A neobank is a type of financial institution that offers digital banking services without physical branches. Neobanks typically operate through mobile apps and online platforms, providing customers with convenient access to their accounts and transactions. Many neobanks also offer innovative features such as budgeting tools, automated savings plans, and real-time spend insights.
This brief article is found in Business Standard and speaks to a neobank in India that goes by the name of Open, which develops and offers an online platform for banking and intercompany settlement. It has digital banking services for startups and small and medium enterprises that offer accounts and has tools used by this business size sector. The company also seems to have BaaS capabilities. We covered the ongoing move to cloud and ‘as-a-service’ models in recent member research. The gist of the piece is that Open plans to add millions of small business accounts over the next several years, The company is backed by Google and Tiger Global.
‘Open, the Google and Tiger Global-backed neobank, is planning to onboard about 10 million small businesses in 3 years as it aims to solve a series of challenges faced by SMEs for managing their business finances, using technology….Open offers a business account in partnership with banks that help SMEs automate and run their finances effectively. The firm which work with the top 14 banks in India is aiming to onboard about 250 banks globally which would be using its platform and technology. It plans to scale up its operations globally in markets such as Europe, Southeast Asia and the Middle East.’
The article goes on to discuss other things that the neobank is pursuing, including lending, cross-border payments and BaaS services to traditional and other neobanks as well. This seems ambitious for a 2017 startup but with substantial financial backing and what seems like a strong product release plan, it may indeed be reachable.
‘Achuthan said that SME lending is the need of the hour as small businesses have been largely lacking access to robust capital resources. A recent IFC report indicated that SMEs take up a minuscule 6-7 per cent credit share and face a credit gap of close to $1.1 trillion….The firm recently received a go-ahead from the Reserve Bank of India (RBI) for its new cross-border payments product. This comes after Open completed the test phase of the second cohort under the RBI’s regulatory sandbox structure themed ‘Cross Border Payments’.Open is one of the 4 entities that have completed the testing phase of RBI’s regulatory sandbox….Open has also come up with ‘Zwitch’ a no-code embedded finance platform. This enables businesses from any industry to build personalized financial products and services that fit into the customer journey.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group.
