The Incentive Challenge in BFSI

The BFSI industry is complex, and nowhere is this complexity more evident than incentives. 

Different loan structures, diverse product lines, and regulatory requirements often mean that calculating accurate and timely payouts for a large sales force, collection and credit teams, and channel partners is a challenge.

Most BFSI institutions continue to use spreadsheets. This is largely due to the complex and dynamic nature of the business not being supported by rigid applications. 

We knew Kennect’s Incentive platform could help. We've built a strong reputation in the incentive compensation space with a client portfolio that includes big names in the Pharma Industry like Sanofi, AstraZeneca, and Lonza. We knew how the pharma industry worked in and out. 

But BFSI is different.

It is pretty much like learning a whole new language. But we rolled up our sleeves, dove deep into the world of finance, and cracked the code.

Landing Midland Microfin Limited as one of our first BFSI clients was a huge deal. This partnership not only proves that our system works in the complex world of finance, but it also opens doors to bigger opportunities in the industry.

Needless to say, we are up for the challenge! 

‍

Midland Microfin: The Case in Point

But first, let’s talk about Midland in detail. 

Midland Microfin Limited is a technology-focused microfinance institution dedicated to empowering low-income entrepreneurs. By providing accessible financial services, Midland aims to uplift lives and foster sustainable economic growth.

For a company as tech-forward as Midland, their approach to calculating incentive payouts for their 4000+ sales team members, reliant on spreadsheets and manual calculations, was inefficient and error-prone, with no real-time visibility into incentive earnings and performance. 

To address these challenges and foster a more data-driven and employee-centric approach, Midland Microfin partnered with Kennect to automate their incentive process.

This case study will provide a detailed account of the challenges they encountered, the solutions we were able to offer, and the outcomes they achieved through incentive automation with Kennect.

‍

Midland Microfin's Pain Points

Our initial assessment of Midland’s ICM process revealed several key challenges:

1. Midland is growing rapidly. Currently, they have approximately 500 branches in 10+ states. They have ambitious plans to expand to newer geographies with the goal to double their branches in the next couple of years. To support this growth, they needed an incentive solution since they realised that calculations cannot be done on excel sheets anymore. 

2. They have a complex 7 level hierarchy structure which includes Centre Officers, Branch Managers and other top hierarchical levels to manage these branches.

3. Across roles, there are approximately 50+ incentive schemes. These schemes also have geography-wise variation. 

4. In addition to the 50+ schemes, they run short-term contests. Since these contests are not like regular schemes, sales teams must be informed about each contest for effective participation. Communication was a challenge here. 

5. Midland offers a wide range of loan types including Joint Liability Group loans, Individual loans, Ajeevika loans, Education loans, and Wash loans, with different incentive structures for each loan type. 

6. Different teams are being incentivised on various parameters including new disbursements, on-time resolution of collection, due amount recovery, team’s performance with impact on payouts based on audit grading of their branches and customer grievances.  

‍

Lookout Process and Solutions

Amongst various solutions that Midland explored, 

Kennect’s self-serve nature and quick turnaround time during the POC made it stand out. 

Beyond this core strength, other solutions that we offered were:

1. End-to-end automation across hierarchies, schemes, loan types and KPIs. Data is refreshed on a daily basis. The Midland team did a fantastic job in integrating their datasets with Kennect.

2. The turnaround time for designing and launching contests was reduced, as everything can be configured in the platform on the go and communication sent to the sales team through Kennect’s app 

3. Kennect’s nudge feature keeps each and every sales person informed about their achievements and proactively guides them on which areas of their work they need to focus on to achieve their goals and maximise their earnings. 

4. Kennect’s comprehensive analytics provide senior leadership with actionable insights into incentive payouts and trends. Senior leaders including CFO, COO, Head of Sales, Head of Credit, and Head of Operations have access to these ready out-of-the box analytics. 

5. On top of standard plans and datasets, various exceptions like specific transactions to be excluded, change in portfolio of a collection agent mid month, and overrides of the sales attribution are also handled in the system leading to 100% movement away from spreadsheets.  

‍

Impact

Tangible Results of the partnership:

• Reduced manual effort by 95% in incentive calculations. The only effort remains is to upload some datasets which are to be done manually.
• Freed up 200+ man-days of efforts previously dedicated to incentive management.
• Reduced queries related to incentive payouts by 70%+

‍

Final Thoughts

Change is never easy, and often it takes a lot to challenge the status quo. In an industry still heavily reliant on manual processes, Midland Microfin demonstrated exceptional foresight by embracing automation. 

Their decision to partner with Kennect is a testament to their tech-forward approach.

For Kennect, Midland Microfin was one of our first clients in the BFSI sector. This partnership has been instrumental in validating our vision of expanding beyond known territories. 

‍