Demystifying Everything About Neobanks and FinTech - AMA with Suman

Alright! Continuing with our series of blogs where we cover the AMAs we hold over on our Slack channel. In case you missed it we regularly host Product Managers and talk about everything #product.

Deep-diving into Neobanks, FinTech, raising funds, and working as a VC, we were joined by Suman Gandham, Founder, (Previously he was an Ex-VC at Nekko Capital) on a really interesting topic "Demystifying Everything About Neobanks and FinTech".

Here are some key takeaways:

With over 350+ payment startups in India, how can new entrants differentiate themselves?

If you see at the last 5 or 6 years of FinTech, it’s just two things that have happened i.e. Spending and Lending. FinTech is not about payments, it’s much more and there are multiple startups focusing on solving Wealth management and Insurance, and Neobanks are going to play a huge role in near future.

What kind of products will the VCs find exciting in 2021?

Niche segment focused Fintechs and Neobanks are going to be funded.

When do you think India will have fully independent Neobank like Monzo or Simple?

There is news that RBI is contemplating on issuing Digital banking licenses and in a couple of years, I think we will have a pure digital bank like Monzo. Simple, still depends on BBVA.

Do you see any distinctive Neobanking products / versions evolve to fit the Indian market use cases?

FinTechs focusing on creators and freelancers are going to be the next thing, we at are focusing a lot on freelancer and creators too.

Who are your target segment for your present phase of the product?

Our target segment is white collar employees, freelancers and first time employees.

How you guys do the needful research before shipping any new features?

We do user research, user interviews and also we have our beta users wherein we iterate and release our features.

What is the scope for Neobanks in India and How does it future look?

There is a huge scope for Neobanks in India. We are getting huge traction and positive feedback on the product. Neobanks will change how people will bank in the near future. It will take some time but there is a change on its way.

Real Robo advisory on wealth management, financial health and savings habits will be the future.

We don’t have a clear success story of any NB in India (maybe Open). What do you think is hindering the growth of this segment?

There is no live Neobank focusing consumers in India other than We went live recently and we are gaining good traction. This year there are few Neobanks coming up and there will be huge growth and potential for Neobanks.

RBI recently took a stab on digital lenders asking them to clearly submit their bank/NBFC. Do you perceive any regulatory hurdles for NB in future?

RBI comes up with different regulations and when they do we have to oblige and also naming the bank/NBFC is a good thing as a user I know whose money I am getting.

Coming to Finin, how are you solving the trust layer of your users that comes naturally with an established bank?

Building trust is an ongoing process, surprisingly only 24.6% of our users were worried about the bank we partnered with and rest are fine. Once you start providing the value you promised and building the right features the customers need, then the trust factor builds itself.

What is your perspective on - What will it take to bring transition in audience to trust NB. Will overall change hinder traditional systems?

It will happen soon. Better features, savings focused, financial health and transparency will bring the transition.

Where do you see Neobanks headed in India in the context of evolution of the banking-as-a-platform concept? SBI for instance has announced its plan to spin off YONO as a separate banking-as-a-platform, and folks have hinted that bank account portability, much like mobile number portability might come into play within the decade.

There will be multiple Banking-as-a-platform startups soon and it will change the whole landscape.

Yes, read the news about YONO as a separate entity but I am not sure if they will be able to get the Neobanking features or concept as an entity.

If someone is working in banking sector, how easy or difficult it is go to FinTech companies? What kind of skills do FinTech cos look for someone who comes from a banking sector?

FinTech always looks for someone with Banking experience but all depends on what roles you are looking for.

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