Introduction

Jio Financial Services Limited (JFSL), the upcoming listing on the stock exchange, has attracted significant investor interest due to the Reliance group’s history of disrupting late-entered industries. Although specific details about JFSL’s business segments are not available, it is evident that the company aims to leverage the group’s synergies to create a strong financial services model. With Reliance’s leading positions in retail and telecom, JFSL has a solid foundation for scaling up its operations. Let’s delve into the different business focuses of JFSL’s units.

Capturing High-Yielding Lending Business

Reliance Retail Finance, a non-banking financial company (NBFC), supports the group’s extensive retail operations in various segments such as grocery, consumer electronics, and fashion. While the company’s annual report mentions investments in shares, securities, and lending, its primary focus will be on financing consumer durables through the EMI model. This places JFSL in direct competition with successful players like Bajaj Finance, which has built a strong business model around short-term, low-ticket loans. Additionally, there is a significant wholesale lending opportunity, particularly in providing working capital and short-term cash flow-based loans to retailers and vendors.

A Foot in the Differentiated Banking Business

The Reliance group swiftly obtained a payments banking license from the Reserve Bank of India, taking advantage of the opening for differentiated banking licenses. Jio Payments Bank, in collaboration with State Bank of India, the country’s largest bank, offers basic banking services such as savings accounts, deposits, money transfers, and bill payments. This allows JFSL to participate in the liabilities side of the banking business, as well as payments and distribution of third-party products.

Capturing Payments Solution Opportunities

Reliance Payment Solutions Limited provides digital payment services to individuals and merchants, offering mobile wallets, payment gateways, and point-of-sale (POS) machines. The JioMoney app, available for individuals and merchants, enables digital payments, transaction records, offers, and access to credit from JFSL. Individuals can also add funds to their JioMoney wallet for utility bill payments, online shopping, and more.

Betting on New Financial Infrastructure Models

Jio Information Aggregator Services is planning to establish its business plan for Account Aggregator (AA). Similar to UPI or ONDC, the AA framework is a game-changing initiative in the financial services industry. Under AA, bank customers can provide consent for data sharing with other institutions for loans, investments, insurance, and more. This empowers customers to choose the best institution based on service, product, and interest rates.

Backward Integration from Broking to Manufacturing Insurance Products

Reliance Retail Insurance Broking, an IRDA-licensed broker, currently distributes insurance products and earns commissions. However, the group has broader plans to enter the manufacturing of life and non-life insurance products.