View: How Mukesh Ambani will use finance to tighten DNA loop
Mukesh Ambani’s telecom customers used up nearly six times as much data last quarter. As the billionaire businessman targets his 428 million subscribers with a new 5G service and seeks to lure another 300 million feature-phone users to smartphones, the challenge facing him has changed. When he was starting out six years ago, how to sell data in a developing country was the big issue.
What to sell next to someone who’s already guzzling data is the question now. One answer is financial services. People will always need credit.
Whether they deserve it — and how much — is either left to traditional credit-scoring models, which tend to exclude a broad swathe of the unbanked population. Or, as it has been demonstrated by Ant Group Co. in China and MercadoLibre Inc.
in Argentina, creditworthiness may also be gleaned from buyers’ and sellers’ transactions data on large online platforms. That’s where Ambani wants to go next — to a “consumer and merchant lending business based on proprietary data analytics to complement and supplement the traditional credit bureau-based underwriting,” his flagship Reliance Industries Ltd. said in a Friday press release.
A successful fintech loans platform draws upon what the Bank for International Settlements calls a self-reinforcing “DNA loop,” shorthand for data, network and activity. The digital trail people leave behind on e-commerce or social media sites can be used to bind them into a strong network, which can be harnessed to encourage borrowing activity, leading to yet more data on consumer behavior. This loop is already in place for Reliance.
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