Demonetisation in 2016 was a massive turning point for India, in ways most of us couldn’t imagine back then. A landmark moment that witnessed the birth of a new era in India’s payments landscape has only gone from strength to strength since. We have since had UPI, which is arguably one of the biggest success stories of Digital India in recent times. The real-time mobile payments system, launched by NPCI in 2016, allows multiple bank accounts to be integrated on one app, allowing for money transfers anytime. This has spurred a slew of payment apps like Phone Pe, Mobikwik and BHIM to thrive. In October 2019, India’s UPI system crossed 1 billion transactions and over 100 million users, merely three years after its launch. UPI now fulfils more than half of all digital transactions in the country. In November 2019, India’s UPI went international, with demo transactions being tested in Singapore via the NCPI’s BHIM app.

And this is just one success story. UPI’s success, the massive popularity of payments apps have spurred a renaissance in financial services in India. While reams of newsprint, airtime and website space has been created to chronicle this unprecedented success story, the struggles of compliance and adherence to a new order deserve some mindshare. The initial weeks of demonetisation are fresh in our minds – long queues of people outside banks to exchange their old notes was just one picture of the struggles the common faced. It has been a time of major upheaval for a very crucial set of finance professionals – those in accounting, reconciliation, billing and all allied financial support functions. While customers are fast moving to mobile and digital payments, how does it all add up on a company balance sheet? With no paper trail, how does every transaction get accounted for? How does a business now figure out commissions, make payouts to vendors and generally, know the status of its financial health?

This was the problem Prashant Borde and Saurya Prakash Sinha are aiming to solve with Recko. This is a comprehensive and robust technology stack to manage financial data and enable financial workflows such as reconciliation, commission calculation, Payout creation and reporting, for businesses to track, manage and account money end-to-end. Prashant, a second-time entrepreneur, co-founded Recko to solve finance teams' problems using deep tech. Before Recko, he co-founded Cubeit (acquired by Myntra) - a tech startup focused on distributed computing and machine learning.

“While digital payments is simple and smooth for customers, merchants faced certain issues when it comes to reconciling these payments due to outdated tools and practices. The amount of data that is generated in the last two years is more than the data generated in the last 100 years collectively. This data resides in data warehouses, data lakes, and is siloed. Especially from a finance point of view, the amount of data that the finance team has to analyze to understand the money that is flowing through their systems has skyrocketed,” explains Borde.

Traditional tools like MS Excel cannot scale to the demands of today’s finance function. To compete fiercely, businesses are looking into the data to ensure business integrity, financial controls and identify growth avenues and increase margins. Data-driven software companies are providing cleaner, usable data to make financial operations within a business better and forward-looking.

This got Borde and Sinha thinking: what if there is a tool that enabled internet businesses to reconcile easily and helped them make informed financial decisions? “As the business needs and consumer behaviors evolve, their finance teams need to transform as well,” remarked Borde.

The core responsibilities of the finance function have evolved from accounting to management reporting, profit & loss monitoring, tax (planning and operations), compliance, investor relations, reconciliations, and special projects. One of the major challenges that finance teams face is data: not the lack of it, but too much of it in too many different places. Financial operations is a critical component that empowers businesses to make informed decisions. Yet, when it comes to data storage, reconciliation, commission calculation, payment orchestration, finance teams still rely on spreadsheets, and other legacy ERP systems.

By doing so, the organization often exposes itself to challenges that are related to data storage, fragmented reconciliation process, poor communication with stakeholders, lack of transparency during handoffs, and resource utilization. Recko has helped solve these challenges for its customers, which include like Deliveroo, aCommerce, Grofers, Meesho, Dunzo, Pharmeasy, Curefit, Udaan, MPL and Khatabook among others.

Decoding the The Recko Finance Operations Platform:

A typical digital business receives data from 20 to 30 different sources, it could be settlement data from different payment gateways, COD collection information from partners, statements from the bank, and so on. The amount of information received increases as the company grows. And this data can span across hundreds of thousands of line items with scale. 

The finance function needs to analyze the massive volumes of data and track money end to end. They are responsible to identify if they are making proper payouts and receiving the correct amount into their bank account at the end of the day. This is not an easy task when you look at the form and shape of the data that is coming in. Every source shares data in a specific format with predefined nomenclatures. This data first needs to be normalized and brought into a single format before starting to analyze. Businesses need heavy-duty data platforms to normalize and analyze data.

Recko, through the use of cutting-edge technologies in the big data and analytics space, enables this process for finance teams without having to write a single line of code. The Recko Finance Operations Platform at its core is powered by an auditable and scalable data platform. It collects, validates, and normalizes siloed, fragmented and complex data from various internal services, payments service providers, banks, etc. This high-quality normalized data is maintained as the central, most granular level financial data repository for the organization. It enables businesses to reconcile, calculate commissions and initiate payouts across innovative and complex financial use cases with agility and confidence at scale. Recko currently processes more than 200 million accounting events per month.

Indian companies understand the rapidly changing customer behavior and expectations and are exploring cross- and up-selling opportunities, uncovering growth opportunities, and analyzing the impact of their campaigns on their business using financial data. Companies are moving towards data-driven decision-making. Today’s finance leaders want their team to be well equipped to make decisions based on solid data and accurate forecasts.

Recko is planning to add more modules that will help make financial operations a breeze for internet companies. They’re also constantly adding new features to reconciliation and commission calculation modules to solve complex use cases. “Our long-term goal is to provide enough insights that enable businesses to make financial decisions in real-time,” adds Borde.