Key insights from a great discussion on neobanks with @guptajiten @sinhaanurag14 @Vinaybagree and Sameer Shetty

@VikramV23 @RajatAgarwal167 @Akshatj17

1. India is very large market for banking. Banks serve everyone from kids to senior citizens to SMBs & corporates. If you can provide 10X customer experience to a certain segment/niche, there is a category to be created.

2. It is not a competition b/w banks & neobanks. ~500M digitally native consumers want personalized, highly contextual experiences – TG for neobanks. There is also large number of people who have never experienced digital – they will migrate to incumbent banks’ digital channels.

3. Building a neobank is an inherently time-consuming process - compliances, backend infra, processes, security certifications etc. However, clear shift in bank’s mindset on fintech partnerships - many are building multiple APIs with clear developer documentation.

4. A ‘trojan horse’ product with an adjacent use case can help lower CACs. However, the core value prop and user experience have to be strong enough to generate referrals and word-of-mouth in the long run. The ‘trojan horse’ product is not a prerequisite

5. Neobanks will have the standard banking revenue models (interchange, lending, wealth, insurance). Retail customers are hardly profitable unless you have a long relationship & sell multiple products. Same will be true for neobanks – they will build multiple revenue streams.

6. It will take some time before we see virtual/digital bank licenses in India. Immediate next step should be regulatory clarity re: bank partnerships – will reduce confusion for banks’ internal stakeholders, remove dependence on workarounds (eg BC model) and encourage innovation