3. The word ‘bank’ is used in the sense of a
commercial bank. It is of Germanic origin though
some persons trace its origin to the French word
‘Banqui’ and the Italian word ‘Banca’. It referred to
a bench for keeping, lending, and exchanging of
money or coins in the market place by money
lenders and money changers.
Banking: The Evolution, Origin and Growth of Banking
Goldsmith-money- lender became a banker who started performing the two functions of modern banking
The first bank called the ‘Bank of Venice’ was established
in Venice, Italy in 1157 to finance the monarch in his wars.
There was no such word as ‘banking’ before 1640,
although the practice of safe-keeping and savings
flourished in the temple of Babylon as early as 2000 B.C.
Chanakya in his Arthashastra written in about 300 B.C.
mentioned about the existence of powerful guilds of
merchant bankers who received deposits, and advanced
loans and issued hundis (letters of transfer). The Jain
scriptures mention the names of two bankers who built
the famous Dilware Temples of Mount Abu during 1197
and 1247 A.D.
Reference:Link here
The next stage in the growth of banking was the
goldsmith. The business of goldsmith was such
that he had to take special precautions against
theft of gold and jewellery. If he seemed to be an
honest person, merchants in the neighbourhood
started leaving their bullion, money and
ornaments in his care.
The next stage in the growth of banking is the
moneylender. The goldsmith found that on an average the
withdrawals of coins were much less than the deposits
with him. So he started advancing the coins on loan by
charging interest.
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7. Key trends and some numbers
India - A global FinTech Superpower
Reference:Link here
India has the highest FinTech adoptionrate globally
India is amongst the fastest growing Fintech markets in the world. Of the 2,100+ FinTechs existing in India
today, over 67%have been setup in the last 5 years.
The Indian Fintech market is currently valued at $31 Bn and is expected to grow to $84 Bn by 2025, at a CAGR of 22%.
The Fintech transaction value size is set to grow from US$ 66 Bn in 2019 to US$ 138 Bn in 2023, at a CAGR of 20%.
A wide range of subsegments Payments, Lending, Wealth Technology (WealthTech), Personal Finance Management,
Insurance Technology (InsurTech), Regulation Technology (RegTech), etc.
The Indian Financial industry has seen cumulative investments into domestic FinTechs of more than $10 Bn since 2016.
As of May 2021, India’s United Payments Interface (UPI) has seen participation of 224 banks and recorded 2.6 billion
transactions worth ~$68 Bn representing a jumpof 15x from just 3 years ago for the same period in 2018.
8. Basic block diagram
What is fintech?
Reference:Link here
Technology
Revamp
Money flow
New Services
New Products
New Processes
New Biz Models
Change or Improve
Disrupt
Apply IT
Create Ease
Increase Viability
9. India tops the chart at 4th Rank on the funding chart
Reference: Link here
Supply View
Drivers on Indian Fintech Market
12. •Driven by mobile wallets:
•More recent innovations including the
Unified Payment Interface (UPI)
platform, Indian consumers have
embraced the use of mobile payments
for day-to-day transactions.
•Consumer awareness:
•Customers are visiting insurance
aggregator and bank aggregator sites for
comparison shopping.
•IPOs & Stock Market –
•Online stockbroking and investment
sites are becoming increasingly popular
•Borrowing is also being transformed —
•“digital lenders” are providing
consumers with a simpler, less–paper
borrowing experience while leveraging
alternate data as a credit surrogate to
provide credit to non-traditional
borrowers.
Reference: Link here
Demand view
Drivers on Indian Fintech Market
23. Reference: Link here
Customer
experience:
Neobanks don’toffer novelbanking services. Their services are similar to those of traditional banks, butwith a
hyper-enhanced and personalised customer experience. Neobanks havesignificantly leaner business models and
superior technologies. Round-the-clock customer servicesupported by chatbots, near real-time cross-border
payments, and artificial intelligence (AI) and machine learning (ML)-enabled automated accounting, budgeting and
treasury services.
Automated
services:
Apart fromproviding primary banking services, neobanksoffer automated and near real-time accounting and
reconciliation services
Transparency: Neobanks aretransparentand striveto providereal-time notifications and explanations of any charges and
penalties incurred by the customer.
Easy-to-use
APIs:
Mostneobanks provideeasy-to-deploy and operateAPIs to integratebanking into the accounting and payment
infrastructure.
Deep insights: Mostneobanks providedashboard solutions with highly enhanced interfaces and easy to understand and valuable
insights for services such as payments, payables and receivables, and bank statements. It’s beneficialfor
businesses with significantexpenditure and appropriatenumber of employees, to be provided with such insights,
reduce expenditureand boostproductivity and revenue.
Who will win the race?
Neo Banking – Key differentiators
24. Digital banking Vs Neo Banking
New Banking – Pros & Cons
Reference:Link here
25. How does it fit into larger business schemes
Neo Banking – Nimble Architecture
Reference:Link here
27. CAC is the key
Customer Funnel – Result of effective Marketing, Sales and Operations
Offline/Sales
Online/Paid/Content
Word of Mouth
Alliances
Loyal/Repeat customer
Active Customer
Cutomer
Onboarding
Sales qualified leads
Visits → Interested
leads
Data flow, basic information capture, the resposne
and engagmeent to be measurable
MIS, customer profiling, sales channel info, Basic product
information, lead info, category
Vertical level onboarding, KYC, pricing, legal, product finalization,
data flow to compliance, underwriting, risk, legal
Support infra, data flow to collections, debt management module,
profitability, risk filters, reminders, accounting, bureau score cards
Upsell/Xsell, sales management, risk profiling, portfolio check,
triggers, customer success team, regulation, macro lending rules
Profitability matrix, customer champion, allied services, customer
life cycle management, meta data for customer,
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29. Keeping growth under control
Support the increased traffic - KPIs to manage the scaled customer acquisitionand retention
Customer Acquisition
Hunting
TECHNOLOGY & PROCESSES
Marketing KPIs
Channel KPIs
Budgeting KPIs
Onboarding Parameters
Information handling KPIs
Underwriting & Pricing
KPIs
Customer Retention
Farming
Experience KPIs
Engagement KPIs
(upsell/xsell)
Service KPIs
Load & Performance KPIs
INFRASTRUCTURE & Use of DATA
Loyalty KPIs
Business per MSME KPIs
Data Driven KPIs
Security & Fraud
• Lead Generation module to be refined for all channels
• Portfolio level loan book to be evaluated for each channel
• Cost of lead generation and churn are important metrices
• Process optimization and service would be the major focus after MVP success
• Xsell and Upsell opportunities to be identified, loan per SME per year to be
observed
• Strong collection efficiencies to avoid stress at book level
Acquisition Retention
