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Regulators may look into how Cred is handling data: Wriju Ray to ET Prime

In an in-depth analysis of Cred's business model, Wriju Ray - co-founder and CBO at IDfy - brought out a fresh perspective on the Fintech start-up's handling of data. In the ET Prime report published on 27 September 2019, Wriju spoke about how their might be paranoia amongst regulators on how Cred is handling customer data.

"Credit Bureaus look up a person’s credit scores using the PAN number. But this is, strangely, not needed during the Cred sign-up process," said Wriju Ray, co-founder and CBO at IDfy

"The spooky part is how they are looking at my credit card through my phone number. Are they allowed to create a parallel credit bureau of their own? These are some of the questions regulators might be thinking," he added.

Cred is surely creating a parallel data economy which is beneficial to the entire ecosystem, but it is not a threat to the bureaus, at least in a short while, an industry expert is quoted in the report. According to the expert, Cred has depth of data in a difference dimension than credit bureaus.

Wriju also highlighted how Banks might view Cred saying, "Have I now been disintermediated? Can my two-minute loan be happening through Cred?"

The report does a deep-dive into the business model of this start-up that has raised $150 Million within 8 months of starting operations. It talks about how the company is targeting the top of the pyramid - moneyed people with a good credit history. This is a diametrically different approach to its founder's - serial entrepreneur Kunal Shah - previous venture Freecharge that was tapping into the masses.

Shah, the report says, is building a customer-centric business model with a rich data of customers' transaction history and preferences with which it can create a market for brands.

“When you are starting up, it is very hard to charge anything because you are still seeing early traction being built. So our goal is to create a certain scale and size before we go ahead and take a direction for monetizing it," says Kunal Shah - founder and CEO at Cred

The report says that Cred could also be looking at the Classifieds business, a model that's popular in several countries but is yet to take off in India.

IDfy provides Digital KYC solutions in a plug-n-play model for Fintechs, Banks, NBFCs, and new-age on-demand economy companies

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