Finance - teknospire

FinRecon: Smarter and Faster Account Reconciliation

teknospire / 17/09/2025

Imagine a finance team that isn’t drowning in spreadsheets and manual reconciliation at the end of every month. Instead, they operate with a clear, real-time view of every transaction. They don’t just react to discrepancies; they proactively identify them. Their audits are a breeze, not a burden, because every financial record is clean, organized, and instantly verifiable. This isn’t a distant fantasy – it’s the new standard for financial operations. This ideal scenario is what modern businesses are achieving with the help of automated account reconciliation. In this guide, we will delve into the reconciliation process in detail, highlighting the hardships faced by accounting teams and the numerous hours spent on various spreadsheets and financial data for reporting and audit purposes and how platforms like FinRecon are changing the game. What is the account reconciliation process? The accounting team compares the company’s internal financial records with the corresponding entries in the external documents to spot discrepancies or errors, such as missing or duplicate transactions. In simpler terms, all the economic data is gathered and then matched. In the event of errors, an investigation is required. The records must then be adjusted and verified to make sure they align with the total balance. The accounting team then records the reconciliation process, and if any discrepancies are found, specific actions are taken for future reference and audits. How to do reconciliation in a smarter and faster way? To thrive with state-of-the-art technology and make account reconciliation a much easier and speedier process, why not move beyond basic automation? Many businesses have already adopted entry-level solutions, but the true transformation comes from upgrading to a platform that makes the process more strategic and proactive. Platforms like FinRecon are built with ML-based OCR models and an AI-Powered Document Reader to make the reconciliation process seamless and efficient by: It must be noted here that the platform also offers a strong case management feature where the reconciliation exceptions can be assigned to the respective teams for resolution. FinRecon for Seamless Finance Operations Businesses should opt for automated account reconciliation as FinRecon comes with multiple advantages, such as better data visibility, improved operational efficiency, and reduced manual efforts. The platform plays a major role in: Why do we need automated account reconciliation? Swift planning requires instant action. So is the case for automated reconciliation. Let’s learn why there is an intriguing need for businesses to switch to automated account reconciliation platforms: When to choose FinRecon? If you are into retail, logistics, travel, manufacturing or even SaaS, FinRecon is the ultimate choice for – Which one do you prefer? Siloed Data or Integrated Data for Account Reconciliation In an age where data drives every decision, the choice between siloed and integrated data for account reconciliation is a clear one. Siloed data, scattered across disparate spreadsheets and systems, is the root cause of the manual effort, delays, and errors that plague traditional reconciliation. Integrated data, on the other hand, is the foundation of a proactive and efficient finance function. Platforms like FinRecon eliminate data silos by consolidating information from all sources into a single, unified view, ensuring real-time visibility, data accuracy, and enabling the finance team to gain valuable insights. Ultimately, the choice is between continuing to manage a fragmented past or building an integrated, automated, and strategically sound financial future. With FinRecon, the answer is simple: Integrated data is the only path to smarter, faster, and more reliable reconciliation. Frequently Asked Questions

Financial Inclusion, Finance, FinNews, FinTech

Biometric Authentication: Enhancing Security in Fintech

Rahul Varma / 03/07/2025

In today’s fast-paced world, digital financial services are exploding from mobile banking to AI-powered investment platforms. But with convenience comes risk: fraud, data breaches, account takeovers. That’s where biometric authentication steps in granting access based on your unique physical traits, offering fintech a powerful line of defense. Why Biometrics Matter in Fintech Types of Biometric Technologies & How They Work a. Fingerprint Scanning Arguably the most common. Users touch or swipe their finger on a sensor; the system compares the print to stored encrypted data. b. Facial Recognition Leveraging front cameras or infrared sensors to map face geometry. More secure versions use “liveness detection” to prevent spoofing with photos. c. Voice Recognition Analyzes tone and pitch used for customer‑service phone lines or voice‑activated transactions. d. Iris & Retina Scans Highly accurate (pattern of eye), though less common due to cost and infrastructure needs. Found in high‑security banking apps or physical branches. Real World Use Cases in Fintech Benefits & Business Impact: Benefit Impact Enhanced security Reduces fraud; biometric is nearly impossible to replicate. Better user experience No PINs/passwords, just a quick touch or glance. Fast & frictionless. Regulatory compliance Meets standards like PSD2, KYC/AML making onboarding smoother. Competitive edge Fintechs using biometrics appear innovative, trustworthy, modern. Challenges & Considerations: The Road Ahead: Trends & Outlook Conclusion Biometric authentication isn’t just a shiny innovation – it’s fast becoming a core infrastructure for secure, user-friendly fintech services. With carefully designed privacy, anti‑spoofing, and accessibility measures, it offers stronger security for companies, and smoother experiences for customers.

Digital Banking, Finance, Financial Inclusion, FinTech, Internet Banking, Mobile Banking, Online Banking, Open Banking, Rural Banking

DIFFERENT WAYS TO BANKING – DIGITAL, ONLINE, INTERNET, MOBILE BANKING, NEO, E-BANKING

Vandana Kaul / 25/07/2019

Editor’s Note : This post was originally published in [January, 2019] and has been updated for freshness, accuracy and comprehensiveness. What is Online Banking Accessing Banking services via internet Also Called Internet Banking or Web Banking Conducting financial and non-financial transactions via web interface or a smartphone Ability to access all financial information of your bank on your computer or mobile What is Digital Banking Banking services delivered over internet Digitization of traditional banking activities and programs In technical terms, full digital transformation of front-end, back-end , data collection and everything What is Internet Banking Facility to a customer to transact/access financial data via a net banking account Internet banking is same as Online banking Manage your money online via internet. What is Mobile Banking Accessing banking services via Mobile phone Using of online banking from smartphone or cellphone What is Neo Banking Digital Only Digital Offers on the go Banking beyond walls “Financial Institutions must be able to deliver and easy to navigate, a seamless digital platform that goes beyond a miniaturized online banking platform.” -Jim Marous, Publisher – Digital Banking Report How many of you have actually visited a bank in recent times? Do you remember the last time you visited a bank to transact money? Not sure, right? The reason for this can be understood better if you acknowledge the fact that you live in an era of digital banking. Your buying behavior and modes of payment have changed drastically over the last decade. Cheque and cash are old schools now, and it is more about online banking, mobile banking, and Internet banking. This cashless economy has not only made things easier for you but has also made it all instant and quick. You no longer have to carry wads of cash or wait for banking hours to receive and transact money. While you do have quite an options when it comes to virtual banking, here, we would focus majorly on digital banking, mobile banking, open banking, and online banking. So here is the primer on different ways to bank. What is ONLINE BANKING | Define Online Banking You are using online banking service every time you log in to your online bank account. In other words, transactions conducted electronically using the internet as a gateway are called online banking. “Online banking refers to banking services where depositors can manage more aspects of their accounts over the Internet, rather than visiting a branch or using the telephone. Online banking typically is comprised of a secure connection to banking information through the depositor’s home computer or another device.” – Techopedia. So Online Banking is – Accessing Banking services via internet Also Called Internet Banking or Web Banking Conducting financial and non-financial transactions via web interface or a smartphone Ability to access all financial information of your bank on your computer or mobile What are the Pros of Online Banking | Advantages of Online Banking HASSLE FREE BANKINGAlmost every financial institution nowadays gives this facility to its customer to reduce the hassle of visiting their physical branch. EASY AND CONVENIENT FEATURESSome banks even allow you to deposit cheque by simply taking a picture of it. BANKING ANYWHERENo more tedious process of banking with the long queue with restricted working hours and unpredictable weather conditions with equally unpredictable mood swings in hot, sweaty and humid conditions. BANKING ANYTIMEWith the advent of online banking, a person can virtually monitor and transact money 24/7 without having to wait for the banking hours. REAL-TIME ALERTS/NOTIFICATIONSAlso, the alert messages and emails allow you tomonitor your account anytime and detect any fraudulence well in advance. What are the Cons of Online Banking| Disadvantages of Online Banking COMPUTER/MOBILE CANNOT DISPENSE/DEPOSIT MONEYThe biggest drawback of this mode of banking is that it can’t be used to deposit and withdraw money. NO OFFLINE MODEAlso, your online banking experience is dependent on your internet connectivity. What is DIGITAL BANKING? | Define Digital Banking While there is a tendency among people to confuse this term with online banking, digital banking is definitely not the same as the former. While online banking literally limits you to the services provided by your banks like NEFT transfers, automatic payment reminders, and the likes, digital banking goes beyond this. Online banking focuses on digitizing the “core” aspects of banking, but digital banking encompasses digitizing every program and activity undertaken by financial institutions and their customers. Digital Banking is – Banking services delivered over internet Digitization of traditional banking activities and programs In technical terms, full digital transformation of front-end, back-end , data collection and everything What are the Pros of Digital Banking? | Advantages of Digital Banking ACCESS HIGH-END FEATURES VIA INTEGRATION WITH THIRD PARTY API’SWhen you talk about digital transactions, you think of mobility, feature-laden transactions, predictive and profile-oriented banking with functions like booking tickets online and purchasing a product/service online. SHOP FROM OFFICE, HOME, BUS OR ANYWHEREIt is also about using e-commerce businesses for doing your day-to-day transactions and your regular online banking without any hassle on-the-go. AVAIL INSTANT DISCOUNTS AND CASHBACKSDigital banking also means attractive cash-backs, discounts, and vouchers while transacting digitally. What are the Cons of Digital Banking? | Disadvantages of Digital Banking While the advantages outweigh the disadvantages, there are a few drawbacks involved in digital banking as well. RELUCTANCE TO CHANGEYou may not be very comfortable making large payments digitally. EXCESS SPENDING’SAlso, you may tend to get lured into unnecessary online shopping just to use the cash back and vouchers that you get whiletransacting digitally. But who considers shopping a drawback ever, right? What is INTERNET BANKING? Define Internet Banking | What is e-banking? You may say that online banking and internet banking are the same. Yes, agreed! However, there is a new facet of online banking that goes over and beyond the understanding and scope of online banking. Open Banking! Ever wonder what that means to you? Through this concept, people can share their transaction data with third parties to boost competition in the financial market. Sounds interesting, right? So, Internet Banking or e-banking is – Facility to a customer to transact/access financial data via a net banking account Internet banking is same as Online banking Manage

Finance, Financial Inclusion, FinTech, Fintegration, Payment Banks

PAYMENT BANKS: BANKING, THE CASHLESS WAY

Vandana Kaul / 27/06/2018

Payment Banks is the concluding part of the series. As a prelude, may I suggest, to read part one of this series, ‘How wallet helps in Last Mile Banking’. There has been a surge in the number of digital wallet service providers which have started offering their own Payment banks. It is the right pursuit for India to bring around 300 million unbanked individuals to the mainstream monetary flow. Being hailed as a major push for financial inclusion in the country, the RBI granted ‘in-principle’ approval of setting up Payment Banks. Speaking at the launch event of the PayTM Payments Bank the Union Finance Minister Mr. Arun Jaitley said and I quote: “This expands the horizon of financial inclusion in the country. The chain reaction is visible now and the habit of dealing only in cash is gradually changing. We are all nudged into a system where convenience and security require switchover”. “Payment banks will change the way people think, change the way they keep the money, where they keep the money, the way they pay.” These are the new entities formed by the RBI keeping in mind the needs of small-scale businesses, low-income households, and vast migrant labor population. They are mostly like the traditional banks, with few key differences. The main difference is that they have a current deposit limit of 1 lakh per customer, unlike normal banking which holds no limit on deposits. Payment Banks caters to the customer’s banking needs through mobile/SmartPhones rather than traditional ‘brick and mortar’ branches. One can avail services such as net banking, mobile banking or getting an ATM or a debit card. They cannot, however, provide their users with credit cards or give loans. ‘Banking on each other’ these payment banks have collaborations with large-scale banks, allowing their users to make transactions via their ATMs and offer other financial services. They also offer interest on the deposits made in the savings account, with the mandatory minimum being 4% as per RBI guidelines. RBI issued licenses for opening these payment banks to only 11 out of 41 applicants. Bharti Airtel was the first one to open live payment bank in March 2017 followed by PayTM and India Post. RBI ensured that this initiative serves it’s intended purpose by making a rule that 25% of the total branches of payment banks must be in rural, unbanked areas. Why are Payment Banks in vogue? Despite the strict guidelines issued by RBI and the limit on earning model due to no lending, payment bank’s licenses are still being sought out by the biggest names in the industry. With India being on the verge of being a digital country, payment banks offer the reach that traditional banks cannot. Almost everyone keeps a Smartphone nowadays, which are becoming a one-stop solution to all needs of a person, this was bound to happen. Payment banks are taking further what digital wallets started, i.e., cashless economy. Why should you welcome Payment Banks? Ever since mobile set and data became affordable and the government started taking up more initiatives for providing financial inclusion to the last mile, the way people handle their financial transactions has started to evolve. With Payment Bank entities giving a further boost to ensure better financial inclusion, it’s a step forward to include ‘one and all’. Going by the likely adoption pattern of the key market segments and the key driving factors like: The rise of usage of Smart Phones Increased mobile internet user base The tremendous growth in e-commerce market in India Easy and Convenient, ‘while on the go’, ‘wherever you go’ Enhanced security features Providing more than ‘core services’ anytime – anyplace, payment banks are hailed as a much-needed step in the direction of financial inclusion for the last mile. Major Payment Banks in India Source: Payment Banks: What’s on a platter Each of the Payment Banks had a distinguished advantage prior to opening their respective payment banks. They are now, trying to make it to the top in this race by drawing the best out of their already established resources, and reach amongst people. Airtel Payment Bank The first to open its payment bank, Bharti Airtel was also the one to provide the largest interest rate on deposits in its initial days. Airtel has about 1.5 million retailers across the country which can serve as banking points too, in future. At present, there are about 4 lakhs of such banking points which is more than the number of total ATMs in India. It has UPI transfer feature in it for transfer of funds between various bank accounts. Along with a MasterCard, it also provides a digital debit card without any charges. Opening an account is very easy and happens almost instantly. You can do so with the help of your Aadhaar card and fingerprints only. It provides free accidental insurance of 1 lakh to all its account holders and 5.5% interest rate per annum. When you open an account with Airtel Payment Bank, your mobile number becomes your account number. PayTM Payment Bank PayTM has the largest customer base for digital banking via its wallet. It gives an interest rate of 4% and targets having 1 lakh outlets all over the country by the end of 2018. With PayTM payment bank, you can open a zero balance account. It also provides fixed deposit facility along with a free digital Rupay debit card. You can also get a physical card for an applying fee of 125/- with 100/- maintenance per year afterward. With PayTM Payment Bank, you get a free insurance cover of 2 lakhs when you open an account. You can open an account by simply downloading the app. But to be able to use all the features completely, you have to get your KYC done. India Post Payment Bank India has more than 1.5 million post offices all over the country, about 90% of which are in the rural areas. This puts India Post payment banks at an upfront as compared to others. It is also

Finance, Financial Inclusion, FinTech Trends, Payment Banks

How wallet Helps in Last Mile Banking?

Vandana Kaul / 07/06/2018

You might have been using your ATM card as an easy substitute for checkbook, but did you know then, that it was just the start of an era? As more time passed, more and more alternatives for traditional banking arose, changing the scenario forever. Not to mention the lack of traditional banking infrastructure which also promoted the growth of digital banking methods. As per the official data, even as of today, only 27% of villages in India have a bank in 5 km radius. A large mass of India’s population lives on the environs of the formal economy. Living in far-flung corners of the country, Illiteracy, lack of financial education, not being aware of the availability and/or value of financial services and lack of connectivity are few of the many reasons why consumers in these areas remain unbanked. Moreover, banks in rural areas are few and far in-between, making the reach difficult for many during working hours. To address these obstacles and to broaden financial inclusion, Indian government came up with solutions to help in reach built out for last mile banking which aimed to give every household access to banking facilities by offering them zero-balance accounts across all commercial banks. After the prime minister of India launched Jan Dhan Yojna, we saw a world record number of bank accounts opening in a single day and things seemed promising. But, a study done 3 months after the scheme was launched, revealed more than 75% of accounts to be dormant. Neither banks nor ATMs are located within reach of all. Opening an account was way easier than to actually keep it rolling on regular basis and encouraging them to have some savings too. People living in remote areas and the people at the base of the economic pyramid, the ones who are underbanked and unbanked, are in true need to be financially included. But then did JDY, despite having the genuine concern and the intention of solving it, actually served its purpose? The answer is NO, well not completely. This was further trodden by the demonetization move and the impact it had on traditional currency and transactional methods. In an interview with CNN two weeks after demonetization move, India’s key player in digital wallet industry Paytm CEO Vijay Shekhar Sharma said and I quote, “I Don’t Need to Sleep, I am Living a Dream.” Paytm saw an increase in traffic as much as 4x times, app downloads increasing by 200% and an overall increase in transactions by 250%. Mobile-wallets-adoption-in-India The Indian government is emphasizing on making India digital, a major example of which is roping e-wallets to digitize rural economy. With the government realizing the potential of digital wallets in helping built out for last mile banking and taking major official steps for it, India is a promising hub. Treading along with the Government are the entrepreneurs and VC backed FinTech companies who have come up with solutions to help in reach built out for last mile banking, thanks to the feasibility and accessibility of digital wallets through the country. At present just about 300 million Indians have a Smartphone and 66% of Indian population still don’t have access to the internet. FYI: (On a lighter note) India has nearly as many Smartphone users as the U.S. has people, and it’s about to get many millions more. This, however, is bound to change after the Digital India initiative of the Indian government with India being a sweet spot in terms of Smartphone market growth in the upcoming years. Another example of how digital wallets are helping make last mile banking a feasible reality is that of Zimbabwe, located in the African continent. Zimbabwe has shown tremendous growth in terms of mobile banking. In the year 2017, almost 96% of total banking transactions which amounted to a total of 98$ billion were carried out via digital methods such as e-wallets, net banking etc. Further data shows that out of around 18 million people of Zimbabwe, 6 million of them are registered on the leading digital wallet in their country i.e. EcoCash and about 1.5 million being highly active on it, total transactions carried out via this app reaches to 30 million per month. Oracle Statistics_Customer Paying Behaviour The above statistics clearly depict the changing scenario in ‘customer’s paying behavior’, as people are preferring to become cashless. In the UK, cash withdrawals reached the lowest number of transactions in 2016 after 2010 (which was after the economic depression). In the same year, plastic transactions overtook cash-based transactions. Supporting this ongoing ‘cashless’ trend less than half of the population (about 43%) thinks cash still will be used in 2022 about 54% think they will be using cash very less in the upcoming years 47% expect to use more mobile payments and digital wallets. The emerging and developing economies are successfully making the last mile banking a reality with the help of digital wallets due to the benefits and feasibility of it which allows even the poorest and scarcely located people to avail banking benefits. First, it was the plastic money that slowly started to banish cash from transactions, now it is the turn of digital wallets. With ATM’s further making banking within everyone’s reach, it’s still not possible to open an ATM within walking distance of everyone. Digital wallets solve this problem by being accessible to each and everyone at a whim. However, it’s not all apples and oranges, they have their own sets of downsides and challenges like: Fear of adoption among users due to transacting online Unearned Interest on money sitting in the wallet as opposed to a bank a/c Lack ‘brand recall’ among the rural population Inadequate merchant tie-ups As per the new upcoming scenario, mobile penetration is very high in urban as well as in rural areas. This tremendous penetration of the mobiles could be used to bring financial inclusion to the last mile. With almost every mobile carrier in India now offering its own digital wallet, you need not even

Finance, Financial Inclusion, FinTech, TechFin, Technical Updates

TechFin or FinTech

Vandana Kaul / 17/05/2018

Sometimes you need to look at things….from another point of view. This is exactly what you need to do when you have to decide between Fintech and TechFin as there is a very thin line which differentiates them from each other. It’s your pick between the innovator v/s the reigning. While, the Innovator is ‘Taking process to technology’, coined as term FinTech, the Incumbent is ‘Taking technology to process’, coined as term TechFin. So, What’s so technical about FinTech and TechFin? Technically speaking, Fintech is a space where financial services are delivered through a better user experience using cutting edge technology. TechFin on the other hand is where a firm that has been delivering technology solutions, launches a new way to deliver Financial services. You need to comprehend both to decide on your pick. The technology and finance are common between the two; the difference lays in the way you apply it. This difference is much higher than just spelling them or writing them in two different ways: Fin-Tech or Tech-Fin TechFin When the banks plan on utilizing technology to improvise or enhance existing financial processes and operations, their focus remains on how to use technology to bring superior efficiency and productivity from existing financial processes and operations. The same is done with the objective to magnify the existing experience and capabilities in financial services domain. The aspirations of transformation or disrupting the process are eliminated. The reason behind TechFin companies not looking towards disruption is the fact that their customers demand- Safety Reliability Stability Legacy No risk and minimal change Therefore, large retail commercial banks seldom make changes in their mobile apps, as a slight change in the app invites customer complaints and inconvenience. For their customer, change implies exposure to risk and any change is interpreted as offensive. Such banks avoid changes to skip the negative publicity from these incidents. TechFin companies, therefore, stick to what Jack Ma coined them as – “Rebuilding system with technology”. Jack Ma during the China Conference organized by the South China Morning Post emphasized and I quote, “Fintech takes the original financial system and improves its technology, TechFin is to rebuild the system with technology. What we want to do is to solve the problem of a lack of inclusiveness.” The best example of a TechFin company Ant Financial Services Group, an Alibaba affiliate company, in June 2017, launched “Fortune Accounts”, a new feature on its wealth management app- Ant Fortune. The platform which allows consumers to buy a huge range of investment products will now allow third-party financial institutions to set up an “Account Page” of their own. By doing so, they will directly reach consumers without the traditional way of competing on online supermarket format, and help customers get financial advice or promote their products. This is a classic case where the process of investing in financial products has been improvised using technology, helping financial institutions receive backend data of users to receive traffic on their company’s stores. Firms like Amazon (US), Apple (US), Facebook (US), Google (US), Microsoft (US), Samsung (Korea), Baidu and Tencent (China), Vodafone (UK, India and Africa), and Uber (US) all offer various forms of payment, lending and/or other financial services. The entry of these firms signals a shift from financial intermediary (FinTech) to data intermediary (TechFin). FinTech FinTech, on the other hand, takes the financial process and transforms it utilizing technology to make its mark. Generally, start-ups use FinTech to create Apps, APIs, and analytics, grab diversity, to disrupt and evolve. For example, the existing products or services like – loans, savings, investments, payments or trading are redefined to profitability, speed, and prudence. They prefer transforming the process using technology, usually eliminating the middleman and intermediaries. Taking the example of traditional and P2P lending, traditional lending will allow an investor to deposit funds and earn interest. A borrower can borrow money from banks, following a cumbersome documentation and approval process, which takes time and at times may face rejections. The approvals are based on pre-historic financial transactions. A FinTech P2P platform allows the lender to directly lend money to the borrower and earn interest, while the borrower uses an online platform to receive instant approval and funds. FinTech Vs TechFin FinTechs take the risk and have been welcomed by millennial and customers who are ready to explore and experience innovation. People who are ‘on the go’ and use the mobile platform embrace transformation. FinTechs are ready to disrupt existing processes and financial services ecosystems with use of emerging technology. The limitations of FinTechs are different as compared to TechFins. Unlike TechFins, who have the limitation of huge credit risk, FinTechs face the challenge of regulators. The global economic ecosystem has still not completely accepted the way FinTechs work. There are rules and regulations which they need to adhere to remain operational. Another most critical hazard which they are greatly exposed to is Safety. The chances of privacy risk and hacking always haunt them. To summarize the difference between the two, checkpoints are: TechFin Process first approach. The incumbent, usually large banks participate. Improvise the existing process Do not take the risk Customers prefer legacy and trust Enhance the proficiency of staff for the betterment of process using technology Huge credit risks FinTech Technology first is the approach. Start-ups, usually participate Follow transformation in the process Do not hesitate in disrupting the existing process. Youngsters, millennial and professionals appreciate them. Eliminate the middleman for faster and superior experience. Limitations of privacy, safety, and regulators. Closure There is no better way to summarize, the difference between the two, by quoting Jack Ma, the father who coined the term TechFin: “There are two big opportunities in the future financial industry. One is online banking, where all the financial institutions go online; the other is internet finance, which is purely led by outsiders.” Though a lot of

Finance, Financial Inclusion, FinTech, Fintegration

No bank is an Island – Fintegration is the key. Welcome to the era of Digital Banking

Vandana Kaul / 19/04/2018

The buzz around fintech has gained substantial attention of traditional financial institutions, startups, venture capitalists and regulators. Banks and regulators are hard-pressed to revisit their operating model and policies respectively to create a conducive environment of collaboration and dynamism amidst the participants in the fintech ecosystem. – FinTech in India, A Global Growth story by KPMG & NASSCOM Financial Services and Technology: The world today is witnessing the phenomenal unprecedented occurrence between FinTech and Banks – Fintegration Redefining FinTech Transformation – Fintegration As the saying goes-“Every coin has two faces”, The FinTechs and the traditional banks have their respective merits and their own limitations. To build on their common business interests and to eliminate their weaknesses, collaborating logically, so that together they can explore potential needs of customers and deliver, is the ‘need of the hour’. “Banks that do things well are our allies, but banks that do things badly are our competitors. We are in the same sector and we should move forward together.” This statement by Alfonso Sainz de Baranda, from Ahorro.net, on how fintech startups should interact with the traditional financial institutions, clearly summarizes the ‘should be’ relations between the most traditional financial entities and fintech startups to have a strategic and streamlined partnership – Fintegration. THEN & NOW : Why Collaborate? THEN: 2010-15 Scenario To better understand the rationale behind the collaboration of Fintech and traditional banks, referring to The Economist Intelligence Unit Survey 2015, also titled The Disruption of Banking, the survey reported the findings of more than 100 bankers and fintech executives across the globe. It stated the advantages and disadvantages of both sides and their impact on each other. The following were the key findings: Dominance Remains with Banks: While 33% of bankers predicted that in the next five years the era will be of ‘FinTech+Bank’ , 46% FinTech executives confirmed that banks will continue to dominate. FinTech lacks Legacy and Funds: 27% fintech respondents believe that they lack risk management experience, and 25% think that they do not have the necessary investment capital. The percentage of executives who believe that they have limited product line and lack legacy systems were 34% and 33% respectively. The absence of Strategic vision with Banks: 49% of bankers believe that banks lack clear and strategic vision for digital. Also, around 38% think that banks do not harness a culture where they can adjust to rapidly changing ecosystems. 42% agreed to danger of security breaches with banks as the main weakness. Both Sides Compliment each other: Amusingly, both fintech and banks have complementary strengths and weakness. NOW: 2017 Scenario To understand the rationale behind the collaboration of Fintech and banks, which is still going strong, let’s look at the “World FinTech Report 2018” survey, conducted by Capgemini. Highlighting successful Fintegrations, ING Bank and Scalable Capital, it suggested that: ‘An alliance between traditional financial institutions, like Bank and FinTechs has become the need of the hour. The blend of their respective competitive advantages and disadvantages perfectly complements each other.’ Further, the report states that FinTech growth has been exponential since 2010. The end of Q3 2017 saw them grow by engulfing more than 7,500 deals and raising USD 109.8 billion. Reinstating on the above point the report states that during the survey more than 55% FinTechs agreed that they would love the relationship as that will enhance- Visibility for them, Economies of Scale, Customer trust, and Distribution Infrastructure. In addition, more than 75% of FinTechs confessed collaboration with traditional financial firms as their primary business objective. The banks, also attracted to the technology wizards, support the alliance. The same is evident when Benoit Legrand, CEO, ING Ventures and Global Head FinTech (ING), said and I quote: “ING should be freeing up time for its clients. For example, with our partnership with Kabbage, we can now offer loans to Small Businesses in less than 10 minutes. This is a great illustration of how a bank and a FinTech can effectively partner” The perfect collaboration can be defined as the one which synergizes and reinforce their strengths and quash their weaknesses. It creates a single entity which can deliver results that they individually cannot. With the perfect combination of Bank’s Scalability, Risk Management, Regulations, Infrastructure, Brand recognition, Customer Trust, Investment Capital, Acquainted with Compliance, Acclaimed distribution network and Legacy system to name a few….. along with FinTech’s Innovation, Agility, Infrastructure built for digital, Innovative new products, Data Handling, Reduced cost and Speed to name a few….., we can build a strong collaborative partnership like never before. Win-Win for All With Fintegration, it’s a win-win for all, from banks and FinTech firms to individual and corporate customers. The key benefits can be summarized as: a. Benefits to FinTech: They can scale their business and hence confirm a substantial ROI. Ramp up millions of customers with speed. They will receive investment capital to scale-up their business. Better the risk management. Widen their customer reach and penetration b. Benefits to Banks: Will have innovative products in their basket of services to offer to customers. Will deliver products which will certainly give superior customer experience. Launch newer customer-centric products. Reduce the transactional costs. Enhanced efficiency. Elimination of intermediaries. c. Benefits to Customers: High-levels of products, services, and solutions. Functionalities with high speeds. Reduced risk. Services and products in a secure ecosystem, and governed by authorities. Innovative products at their doorstep or directly into their hands or fingertips. Fintegration across the Globe The collaboration between FinTechs and banks are not the talk of future, rather it’s the reality of today. Both are getting into partnerships and product integrations, direct investments and venture debts, VCs and fund-of-fund investments. There are successful Fintegrations like: BBVA Banco Bilbao Vizcaya Argentaria is a multinational Spanish bank and is the second largest in Spain. By the second half of 2016, BBVA launched its API market-place, which aims to offer other companies, startups, and developers to use eight of its APIs. Therefore, allowing integration of customer banking data with

Finance, Financial Inclusion, FinTech, FinTech Trends, Mergers & Acquisitions

Bank – FinTech Merger Importance and repercussions

Vandana Kaul / 05/04/2018

The financial services industry has entered 2018 with a focus on digitizing services to better meet customers’ needs. But do the banks understand that previously inefficient, paper-based processes and messy ‘not so friendly’ user interfaces are no longer going to be good enough in today’s technologically advanced environment? Banks are needed to connect digitally to succeed. With FinTech continuing to gain momentum, it’s just a matter of time, to see them fully integrated into business-as-usual banking. One of the world’s largest Deutsche bank calls for “a shift in mindset from one of competition to collaboration,” arguing that traditional banking providers and new innovators must work together in order to revolutionize the payments market and the wider financial sector for the benefit of all. They said it and I quote: “For both parties, a partnership should liberate them to focus on their core competencies and contribute these areas of expertise to the innovation process.” Fintech, no doubt, is the talk of the day amongst investors, financial service providers, entrepreneurs, and even big corporate houses. The phenomenal potential of creating innovative services and business model makes it disruptive in nature. Realizing the immense potential of the technology, “Banks” are looking to integrate with FinTech solutions. In short Bank+FinTech merger is next on the cards in the coming years. Welcome to the Era of FinTech. FinTech Nudged All FinTech, the technological innovation in the financial arena, registered its birth as a back-end activity, and today is nudging everything across the globe. It has transformed, almost everything, in such a way that you are about to witness the impact of the “fourth industrial revolution”. More than anything, it has created its own “FinTech Ecosystem” by embracing the following: Digital Payments Remittances Insurance Lending Financial and Wealth Management Retail Banking FinTech has impressed the Banking Sector and its customers, which is why the transformation in banking has touched a new height. The “2016 World Retail Banking Report” states that almost two-thirds of the retail banking customers across the world use FinTech products or services like cards & payments, loans, Investments, financial advice and mortgages. This is because of the UX standards they offer to their customers. 81% of the customers feel that FinTech offers faster services and extends a great experience. In addition, FinTech firms are fast catching up bank’s “niche parameter”- TRUST. The percent of customers who have complete or partial trust in FinTech firms is as high as 87.9% across the globe. FinTech-Globally Embraced Global acceptance of FinTech is evident from a recent comparative study by EY (formerly Ernst and Young) which reported FinTech adoption between 2015 and 2017 has increased across various countries like- Australia, France, Germany, China, and India. The figures indicate adoption of past (2015), present (2017), and future (as responded in the survey). The adoption of FinTech in these countries has climbed exponentially: Australia- From 13% in 2015 to 37% in 2017 France- From 27% in 2015 to 40% in 2017 Germany- From 12% in 2015 to 35% in 2017 China – From 69% in 2015 to 77% in 2017 India – From 52% in 2015 to 80% in 2017 ‘Banking with FinTech’ attraction Like any other sector, Banks have started reacting to FinTech, and since 2015, FinTech Banks have started emerging. Banks and Financial inclusions have initiated startup programs to constitute FinTech companies. Across the globe, 43% banks created such startups. Another 20% set up VCs to fund FinTechs. There are obvious reasons behind banks being forced to or influenced by FinTechs. EY FinTech Adoption Index 2017 released in June 2017 indicates that the appetite of digitally active consumers has risen considerably, from just one in seven digitally active consumers in 2015 to one in three in 2017. The report also shows that in 2017, there are 84% consumers aware of the fintech facilities in comparison to just 62% in 2015. The same reports show that the fintech adoption rate is expected to reach an average of 52% globally from the current rate of 33% in 2017. Such growth in numbers could soon blur the boundaries between different financial services, laying down new standards for the industry during the process. To stay ahead of the curve, financial firms would benefit from the technical assistance from the fintech startups. Why FinTech Lures Banks Unlike traditional banking, FinTech reduces structural cost and operational deficiencies. The communication between branches or P2P transactions happens in real-time environments. Real-time updates, proactive alerts and agile innovation are an integral part of an enhanced customer experience. When right technology is used, it can reduce the need for manpower and even the “Brick and Mortar” locations. FinTech provides simplicity of design and power of contextuality that consumers are increasingly expecting. Another customer expectation of ‘externally simple yet internally efficient’ service platform is forcing the banks to rethink their policy of ‘working alone in stumbling mode’ or ‘working and staying ‘in the game’ powerful mode. It also enhances regulatory compliance and better service to customers. Fintech firms like Teknospire are delivering convenient and affordable services by providing sustainable solutions for digitization of financial ecosystem to market segments (unserved and underserved) by taking care of their need for microloans and grants to the last mile, that till today were thought as unprofitable zone for banking organizations. User friendly, data focused seamless technology is bringing more personalized offerings. With the security aspect, well taken care of, with biometric advances, the virtual reality solutions are helping customers interact with the banks in innovative ways which were unheard of, with traditional banking. The fast and efficient products and services of FinTech have attracted Banks to offer P2B services. This is evident from the fact that many have started offering traditional in-bank services on mobile devices as well. This has helped them offer high levels of access to consumer, and hence, a better usability and User Experience (UX) standards. Advantages of the Alliance betweenFinTech and Banks With FinTech and Bank partnership, the ultimate

Finance, Financial Inclusion, FinTech, FinTech Trends

Why Fintech B2C and B2B solutions are more in vogue in Asia?

Vandana Kaul / 15/03/2018

Preamble The global Fintech trends show an investment of £25.6bn in 2015 rising to £27bn by 2016. The global Fintech investments doubled in the period ending Q2 ’17 and reached $8.4billion. Similarly, in the period ending Q4 ’17, the figure was $8.7billion across 307 deals with annual global Fintech investment touching $31billion in 2017. FINTECH ASIA Asia probably “knows the way, goes the way, and definitely shows the way” and hence, is leading the globe in Fintech, fast embracing the innovation, adoption, and attending the unaddressed Asian customer needs. Fintech has seen some incredible growth around the world. According to DBS CIO Neal Cross, and I quote : “Asia is the real “waking giant” on the scene. Late to the party but catching up fast.” The fact that of the top ten leading Fintech companies in the world, five (Ant Financial, Qudian, Lufax, ZhongAn, and JD Finance) are from People’s Republic of China (Asia) is enough to justify the lead. Source : Top 10 FinTech Companies in 2017 Though the primary focal point of Fintech companies has been customer-based initiatives (B2C) and customer experience, it seems they have started believing in “ignore the noise and focus on the work”; hence, have shifted their focus to B2B solutions. In the period ending Q2’17, it is reported that out of the top 10 Fintech global deals, three are B2B-focused companies namely- CCH Tagetik ($321m), Pos Portal ($158m), and ITRS Group ($140.6m). Trends Which Keep Asia Leading the Fintech B2B and B2C Solutions Fintech investments Trends in Asia The legend “Only a king can attract a queen and only a queen can keep a King focused” stands true for Asian Fintech markets. The King of global Fintech- Asia has been attracting a lot of investments in the recent past which is evident from the Fintech trends in 2016, of the £27bn global investment £11.7bn was done in Asia, a whopping 44% share. Leading the region, China is estimated to have done an investment of $10bn in 2016 followed by India which did a Fintech investment of $1.1bn Fintech investment. Source : The Fintech Times May12,2017 Apart from these two major countries, other countries like Thailand, Cambodia, Myanmar, Malaysia, Indonesia, and the Philippines did a cumulative investment of $217mn in 2016. Singapore and Hong Kong clocked $800mn with $400mn each, which experts feel is a clear financial prediction of these countries becoming crucial Fintech Hubs in the near future. Latest Fintech Trends in Asia Asia, no doubt has become the largest hub for B2B and B2C Fintech solutions hub of the world and holds some of the largest Fintech companies like Ant Financial (US$60Bn), Lufax (US$18.5Bn), JD Finance (US$7Bn) and Qufenqi (US$5.9Bn). Incidentally, all the four unicorns are from the People’s Republic of China (PRC). There are obvious reasons behind Asia leading the Fintech race and the following Fintech Industry trends in the last few years suggest that Asia will see more movement in the Fintech space. Why Asia leading the Fintech race? Unbanked Populations It is said that 73% of the unbanked population of the world is in 25 countries, majorly in Asia. Since more than half of the world’s population is in Asia, Fintech firms have exploited the emerging needs or demands of the mass and have delivered innovative products and services like- Virtual wallets, Internet lending, e-commerce, P2P lending, payment gateways or mPOS. To match the pace of Fintech firms, traditional banks started adopting similar products and services and ended up in digitalization of banks. VC-Funding One of the major reasons for the Fintech industry of Asia experiencing an explosive growth and innovative products and services is strong Venture Capital funding. ‘Ambitious investors are turning their attention to opportunities in Asian emerging markets. It’s Asia, with its enticing mix of booming middle-class populations and rocketing Smartphone adoption, that arguably offers the greatest opportunity for returns on FinTech investments’, according to Michael Lints, venture partner at Singapore-based VC Golden Gate Ventures. In China, the gradual shift away from a manufacturing-centric economy towards a service and consumer-led economy, coupled with the support of the government through financial incentives, is helping in fostering the innovation and entrepreneurship in the region, which bodes well for the future of VCs. With the power of the internet increasingly breaking down geographic barriers, and the combination of high speed of internet, higher spending power and a freer adoption of technology means that fintech has an entire market of willing and able customers. Not only Asian countries are presenting opportunities for VC investment but also seen is the greater interest in companies that have businesses that are integrated with these regions, as they can tap into the abundant resources, as well as the enhanced logistics network that has been built over the years. Furthermore, in an era of decreasing interest rates, investors are considering alternative investment options, making VC funds an attractive choice. VCs are focusing on unbanked and underbanked sector of Indonesia, with its massive population becoming tech savvy and gaining increasing levels of disposable income. It is the world’s fourth most-populous nation, with Jakarta alone home to 10 million people. The World Bank reported the country’s GDP per capita to have exploded from just $560 in 2000 to $3,374 in 2015, while the Indonesian FinTech Association says fewer than 36% of adults have formal bank accounts. Not only B2B but also the massive B2C market open ups the lucrative era for VCs. According to Michael Lints, venture partner at Singapore-based VC Golden Gate Ventures, payments is a major area of focus for business in the region. “A large number of startups are focusing on the B2C payments market because that’s where there is an open gap, especially when you look at the number of people that never use a bank for their payments. For them is has always been cash but now they are using smart phones. Making these devices a means of doing online payments is