Ex-banker set to start his own neo-banking startup SaveIN

A neo-bank is a digital banking platform which offers all basic banking services like account opening, credit, insurance and others, but without a branch-led model. Startups typically work with a bank to offer these services to customers.

These fintech firms typically offer a wide range of services like faster account opening, mobile deposits, digital debit card, credit, digital payments and many more without the burden of a physical network.

India does not offer any neo-banking licence unlike other countries like Singapore and Hong Kong. But startups partner with banks, riding on their licences, to create a digital banking experience for their consumers.

Among the larger startups, there is Razorpay, which expanded from payments to banking; NiYO, a neo-banking startup for blue-collar workers; and, Open, which offers current accounts for small businesses in partnership with private sector lenders.

 Seeking a patent

The neo-banking ecosystem in the country is already getting crowded. Hence Bhasin wants to create a different experience through technology innovations and a superior mobile banking experience through an app or a website.

SaveIN is in talks to partner with a scheduled commercial bank and offer a savings bank account, debit card and also offer credit cards to its customers. Further, the platform will also open up other basic banking services, completely digitally, so that customers do not need to visit any physical branch for their banking processes.

SaveIN is looking to launch the product in early 2021. “On the product side, we are going to launch a financial health score, which will be much more powerful than the basic credit score used by lenders for customer evaluation,” Bhasin said.

As a financial health score, all SaveIN customers will get access to a dynamic scoring model where they will be evaluated on the basis of their credit and transaction history, financial investments, loan repayment trends and other factors.

Unlike the normal credit score, SaveIN will give a score which will track current financial health of a customer and will not operate with a lag. This score will be created by SaveIN, which will track customer’s smartphone data, transaction history and others.

Bhasin added that they are also in the process of filing for a patent for a social financing product. While he did not disclose details around the product, since it is still in the application stage, Bhasin added that once operational, it will disrupt the lending process between two individuals.

“We are self-funded as of now, but have already created a 20-member team across design, engineering, marketing and other verticals,” he said. The company plans to raise an equity round in the next 2-3 months.

While Bhasin intends to start with a digital savings product, he will eventually foray into broader financial services and could bring in a digital home loan product, a category which has been least disrupted by digitisation.

On regulations

While many entrepreneurs are attempting to create a digital bank in India, the Reserve Bank of India (RBI), technically, does not recognise digital banks. While it did experiment with payment banks and small finance banks, these are not full-service digital banking platforms.

“I believe, eventually, there will be some light touch regulations in this space, and I hope we can apply for such a licence then,” said Bhasin.

Startups are partnering with banks till then and riding on their banking licence. Startups just provide the front-end application, and the back-end account creation and lending all happen through the partner bank.