How Mukesh Ambani's Jio Financial Services plans to champion the owner's mindset with the 4Rs

Jio Financial Services Limited (JFSL) is the newest addition to the Reliance Group stable. And it has to  embody the culture that the Reliance Group, founded by Dhirubhai Ambani, has stood for all these years. As a new financial services company, it has placed special emphasis on fostering an organisational culture that champions an owner's mindset. 

What does that mean?

"Each of our business units is tasked with upholding our foundational principles, encapsulated in the 4Rs—Reputation above all, Regulatory adherence, Return of Capital, and Return on Capital," explains Hitesh Kumar Sethia, Managing Director & Chief Executive Officer, in the first annual report after the public listing.

The first two are easily understood, but the last two need more clarity.

Return of capital and return on capital are actually two different concept often used in the world of finance. The return on capital is about how much profit or money you make from the money you invested in a business. It shows how well your investment is doing each year. Whereas the return of capital means getting back the original amount you invested in a business. Over time, this could be through dividends or other payments, 

The company has laid down robust foundations across five key areas including governance structures, operational leaders, technology stack, new ventures and fostering an organisational culture that champions an owner’s mindset. 

First, it has strengthened governance throughout the company, its subsidiaries, and associated businesses, including those that interact directly with customers. This involved enhancing the boards, creating governance committees, and developing policies that comply with relevant regulations.

Second, it has brought together a strong group of leaders and operational teams across all its entities, made up of experienced professionals from both regulated financial institutions and fintechs. These appointments focus on top governance standards, a digital-first approach, diversity, and innovation. "These leaders will mentor a cohort of bright young talent, recruited from Tier 1 academic institutions," says Sethia. 

Third, the company has implemented a modern, bespoke technology stack across each business unit. "We have developed a cutting-edge, scalable, cloud-native technology stack, incorporating Artificial Intelligence (AI) and data driven capabilities to deliver optimal performance and cost efficiency," says Sethia. Take for example, Jio Finance Limited has crafted end-to-end journeys and backend systems for unsecured lending while accelerating the establishment of secured lending frameworks. "The technology infrastructure of other customer-facing entities has been augmented to ensure future readiness," adds Sethia. 

Fourth, it has embarked on new business ventures targeting disruptive opportunities with scalable potential. This includes joint venture with BlackRock Inc., announced in July 2023, to enter into asset management, subsequently expanding into wealth management and broking services. "Additionally, under Jio Leasing Services Limited, JFSL has introduced an operating lease business for home devices," says Sethia. 

Fifth is all about placing special emphasis on fostering an organisational culture that champions an owner’s mindset.