The Future of Banking, AI & Entrepreneurship | Rohit Arora (Biz2Credit)

[00:00:00]What [music] problems were you trying to originally solve when you founded Bisto credit?

[00:00:04]>> Credit for businesses is their lifeline and bloodline and they need it [music] all the time unlike consumer who will get a mortgage or credit card then they are set. Businesses need capital all the time especially debt capital.

[00:00:16]>> Bisto credit has funded [music] billions of dollars in small businesses. What have those years of data taught [music] you? Traditional lenders often miss.

[00:00:24]>> Cash flow data is the most predictive data. Traditional lenders will look at their tax data which is a past historical data for last 2 years.

[00:00:31]Because if you see in this country, most of the business owners don't file their tax returns. Now if they upload their bank statements and all that, we have AI and machine learning algos which can analyze everything in real time.

[00:00:43]>> How geopolitical [music] tensions and global events changing the way small businesses access capital.

[00:00:50]>> Almost 70 75% of the tariffs in this country was paid by small and mid-size businesses not by large corporates. So I have clients who are not paying almost zero tariff and they were forced to pay on every container [music] tariffs up to like $28,000.

[00:01:02]>> Many people still think lending as a transaction. How do you see bisto credit evolving over the next 5 to 10 years?

[00:01:10]>> So see >> welcome back to true power. I'm your host and today we are sitting down with someone who has spent about two decades rethinking how small businesses get access to capital. Rohitarora co-founded Bisto Credit in 2007 and since then has helped arrange over $8 billion in financing for entrepreneurs around the world. He later launched BIS2X which now powers digital lending for banks and financial institutions globally. He has been named entrepreneur of the year by Crane's New York Business and you've likely seen his insights on small business finance in the New York Times, Bloomberg and the Wall Street Journal.

[00:01:55]Rohit, welcome to the show. How are you doing?

[00:01:58]>> Yeah, good morning and uh thank you for inviting me for this show.

[00:02:02]>> Thank you for taking the time out.

[00:02:04]>> So, I want to start with your journey of starting Bisto Credit. what made you make that decision? We'd like to little bit understand more about your background and uh I'm sure when you came to the states you had a vision of how you wanted to build your uh career or the path forward of excelling in the field that you were in. So we just like to know a little bit more of background of building this business.

[00:02:32]>> Yeah. So uh I came to US in 2003 always had an entrepreneurial bent of mind and then living in New York uh one thing uh you know me and my brother we figured out that there was a lot of this gap uh in the in the credit markets even when the credit markets were doing so well prior to the 2008 crisis especially on the business side of the things and uh and I used to work at Deoid Consulting in the strategy practice at that point of time and then got this idea you know that if we start a digital platform form where we can match up the business owners with funding options. You know, initially and when Steve Jobs came out with the first iPhone, you know, that was like a aha moment that now people will have internet in their hands because typically business owners don't have, you know, like they don't sit in front of a laptop or a computer. They're busy running around all day long. They are like very busy wearing multiple hats.

[00:03:25]>> Yeah. So we thought that you know that could be a great idea and like any other you know entrepreneur you know entrepreneurial gig you know we said let's start something and then we'll and then we'll figure out. So that's how it started you know uh in late 200.

[00:03:37]>> Were you were you doing a job at that time because majority of people who migrate from India they're starting their career in the corporate space. So uh see I was a little different because I started my career uh uh you know I grew up in India and then worked for a venture fund in in Singapore ran the first incubator for GIC which is a sovereign fund. So my career path was a little different in that sense because I always wanted to you know be an entrepreneur. So even in my first job it was more entrepreneurial than like a normal job and while running that incubator you know I also started a company there raised close to3 4 million in the pre-com uh you know boom bust era 3 to4 million so that gave me a very good insights into you know how to set up a business in the internet economy how to raise capital and and working for that 300 to $350 million fund you know uh also gave me that perspective so coming to us I was always very uh focused on creating an entrepreneurial gig while I worked in corporate America for some time but it but I was very clear that I want to go and set up something on my own.

[00:04:44]>> That's wonderful. So that spark that desire to build your own business and being an entrepreneur was existing in you. Did it come from the family background? Was your father an entrepreneur?

[00:04:55]>> No. So my father was uh my father was not an entrepreneur. He was in a government job for all his life. But uh uh most of the other extended family was entrepreneurial. So part of it was that you know part of it was just like you know controlling your own destiny and I and as I joke I came to America to make America great before Trump made it great again. [laughter] >> But >> wonderful.

[00:05:17]>> Yeah. But like I think the idea around uh I had a very strong conviction about things you know growing up and also when the internet came along you know I could see that this is a paradigm shift in the way businesses will be done and handled and I then planned it the right way because in my view entrepreneurship is also that something that you have to practice and learn you know if you want to build a scaled business you cannot like those stories look great of college dropouts and everything but you one it's it happens very rarely.

[00:05:49]Secondly, it's also more a question of the timing piece. And then the third thing is that you have to be prepared because being an entrepreneur is a marathon. It's not a sprint. So, so you will go through a lot of ups and downs.

[00:06:01]So, obviously you need to be prepared you know for that you know.

[00:06:05]>> True.

[00:06:07]What problems were you trying to originally solve when you founded best to credit? So I think the biggest challenge that we saw in the market especially uh you know in New York was that there are so many small and mid-size businesses here and we initially thought that we are going to solve a problem for immigrant businesses you know first generation entrepreneurs have come into this country set up a business they don't have a very strong banking relationship at that point of time a lot of them were not even exposed to technology much so for them even going online and trying to get or or apply for funding online was a very new concept and And they were very skeptical and they were right. You know the data availability was extremely patchy at that point of time. I think the the things that we were trying to solve was three-fold. We were saying that okay you know how do we create a online platform which you know builds into all the big say touch points. So uh and this I'm talking about pre-API era prefint era there's no word as fintech >> was that you know we could connect you know like like what are the businesses doing on a day-to-day basis. So, so we identified four or five big touch points, payroll, payments, marketing, filing taxes, you know, stuff kind of stuff. So, we said why don't we go and start building the connectivity with the players in in in US which actually serve them, you know, in that sense >> and make their life easier. And the bet we took was that it will take some time for online adoption to come in and the data availability to come in. But once it comes in then it will become it can become a really large opportunity you know uh for us as well as for financial institutions business owners and everybody else and it will also solve a big pain point because credit for businesses is their lifeline and bloodline and they need it all the time unlike consumer they will like who will get a mortgage or a credit card you know then they are set.

[00:07:55]>> Yeah.

[00:07:55]>> Businesses need capital all the time especially debt capital. So we said how do we go and solve that for that problem? How do we you know create something which is extremely smart and efficient over time that saves them a lot of time, money and effort and also lets the financial institutions reach out to them you know in a more informed manner and also in a more uh productive way you know >> looking back over nearly two decades what has been the biggest turning point in Bisto credit's journey >> so one is yeah two decades close to two decades so that reminds me of my age now you >> [laughter] >> Uh having said that I think I think there are two or three big inflection points that we have seen. One is obviously after the 2008 uh great financial crisis we saw the capital from traditional banks and lending institutions has dried up you know especially in this space and that hasn't fully come back even today you know after that we saw the rise of alternative channels of uh you know financing money coming in you know and uh so so that was the first inflection point we started seeing in 2011 2012 the second inflection point really came uh you know when the digital adoption started really picking up uh just before COVID and during COVID you know that was a big paradigm shift you know that happened where most of the business owners who were not comfortable going digital went digital and then they are more and more are going digital >> so which is which is a great thing and now I think the bigger change will come with AI because if you have all the data if you have all the things out there you can actually go in and >> you know do a lot of wonderful stuff with that you know in terms of whether customer onboarding experience, underwriting, adjudications, you know, portfolio monitoring, pricing, uh dealing with institutional investors, you know, at the other end because now this asset class has become pretty mainstream.

[00:09:48]>> So, we see that, you know, it started slow, it started small and then it's going uh but now it can become very large very quickly over next 2 three years and and I foresee that's coming you know already. While you were building business credit for the last two decades where internet was still relatively something that people want were exploring and buying online or uh you know wanting to get money online from a credit union or a lending company was something that people didn't even experience or didn't even try to uh engage with. What were some of the bottlenecks that you had to overcome while building it and could be psychological awareness to people building more trust and credibility? So what was the theme there?

[00:10:37]>> So when we started the one or two big challenge was obviously uh people were not trusting online you know channels at all and secondly there was lack of a availability of data. So in US unlike some of the other markets open banking was not really prevalent you know so people are not really uh like they were doing online banking per se but they were not willing to do simple things like connect their bank accounts online and that infrastructure was not there.

[00:11:03]So now what has changed over the years is that you know even pre-COVID you know we had like almost say 30% of our customers who used to come in used to connect their bank accounts digitally.

[00:11:12]Why I say that's important is because that gives us idea of their whole cash flow data like I can we can look back 6 months to 12 months of their cash flow data. We can run a lot of analytics on that. Now we can use AI machine learning to do a lot of that stuff and that also reduces massive amount of paperwork.

[00:11:28]>> The second thing it does is that it also gives us data on an ongoing basis which helps them to get better price products and for us it's more better portfolio monitoring which makes our institutional investors also a lot more comfortable.

[00:11:39]So I think one of the things that we have seen is that obviously people have become now internet has become default you know everybody goes online before they go offline >> but that wasn't the case earlier the second aspect has been you know social media is is playing a bigger and a bigger role like we are sitting today podcast is all about social media you know now so people are consuming content which is more social mediadriven than anything else >> which is good in a way because then you can reach out to more people you can target them better and the decline of traditional media and the rise of uh non-traditional media is part of that paradigm shift happening and especially for a lot of immigrant you know communities who never were watching main street TV >> you know in America for them you know social media is one of the best ways to educate them reach out to them do things with them which they traditionally wouldn't have done >> I think the third aspect now is uh uh two things there one is that as the asset class has become more mainstream you know we have a lot of instit institutional investors including insurance uh money, pension fund money that is now getting invested in this space which wasn't the case earlier. So that brings a lot of access to permanent capital that brings a lot of access to you know lower cost capital which wasn't the case earlier. Earlier the lower cost capital was only available through banks you know not anybody else >> and the third thing which is now happening with AI is that you know things will get smarter, better and also a lot cheaper >> to run the processes do things. Now that also means that it'll be more scalable and that also means that it will lead to you know faster you know outcomes and also more customized outcomes you know that business owners need because credit is their bloodline and lifeline but they also need a lot of handholding and help and you know managing their business doing other things because they are very busy people. So how do we now make things very customized for them? So we have like a whole platform known as virtual CFO which will help them to you know look at their not just their cash flow but how they can benchmark their business against other businesses you know where they're doing better where they where they can get better with things you know all that kind of stuff now that couldn't have been done in a non-digital environment but now with AI coming in you can make it so much smarter customized to their needs you know which wasn't the case earlier and >> this is actually a great [clears throat] opportunity because more and more people are getting laid off and they're realizing that they have to figure out a way to start their own business. So, we're seeing hundreds and thousands of new entrepreneurs coming in AI's era.

[00:14:07]From a point of view of a layman who's just started their business and they aren't aware of what opportunities are there, what would you like to tell them step by step as a process and what should they look into uh xyz factors while they're deciding to go with a company like Bisto credit? So I think what if you're an entrepreneur and you're looking for access to credit you know the obviously the thing that you have to look at is that for what reason you're buy you're borrowing money >> is it like a good example is if it is working capital then short-term money works well but you're looking to buy a piece of equipment or you know or let's say if you're buying a real estate for your business then it has to be more long-term capital. So as a business owner you should be aware about your own asset liability matching you know kind of stuff otherwise your cash flow will get you know disturbed. So I think that that one thing is very important. The second piece out there is that you know you need to also uh have a plan in place you know that how you you're going to grow your business you know what are the new technology tools you're going to use you know where you want to go because as an entrepreneur growth is important because if you don't grow then you will not go anywhere you know you know because competition will catch up with you new things will happen so it's always one big difference in a corporate job and being an entrepreneur is that in a corporate job okay you you're a part of a So you'll you can keep doing that same stuff over and over again. As an entrepreneur, you will wear a lot of hats. You will be doing a lot of the different things. So so you have to be comfortable with that. But you also need to plan ahead. You have to see through the uh what I say you know around the curve you know you cannot get caught by surprise because getting caught by surprise is the biggest you know pitfall you will ever have you know actually. So I think that's something very important you know that you have to plan things you have to then also figure out uh do you have enough capital if you don't have enough capital then from where you will borrow and and I think one thing that a lot of business owners struggle for a for a long period of time is that how to set up your almost like your business credit >> you know that's important >> line of credit >> so once you set up your business credit then borrowing money against business becomes easier and you should try to do that as fast as possible because otherwise all your business borrowing will will be tied to your personal credit which is not good in the long term. You know actually >> this is a great piece of information for someone who's just starting out. But one thing fundamentally uh is relevant and most important element to succeed in the business is to set the foundation right and as you said you know with the AI tools coming up there's more optimization there are additional services that you can offer for them to succeed as well because one thing is you know acquiring the credit and capital and second thing is to actually make something happen >> from it right so so far is BIS2 credit involved in any kind of uh functions or activities that are supporting entrepreneurs or were looking into building that aspect of it.

[00:17:11]>> So obviously our core business is uh giving access to credit to businesses.

[00:17:15]Having said that you know now we have so much of data and so much of experience that's why we have you know put together other tools around there whether uh you know virtual CFO kind of stuff which is digital then partnership with a lot of you know uh local bodies across the country that can help businesses you know we have partnership with over you know 7,000 plus CPA firms you know we run something known as CPA loan portal.com so 7,000 plus CPA firms on that so so while they can get access to credit for their client base you know They can we can also offer uh you know to match them to the right CPAs for their accounting >> stuff and that we do at no charge. So we don't charge you anything as a business owner because our aim there is to make you more aware about your business, make you more creditw worthy >> and also help you to keep sustain and grow your business. We don't want you to get into trouble you know on that side of the equation because that doesn't help us also.

[00:18:09]>> So so we do a lot of that. And then we have partnership with a lot of Fortune 500 companies like Mastercards of the world and paychecks and other companies where you know we can help you with a lot of the education piece you know and if you're looking to you know get some payroll advice or some you know insurance advice and all that. So we have a lot of that you know stuff ecosystem >> ecosystem now >> and we are deepening it now very quickly you know. So uh for a very long time we were very focused on scaling up the business on the credit side now which is uh you know happening at a rapid pace.

[00:18:41]So we're adding a lot of these new elements on the ecosystem side of the business now >> that'll be very supportive to the new entrepreneurs.

[00:18:48]>> How have higher interest rates and changing access to capital changed the way entrepreneurs build and grow businesses now and what what are the shifts that you're seeing in the market?

[00:18:58]So what what happened after the covid was that with higher inflation you know interest rates went up significantly because obviously during covid interest rates were at historical low close to 0%. That will obviously unnatural in a way also. So what that has done is that unlike mortgages where you know you you can get a lot of fixed rate mortgages and you can lock it in for 5 10 years business lending is mostly be mostly variable you know cost lending. So even a good example is that even if you go and borrow an SBA loan which is a government guarantee program there the interest rate is also variable. So it changes even on your existing loans. So what happened when interest rates went up significantly higher was that even on the existing loans you know uh borrowers have been paying on an average between 400 to 500 bips extra which is a which is a very significant jump >> because if you see if a loan is like a million or million half dollar then on an average you are paying an extra 50 $60,000 a year extra which is which is a which is significant amount of money. So what that did that obviously impacted the cash flow of businesses that also that combined with higher inflation you know uh uh that meant that you know the businesses had more cost pressure wage pressure everything for their workers.

[00:20:13]So that clearly impacted their competitiveness you know to a certain extent and in US you know interest rates have not been so high in last 40 years.

[00:20:21]So people were used to low interest rate environment all the time. So that led to I would say some issues around businesses having to rejig. But what a lot of businesses have done is that you know they're very resilient you know that's what I've seen their entrepreneurs are very resilient people they're very they know how to pivot how to do things I think where they have got better is using technology uh they have increased their productivity quite a lot I've seen that you know they have they do more with less now you know they have become smarter >> uh you know they're trying new tools in everything marketing to everything else you know out there and and the other thing is that you know what they are trying to also do is to trying to see what are the new growth opportunities So we see a lot of like like we have a lot of restaurant owner clients now who are trying to use AI to you know develop their menus now you know they are trying to figure out you know what kind of customers they are getting how to retain them better how to build their databases with them and because traditionally they have been very dependent on third party online platforms which take almost say 30% of the topline proceeds so they're also trying to do and and I think where a lot of small businesses have got really good is using social media Yeah, Instagram is a great example of how many small businesses now use it to promote their own businesses.

[00:21:34]>> That has made them bigger and better and also more cost effective marketing and reach is massive. And the other thing that has also helped them is that you know uh as people go more and more not like people have gone online already but as search also becomes more AIdriven so a lot of businesses are starting to use that because Google Adwords and all that had become extremely expensive in the past.

[00:21:59]>> So now a lot of them can take advantage of that organic you know search starting to come back >> if there are better content you know more interesting engaging you know things to do online.

[00:22:09]>> True. And this also relates to the geopolitical tensions and uh the trade disputes and all the situation with the war and in multiple parts of the world that has also shifted the economy. How are these global events changing the way small businesses access capital and plan for their growth?

[00:22:33]>> So what happened when Trump administration too came back? You know, while it's a very businessfriendly administration, you know, one thing that or two things that have impacted businesses a lot is was one was the imposition of tariffs. So, a lot of studies have shown that almost 70 75% of the tariffs in this country was was paid by small and mid-size businesses not by large corporates because what they do is the large corporates actually take a lot of their supply chain is managed by their vendors who are SMBs. So SMBs were the one who were like importing goods into the country not the large corporates.

[00:23:06]>> Exactly.

[00:23:07]>> So they were the one who were paying a lot of that you know tariff. Well obviously some part of it was transferred over to large corporates and consumers but it wasn't fully transferred. The biggest issue and the challenge in that became was that there was a lot of upfront deployment of money. So I have clients who who were not paying almost zero tariff and they were forced to pay on every container tariffs up to like $28,000 you know which is a which is a large amount of money. So that impacted them quite a bit you know their cash flow and and obviously money got stuck. They they needed to borrow more money to just you know pay more tariffs up front and obviously by the time they realized the some part of it from their customers you know it was a long period of time that really impacted a lot of businesses.

[00:23:49]Good news is that is gone.

[00:23:51]>> A lot of tariff refund is also coming.

[00:23:53]So that will help because the Supreme Court judgment was very clear that not only can you not charge tariffs going forward but you also have to refund what was charged.

[00:24:01]>> So obviously that's a tailwind. So our data shows that there'll be around 170 billion plus of tariff refund that is happening over next 6 to9 months. So that should be helpful. The second challenge for a lot of SMB businesses was the whole immigration situation because once ICE started cracking in on illegal migrants. Uh you know a lot of legal migrants at the lower strata you know while they were workers in the in these small businesses or consumers you know they also got massively impacted because of that especially in certain parts of the country and that has not helped the or the demand piece also. So and the third piece obviously is that inflation has still been high >> and with the Iran war you know uh gas prices went up quite significantly they're back down but in last few days again things are going in the reverse direction so that again impacted a lot of you know businesses so I would say overall last two years have been uh you know like there has been a lot of uncertainty one good thing has been a lot more deregulation so that has really helped businesses you know the cost of doing business cost of compliance cost of everything else has gone down significantly but some of these costs have really not helped the businesses. I mean the aspect that you mentioned before that entrepreneurs being resilient and moving through different phases of their growth while there there's a economical situations shifting because of geopolitical events or for that matter uh a natural calamity or you know situation like covid um so support uh for the growth of the businesses become it becomes even more of paramount importance as you mentioned that you're also pivoting into uh adding services or optimizing for the success of the businesses that automatically would want people to get more money to get more capital so that they want to grow and scale the businesses. So I want to move to building the future of the finance.

[00:25:58]Bisto credit has funded billions of dollars in small businesses and what are what have those years of data taught you that traditional lenders often miss?

[00:26:09]>> So I think there are uh there are two or three things. One obviously is that we have access to a lot of their cash flow data. So traditional lenders were looking uh and even today they look at their tax data which is a past historical data for last 2 years because if you see in this country most of the business owners don't file their tax returns till 6 to 9 months after the after whatever financial year they end it at. So that already is like 6 to 9 months of dated data. you know by the time the the the lenders are going to look at it. What we have found out is cash flow data is the most predictive data uh you know that's why we help them to either connect their bank accounts directly or now if they upload their bank statements and all that we have AI and machine learning algos which can you know analyze everything in real time can help them also you know to benchmark their businesses and everything else. So the idea around that is that you know you can actually do a lot of that stuff you know very quickly and that cash flow data is extremely important you know the second thing we have seen is that how are they using their money you know because a lot of time once the lending has happened you know that's why we can see in their bank accounts you know how they're spending that money what they're doing with that you know becomes very important you know overall in the overall scheme of things >> uh because if they are putting the money for productive uses you know then it's great but if they're not putting it in productive uses then it can lead to higher defaults and everything else. And I think the third thing is helping them to benchmark their own businesses against other businesses in their industry in their region and they can learn from that you know what others are doing better than them and and and how they can improve their businesses. That also includes how to become you know better in their cost optimization as well as digital marketing and any other third services that they're using how they can get the best offering on those also >> makes sense and many people still think lending as a transaction how do you see bisto credit evolving over the next 5 to 10 years >> so see uh lending as a transaction yes that's true but lending has a lot of stickiness also so in our ecosystem we a large number of our borrowers are now repeat borrowers you know so they come they will either take other products or they will renew their existing you know financing >> because as I said initially you know in businesses you need money all the time you know it's not like oneoff kind of stuff >> so we see now more and more it of a of it as a you know uh where they will do their transactions but they can also build their credit history and their relationship in the old days what used to happen was the this relationship ship is all relationship manager driven or branch driven kind of stuff. So that has gone away.

[00:28:52]>> Now it's all digital. So like you have to adjust yourself. One thing I see more and more happening as AI agents evolve and everything is that they could even have that relationship manager who could be an AI agent you know down the line.

[00:29:03]So somebody who can understand, who have the empathy, who have the intelligence to figure out that you know what these business owners are looking for or what they need or or how they can get better.

[00:29:13]you know those AI agents could also become their advisers you know actually down the line and that will help them quite a lot you know in my view >> to you know get better >> stages where you are thinking that you may need let's say $50,000 of funding but when you have a conversation with a relationship manager you figure out maybe you need $10,000 more because this business requires that kind of funding for it to get to the next level of growth. So that initial consultation is it very important part of >> that is important but the other also important part is that what are you doing with that money >> where are you putting that you know how you are putting it in productive areas you know where you can get better >> so a good example is that you know if you have a let's imagine a AI agent as your relationship manager who can go through your books your financials can help you to even >> help you to optimize that you know say oh you're paying >> more to some of these third party providers we see in some other businesses they're paying less you know or you can get more value added services or products out of it you know actually >> so that kind of stuff the second thing is also helping them to build more productiveness into their business that when they really need the money >> a lot of businesses are seasonal by nature you know so when do they because a lot of time they're scampering for money when at the last minute and that's not the best time they should be doing it much earlier in the cycle how do you plan for that you know how do you keep your uh you know your financial uh you know fully kosher simple things like matching your account payable to account receivables because otherwise you if you have negative balance in your account you're paying overdraft fees to banks that also doesn't look good on your business cash flow. So simple things like that you know actually >> BIS 2 credit lends directly to the small businesses whereas uh BIS2 X puts your technology inside banks and financial institutions. So what made you build both and uh how does one make the other stronger? So we really started Bistox in 2017 2018 when we were getting a lot of inquiries from traditional lenders because that was the time when a lot of them started thinking about going digital in this space and the challenge for most of the banks has been that you know uh in a non-digital environment trying to do loans below a million dollar is very expensive. So they were saying that okay you know if I have to go digital then I can lower uh my cost and also I can offer you know smaller loans than a million dollar and so we started best 2X uh almost like how AWS came within Amazon so like we we did for ourselves we had built the platforms we had the data we had the technology you know we had our IP on that and everything else so we said why don't we go and uh as banks were coming to us because we were not trying to offer every product on our platform form also on our own and when I say on our own also we don't take most of that stuff on our balance sheet we still have institutional investors but like say bank products you know we are not offering it at that point of time >> so we said it will be good for our customer base also in bal credit because then they get one seamless experience >> and banks also get enabled digitally which will be helpful I think now what we are seeing is something very interesting so we initially started with banks on that side we have close to 30 35 banks in the country who know use our platform we we started with that But now we have seen a lot of opportunity in embedded finance. So we have now partnered with a lot of large insurance companies, payroll companies, payment companies, you know, in this space.

[00:32:36]>> Okay.

[00:32:36]>> And we are starting to do a lot of work in the in the space where you know you as a business owner are you know buying insurance product or or you're running a payment processing and everything. Now I can be sitting there literally and with the customer permission can get access to all that data which is non-bank data do all the analytics run everything and then can offer you credit products then and there itself. So that is another very valid or or a big use case that we have built in Bistox now that's growing very quick and that also helps in our Bisto credit business because the more touch points we have with businesses the more data we underlying data we have the more we can you know do uh not just the lending piece obviously that's core but other things that I had you know mentioned earlier and that also helps business owners because now they're not even have to go online and apply for any lending you know they could be running their payment processing business, they could be running their normal, you know, payroll stuff and everything and then and there itself you can get that access to credit you know built in. So, so what what Bistoex has done is that really helped us to uh you know increase our overall total addressable market what we call TAM that has also helped us to you know put tentacles in more places so more data is there and now with AI coming it's it's going to get even more powerful >> banks used to look as fintech as a competition so how are they adopting it or what is something where they do they see the value you mentioned about the cost efficiency is there anything else >> yeah yeah so I think I I think a lot of banks have now realized that you know they will also have to go fully digital and they cannot do it themselves you know because they don't have the expertise or the technology folks in house to help them so so that's a partnering with fintex makes a lot of sense you know for them to scale up their businesses and see banks have their own role fintex have their own role >> I still feel like you know banks are not going away but what's happening is that in this country you know banks will are getting consolidated so there'll be less number of banks we have like close to 4,000 000 banks. So, so those are so those are getting consolidated cuz a lot of those banks are very subscale today, you know, both in operations and by nature. So, that's going to happen. The second thing that's going to also happen is that most of the customers want a digital experience. Now, they don't want an experience of just walking to a bank branch and not experiencing it digitally. So, that's becoming key, you know, for a lot of businesses and for the banks also. And the third thing as I said the whole embedded finance piece is going to just transform the the way people look at you know uh these various touch points you know and then the fourth piece is you know a lot of private credit money is now coming into this space which wasn't the case earlier.

[00:35:18]>> So earlier banks used to have all the capital to go and lend >> now that piece is getting totally changed very quickly. It's not just banks anymore. So, so that's a banks also have to get more cost efficient, process efficient and also more customer friendly in a way uh because they were taking in all the deposits. They will still keep taking in the deposits because that's where uh you know they have the regulatory mode but the issue is going to be that how they deploy their deposits you know because they only make money when they lend they don't make money when they take money in.

[00:35:51]>> Makes sense.

[00:35:52]>> So I think that's a paradigm shift we are starting to see. US has been a little behind the curve on the digital bank side but now we can see the speed at which it's coming so more of that is going to happen and and more scaled uh institutional businesses will get in the digital space now >> what other markets are you penetrating except I mean you built in the US because Bisto credit and Bistox is global market so are you favoring other markets too >> so we recently expanded into Middle East and also in India uh there we only offer our B2X offering. So we don't do any lending but we offer our platform again to banks, payment companies, large aggregators and even sovereigns now. So that we are seeing pretty good growth because obviously digital adoption in some of the other emerging markets is higher than US right now even today and there's a lot more openness about you know investing in digital and now in AI you know so because AI sits on top of all of the digital stuff. So the idea now is that you know we are starting to put together is that okay what should we be doing to create something which is more global in nature because uh again 70 to 75% of trade flows globally is handled by SMBs you know actually so that is another opportunity that we are seeing that if you have platforms in some of these economies then how we can also help them to gel together >> that's wonderful and we're all here to see bisux and growing in a global space and uh helping more and foreign banks and financial institutions getting digitized and use more of AI resources.

[00:37:25]I'm going to go to uh the last segment which is our leadership and legacy. Uh I want to know your beliefs around imparting the leadership within the organizations and what have you been seeing in other organizations of your size or bigger or smaller that needs to be shifted that needs to be changed in order for them to grow faster and scale. and obviously build that cohesive atmosphere and sense of belongingness. So I think from a leadership aspect what I feel is two or three things you know one as a leader you have to lead by example and you have to lead from the front you cannot be a especially in this day and era you cannot be a back back room kind of a leader you cannot be like you cannot expect your people to work hard if you're not working hard you know first of all you cannot expect them to be you know doing things if you don't want to do it yourself you know uh uh and uh and as a leader you have to be available accountable all the time that's what you know life is all about you know you cannot have your choices you know in that sense so so I think that that one thing is very important because there are bigger opportunities in the world but also more intensifying competition so if you're not like charging hard and you're not trying to build a large business then you're not being fair to a lot of your co-workers you know you're not like letting them grow you know so that's what my view on on leadership is the second piece is that anticipation I think that's very important like looking beyond the curves because the world is becoming very different than what it was in the last 40 years. we were in the most benign period in the world. Now you know we are in a very interesting phase where there's a lot of AI going to come but a lot of disruption is coming but that's combined with a lot of geopolitical you know issues we are starting to see and the world is splintering away you know so we have a we'll have a China plus standard and a US plus standard now that wasn't the case in last 40 years it used to be all US plus kind of stuff only so I think a lot of businesses will have to adapt to that you know that means there'll be higher cost than what we have seen in last 40 years uh interest rates or infl inflation coming back to less than 2% will be tough and challenging on a consistent basis till the supply chains get resettled and I think the other thing is that you know uh the competition is now global >> opportunity is global but competition is also global >> so I think that's where as as a business owner or a founder you know you have to be and as a leader you know you have to set that example you know that okay you know how do you how how things can be done how they can be managed what are the other things you have to do and I think then it's all about you know as the environment becomes more uncertain and fastm moving how do you keep your your people focused motivated and also and in this day and era when job losses are increasing and in my view because of AI you know uh what manufacturing outsourcing did to us in blue collar jobs AI is going to do it in the white collar jobs and it's already happening and it's going to get even uh bigger in play >> so that's where I think a lot of that you know uh disruption is going to happen and pain is coming. So how do you you know help your people to overcome that pain and and how to make them more efficient better and give them more opportunities because it might not be everybody can work for you down the line but at least people who are working or who are not even working for you anymore they have the right skill sets you know to go and do something I think that's the most important thing I think the economy will need a lot of reskilling and upskilling again and and that's where I think as a leader you have to be very very very smart about it. You know how >> you have to be more proactive. You >> have to be more proactive.

[00:41:08]>> So how do you manage work and play? How do you balance it for yourself?

[00:41:13]>> So the issue sometimes is that you know you cannot have a balance. You cannot you know. So the way you do it is that when you have to do stuff you have to do it you know and you have to make it happen you know actually but then there are ways to do it like a recent example is obviously the FIFA World Cup where I've tried to you know like combine it like I've invited clients but I've taken my family also you know to to some of these matches and trying to make it like more of a you know like a fun kind of stuff you know which is like uh good in a way because that helps you to you know do both things together which which obviously doesn't happen that often you know Yes, as an entrepreneur, you know, uh living a balanced life is not for entrepreneurs, you know, that's that's very clear because you have too many things to do. You have to fight a lot of fires every day. You have to do a lot of long-term short-term stuff, you know, actually. So, I think you you need to get used to it and you need to get smarter with your time and and the and the things you do in, you know, at work or at home, you know. So, that I think is very important. What legacy do you hope to leave through Bisto credit and Bis2X and all that you're building or in fact putting your time and energy in pursuing this vision? What is that vision at the macro level?

[00:42:25]>> So the vision at the macro level is two or three-fold. One obviously is that you know uh we are we are very hungry to grow the business make it global you know uh me and my brother being co-founders you know we see a a lot of opportunity right now. So we want to build a large you know business uh you know and when I say large business you know it's like uh 100 200 billion plus kind of valuation kind of stuff. So I think that is that is important you know in a way I think the second piece is that one thing I like about this business is that we see very tangible benefits when we help businesses you know so like like every year I we bring out a woman entrepreneur you know report so we see a lot of women entrepreneurs you know getting smarter better other folks also you know same way so I think that is fulfilling in a way because when businesses get money and then they're able to deploy it the right way grow their businesses improve their lifestyles, livelihoods, you know. So that that is actually good, you know, in a way. And and that is also good thing because obviously we are in business for profit, but but you're also doing a lot of social good with that profit. So it's not just profit only, you know, because long-term businesses are not sustainable if they're just out there to make money.

[00:43:38]You know, it has to be a bigger mission than making money. Making money is important, but it has to be a bigger mission than that. And I think the third thing is that what we want to do is uh go into some of the other bigger markets down the line. And uh because this is a global opportunity, global problem you know every year we bring out a report B2X and BCG and uh and what we have estimated this is almost like a $7 trillion credit gap globally which is huge you know actually which is bigger than most of the economies in the world.

[00:44:08]So that is something that we see an opportunity and and obviously with the as I said with the advent of AI new technologies we feel very excited because cost of building stuff cost of doing business cost of offering these products tools and services is going to go down dramatically over time and and also make it much smarter and also as the corporate world becomes less secure we'll see more entrepreneurship is going to happen. So we see a lot of growth in the in the pool of customers that we'll have over time. Uh so that's happening and then at the other end you know a lot of the institutional money because as people live longer and other things happen you know so there's going to be more money with the pension funds and the insurance companies and they need to also get better returns on that because you know now they have to plan for a longer you know payout periods. So that is another investable pool of money which is which is now getting more mainstream in the lending space especially in this space. So that's going to get better you know.

[00:45:09]>> Very interesting.

[00:45:10]>> Yeah.

[00:45:10]>> Thank you for sharing that. Um my last question is about true power cuz the name of the podcast is true power.

[00:45:18]How would you define that in your life?

[00:45:21]How did it manifest for you? How did did how did you use your true power to build a life of growth and fulfillment for yourself? So I think for for me personally true power is something then when when you have that you know flexibility of doing things you know uh uh and not being very like you know worried about paychecks paycheck to paycheck because that gives you a lot of freedom you know doing that and also ability to make things happen which as I said earlier you know it it helps you to change the world you know it helps you to uh go with some greater thing you know out there Because in my view you build legacy by building companies not by selling them you know actually >> so that's an important piece and then how many how many people you touch you know by doing that you know if you are touching a large number of people helping them to get better in their lives and everything else so I think that is a part of the true power in a way because you are obviously everybody has to earn money everybody has to have a livelihood you know kind of stuff but at the same point of time if you're making an like a bigger social impact a bigger policy see impact out there that is equally important you know from that and that gives you that true power >> it's wonderful thank you so much for sharing this all I learned personally learned a lot of stuff today and I can see that when Bisto credit and B2X becomes like a hundred billion dollar group or even more than that there's going to be larger social impact probably better policy changes and also supporting more and more entrepreneurs not only just access to the capital but also the resources that are going to help building >> a great scalable business.

[00:47:01]>> I know in this day in this day of AI 100 billion is just the starting point. It's now trillion you know plus >> trillion. So yeah, thank you so much for joining us today and it was a wonderful experience of learning from you and I'm sure a lot of our viewers and uh listeners who are watching or seeing this podcast are going to take the maximum advantage and uh before you go where should people go to start looking for the resources or uh more information about bisto >> so I think they can go online on bistocrat.com and they can always send an email at [email protected] you know if they want because all info@bis to get emails come to me also you know so if anybody wants to do that so I think the idea around that is that absolutely you you go and check out all our resources even if you're not looking for credit you know we have a lot of resources around knowledge center and everything else a lot of webinars we do now and other things you know so I think the idea around that is that we are genuinely very interested to help businesses to thrive and grow you know and uh and whether they get or they or they want credit or not is is is one part but the more educated they are the more aware they are you know the the better it for the overall economy also >> that is absolutely amazing thank you so much for joining us today >> yeah thank you for the invitation thank