The Pattern #9: During a gold rush, sell shovels

Mayank Jain   /    Head - Marketing and Content    /    2022-05-13


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    Hello and welcome to this week's edition of the Pattern, a newsletter where I try to make sense of all the big and small rumblings in the Indian FinTech space. Let’s dive in.

    Legacy banks are in the spotlight this week! For starters, South Indian Bank has posted an all-time high net profit of INR 272 crore for Q4 in FY 22 against INR 6.79 crore during the corresponding period of the previous year.

    According to Murali Ramakrishnan, Managing Director & CEO, several factors have contributed to this rise - including digital banking and improved data science capabilities.

    Other private players are not ones to be left behind in the digital banking game though. HDFC Bank, India’s largest private lender, is set to launch a digital platform for merchants between June and September. According to the bank, it will “allow a small kirana store to be the local Amazon for its catchment.” This platform, one of many upcoming digital initiatives, will let merchants accept online and offline payments, similar to China’s Alipay.

    Clearly, private players are making all the right moves in a context where FinTechs are consolidating their power and popularity. However, one can’t help but wonder what’s stopping our public sector banks (PSB). Why, in the words of my colleague Chitwan, are PSB customer experiences still characterized by “disappointment, dread, steeling of the nerves, unfaltering patience, and finally, a huge sense of relief”?

    In this piece, she explores just why PSBs (perhaps with the exception of SBI) have been so slow in the digital adoption race - just like everything else in life, it’s all about priorities…

    However, it’s clear that digital transformation is well and truly here for Indian banks and our CEO Rajat Deshpande explored this in his newsletter last week where he wrote about just how much money banks are spending to catch up with FinTechs and more digital competitors in the race. 

    The best takeaway from the piece was this: “there’s a $20 Customer Acquisition Cost (CAC) for digital wallets as opposed to a $1500 CAC for a bank to get you to open a checking account  with a bank.” 

    You can read the full piece here.  

    Moving from processes to people, organizational psychologist Anthony Klotz, who coined the term ‘the great resignation’ recently stated that the workplace has changed for good.  More specifically, he says that the pandemic “brought the future of work into the present of work.” 

    Flexibility and wellness are key to keeping teams happy in 2022, and considering that nearly 86% of the formal workforce is expected to find a new job in the next six months - the time to focus on employee retention was yesterday. My colleague Aparna talks about this in her article that focuses on how a comprehensive yet seamless FinTech suite could be a boon to employers navigating the great resignation.

    Taken from:

    It’s no secret that we at FinBox are major proponents of Buy Now Pay Later (BNPL) - just glance over the many pieces we’ve published on the subject. Now, the 2022 Global Payments Report by Worldpay from FIS has only reinforced what we’ve said all along -  that superior checkout options and flexible payment methods such as BNPL will result in digital wallets surpassing (not replacing) cash as an e-commerce payment mode by as early as 2023.

    Our content specialist Anna recently explored how BNPL can give E-commerce pricing strategies the edge they need - read all about it here.

    Taken from:

    Finally, I can’t end this edition of The Pattern without mentioning something everyone is talking about - India’s scorching heat wave. It’s so bad that dehydrated birds are quite literally falling out of the sky. So it’s not hard to imagine what kind of an impact these burning temperatures are having on our country’s agricultural sector. According to estimates, for wheat alone, pan-India losses could come up to around INR 4,500 crore. Safe to say that the government’s ambitious plan to ‘feed the world’ could encounter some road blocks.

    Over the last couple of months, we’ve gone deep into the relationship between technology, data and agriculture, exploring how a combination of the first two could improve yields and access to financing. Whether or not technology can overcome the forces of nature is another debate altogether, but there’s no doubt that it can help mitigate the severe stress our farmers are under.

    Here’s a quick guide to our recent pieces on the subject:

    It’s a wrap for this edition - and as always, here’s my list of reading recommendations for you this week:

    See you next week! Cheers, Mayank

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