New Delhi– The $31 billion fintech market in India is set for a disruption with the emergence of neobanks and to scale and secure a foothold, these digital-only banks should acquire primary bank accounts, a new report said on Wednesday.
The salary accounts of white-collar employees with a lifetime value of 10 times seem an addressable market and the best way forward.
“In addition, there is said to be an opportunity to address about 25 million additional accounts of new professionals every year. The estimated 120 million professionals (steady income earners) currently represent around 80 per cent of the addressable banking ARPU or average revenue per user,” said the report by Bengaluru-based management consulting firm Redseer.
Neobanks are bridging the gap between the services that traditional banks offer and the evolving expectations of customers in the digital age
As the third largest fintech ecosystem in the world after the US and China, the Indian fintech market is poised for further disruption with the emergence of neobanks.
“Personalised experiences, data-driven insights, better user experience and value-added services can help neobanks solidify their base with India’s retail banking customers,” the report noted.
Currently, the Reserve Bank of India (RBI) does not allow banks to be fully digital in India.
According to the report, neobanks will not be able to obtain their bank licenses and will be dependent on their bank partners to offer licensed services.
Jupiter, Fi, Niyo, or RazorpayX are currently working in partnerships with traditional banks as the consumer-facing layer.
In one of the most recent partnerships, OneBanc Technologies, an AI-driven neo-banking startup, partnered with Visa, a global forerunner in digital payments, in a bid to issue India’s first debit and credit card without a magnetic strip.
Federal Bank recently opened more than 300,000 accounts with neo-banking partners.
Similarly, Fintech company Niyo, in association with SBM Bank India and Visa, now offers a digital savings account with Niyo Global.
ICICI Bank too has joined forces with Niyo to roll out prepaid cards for people working in micro, small, and medium enterprises (MSMEs). (IANS)
