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Thursday, June 22, 2017

Banks and fintech startups see more value in cooperation than in rivalry


in 2011, ICICI BankBSE 2.90 % was confronted with a unique problem. Most of the frontend staff of India’s largest private sector bank by consolidated assets were reasonably fresh, and had to be quickly trained to interact online with customers. A lot of time was wasted toggling between multiple screens to understand a consumer’s profile.

“While the system was automated, it had many layers,” recalls B Madhivanan, chief technology and digital officer of ICICI Bank. The challenge was to get the customer service teams to climb up the experience curve in quick time.

Enter CustomerXPs, a year-old startup formed by a bunch of ex-Infoscions. CustomerXPs built augmented intelligence software that dipped into various internal systems of the bank to create profiles of customers, their relationship with the bank and the best product they were likely to buy next. “That was our first tryst with fintech,” points out Madhivanan.

That tryst evolved into the bank’s first concrete fintech initiative in 2012 when it launched ICICI Trinity, a programme targeted at 23 premier engineering colleges. Of 620 ideas gathered from students, the bank built 12 prototypes, and finally rolled out one product last March: [email protected] A programme that replicates the work environment at home by providing employees access to their work applications, iWork@ home uses a unique facial recognition technology that ensures against impersonation of the employee. “Over 300 women employees work from home using [email protected],” says Madhivanan, adding that since then the bank has been closely working with a clutch of fintech startups.

Win-win partnerships
Working with startups — considered more nimble and aggressive, and therefore more innovative than established institutions — may seem a compulsion, but Madhivanan doesn’t agree. “There is nothing that a bank can’t do that any fintech startup can,” he asserts. “It’s an issue of priority and striking a balance.”

He adds that the bank is guided by three principles before roping in a startup: what it brings to the table, the probability of its success, and whether it is solving a genuine problem. Every month, he lets on, the bank organises a demo day where 8-10 fintech companies come up with working prototypes of their ideas and exhibit.

Call it a priority or a compulsion, or a marriage of convenience, what seemed unthinkable a few years back is now the most preferred option for both banks and startups: working together rather than disrupting each other’s business.

Take, for instance, Kotak Mahindra Bank. The biggest bait for the bank joining hands with fintech startups is the opportunity to cost-effectively test various solutions in a short span of time.

“It allows speed to market, right from ideation to concept validation and execution,” says Deepak Sharma, chief digital officer, Kotak Mahindra Bank. In September 2013, Kotak BankBSE 0.95 % decided to focus on creating a seamless banking and transaction experience for digitally and socially connected professionals.

It discovered that such consumers valued accounts without a minimum balance and charges, and wanted transaction convenience through channels of their choice.

Months later, Interface Business Solution (IBS), a digital marketing startup, approached the bank with a solution to provide a banking transaction experience through Twitter. This led to the launch of Kotak Jifi, India’s first digitally and socially connected bank account in January 2014. It was an invitation-only account, where users had to sign in via Facebook, with the option to invite friends to join.

“We became the world’s first bank to offer Hashtag Banking on Twitter, which led to many more such partnerships with fintechs,” says Sharma.

Partnerships with fintech ventures, says Sharma, create value for banks as the solution is often designed around business model innovation, process efficiency and revenue opportunity. “Such partnerships are win-win,” he adds.

KPMG and CB Insights, in their ‘Pulse of Fintech Q3 2016’ report, noted that while banks once viewed next-generation payments solutions as too small to be credible, they are increasingly feeling threatened by the disintermediation occurring within the P2P payments space. Ultimately, if banks are no longer viewed as the service provider for consumer payments, there could be an adverse impact on their revenues, it added.

In 2011, Brett King, founder of American retail mobile money service Moven, wrote Breaking Banks, which sent tremors across the financial world. In the next 10 years, King then predicted, the world would see more disruption and changes to the banking and financial industry than it’s seen in the preceding 100 years. Six years later, the Moven CEO was selling his software to the banks he once mocked.

“We had grand ideas of being the Facebook of banking, and being a new form of bank account,” King reportedly said recently. “We realised that if you want millions of users as a bank, it is a very different proposition than building a social media network.”

Banking bets
Back home, a flurry of fintech startups have realised the virtues of working closely with banks. Bala Parthasarathy, cofounder of MoneyTap, is one of them. Parthasarathy reckons the demise of banks was exaggerated. After all, it’s any day cheaper to take a loan from a bank than elsewhere once you manage to wade through the paperwork and qualify for one. And unlike, say, hailing a taxi or buying a mobile phone on an ecommerce site, depositing money or taking a loan involves regulations that every startup or bank must go through, he points out. Well-meaning though these regulations are, they strongly favour the incumbent bank.

“Lending Club, Prosper and a host of Chinese peer-to-peer lending startups found out the hard way that cutting corners up in a train-wreck for the startup,” Parthasarathy, who roped in RBL Bank launch partner of MoneyTap. Started September 2016, MoneyTap is India’s app-based credit for consumers, offered in partnership with leading banks and NBFCs, claims. “Partnership is the key.” There have been instances in the recent past when banks fintech ventures head-to-head. Bank of India blocked users from transferring money using banking to mobile wallet services, Bank blocked Flipkart’s PhonePe, HDFC BankBSE -0.41 % CEO Aditya Puri took a dig Paytm by questioning the business model mobile wallet players. Yet, as venture capitalists point out, there is a huge untapped opportunity for banks and startups. “Of course, there competition and some of it will play out publicly. But neither can do it alone,” says Sanjay Swamy, managing partner at Prime Venture Partners.

Cohabitation is the reality
The Reserve Bank of India (RBI) too believes in collaborative coexistence. While conceding that the fintech sector impacting banks, RBI deputy governor Gandhi recently acknowledged that writing off the latter are probably getting wrong. Disruptive fintech innovations cannot eliminate or decimate traditional banking or finance, he said at a fintech conference in Mumbai early this month.

Fintech companies are accelerating the pace of change and reshaping the financial services industry radically, remarked Gandhi. Banks and financial institutions have realised that there will be value in adopting or adapting the fintech innovations for mutual and customer benefits.

There are ready takers for this mantra of adopting and adapting. Collaborations help give shape to ideas, says Smita Bhagat, branch banking head of HDFC Bank. “If there is a readymade solution on offer, then it makes better business sense to opt for it than develop it ourselves. Disruption that benefits the customer will happen only through collaboration and it’s a win-win for both parties.”

For the past two years, HDFC Bank has been hosting Digital Innovation Summit, which has enabled the bank to create a pool of potential ideas from fintech startups.

Nobody would know the value of tying up with a huge bank better than Chillr, India’s first multi-bank mobile payment platform, which counts HDFC as its first and largest partner bank.

Before entering into a tie-up with HDFC Bank in September 2014, Chillr had talked to several smaller banks, but most stayed away due to inhibitions of working with a startup. “When we pitched to about the idea,” recounts Mohamed Galib, cofounder of Chillr. “Since then the journey has been pretty amazing.”

Chillr has tied up with 10 banks on the IMPS platform (which facilitates instant interbank electronic fund transfers via mobile phones), enjoys over a million monthly active users on its app, and recently crossed `500 crore worth of monthly transactions. By the end of this month, it will launch UPI (which allows account holders to send and receive money through mobile phones without entering their bank account details. this will enable customers of 35 other banks to experience Chills.

For Niki.ai, an AI startup that counts Ratan Tata among its investors, bank-fintech alliances are a natural evolution. While fintech startups offer agility and innovation, banks are able to provide a solid base and a readymade pool of consumer trust, contends Sachin Jaiswal, CEO of Niki.ai.

Ritesh Pai, country head, digital banking, at Yes Bank, reckons that banks are aware that most innovations will happen outside their organisation. “Startups are more agile, and banks need to partner them. This will only help improve the banking experience,” he adds. Startups are also able to concentrate on specific problems in the banking sector and solve them using the latest technologies. This gives banks an opportunity to integrate them into the larger financial supply chain.

Yes Bank collaborates with PhonePe, a UPI-based mobile payment company that was bought by Flipkart last year. It began discussions with founders of PhonePe, Sameer Nigam and Rahul Chari, in December 2015, even before the company was acquired by Flipkart. While the entire banking industry was focused on building their own apps with a focus on P2P payments, Yes Bank enabled the PhonePe app to launch UPI services for the peer-to-merchants (P2M) part of the ecosystem. In less than a year since the launch of UPI, Yes Bank claims to have over 30% share of transactions on the UPI platform; and this would not have been possible without this partnership, says Pai.

“We never considered fintech companies as our rivals,” he says. The bank, adds Pai, has launched its fintech accelerator, which provides startups access to Yes Bank’s over 2 million retail customer base and more than 15,000 SME and corporate clients.

In his annual letter in 2015, Bill Gates noted that “we need banking but we don’t need banks anymore”. Perhaps not yet.

Banks and fintech startups see more value in cooperation than in rivalry


Banks and fintech startups see more value in cooperation than in rivalry


Banks and fintech startups see more value in cooperation than in rivalry


Banks and fintech startups see more value in cooperation than in rivalry


Banks and fintech startups see more value in cooperation than in rivalry


Banks and fintech startups see more value in cooperation than in rivalry


Demonetisation impact: IIP hits 4 month low of 0.4% in December


After scaling a 13-month high in November, industrial production dropped 0.4% in December, reflecting the effect of demonetisation, although the ferocity of contraction was somewhat masked by the persistence of a conducive base, reports fe Bureau in New Delhi.

Although the usually-volatile capital goods segment — a gauge for investment — dropped just 3%, a sharp 10.3% plunge in consumer durables and a 5% decline in non-durables output suggest the note ban dented demand, showed official data released on Friday. However, the plunge in the consumer durables segment seems to have been aggravated by an unfavourable base (it had grown 16.6% in December 2015).

Although excise duty collection in December rose 31.6% from a year earlier, it was partly due to additional revenue-enhancing measures like rate hikes.

Not surprisingly, commercial vehicles remained the worst performer, which alone shaved almost 0.5% off the Index of Industrial Production. Gems and jewellery, motorcycles and cement were among the worst performers, with a negative impact of around 0.3% each on the IIP.

The data showed manufacturing dropped 2% in December, compared with a 5.5% jump in November, while mining rose 5.3% from 3.7% in the previous month. Electricity generation rose 6.3% in December, against 8.9% in November. The IIP grew 0.3% in the April-December period, against 3.2% a year earlier.


Already, automobile sales recorded the worst monthly performance in 16 years in December. Also, the Nikkei Purchasing Managers’ Index (PMI) survey showed manufacturing activity contracted for the first time in a year in December, while services contracted for a second straight month.

Also, as Pronab Sen, former chairman of the National Statistical Commission, tells FE, a note ban hits consumption first and the full impact on the supply side could come with a lag.

Although the IIP posted a 1% rise in the third quarter of this fiscal — compared with a 0.9% contraction in the previous quarter — despite demonetisation, it was aided by the favourable base effect.

Aditi Nayar, principal economist at Icra, said: “Lead indicators present a mixed picture for January 2017, with a pick-up in expansion of output of Coal India, a base effect-led halving in growth of electricity generation, and a continued albeit narrowing contraction in aggregate auto production.”

Courtyard Marriott Launches 10 Day Raj Cuisine of India Food Fest

Raj Cuisine Of India
Chef Ravinder Panwar Displaying One Of The Dish

The Festival To Present Unheard Dishes Of Indian Cuisines of British Era

Bhopal, 8 February 2017: Have you ever heard of dishes like Kedegeree, Jhalprezi, Dak Bungalow Murghi Roast, Railway Lamb Curry, Nigella Potatoes and Dhal Churchurree? If not you should head to MoMo Café at Courtyard Marriott where you can relish these and many more spicy dishes of British era at 10 day Raj Cuisine of India food festival beginning from 9 February between 7.30 to 11 pm. This never before food festival will take city food lovers to rich culinary journey of Indian cuisine.

Ravinder Panwar, Executive Chef, while talking to the media here on Wednesday said “The Raj Cuisine of India food festival is all about spicy Indian food that was cooked and tasted so good to the Britishers that they not only became obsessed with but also made it part of their menu. The Khansammas used a little different ingredients such as butter instead of oil and ghee, braising process instead of fry and charcoal grill instead of electric grill to prepare dishes.”

Chef Ravinder said every cuisine to be served during the festival will have a great story to tell. The typical dishes of Raj cuisine include Kedgeree, Mulligatawny Soup, Jhalphrezi, Nigella Potatoes, Lady Finger with Pickled Mango, Butter Jeera Potato, Steam Roller Chicken, Indian Masala Omelet, Mustard Fried Fish, Dak Bungalow Murghi Roast, Railway Lamb Curry, Chingri Samosa, Country Captain Chicken, Madras Club Korma, Dhal Churchurree, Ginger Soufflé, Bombay Custard.

Giving an example of Dak Bungalow Murghi Roast Chef Ravinder said “Historically this cuisine is said to have been prepared in the dak bungalows or the resting houses of Calcutta where the British government officials rested during their hunting expedition or during a night stay on between journeys. This cuisine was made using readily available ingredients by the khansamas or chefs as they are known today.”

He said one can begin his dinner with Muligatawny soup. The spicy, tangy soup takes its name from Milagu (pepper) and Thanni (water). A great appetiser, it can be rightly dubbed a close cousin of ‘Rasam’ – a south Indian soup made of tomatoes and cumin powder.

Talking about cooking method Chef Ravinder said that we will be extensively using tandoor as tandoori dishes taste exceptionally good because the meats are grilled in a charcoal oven and not on an electric grill.

Another attraction of the food fest would be main course dish Madras Club House Chicken, a spicy chicken curry with onions, tomato and masala, and Chicken Tikka Masala, the most popular Indian dish in the UK.


Will the Budget bonanza for realty benefit housing finance companies


As soon as the Finance Minister announced infrastructure status to affordable housing in the recent Budget, stocks of real estate developers, select banks and housing finance companies moved higher and higher on the domestic bourses.

It was a longstanding demand of the real estate developers. Over the past few years, the real estate sector was languishing due to lack of demand on the back of weak sentiment among home buyers and rising inventory levels.

The announcement to ban high-value currency notes further dampened sentiment in the real estate sector. However, the recent Budget has offered many measures aimed at kickstarting the investment cycle.

At present, the macro environment is extremely favourable for housing finance companies. The Modi government’s incentives in terms of allocation related to Pradhan Mantri Awas Yojana (PMAY) of Rs 23,000 crore would provide the much-needed momentum to the sector. The total allocation for the infrastructure sector in the Budget stood at Rs 39,6135 crore in 2017-18.

The holding period for capital gains tax in case of immovable properties has been reduced from three to two years. Moreover, the Finance Minister has proposed to shift the base year for indexation from 1.4.1981 to 1.4.2001 for all classes of assets, including immovable property.

This step would allow more realistic calculation of the cost of acquisition of the house while claiming indexation benefits. The Finance Minister has announced that National Housing Bank would refinance individual loans worth Rs 20,000 crore in 2017-18. This is positive towards the sector.

Infrastructure status to the sector would help affordable home developers access cheaper funds from big institutions such as insurance companies and pension funds.

This step is expected to improve margins, and increase supply, meaning thereby that margin issues that private players often face would be eased and this would provide ample push to the sector.

It is expected that with several associated benefits and the advantage of digital documents, the cost of finance is expected to come down, which may be passed on to the real buyers.

In the days to come, supported by growth drivers such as rising disposable income, personal income-tax benefits, increasing urbanisation and economic growth of tier II and tier-II cities, the sector is likely to see immense growth.

Government initiatives towards ‘housing for all’ would give immense boost to the companies form the housing finance space such as GIC Housing Finance, LIC Housing Finance and Dewan Housing Finance.

At present, valuations of these companies are looking attractive and investors can look at investing in these stocks for the long term.

Luckylips.in Makes Headlines on the First Day of Launch


Ahmedabad, Gujarat, India

They say for a new brand to penetrate the minds of its customers it takes at least a good run of 5 years in the market. But luckylips.in, a beauty and wellness brand belonging to the e-commerce sector, defied all odds on the very first month of its launch. The core idea behind the inception of Luckylips.in was creating a brand which will not only cater to a woman’s personal and beauty needs but also empower women by propagating them towards a self-sufficient personal habit. Luckylips.in was a brain child of Mr. Mahesh Patel, his wife Mrs. Kanchan Patel and Ms. Bindi Patel with the intention of changing the way women shop for their hygiene and beauty needs in this country.

To find their rightful position in the wide and competitive market of e-commerce, luckylips.in came up with a digital campaign plan and a revolutionary beauty offer.

Their first step towards a strong digital presence was followed by months of rigorous planning and strategizing. The brand started their penetration in the beauty market with a very simple and organic social media campaign on all portals. The initial aim was to become a familiar face in the beauty segment; thus gaining the trust of the audience and boosting sales in the first year of launch seemed to be an impossible dream. But the brand did not give up the hope of a miracle in the onset of Christmas. Thus on 15th of December, the day of the launch luckylips.in came up with a social media campaign which was backed by a wonderful referral program. This organic campaign merely focused on spreading the word about the existence of this new brand in the beauty segment.

The night of miracle did arrive and on the 15th of December, the website of luckylips.in crashed over 5 time in a matter of 3 hours. The website received over 1.6 lakh page views within the first eight hours itself, and the high traffic in first day of the campaign itself resulted in a spill over of the audience visits. Mahesh Patel, Co-Founder of luckylips.in, stated, “We had a vision in mind of how our website would perform, and it turned out to be even greater than our expectations.” Over 10,000 users registered to become members of luckylips.in and the turnout at the end of the day amounted to a massive amount of sales for the brand, aiding in their aim of generating profits on a massive scale in the first day of the campaign launch itself. The brand received a wonderful welcome in the competitive market of beauty and e-commerce with a glorious transaction of over 3500 products. The first day of the campaign activity resulted in the complete sell out of their in-storage inventory, and this feat was achieved 100% organically and at zero cost. Commenting on the matter, luckylips.in Co-Founder Ms. Bindi Patel stated, “luckylips.in recently made its entry into the market, and as a brand they have the potential to make a difference in the beauty segment of e-commerce portal. We aim to surpass all our other competitors in this segment and ride our way to the top brand of the beauty segment.” To pull off this glorious overnight success launch, luckylips.in had joined hands with a Mumbai based digital agency called Insomniacs.

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