending machines have apparently been around since the 1880s in the west! The first time I saw a vending machine was a Chocolate/ Magazines (Cadbury's?/ Malayala Manorama - don't remember which one) vending machine at an Indian railway station in the 1990s. Interestingly, there was a chair (with a person sitting) right next to it! To get a Dairy Milk bar, one had to give this person the money, he'd hand back the change from his cash-till and he would put in some kind of a special token into the machine, punch some buttons and hand over the goods that the machine spit. More often than not, he had to put in his key, open the beast up and manually retrieve what he had to from its innards. Something drove the company to invest in a layer of mediation while transplanting something that seemed to simply work by itself in the west. You'd note that the vending machine was actually made redundant by this layer of mediation. The company might as well have put a dumb shopping-shelf instead! Well, I think there is a reason to it- a longer term purpose- we'll come to that.

My most recent sighting of vending machines in India was in the new International Terminal of the New Delhi Airport. I guess these were from Pepsi co. Just for the heck of it, I tried following the instructions for a fruit-drink pack. Try as I might, the thing wouldn't take my ten rupee note! Finally, a guy came around with a bunch of keys, opened the machine up and gave me what I wanted :). Note the guy wearing a cap with a bunch of notes? He's the 'vending machine mediator'.


ATMs in India are a great example of how mediated usage has over time, evolved into self-transactions. Quite a few ATMs in India had and continue to have security guards posted outside them. Many a times, when first time users get stuck, they actively seek the help of these guards. It is interesting to note how an immediate need (for cash) or the aspirational need for becoming an ATM user drives people to trust near-strangers. We human beings are inherently 'social' and at times take decisions based on emotional reasons and relative perceptions of risk vs. reward rather than rational algorithmic ones.
(Dude: "Siri- should I ask the security dude outside this ATM to help me with my withdrawal?"
Siri: "Of course not! Your mom says, don't talk to strangers!")

PCO or the Public Call Office phenomenon is another uniquely Indian one. Long before mobile phones got in vogue and when there used to be year-long waiting lists for getting dumb rotary dial land-line phones, the then visionaries had a brainwave: That of entrusting atleast one phone line in every village with a local entrepreneur and enabling him to meter and charge for the call. Not very long ago (when mobile phones were a super luxury), when I was an engineering student at NIT J, we used to go to the village right next to our college ('Bidipur') and queue up outside the STD PCO booth there once every week (late night- they had discounted tariffs then ;))  to make a long distance phone call to our parents. Thankfully, we are in a different era/ planet now! PCOs still exist and still continue to be relevant in some parts of the country. What was interesting about the PCO was the way many of the villagers used it. They carried a paper chit with the destination number scribbled on it. They would dutifully hand it over to the booth operator who would dial the number on their behalf and once the call was connected; make an introductory announcement and hand over the mouthpiece to the caller to proceed with whatever publicly private conversation he/ she had to make.

The point is; that the option of having that mediated transaction enabled the poor villager to access a service he/ she needed which the person otherwise would not have. Over a period of time, (as is evident with the mobile telephony boom we are witnessing now), people do get over their barriers and learn whatever minimum viable product/ service that they need to use. But having an external spark, sure helps start the fire.

The last example I'd like to give shows cultural inclinations for mediated usage. India has millions of small mom-n-pop shops (grocers, chemists, textile vendors, 'paan' shops et al). Unlike the west, where people drive down to the closest mall once a month and stuff their cars with all the super-sized things they think they might need; in India, a mother would send her son/ daughter with a small list and the list could be as small as a single item ("Son, please go and get 200g sugar- hurry, I have already put the porridge on the pan!") The son would then run (or cycle) to the friendly next-door grocer (usually, no fake smiles or smile-badges here, strictly and simply business-friendly), buy the stuff wrapped in an old newspaper (+ two candies bought slyly with the spare change) and run back home- just in time for the mother to add it to the heating brew.

Self-service larger format stores are a very recent addition to the Indian retail landscape. But despite their discount offers and the promise of getting everything under a single roof, its been difficult for them to threaten the well-entrenched next-door shop's mediated shopping model. This is because culturally, we have been used to this kind of shopping (with the bargaining sessions, touch and feel instances, recite-the-shopping-list and someone hands you the goods in a jiffy shopping, mental arithmetic/ scribbled bills, moles and warts and everything that comes with it). Simply because it seems more human to us. Perhaps the next generation in the urban context may not share this perception.

Eko also leverages mediated usage to the hilt. Its promise of simplified banking and financial transactions presents a HUGE trust barrier that potential customers need to cross. While we believe that self-transactions are but a natural extension to enabling such an access, mediation of transactions through these trusted shops (where people have been buying their groceries/ medicines for years) is a great base to build on.

An important principle we've always believed in is that customers are not stupid. While this might sound like a strong statement to make, it is relevant in the context that many people still design services and solutions for the less-privileged as if they were lesser people! They might not be very educated and may not tote an iPhone but they are smart and nothing implies that they are stupid. The fact that they use mediation is not a measure of the weakness of the customer, but rather a measure of the strength of the mediator. The act of mediation represents a basic human-bond of symbiotic needs; customers' trust in the shopkeeper and the shopkeeper's need to have customers. There would of course be bad apples, people who could misuse their position of trust. The antidote is in having efficient selection and monitoring systems to weed them out.

Gist:
Mediation is natural and human.
Mediated usage helps in facilitating customer adoption of new services.
Mediated usage is a good stepping stone towards self-reliance.
Mediated usage has a social, cultural and economic context.

Further reading:
Jan Chipchase,
  CGAP Blog on mobile banking mediated use
  Shared Phone use
  Designing Mobile Money use
Microsoft research, on inter-mediated usage

To The Tech-Mecca and Back

The Silicon Valley is undoubtedly the most important place as far as high technology is concerned. It has all the major technology companies that power the internet age - Apple, Google, Cisco, Intel et al. ALL of these concentrated within a relatively small geographical area south of San Francisco.

View Larger Map

Eko was named as a laureate for this year's The Tech Awards - a prestigious event and a great great honor. I thus got a chance to tag along Abhishek and Abhinav and spend a good week in the silicon valley - The Tech Mecca, (and then back to reality :). 

It all started with an 18 hour Emirates flight from Delhi, via Dubai and over the North Pole to San Francisco International. On an airport shuttle, we traveled to San Jose, the uncrowned capital of the Silicon Valley.

The Tech Awards is a signature program held by The Tech Museum, San Jose, in association with the Santa Clara University. What stuck me was the grand global vision that the relatively small museum had (for a start, it calls itself 'THE' Tech Museum)! For the last 11 years, it has been seeking out, encouraging and supporting enterprises around the world that were trying to play meaningful and transformative roles in Environment, Economic Development, Equality, Education and Health. The program is sponsored by technology majors like Applied Materials, Intel, Flextronics (the sponsor for our award), Microsoft, Nokia and the Swanson Foundation. 


There is another great signature program for the Tech Museum - its called the Grand Challenge. I hope someday soon, we will be able to have something similar for students in India!

Stanford University

We also got a chance to visit and Abhishek got a chance to speak to a class at the Stanford University. The campus itself is so picturesque and grand; with such a great legacy that just being on that campus inspires you to think big. Imagine what would happen if you're tutored there ;)? Ans: You get to be Larry Page, Sargey Brin, Peter Thiel, Jerry Yang, Azim Premji, Ray Dolby or Vinton Cerf :)

Close to Stanford University is the Sand Hill Road - one street lined with all the major VCs. Guess why they have parked themselves right outside the university gates :) ?

From what I could observe, the valley is what it is because of three main reasons:
1. Climate. Seems to be just right! I'd call it nice cold and nice sunny. No sweat.
2. All migrants. I think I read somewhere that it was a place which did not have incumbents. Its 'history' hardly stretches back a few centuries. It perhaps represents a very open and forward looking culture.
3. Infrastructure. Things were just in place. To someone coming from India, even simple things like the highway networks, buildings, traffic lights that work, reliable electricity and water seemed awesome. While it is true that the sheer volume of the needs in India are daunting, we seem to have stretched this excuse way too far.
Consider the presence of just the Stanford University and its contribution! Even access to capital could be considered an essential infrastructure and silicon valley seems to have a surfeit of it!

At the Golden Gate Bridge

We couldn't get time to travel much, but we did travel to the Golden Gate bridge and gazed at Alcatraz from our vantage point. I also got to meet my college batch-mate Tapish and my brother Arun..

Jetlag (this thing is for real!) prevented any further ambitions of venturing out - something hit us so hard by the time the sun went down that we could hardly force an eye open.



Thursday, 20th October was the gala. That was a really grand gathering marked by meticulous planning and impeccable execution. It was encouraging to have Patrick from Creation Investments (the folks who have invested in us) with us at the gala. Silicon valley was well represented by top executives, VCs and well-wishers. It took some time for the realization to sink in that the net worth of that hall, that evening, should have been a pretty impressive $billions figure :)!

Also, each year, an individual is honored through the Global Humanitarian Award- this year's recipient was Jeff Skoll (An active philanthropist and a maverick movie producer- An Inconvenient Truth, American Gun, The Kite Runner and the erstwhile employee number one for eBay). Previous recipients include Bill Gates, Gordon Moore, Dr. Mohammad Yunus and Al Gore.




There were over 600 nominees, 15 laureates (5 in each category) and 5 grand prize winners. The names of the grand prize winners of $50K were revealed only during the gala, when Abhishek and Abhinav were on-stage. The sense of joy and exhilaration when Eko was named as a winner was amazing. Equally awesome were all the other laureates and winners. My personal favorite was WeCareSolar represented by its founders Dr. Laura and her engineer husband Hal. Their innovation was a solar power unit that fits in a suitcase and provides the necessary power and lighting required for medical procedures, especially related to child-birth; in developing countries. There is nothing technologically earth-shattering about most of these innovations, its their simplicity and appropriate use in solving real world problems efficiently that makes them noteworthy. Their solar suitcases for instance have already saved a lot of lives!

Check out Abhishek's acceptance speech video:


That was an amazing week! One last thing...

The Trophy

The trophy that we received aptly summarized the spirit of the silicon valley. On the bottom is a solid ingot of silicon (The same thing that is sliced into neat wafers and each slice could give birth to a set of microchips). On top of it rests a crystalline globe. The modern world literally runs on silicon. The Silicon Valley therefore is closely intertwined with all of our lives.

Here's a technologists salute to all the people who make the valley what it is.

To The Tech Museum, CSTS Santa Clara University, Leslie, Andy, Lee, Mike - and all the others who led us through the entire process- thank you!


[It took me quite a few sessions to finish this blog post- its been almost a fortnight now!]


That weekend, we returned home -recharged. 
To newer heights!

Triple Honors for Eko - mBillionth, NASSCOM and PCQuest

Its been well over two years since Eko was born; One and half years since it started its journey with the State Bank of India.

Eko today has a great team in place, good partners and most importantly- around 70,000 customers who have transacted over Rs. 25 crore through SBI-EKO Customer Service Points- friendly next door grocers. Slowly but steadily, some of the fundamental principles that its founders believed in, are being validated through positive growth, satisfied customers and transaction numbers.

The journey has been tough- but well worth it! It gives me immense pleasure to share three top honors Eko has just won.

1. The mBillionth award in the m-Business category.
"The m-Billionth Award South Asia 2010 is first of its kind in the region recognising and felicitating mobile innovations, applications and content services delivery. It is to honour excellence in mobile communications across South Asia spread over 9 core categories. The m-Billionth Award is designed as an annual South Asia’s leading mobile content’s award platform towards larger regional Mobile Congress in media and policy advocacy."

2. NASSCOM emerge 50, 2010.

"With EMERGE 50, we have a sharp focus – in the process we have been able to spotlight some really good companies, that were hitherto unnoticed. Plus with the level of detail that we go into with each company has helped us build an excellent dataset – covering funding, cash flows, employees, markets and specializations – for over 200 companies. This has really helped us get a sense of trends in this space."





3. PC Quest, Best IT Implementation of the year. Maximum Social Impact

"Nobody can deny the relevance of IT for enabling business growth today. It has become a crucial part of every organization. However, this achievement didn't come so easily. It required a lot of passion, many sleepless nights, and fire in the belly. Unfortunately, despite all the benefits it brought for the organization, the IT heads and their teams remained behind the scenes. They were the unsung heroes.
To change all that, PCQuest instituted the Best IT Implementation awards seven years ago in 2004. They were created with the sole objective of setting up a platform for recognizing the gut-crunching efforts put up by the IT departments across Indian organizations."

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Eko in Financial Express

We had a great coverage on the Financial Express, Open Forum page today.
Do read the article (e-paper layout) Human ATMs by Sarika Malhotra.

Update: Corrected the url. Alternative web layout link

US Treasury Secretary Timothy Geithner visits Eko

It was an eventful day for Eko. Timothy Geithner (wiki) today visited an Eko SBI CSP (Customer Service Point) and spent time there interacting with the customers, retailers and staff understanding how Eko is trying to change the way banking is done in India.

(Pic courtesy: Purva Gupta, Eko.)

Heres some coverage by Reuters, a string of images on WSJ, Economic Times, Yahoo News.

Also, do check out our facebook presence, and get updated with the latest at Eko.

Eko rebranded

If you'd noticed, Eko has changed its colors and its logo over the past few days. Instead of orange, it now sports an earthy green and has a tail-piece (lets call it 'slash dash') added which makes it identify itself with the way most Indians sign off a cash amount while writing it on paper.

So adieu ol' logo

And a warm welcome to the new one

How do you find our new logo?

"Poor aren’t lifeless bricks"

I am borrowing this caption straight off this article on LiveMint "Poor aren’t lifeless bricks".

For a good part of our history, folks seem to have focussed on exclusively on charity as a means to uplift people out of poverty. While in some cases, this benevolence might be essential, in most cases it is counter productive. I still remember one of dad's church sermons based on the proverb "Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.".

Poverty, in each of its grim shades, is undoubtedly a crippling condition. While it gags and bogs down, it finds itself fighting hard against the basic human instinct for survival, upliftment and reaching a state of equilibrium with his context. A lifeless brick definitely cannot do that. The fact is that inherently anyone who has fallen wants to rise and the risen want to fly. The key is to simply enable them. All that they need is inclusion - social and financial; to an infrastructure that could help them help themselves.
(pic: A Sattu "powdered baked gram, a high energy giving food usually mixed with water or with milk" vendor in Bihar.)

There are many whose knowledge about poverty starts and ends with reading about it on the Wikipedia, or watching 'Slumdog Millionaire'. Communicating with them is disheartening at times because they tend to stereotype the poor as somehow second rate. It is at times difficult to convey Poor NOT EQUAL TO Stupid. While it is a fact that the poor have lesser opportunities; that is simply the side-effect of a 'state' they were/are in and can be enabled to get out of.

Another misconception is equating 'Rural' with 'Poor'. Both are entirely different realms in themselves. There are the urban poor too and their problems are just as daunting! This is more a difference in contexts.

There are a few who have got this understanding right - and they will no doubt be able to reap its benefits. The telecom companies for instance, have done a great job so far! Instead of just pitying the poor, they have gone ahead and launched (potentially profit making) services that addresses the communication inclusion part. This is definitely not charity! By ensuring that their services were tailored (packaged) for the 'poor' (Rs. 50 lifetime connection packs for instance), but not compromising on the service quality itself, they have at least started with the right step. The same networks host the communications of the richest as well as the poorest :). It is high time that all product and service designers are sensitized on these issues.

Also, do check out Universal Financial Access - India. It is a social network initiative which aims at financial inclusion started by Sanjay Bhargava who is also the Chief Mentor at Eko.

Welcome to the age of 'micro' revolutions that have macro implications!

Lessons on 'context'. Kiva - Cats that donate

I've been reading about Kiva. Its an amazing project that can turn anyone online with a credit card into a micro lender. If you always wanted to be a part of an MFI but couldn't get yourself to move beyond the edge of your office cubicle, Kiva puts you thousands of miles away, just a credit card and CVV number away from the wallet of a micro-entrepreneur.

I admire the way Kiva has touched the lives of thousands of people. But heres a candid confession made on his blog that takes my respect for its founder Matt Flannery a notch higher. It is a lesson on the importance of 'context' and communication. Every product, solution or communication is usually made on the basis of its 'context'. Take things out of their intended context and plop 'em in another - suddenly a perfectly sane piece begins to sound bizzare.

Catfood and Commoditization. In this blog Matt observes how the simple (and innocent) act of a lender in America setting his pet cat as his online avatar on Kiva leads to (an equally innocent) confusion for its recipient in Africa.

I heard a story recently from a Kiva Fellow stationed in Africa who, when showing the entrepreneur his lenders, was asked the cat question. How does that work? Why has a cat lent to me? How can a cat lend to me? Does that cat really want his money back? (he looks pretty fat).

Funny but true. Even at Eko, our User Interface was made keeping in mind a context. The context is an unbanked majority in India who however have access to mobile phones. Dig a few layers deeper - a majority of these handsets are Ultra Low Cost Handsets. - almost all the users are just number literate - most of them are pre-paid mobile users.

Eko's interface that uses just number dialing fits this context really well. But the trouble starts when analyzed by and within the frameworks of smart-phone toting, iPod sporting executives like you and me, the interface appears hopelessly outdated, outmoded, complex and what not. I've just been back from a field visit to rural Bihar and I couldn't help but imagine how useless it might be to give an illiterate villager a special 'hard-bound' edition of 'The fortune at the bottom of the pyramid' - being hard-bound he can't even feed it to his goats!

Project Architect

Its been less than three active months and Eko's pilot with the State Bank of India in West Delhi is now almost a thousand customers strong! Very soon we will be hitting the 10K mark. Internally we have begun the work required to prepared with technology to serve 100mn+ customers and many times as many transactions. This is where we have begun exploring for someone who could help us evolve the project architecture for what we call SimpliBank 2.0 - the next step in the evolution of our platform (or maybe an entirely separate/ off-shelf platform(s)). Someone experienced with having architected something of this scale and who fits into our current startup context well. Scale: in terms of the massive number of transactions, customers, flexibility and robustness. Context: One of the most promising startups in India with all its inherent caveats. If you find this really exciting and think you fit the bill, please send me an email and I could send you more details.

Do check out Amy the Architect. Its an interesting view on what an architect's role might be. Just to borrow their gist:

Suddenly, it struck Amy: she wanted to be the meaningful link between project decision makers and the technical people on the project. She wanted technical people to feel that project decision makers understood them and that the decisions made reflected that understanding. Conversely, she wanted the decision makers to feel confident that they had access to all the information they needed in a form they understood and believed to be what their technical staff really wanted to say.

Bill Gates at Uttam Nagar

We were told that some senior officials from the Bill & Melinda Gates foundation would be visiting our pilot site at Uttam Nagar (Delhi) and that we had to give them a demo.

Almost 9:00 am on the 4th, we were pleasantly surprised to see Bill Gates himself along with a few other family members walk in to our small office there!

Bill Gates came across as a keen listener, sharp thinker, avid note-taker and someone who asked just the right questions. It is always a pleasure interacting with someone who just needs the bullet points and obvious sub-points never need to be stated :). To be honest, not many people in high positions to whom we have spoken to (or tried to speak to) were as down-to-earth and even a fraction as sharp as he was. In fact, most 'top' guys would rather send their subordinates for a visit rather than take the pain and time for visiting a place like this.

He even took time to visit 'Gupta Medicos' a shop which used be an 'Eko Relationship Center' to hear first-hand what they felt about Eko.

All in all, that was one great day in each Eko member's life. In spite of our challenges, the very fact that we seem to be on a track which has at least created a 'micro' interest in a man no less than Bill Gates himself is something that gives our team a huge boost.

Eko nominated at Tata NEN Hottest Startups

Eko has been nominated for the TATA NEN Hottest Startups awards. Brought to you by National Entrepreneurship Network and TATA Group, in association with Helion, Mint , Seedfund and Wadhwani Foundation, it is India’s only community-chosen awards for Indian start-ups.

Vote for Eko online by clicking the link below: or via sms.
SMS HOT[space]85 to 56767.

If you are a startup yourself and want to be nominated, go right ahead and nominate your venture. I guess the last date is mid October.

A big thank you to all! Let the voting begin.

Eko Presentation at Proto.in

Eko was one of the companies that presented at the July edition of Proto.in. The following is a video recording of the same, gives one a good view on how it works.

I'm attending proto.in

Hope to see you too!

A sunrise industry coming up in West Delhi’s Uttam Nagar - LiveMint on Eko

New Delhi: Shyama Kumari has a new-found sense of confidence. The 20-year-old college goer taught part-time at a local school for two years and saved Rs8,000, which she has put in a bank account. Her banker? The local drug store.

Kumari isn’t the only one who banks in a shop and shops in a bank. Around 1,400 people in her neighbourhood, Uttam Nagar—a lower middle class colony in West Delhi—have, through shops that include grocers and chemists, opened accounts that now have between Rs20 and Rs 14,000...

Here's the link to the complete article on liveMint.

Eko In Action - Video (Hindi)

An Eko video trying to track customer response to Eko at the Pilot site:

The language being used is Hindi. I guess someone might put together an English voice-over / sub-titles - till then, please catch hold of a Hindi speaking friend to translate ;-)

"Banking@the Grocers" - Dataquest on Eko

What if you could just walk up to your good old neighborhood general store or chemist shop, spend around five minutes (a few minutes give or take), and come back opening a bank account?...

Here's the link to the complete article on Dataquest.

My first month at Eko, an intro

Its been almost a month (though Feb is a short month) since I joined Eko. The past few weeks have been typically hectic with Eko launching its 5000 customer target pilot in Delhi.

Before I proceed any further, I guess it would be appropriate to point out what exactly Eko is all about.

Eko (www.eko.co.in) - startup based in Delhi, India aims at extend banking facilities in these untapped/un-banked areas through the use of mobile phone as a channel; currently there are over 200 million mobile phone subscribers (GSM & CDMA). Eko is looking to ensure greater financial inclusion and increase the outreach of the banking sector as envisaged by RBI – the Indian Federal Bank through the use of Business Correspondent Model.

Eko’s unified approach to financial services will address two key challenges - ubiquity and comprehensiveness of range of financial services. Often financial services with the focus for financial inclusion have resulted in high transaction & servicing costs, inadequate collection & use of customer information, and a focus on credit based services leading to the exclusion of more needed services including Savings.

Our first initiative is “Branchless Banking” using mobile phone as a channel. For now we have initiated a pilot project at Uttam Nagar in Delhi in partnership with Centurion Bank of Punjab under the “Business Correspondent” model. Our first offering is “Abhilasha” - No Frills Savings Account to customers with only two transaction - deposits and withdrawals.

Customers are acquired through Eko Relationship Officers (EROs: local salesmen of the locality with full KYC and good banking record) while they can transact (deposits and withdrawals) at Eko Cash Points (ECPs: local retail shops). EROs are remunerated for customer acquisition while the ECPs are remunerated per transaction.

The model is such that money is deposited to the bank, through the distribution chain of ECPs, even before the savings are mobilized from the retail customers. Hence there is no exposure to the bank. Subsequently, ECPs mobilize savings from retail customers. The customers have all the protections extended just like any other depositor with a bank.

Eko issues Signature Booklets (filed for patent) to every account holder. The Signature Booklet is used to secure the transactions and ensures more than ATM like security for the transactions. Eko also issues a comic for easy communication to the customers.

Eventually, multiple value added services would be offered to the members, through the network of EROs and ECPs including more credit and savings product apart from transactional services.

We would like to invite all those interested to visit our Pilot site at Uttam Nagar in Delhi. The directions are:
1. Take the Delhi Metro Blue line, get down at the 'Uttam Nagar West' station.
2. Once there, if you are facing west (or looking opposite to the direction of 'Uttam Nagar East' station), take the first turn left immediately after the station.
3. Ask directions for Eko, T 105, 'Shukkar Bazar' Road. (Its essentially three blocks straight and three blocks right from the beginning of the road and normally you zig-zag one block straight and one block right at a time)
4. Keep watching en-route to spot shops (medicos, groceries) sporting the eko signboard.

The following is the location of the Pilot Project on Wikimapia (you have to reach somewhere near the bottom left corner):



In my next post (when I get the time for it) I will post with pictures and illustrations how the transactions are carried out. So folks, watch out this space!