Navigating growth: Yashish Dahiya on expanding PB Fintech in the MENA region

Welcome to the first Money 2020 Middle East.

We're here at the Riyadh exhibition and Convention Center, and I have to tell you the energy here has been palpable.

We have tens of thousands of people attending from all over the world, and my next guest is here from India looking to expand in the region.

I want to welcome Yashish Dahia, the chairman and group CEO of PB Sintech.

Thanks for joining us.

Thank you for taking the time.

Thank you.

So let's just dive right into your expansion plans for the Middle East.

So I think uh we have been in the UAE for the last 67 years.

Uh, we started out from India 17 years ago, so we moved slow.

I think when we look at uh the Middle East and actually the main region as a whole, we see more than a billion people out there.

Uh, and economically, I would say slightly ahead in terms of spends per person compared to India.

In fact, a lot ahead.

So we see a lot of opportunities here.

I think, uh, it's not yet operating as a single market, uh, which, which means it'll take a little longer because, uh, you have to deal with the regulatory positions in each place.

You have to figure out your partnerships in each place.

So that's one of the reasons why we're moving more carefully.

I think if this region was to somehow operate as one, it would be a far more powerful kind of place for people to start up and come and build businesses.

I think it is what it is and we're we're kind of moving forward.

I think our entry here would be both from a consumer side and from a manufacturing side, more in terms of uh reinsurance plays, etc.

So we're looking at maybe partnering with some reinsurers or.

You know, because a lot of the business here is done through reinsurers across the Middle East, uh, and uh there is access to a lot of, you know, because of the favorable taxation, etc. there is a lot of uh access to reinsurance capacity here.

So you did mention you're moving a little bit more slowly because it doesn't operate as one region, so that's a little bit challenging.

What else is the climate like here?

I think, uh, as I said, you need to build relations first.

Uh, you can have a business, you can have a strategy, but you need to have the relations because those actually come first.

So I think you spend the first few years building those relationships.

And that's one of the reasons why you, uh, do not come in and take a playbook from somewhere else and try to implement it here.

Uh, I think you build your relationship you want the markets are the same.

Consumers are the same all over the world.

They want the same things, right?

They want convenience, they want, uh, you know, better prices, they want, uh, more transparency.

Uh, more useful products. uh, but I think, uh, uh, from a, from a regulatory environment, uh, from, uh, uh, from a business stability perspective, uh, you just need to build your relationships first and be a little more confident as you, as you move into the area.

That's that's precisely how we see it.

Alright, consumers are the same.

Are there other parallels that you see from the growth story in India and the opportunities here.

I think if you look at the Saudi Arabia, for example, Saudi Arabia is actually even younger demography than India to some extent, and a lot of uh the African countries from my perspective are again even younger demography than India.

So you do have a demographic dividend waiting. uh, I think when we look at the West, you see a lot of uh stable companies, but you're.

You're now really missing the growth.

Uh, and where do you go for growth, and this clearly is one very large area, both the Southeast Asia as well as the Middle East and North Africa region are clearly areas where which are very ripe for the next growth.

And I think when I look at a single market like India and this market, I guess the biggest differentiation is in India you have one regulation for 1.5 billion people, whereas here you will probably have to deal with.

With maybe 1020, so there is Saudi, there's Egypt, there is UAE.

You can extend it to Turkey, you can extend it to most of Eastern Africa, uh sorry, Northern Africa.

And uh, but, but in each country, you will have to You know, you'll have to deal with it like a country.

You, you can't deal with it as a single mass if you would.

From a consumer perspective, you can, but not from a, from an operations perspective.

So you mentioned growth.

That's certainly one factor in why this region is so important to PB FinTech.

Why else is this region so crucial?

I think it's very close to India.

Uh, there's been historical ties with India.

Uh, a lot of people from India here, a lot of education, uh, has been flowing both ways.

Uh, you know, if you think about even something as simple as the Arabic numerals, they actually come from, uh, from, you know, one of the scripts in India.

And so even the gentleman Al Jaar behind whom Algebra is is named, he uh did a lot of his education back in India.

So I'm just saying these are thousands of year old relationships that have existed right across.

Uh, you know, the, the Gulf of Eden all the way to Kerala.

So these are, uh, you know, historical ties, and I don't think, uh, uh, even if you look at the next 2000 years, those ties will be there and those ties will be very strong.

So I guess from that perspective, it's the natural place for us to come to.

In fact, when I look at India, actually the ties with Southeast Asia are far fewer than with the Middle East.

Because, you know, you, you don't find um as much of India in Southeast Asia, let's say Indonesia, uh, etc. as you find in the Middle East.

So clearly the ties are much more, the cultures are far more similar, um.

So yeah, I think, I think there's a lot more similarity here, and we find, we find that in our working environment.

So us operating in the UAE has been very, very easy from that perspective, from the consumer perspective.

Right, and Mining consumers again, you said, we pretty much all want the same thing.

It to be convenient, easy.

That's all over the world, all over the world, whether you're an American, whether you're European, whether you're in the Middle East, whether you're in Africa, whether you're in China, India, Australia, South Africa, all consumers want the same thing.

Consumers want life to be easy.

Consumers want cost to be less.

Consumers want more transparency.

Consumers want verification, verifiable services, they don't want to be frauded.

Uh, so I think consumers expect the same things, and that technologies are are very uh very changeable, as in, as in very, very, uh, you know, usable across the piece, but more importantly, in the insurance world.

Even capital speaks a single language.

So whether you're a reinsurer or an insurer, you can pretty much be the same capital all across the world, and it's very fungible.

And if you think about it, there will be certain demographies which will be older, let's say a Chinese demography or an Asian or a European demography, and then you will have demography if you're younger like.

The Middle East demography or the Indian demography.

If you think about it, what's that got to do with it from an insurance perspective, some people will have more use for pensions, and some people will have more use for, you know, uh, basically protection against early death.

So you're either protecting people against early death or against late death. pension is basically that, right?

So I think you will always have a play and thus your capital will also get um uh so to say, uh.

Uh, diversified and so your risks are getting diversified as you operate across multiple geographies.

So I think from a, from an insurance and a capital perspective and a technology perspective, everything is, um, is, uh, is transferable.

What is not transferable is the local relationships you have to build, and that is why you have to move slowly because whether it's regulators, whether it's suppliers, all those relationships have to be developed slowly and you if you move too fast.

Uh, it, it may not be to your long term advantage.

So we can't replace humans yet.

Uh, I think you can't replace relationships.

Machines have not become relationships yet.

Right, so thankfully, now speaking of the technology, because that helps to enable all of this, where are you seeing the biggest impact?

See, I think technology has, OK, so let me go this way, right?

Technology did not surprise us for about 20 years.

It was very static.

It was every few years there was a certain productivity gain.

I, I learned programming in the 1990s.

Programming till today is pretty much the same.

So I look at a new language, it's pretty much the same.

Nothing has changed.

I think the last three years have been a surprise because to, to a large extent, AI has come out of the blue.

And, uh, it's, uh, each version is impressing more and more.

And it's almost like it's holding back its capabilities.

It's like some kind of magic that's, that's almost holding back its capability, right?

Uh, so, I think if I take a, if I, I don't want to be wrong with timing here, but if I take a 3 year view, and that's why I did not take an 18 month view, I think AI will surprise us phenomenally.

The beauty of AI, you know, I was in a panel just before this.

We were talking about data structures.

AI does not need as much data structures.

It is very comfortable working with, with unorganized data.

We operate in 17 languages in India.

If it can operate with 17 languages, it can operate with 170 also, right?

And that kind of covers the entire gamut.

So I think there will be.

Transformation which you cannot foretell right now in terms of risk assessment, in terms of sales, in terms of cost reduction, in terms of efficiency, and here's the catch the winds will not be on cost.

The winds will be on capability because, uh, the basic thing is humans humans make mistakes and, uh, while AI will make mistakes, but the mistakes will be far fewer and uh it's the consistency.

With which you would start getting responses and, and uh I think what you're also seeing is a lot of the uh higher end thought process moving towards AI.

So, uh, I actually feel it's going to be a very strong Uh, device for decision making, and that's what a lot of humans end up doing.

A lot of, lot of, you know, decision making does happen there.

I don't think it is so much about taking out the the lower skilled workers.

The entry level, you don't think so.

No, I actually don't think so.

I think, uh, in fact, its costs are high enough that once people do a fair assessment, they will realize that AI is not for free and actually humans at a low end are actually quite efficient.

Uh, at what they do.

Um, I think where the advantages will come is consistency, uh, and it will also come in terms of, uh, just superior thinking abilities.

So it will not beat on cost, it will beat on capability is my bet, uh, because, you know, I have not seen.

A human being evolved so much in 3 years as AI is world.

So given that that's your bet, how are you positioning PB FinTech?

I think, uh, I want to make sure that AI is an enabler to our teams.

And so the only thing I'm measuring at this stage is how much my managers, my tech teams, my product teams are using AI.

I'm not even worried about how they're using it.

I'm not worried about what output they're driving out of it.

I just want to know.

How many people are using it?

Number one, what percentage of my teams are using it and how much are they using it?

How many prompts do they do?

How many, uh, lines of code does he write for them?

Uh, how much, uh, which, which all tools do they use?

So it's a very, uh, mass approach right now for me.

And, uh, that's because I know people will, will use it in a manner that's helpful to them.

It's very decentralized.

Uh, yes, we have an AI team.

But I would say that only controls about 30% of what goes on in the company from an AI perspective, because eventually everybody can be using AI in their own ways.

But, but I want, I want to see that transformation was beginning to drive to drive that because over the last 6 months we're looking at data.

And every year, every month, we're seeing a higher and higher adoption by more and more people.

So earlier, you know, 6 months ago, maybe 5% of the people were using tools regularly.

Now probably 60% of the people are using tools regularly with about 30% being high users.

And yes, there are people who are not using enough.

And uh, my request to them is please start using it because if you don't, then You know, then life will be harder.

Right, right, that is so fascinating.

Like, so this growth has been organic.

There hasn't been a unified directive that you must no, there hasn't been a unified directive yet.

That doesn't see, I, I, I believe in in not the power of control, but the power of decentralization.

I've been a big believer in that.

So, uh, I believe, yes, you have your conversations and all that stuff, but eventually, rather than 1 person directing 10 intelligent people, 10 intelligent people are far smarter than than 1 person anyway.

Uh, if they are basically explained what they need to be doing and they get it done.

And so to some extent we've left the actual usage to the people, and there is cross training.

So for example, we have the high users explain to the others how they use it, right?

But it's not, you have to do this tomorrow morning.

That I don't, I don't think we want to dumb people down to that level.

If you have dumb it down to that level, we might as well not have people.

Right, right.

Do you think this approach will change with time?

I don't know.

Everything about AI has surprised us every 6 months, it's surprising us more.

Uh, all I'm trying to say is this is not a cost battle, which people are misunderstanding.

This is a capability battle and it's uh it's about how much.

Uh, capability, consistency, consumer orientation, uh, consumer understanding, empathy.

Your technologies will have, uh, and one thing I know is, uh, the machines have crossed the humans already.

So it's not about, uh, you know, uh, it's really that simple.

So, you know, uh, humans are the, the machines are able to have more personalized conversations.

Uh, now it's just about mass adoption.

And, and, and the machines will keep improving.

So AI keeps surprising us.

Are there any other emerging trends that you think will surprise us? or that you have your eye on?

Nothing else has really surprised us, like it's expected.

You expect productivity to go up, you expect, uh, you know, technologies to become faster, you need, you expect to become stronger.

Uh, honestly, and I'm not talking about 2 years, I'm talking about 20 years.

Nothing else has really surprised us in a sense, it was pretty much as expected.

Uh, this is the only outlier.

Oh wow, certainly interesting times that we live in.

Absolutely.

I think, I think the next phase and I think AI becomes more and more powerful as you start to get, uh, uh, you know, quantum computers and those pieces.

One more thing you have to take away.

Uh, I initially thought AI would be very uh ubiquitous and, uh, you know, available to all.

I mean starting to think, um, the larger organizations have a natural advantage.

Because they have the ability to invest behind it and actually takes a lot of investment.

It's, it's certainly not for free.

That is becoming increasingly clear.

So there is a retail level AI and there's enterprise level AI and the enterprise level AI is expensive.

Yeah, so do you see a whole segment of the population being left behind then?

That always, that always happens for a while, for a while, for a while till the till the technology gets commoditized to a level where uh it can become ubiquitous again.

I think that would be a phase when uh but but you're seeing that, right?

I think you are seeing the K-shaped recovery almost everywhere in the world where there is a knowledge economy and there's a non-knowledge economy, and they are diversifying.

Uh, they they they they are kind of going in separate ways and that.

Uh, in, in some, in some parts of the world that is causing challenges of its own.

Uh, so yes, that is, that is happening and uh I think that's a longer term trend that governments need to be very careful about.

Yeah, fascinating thing to keep our eyes on as it unfolds.

Thank you so much for joining us.

Thank you for taking the time.

Lovely to speak to you.