Global financial services giant Macquarie. in its latest report. has highlighted Reliance’s foray into the financial services space through Jio Financial Services and said it poses a big threat to Paytm and other fintech companies in terms of market growth.
Reliance Industries will transfer 6.1 percent of the company’s shares held by a wholly owned subsidiary to Jio Financial Services, which signals a grand ambition with respect to financial services.
Jio Financial Services will differ from most of the fintechs, as per the note, as it will have access to huge amounts of data. Macquarie saus that Jio Financial can process and analyse this data in real-time to offer financial services similar to the likes of Alibaba, Amazon, Apple, Facebook, and Google.
After the demerger, Jio Financial Services could be the fifth largest financial services company in terms of net worth — around Rs 1 trillion.
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Reliance Industries already has an NBFC licence, which it can leverage to kickstart consumer or merchant lending. And this is where talk kicks in about how big of a threat it could be to the fintech business model or NBFCs.
Jio Financial Services, according to Macquarie, can offer attractive rates in merchant lending and digital unsecured lending markets as well, and that is where the competition will come in from.
KV Kamath has been appointed Jio Financial’s chairman and, according to Macquarie, the growth pursuits of this particular vertical could be aggressive because of his being at the helm of the company.