SmartChoice is a supermarket for financial products. Whether you want to decide which credit card is suitable for you or what insurance policy best fits your needs, this startup claims to be your one-stop shop.<\/p>\n
The way it works is you go to their website, select the financial product \u2014 currently includes credit cards, car loans, insurance, takaful plan, broadband \u2014 and select your filters. Let\u2019s say you want a car loan, all you have to do is enter the vehicle model, installment tenure and down payment, and bam! The system will show you a list of plans which you can apply for directly through the website.<\/p>\n
Obviously you will have to fill in your identification, contact and income details after which a SmartChoice.pk agent will contact you for proof of income and other documents. Once all of this is done, they will forward the application to the bank that will then process it and decide on the fate of your car.<\/p>\n
In the entire process, the company gets access to a lot of your personal data and Sibtain is very clear about the privacy policy: no external use whatsoever.<\/p>\n
Simply put, SmartChoice is a price comparison website that gives you the best rates from a number of market players. How? So far, they have stuck to only displaying results from partner organisations from whom they get direct quotes.<\/p>\n
And Sibtain has been rather conservative about the organisations he teams up with. While around five banks are good enough for a start, many of the biggest names, like Habib Bank and United Bank, are still missing. Isn\u2019t the credibility of a supermarket undermined if it doesn\u2019t display the most notable brands? To Sibtain, the answer is a definite no.<\/p>\n
\u201cThese big banks already have a large enough customers base and find it difficult to even lend to the existing customers. So even if we get them on board, they would hardly be approving loans through us,\u201d he explains. \u201cOn the other hand, our partner banks are aggressively lending so there\u2019s a better approval rate and more money for us,\u201d he adds.<\/p>\n
But Sibtain believes the role of SmartChoice goes beyond being a supermarket. \u201cIn financial products, there is a need for human interaction while making the right choice. And that advisory role is where I think is our biggest strength,\u201d he says.<\/p>\n
This is not e-commerce though: in financial products, the gap between the willingness and ability to pay is rather wide, with approval rates for loans in single digits. Lack of credit scoring makes the task even more difficult. So, what then? \u201cThe State Bank is working on some mechanism for credit scoring but that will take time. Until then, we are trying some collaborations with banks to streamline the process,\u201d Sibtain says, without disclosing what exactly is in store.<\/p>\n
While the website does have a number of financial products, insurance seems to be their bread and butter. \u201cWe started out with insurance so we have a consolidated position in it: there are more partnerships with insurance companies and we have only recently started expanding into other areas,\u201d says the CEO.<\/p>\n
Sibtain realised the need for such a portal when he himself was ripped off while buying a car insurance policy. Soon after its launch in end 2016, the company raised seed money and has been bleeding ever since. Now it wants to go for the first round of funding and is looking for the right investor. \u201cWe have to expand our tech and marketing so that\u2019s where we will be focusing if we secure money,\u201d says the CEO.<\/p>\n
Like any online aggregator, it is free for consumers; so how does SmartChoice make money? On every sale, the startup charges the supplier a certain cut. Other than that, there are paid marketing plans in offer that let companies be featured on the top.<\/p>\n
Lately, this industry has garnered much interest with KarloCompare and Mawazna also looking to make gains. But Sibtain is not perturbed, claiming that his position is in no imminent danger in the near future. While that might sound arrogant, his words are substantiated by the traffic SmartChoice.pk attracts \u2013 twice compared to other two players combined.<\/p>\n
But rather than comforting Sibtain, this should in fact worry him: monopoly in a tiny pie is far worse than a smaller share in a bigger market. Even though financial inclusion is on a steep rise, the current market size is too small, let alone the online market. And until that happens, the startup has found itself another niche: the Pakistani expats. \u201cWe have a significant demand from Pakistanis abroad flying their parents out of the country or want to get them a car,\u201d he shares.<\/p>\n
What exactly is the overall market potential though? For starters, just the auto financing last year hit Rs193 billion while the underwritten insurance premium exceeded two billion dollars, and the CEO feels his startup is well-suited to grab a sizeable share. \u201cWe are targeting 7-10pc of the market by the next couple of years,\u201d Sibtain notes.<\/p>\n
SmartChoice wants more than to simply digitise the market for financial products though. \u201cThe current industry is very old school with complex procedures and products and our model can only work if we simplify both,\u201d he says. How? Through innovation. \u201cWe are building our own products with financial institutions, such as a life insurance policy valid for a particular term. After that, we plan to enter the mutual funds arena,\u201d the CEO shares. Let\u2019s see whether his smart choices reap results or not.<\/p>\n
Via: Dawn (https:\/\/www.dawn.com\/news\/1434488)<\/p>\n","protected":false},"excerpt":{"rendered":"
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