Essays on rational absurdity of banking
Lenders—Banks, NBFCs, or FinTechs—face the classic ‘Knapsack Problem’ while trying to create an optimal SME lending distribution structure. Each channel mix—branches, digital, phygital, own, agents, co-lending—brings its own costs and benefits, with varying considerations of scale, risk appetite, resources, and practicality specific to each lender. These essential considerations can help bring clarity to your distribution strategy.
In Banking, there are no barriers to imitation. Any lender—Bank, NBFC, or Fintech—can easily build a Loan product suite simply by following the leader. This quick-fix works until the inevitable product and portfolio challenges arise. However, for long-term sustainability, you need to innovate, differentiate, and pioneer new approaches while managing risk well. First Principles Thinking is exactly what works here
Hyper-personalisation promises to revolutionize banking by creating a “Segment of One” experience, but the path is riddled with complexities. Challenges of execution and technological demands can turn this potential goldmine into a costly misstep. What does it take for banks to truly harness this power?
Banks are diving headfirst into the digital age, eager to revolutionize their operations with cutting-edge technology. But beneath the sleek, modern facade lies a hidden “digital trap”—a complex web of outdated systems, spiraling costs, and endless customizations. This article uncovers the unseen challenges that deflate a bank’s push for digital change.