How can an Ideal FinTech Model be Crafted for India?
India is still a country transitioning towards the digital so it may take some time but eventually it will be in accordance with the modern ways
Startups are hard. That’s a no-brainer. To be a startup founder is to be a next-level multitasker—raising funds, balancing budgets, motivating employees, all the while finding time to carry out the vision that first encouraged you to set out on your mission.
Financial technology is no exception to this rule. In a constantly-changing regulatory landscape, the rules of the game are even more constrained for FinTech players. Although certain components of FinTech management may be volatile, there are certain guiding questions that have helped me through my experience as the founder of a FinTech startup. Though not all minds think alike, and no two companies are the same, these guiding questions can help other prospective startup founders—especially those entering the FinTech space—navigate these waters with greater ease.
We’re conditioned to think that this question is preachy, or somehow naïve. It’s not. It’s 2018. We’re facing the impending risk of climate change, rampant wealth inequality, and increasing populism around the world. We need to think beyond quarter-to-quarter profits to survive this. Companies must think about the long-term effects of their work—beyond their bottom dollar.
Find a purpose for your company that will help you soar during the good times, and persevere during the tough. What’s helped me fight fires every day—and get through the hardest challenges—is our mission of powering a new, more equal digital economy in India. A true mission serves a massive need in our society, especially for SMBs navigating the post-GST economy, and has the potential to create millions of jobs for companies looking to digitize and become compliant.
What’s my business model? How does it relate to my mission? What vulnerabilities does it have?
A mission should be more than words on your website’s ‘About’ page. It should lie at the core of everything you do, including your business model. You’re destined to fail—or at least be gravely disappointed—if your mission and business model do not align.
Instead, our mission statement values a more equal digital economy—and so does our pricing. We’ve crafted a pay-as-you-go model that lets companies pay according to need. This not only reflects the varying willingnesses to pay of Indian businesses but also enables us to service SMBs across geographies, industries and financial abilities.
Further, we ensure that businesses’ data remain private and secure. For FinTech companies, vulnerable security infrastructure can tarnish a company’s reputation, especially in the case of large-scale data breaches that make it to the press.
Other business model vulnerabilities may be less hack-related. Government regulations can make or break FinTech companies, as was the case when the RBI updated its KYC standards. Multi-channel revenue models can help weather vulnerabilities, in the way that diversified portfolios do.
Do my mission and business model scale? How?
It should almost go without saying—but, especially in a digital era, missions and business models must solve for scalability. Luckily, it’s increasingly simple to do so. Using a microservices architecture means that we can launch new products in a matter of weeks, using our processing engine as the core of every service.
But, India is still a country transitioning towards the digital. Scaling may still require feet-on-street sales models and investments toward skilling clients on how to use your products. India really is still all about personal relationships – so don’t forget to couple your digital marketing and sales strategy with an on-the-ground presence.
What potential partnerships exist for my mission?
You can’t do this alone. Apart from helping you distribute your services and products, partnerships help you expand your horizons and build more full-stack ecosystems for your clients. We’ve endeavoured to work with established banks as we provide financial products to SMBs. These partnerships have taken on almost a symbiotic dynamic, helping established banks utilize our tech experience, while we assist their client base.
In the end, Indian FinTech can’t look at what’s worked in the United States and Europe. Our unique set of challenges—a developing economy, changing government regulations, low connectivity—means we have to be more innovative and holistic in how we start and grow our businesses. But it’s an exciting time. If executed with the guiding questions I’ve offered, a growing network of FinTech players can help create a digital boom that drives employment and fosters more sustainable growth in India.
riyanka is passionate about helping people from all backgrounds access modern finance. She founded Kite to empower businesses and their employees with innovative and low-cost payments, capital, and financial services. Launched in 2017, Kite’s platform has processed over USD 70 million in transactions and served 150,000 users from 1,200 cities, building financial identities with more than 6 million data points.
The idea for Kite first came to Priyanka at age 17, while shooting a documentary film on the plight of microfinance borrowers in India and globally. Subsequently, at Yale, as Tobin Research Fellow at the Department of Economics, she continued conducting development research on the sustainable delivery of financial services in Honduras, Mexico, Uganda, Bangladesh, and India. Her thesis was among the first studies of the impact of the Direct Benefit Transfer (DBT) system on service delivery in India.