Fego.ai, an Open Finance start-up that allows developers to link to their users’ Bank Accounts and understand their financial behaviour, confirmed that it has raised a pre-seed round of 200,000 $ from Angel Investors & HNIs.

The round was led by Yogesh Suresh – a Bio-energy entrepreneur and Andromeda Capital Advisors LLP. Started in July, 2020, Fego says the pre-seed funding will be used to build the team and develop the initial version of the Product. The Founders, Kumar Srivatsan, a Chartered Accountant and Kumar Srikanthan, an Indian School of Business (ISB) Grad were earlier the founders of OptaCredit – a digital lending startup focused on segment of employees belonging to uncategorised employers.

“Banking Transaction data contains financial behavioural footprint of users and until now, it was used as a point-in-time input, and at best, transaction analysis. With a real-time feed of aggregated Transaction data from multiple institutions, it is an authentic source of financial behaviour of users. Fego using Machine-learning algorithms to enrich, categorise and harmonise these transactions to

extract insights which are modelled around user’s financial behaviour. This is then projected onto various use-cases across Credit, Wealth, Fraud, Marketing etc for our clients to consume and act on”, explains Kumar Srivatsan, CEO & co-founder, Fego.ai

Fego manages all of these complexities and provides the entire stack for developers to plug into its APIs, right from Onboarding, Connecting - managing data connectivity (either its Multi-AA connector or directly into a Core-Banking System), Enriching data to providing actionable Insights across various use-cases and Engagement. As part of its product stack, Fego provides SDKs which can be embedded as part of their clients’ user-facing apps, to help with frictionless Onboarding of users and connecting with their respective Bank accounts.

“Consent-driven data-sharing is going to be the norm with the advent of Account Aggregators (AAs), and Fego is a play on that. This takes care of data-stability concerns and provides for complete data-privacy”, stated Kumar Srikanthan, COO & co-founder of Fego.ai.

Fego claims that their insights are ROI-sensitive and provided across various customer segments in the user portfolio in real-time, for clients to monitor, consume or act upon. These Actionable Insights help clients build new revenue streams, reduce costs, increase digital engagement, customer satisfaction, and also more importantly lead to better financial outcomes for its Clients and their end-users.

Interestingly, clients can embed Fego’s PFM (Personal Financial Management) SDK to super charge their in-app user-engagement, close the feed-back loop and trigger new financial habits in users by building on top of Fego’s Insights Engine. “While requesting for data-access from users, it is only fair that you give something in return to your users immediately, and we recommend our clients embed our White labelled, PFM SDK within their app. While most of the so-called PFM players are either glorified Budget or Expense Management apps, our PFM SDK allows for a holistic approach, enabling our clients to make finance more relevant and engaging for their users.” elaborated Kumar Srikanthan.

History of Open-Finance in India

Until recently, no framework existed to allow users to access data from a single-window and entities to access user data even with the user’s explicit consent. To solve this problem in March 2016, RBI approved a class of NBFCs called the Account Aggregator (AA) and created a framework called “Account Aggregation”. Europe started the initiative of Open Banking by issuing (Payment Services Directive) PSD2 Norms with the aim of increasing competition and participation across Europe in the payments industry and provide a level playing field by harmonizing consumer protection, rights and obligations for payment providers. Many other countries have adopted Open-Banking initiatives like Australia, UAE etc.

The key differentiating factor in India being that the scope of AAs is far greater and the impact it is expected to create is manifold times greater compared to what PSD2 or other Open-Banking initiatives, have created in other parts of the world. Unlike the EU, AA already covers not just bank account data but also loans, insurance, pension, wealth, and even GST data, thereby enabling not just Open-Banking but true ‘Open-Finance.’ Even more uniquely, these initiatives are overseen by DigiSahamati Foundation (Sahamati) which is a self-organised Collective of the Account Aggregator ecosystem.

With Open-Banking growing leaps and bounds in India, players like Yappay, Setu & Zeta focus on the Infrastructure part of the equation, whereas Fego works on the Application layer on top of such Infrastructure making Open-Finance easily accessible and consumable by developers everywhere.

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