Covid raises costs of vaccine, insurance & app development
Aiswarya Ravi, CFO at Kinara Capital reveals the details of the next-gen initiatives adopted by the organization to improve the finance function:
Ravi Lalwani: Which are the things that have seen the maximum cost decrease during the pandemic?
During the pandemic, the familiar set-ups of work and leisure were completely disrupted, and people adapted to the new normal. We saw decreased costs with general employee travel, office maintenance, and electricity, and some operational costs were reduced as everything came to a halt. However, the negative impact on economic growth did not justify any short-term accounting gains from the cost decreases experienced during the pandemic.
Which are the things that have seen the maximum cost increase during the pandemic?
The pandemic questioned us all on how to approach our business and operations and move forward. Early on, we had to make some strong business decisions and we were determined to keep finding ways to move forward including keeping all of our 1200 employees and not conducting layoffs. This decision along with keeping our head office and 110 branches operational while our normal business had stopped was a difficult one from a cost standpoint, but the right one for the long-term benefit of the company. Once things resumed, we already had a dedicated and even more motivated team force to move things forward.
We were already tech-ready to move our work remotely overnight, including our in-house call center. However, we did invest in revamping our technology during t hi s time and building a consumer-accessible myKinara app which led to some new costs earlier than expected. During the pandemic, some other new costs that saw an increase were in providing vaccines for our employees and their families, ensuring insurance coverage was extended to covid-care for all on the plan.
What upgrades have been made in the accounting and finance software in light of the pandemic-related issues? Were these done in-house or with the aid of partners?
At Kinara Capital, we affected several major tech changes across our business, in all verticals. We began using Zoho for project tracking and upgraded our CRM. Specifically, in the accounting and finance software, we moved to a new ERP with robust process applications. We have also adopted RPA bots in many of our routine procedures, to improve efficiency. These were implemented with a mix of in-house tech and a couple of tech vendors.
What were the WFH-related issues faced by the accounting and finance team of the company? How were they overcome?
Kinara Capital has always been very focused on digital efficiencies. This helped us adapt quickly to the remote work model, and we switched to working from home even before the lockdown came into effect.
However, the most significant roadblock we encountered was the possibility of moving all aspects of accounting and finance online. While tech adoption has always been part and parcel of our operations, the team hadn’t envisioned the possibility of actually completing activities like disbursements, payments and audits completely virtually, without any in-person interactions. Through collective and collaborative efforts, we overcame the hurdles, establishing an efficient system of functioning based entirely on the virtual model. Of course, all our partners, including banks, had an undeniably important role in pivoting their strict guidelines and processes to enable virtual transactions during the pandemic period.
What is your perspective on the use of newer technologies like blockchain for accounting? What initiatives has the company taken in this regard?
Blockchain for accounting is nascent in India, even ICAI is expecting a rollout within 3-years. No initiatives taken so far on this by us as it is not a possibility now.
How are AI & ML improving the finance function? Is the company developing solutions in-house or procuring solutions from vendors?
For accounts and finance, there is the value of implementing AI/ML to detect fraud but so far, we have not needed to implement this internally. I value digitization and the efficiency it allows so this along with any other helpful use of AI/ML is something that I am most open to exploring.
As a fast-growing MSME fintech, the value of AI/ML is significant for our core lending process. We are at the forefront of using AI/ML-based data-driven credit decisioning to ensure fast eligibility and approval for MSME loans. We have built the methodology in-house and for the technology integration, we combine the implementation with both our in-house team and vendors as needed.