{"id":2663,"date":"2020-03-04T15:29:16","date_gmt":"2020-03-04T09:59:16","guid":{"rendered":"https:\/\/rzpwp.blog\/?p=2663"},"modified":"2023-04-24T18:03:27","modified_gmt":"2023-04-24T12:33:27","slug":"indian-startups-neobank","status":"publish","type":"post","link":"https:\/\/razorpay.com\/blog\/business-banking\/indian-startups-neobank\/","title":{"rendered":"Why Indian Startups Need to Change the Way They Bank"},"content":{"rendered":"

Today, India is home to the third-largest startup ecosystem (9,300 tech startups) and an abode to the third-highest number of unicorns (companies with a valuation over $1 billion). So there\u2019s no doubt that India is an epitome of innovation, thanks to <\/span>startups<\/span> building solutions aimed at solving locally relevant issues. But in this era of unicorns, soonicorns and IPOs, while it\u2019s easier to get caught up in the stories of startup successes, startup failures are becoming more common.<\/span><\/p>\n

Albeit other reasons for this failure \u2014 \u2018no market\u2019 need or the lack of alignment among founders and investors, the biggest and most tragic reason for some promising businesses to fail within the first year or two is primarily because of not knowing how they can best manage their financial challenges.<\/span><\/p>\n

I have sailed the same ship and witnessed other entrepreneurs who did their due diligence, created reasonable financial projections and yet struggled to pay for unforeseen expenses. In the early stages of a business, even a relatively small expense that is not accounted for in the company\u2019s budget can make it difficult to pay bills or make payroll.<\/span><\/p>\n

It\u2019s important for businesses to not only think beyond just sourcing working capital<\/a> for operational and day-to-day expenses but also adopt a new-age <\/a><\/span>banking<\/span> solution that will help the business with entire money management within the organisation, in addition to borrowing working capital.<\/span><\/p>\n

And, if you ask, why I can\u2019t do all of these with my existing bank, ask yourself how many business hours has your team spent on manual labour, dealing with buggy software and complex infra systems? The most important factor for Indian businesses is to have issues resolved at the first point of contact, and to receive the same level of experience and service, over and over again.<\/span><\/p>\n

A \u2018one-size-fits-all\u2019 traditional banking solution doesn\u2019t suit the business banking<\/a> needs of new-age businesses. Therefore, the lack of an intelligent tech infrastructure has led to the birth of neo-banks. These exist to simplify banking for businesses, and accelerate and supercharge every aspect of a business\u2019s financial operations \u2014 from accepting payments and managing cash flow to reconciling transactions and flexible payouts. In its nascent stage, neo-banks are taking over the <\/span>fintech<\/span> industry. Let\u2019s understand this difference better.<\/span><\/p>\n

    \n
  1. Access to daily financial reports and diligent insights is a norm for startups and SMEs. Unfortunately, this can take some time with traditional banks. Neo-banking is made for today\u2019s DIY generation where everything is accessible at the customers\u2019 fingertips. Businesses can generate reports based on specifications on their neo-banking dashboard, without banks\u2019 intervention<\/span><\/li>\n
  2. While traditional banks have restricted working hours, which means, businesses are required to work within the set banking hours, <\/span>neobanks<\/span> help businesses integrate in just a few days and enable a 24*7 money movement facility.<\/span><\/li>\n
  3. It\u2019s critical for businesses to have real-time visibility of their money movements. Waiting on a traditional bank facility to provide this information comes at the risk of losing valuable time and manpower. Using data in the right way and at the right time to inform your strategy is what neo-banking platforms are designed to look at.<\/span><\/li>\n<\/ol>\n

    This year will mark yet another significant progress in innovations in financial services. How neobanks manage obstacles like regulation and compliance, security, API integration, and how they will come together with traditional banks to build intelligent solutions will be an interesting watch for all of us in 2020.<\/span><\/p>\n

    This story was first published in The Economic Times<\/a>.<\/em><\/p>\n

     <\/p>\n","protected":false},"excerpt":{"rendered":"

    It will be interesting to watch how neobanks will manage obstacles and come together with traditional banks to build intelligent solutions in 2020.<\/p>\n","protected":false},"author":7,"featured_media":2666,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[27],"tags":[57],"class_list":{"0":"post-2663","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business-banking","8":"tag-technology"},"_links":{"self":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/2663","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/comments?post=2663"}],"version-history":[{"count":0,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/2663\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/media\/2666"}],"wp:attachment":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/media?parent=2663"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/categories?post=2663"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/tags?post=2663"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}