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Why legacy businesses find it difficult to derive value from digital?

Fintechs have shown the path of digital innovations across payments, lending, wealth, insurance etc. As their business model is almost 100% focused on digital innovations (even if overall business may be pure digital or phy-gital), they are able to leverage the innovations to create top line as well as bottomline (may be bleeding initially). Legacy institutions like Banks, NBFCs, Wealth firms, on the other hand, find it extremely difficult to correlate digital innovations with real business. Why legacy businesses find it difficult to derive value from digital? They are already making decent revenues / profits and find it difficult to…

Lending Fintechs : Aadhaar KYC challenges / Privacy issues / Tight Liquidity : What next?

In last one year, massive amount of funding has been provided to Lending Fintechs in India across Retail and SME segments. I believe more than 100 new fintechs would have started in last 12 months in these segments. In addition, Leading Payment Fintechs have also moved their business model to lending as there is not enough revenue in Payment business. Last one month has been tough for Lending Fintechs, with the following challenges impacting their model: – Lack of clarity around Aadhaar KYC : This is impacting customer on-boarding process, which is critical for the growth in low ticket segment.…

Insourcing of Technology: Banks are getting it right

Technology is moving fast from “cost center” to “business / value center” In my article “Key Fintech Trends of 2018”, I had predicted that banks will start moving away from outsourcing of technology and will insource key areas like customer onboarding, omnichannel platform, analytics etc. This has started happening across leading banks in India as well as Europe / US. DBS Bank / Kotak Mahindra Bank have clearly demonstrated the power of Digital for everyone to emulate. Most of the banks are now hiring engineers, data scientists, designer and blockchain experts across various levels. These teams are getting embedded into business teams and…

Pivoting by Startups: Realizing what makes sense

I always looked at pivoting with some level of negativity. Basic thinking was that the founders would not have understood the market and after losing money, he / she may be trying out alternatives just to keep afloat. Reality Check: As founders, when we start our businesses, we do not know if the product market fit would really be there. It takes a lot of time and money for startups to build a product aligned with market needs and to get it validated. Many times our validation process provides us with deeper insights on what would work, which helps in reimagining…

Start-up journey : Few realizations

A) There is zero correlation between efforts and revenue in initial stages.     Don’t fret over it. B) Mental fitness and resilience are key to success.       Doing Yoga helps. C) Founders appear delusional at times to others. It takes time for others to understand them.       Listen to others but decide your own journey. D) Don’t underestimate finance, legal, taxation and collections efforts.      Dedicate at-least 10% of your time in initial days. E) Planning and tracking helps.      You have no choices here. F) There are more growth models beyond the famous…

Indian Fintech Ecosystem by The Digital Fifth

Indian Fintech Ecosystem by The Digital Fifth Essentially three eras: Before 2010: Digital marketplaces generating leads for loans and insurance 2010 – 2014: Payments ecosystem growing across B2B and B2C 2015 till date: Wallets going from expansion to closure, Usage of Indiastack (Aadhaar / eKYC / UPI / eSign etc) simplifying tech, Lending Fintechs prospering, Insurtech leaders evolving, PFM business moving towards cross-selling, Fintech Enablers thriving.

COO / CFO managing Digital

Till when will CFOs / COOs oversee Technology & Digital in Financial Institutions.. These areas must be “not so critical” else, CEOs would have directly handled it. As per these institutions: – Digital is feel good / PR activity – Tech is support – Business happens through branches

Fintech Roles

By year 2020, each role in Financial Institutions will have “Fintech” embedded into it. There is absolutely no possibility of any role remaining independent of tech. Sales, Marketing, Compliance, Treasury, Operations and everyone else will embrace this. Either we accept the change now or get ready to face challenges. Feel free to comment. I will share my views on each role in detail in posts during this week.

Digital Channels – Opex or Capex

All banks need to revisit their digital channels… they need continuous upgrades.. And not give responses like “we upgraded it last year” Few thoughts to enable digital: – Expenses in Digital are Opex in nature.. Don’t treat it like Capex.. Don’t let CFOs KILL the channel… – Hire designers in the bank without shackles of “this can’t be done” – Use design thinking approach for solving real customer problems… To do it, first learn how it is done… – Ensure that your team members meet clients every day or every week. I mean real clients… Else they will go ahead…