The idea to establish an MSME-focused bank in India seeks to address the long-standing credit gap faced by nano, micro, small, and medium enterprises. While the idea has merit, it also presents significant challenges, including operational complexities and potential overlaps. Piyush Singh explains why a dedicated MSME bank is not the right path
LendersāBanks, NBFCs, or FinTechsāface the classic āKnapsack Problemā while trying to create an optimal SME lending distribution structure. Each channel mixābranches, digital, phygital, own, agents, co-lendingābrings 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 lenderāBank, NBFC, or Fintechācan 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 But beneath the sleek, modern facade lies a hidden “digital trap”āa complex web of outdated systems, spiraling costs, and endless customizations.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.
It seems obvious that any organisation will need to evolve in line with customer needs and competitive pressures. While ideas of change may be inspiring, execution without culture prep will deflate them as easily. Here are some lessons I have learned the hard way
By definition startup is a disruptor. Unless the startup idea is demonstrated to be scalable, there is no fun and sustenance. So, while banks look for āprofitā, there is a critical mass a startup needs to acquire, much before they think profit.. The banker’s paradigm needs a shift to look at startup finding
We have seen phenomenal growth in the BNPL (Buy Now Pay Later) segment in recent past, why not also have PNBL ā Pay Now Buy Later. Kartik Swaminathan explains
In a recent survey we found 86% of participants reported Banks and FIs to be the biggest spammers. Banks need to realise that every interaction with customers, existing or potential, is a moment of truth. Pestering only leads to increased trust deficit as the customer starts to see an ‘aggressive marketer’ and not a ‘trusted partner’
[dropcap]T[/dropcap]he rationale for cross sell focus in banks is not difficult to understand. It creates win-win for all stake holders- Banks get additional income, Employees get brownie points, better appraisals and Customers get access to a wider product suite at a convenient point of sale. The research around the world seems to support this. Cross-sell…
