Artoo | Doorstep Digitalization

artoo.com/doorstep-digitalization/

WHY DIGITALIZATION AT THE DOORSTEP?

Because it makes sense for the end customer

India is seeing a surge of potential in the micro and small enterprise segment of the economy
these are individuals who have the initiative to take control over their own destinies and
make them better. However reaching out to them is fraught with problems of inconsistencies,
unreliable network and semi-literacy. Artoos digitalization of lending processes solves this
problem.

Allow us to introduce the typical small entrepreneur. A young woman running a small bakery in Uttarahalli needs a
loan to expand her business; she wants to buy a fridge to serve her customers cold drinks in the summer. She finds
the paperwork and the professional staff in a bank intimidating and dreads the prospect of being diminished or
humiliated. She is also tired of borrowing from moneylenders, who charge exorbitant interest rates. Small business
lending is for her.

The Field Agent Model

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In a scenario of borrowers who are excluded by traditional banks, either because they live in remote geographies or
are intimidated by the threshold barriers of these banks, the most workable model is the one that is based on field
agents playing a critical role. 80% of customer interactions and therefore operations, take place in the field. Field
agents, who come from similar socio-economic backgrounds as the borrowers, serve as the vital human link
between financial institutions and their borrowers.

However, this process is rife with loopholes. Field operations are largely dependent on a costly manual process with
awful inefficiencies, for example limited ability to scale, sub-optimal productivity and customer service, errors,
fraud, etc. In other words, a classic case of a broken, brain-dead, mission-critical process. Loss of valuable data
coupled with poor data quality make it difficult to gather insights to improve performance, create new financial
products, and enhance customer experience.

On the other hand, traditional systems (for Core Banking and Loan Origination), which are suited for the larger and
more lucrative formal sector, are not designed to deal with this situation because they primarily focus on building the
backend while relying heavily on paper at the frontend. Often, in fact, traditional systems discourage financial
institutions from collecting any more than the bare minimum data required to enrol borrowers and process their loan
cycles.

With Artoo, lenders are able to overcome these inefficiencies and enhance the interaction between agent and
borrower, thus improving productivity, reducing costs, and enhancing the customer experience.

And therefore it also makes sense for the enterprise

Artoo believes that since the borrowers doorstep is where all the data points are, it is
inevitably where digitalization must begin. Moreover, the best way to maximize the
operational efficiency of an enterprise, and to enable financial inclusion at scale, is to
empower the field agent to do more for the borrower right at his or her doorstep.

To enhance the interaction between field agent and borrower, we have built a complete digital solution especially for
small business banking. To keep user behaviour intact, our products are designed to mimic the flexibility of paper
while bringing in the intelligence of digitalization. It is easily adopted by first-time technology users. It has strong
offline and online capabilities and works even in remote locations.

The world is not binary. The future of microfinance will not be all agents based,
nor will it be all self-service. There is a space where technology can coexist with,
and even enhance, human interaction.
- Sameer Segal, MFN 2016

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Artoos products distinguish between traditional automation which merely dumbs down the work and digitalization,
which uses technology to also harness peoples unique value. Thus, while using machines to do most of the
monitoring, data collection and incident reporting it leaves the field officers to do things that only humans do well
like touch, talk, observe, empathise and assess on the ground.

For example, Artoos technology can pull up credit bureau information in the field and present it in a simple, readable
manner. Using this data, the field officer can engage the borrower in a conversation about his or her
creditworthiness and explain what he or she could do to improve the credit history: like pre-close an existing loan or
resolve an error in the credit history. Or else, based on the data captured, Artoos technology can automatically
compute complex financial ratios, which the field officer can use to help borrowers better understand their business
performance, and what they could do to improve it. All of this means that technology frees up the field officers time
to allow him or her to focus on building a bond with the borrower. In an industry where product differentiation wears
off, Artoos technology enables our customers to build trust and improve the quality of their service, thus
differentiating them from competition.

Pushing Digitalization Further: Leveraging the SMAC Stack

Artoos model combines mobility with analytics and cloud computing, to digitalize the field
processes to improve productivity, reduce risk, and improve the customer experience and
further adds a strong social element to the process.

The New Frontier of Digitalization is the SMAC stack and Artoo has already brought 3 components of the new SMAC
wave of IT architecture to small business lending Mobility, Analytics, and Cloud computing, and sees good
potential for the 4th Social.

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First and foremost, Artoo understood the nature of the borrower and designed a solution based on strong mobile
capability, so that all the possible data could be captured in the field itself. We realised that mobile capability is
crucial because the enterprise is geographically dispersed, and being able to do everything on the road is
becoming increasingly important.

Then, we combined mobility with analytics and cloud computing, to digitalize the field processes to improve
productivity, reduce risk, and improve the customer experience and therefore customer retention.

Artoo enables lenders to make peer comparisons amongst borrower

demographic data across family structures, business types, and geographies, to
make better credit decisions.

In the process, our model also provides a degree of differentiation for the enterprise as the market grows and
competition intensifies. To sum it up, Artoo improves both growth and profitability for the enterprise, making it
significantly more successful in a more sustainable way.

Going beyond a strong mobile capability therefore, Artoo has, for instance, designed intuitive interfaces and built a
highly empathetic Training and Support function for easy adoption which incidentally also helps the organisation to
scale. Beyond that, to address the issue of poor connectivity, Artoo has provided for all functionality to be available in
offline mode, with ability to sync data on request when the Internet becomes available.

Now addressing the 4th component Social Artoo is committed to building online communities of both field officers
and borrowers, so that they learn from each other, build bonds, and help us improve our product on an ongoing
basis. This synergy of the SMAC stack will transform small business lending beyond recognition.

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Making it Relevant to India

It has required going the extra mile, but that comes naturally to Artoo, because we are driven
by compassion for the frontline staff as well as the borrower, who come from roughly the
same social class.

Borrowers are slowly beginning to leave digital footprints. Artoo leverages the India Stack (www.indiastack.org)
Aadhaar, e-KYC, e-Sign, Digital Locker, UPI to make possible self-service, paperless, cashless lending for
creditworthy borrowers. Why should someone have to leave their business and lose income, in order to get a repeat
loan if they are eligible for it and these alternate sources of data are available?

Artoo believes that it is only by leveraging cutting-edge technology that we can truly improve the borrowers
experience and change the economics of lending.

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