Earlier this week, Asia’s first Neo-bank “BankOpen” raised $30 million in a new funding round as investors found an opportunity to replicate a globally tried and tested business idea in the emerging market- Fintech Mobile App Startups. The Series B financing round for the start-up was led by Tiger Global with Tanglin Venture Partners Advisors. The pre-existing investors that also participated in the funding round include 3one4 Capital, Speedinvest, BetterCapital AngelList Syndicate. This round valued BankOpen at $150 million, and has raised about $37 million till now.

BankOpen has partnered with ICICI Bank for creation of accounts. On ICICI Bank’s internet banking website, BankOpen has integrated its tools including a payment gateway powered by Stripe. It gives back-end support to YES Bank and ICICI Bank. This one of a kind FinTech project was undertaken by EngineerBabu, an award winning IT company for web and mobile development services for StartUps, SMEs, as well as Enterprises.

What Is FinTech and Why it matters?

Neo-banks are conventional banks that do not have any physical branches but only use FinTech Mobile Apps and websites to provide their services. It is basically an institution that provides checking, a prepaid debit card and some form of savings account minus the traditional brick-and-mortar building. It includes P2P payments, mobile deposits, real-time digital receipts and mobile budgeting tools.

For Asia, neo-banking might be a comparatively newer concept, but globally, the experiments with neo-banking have been done by major global banks for close to a decade now and the trend has since then, caught up the entire world. Very recently, banks and FinTech Mobile App companies have started to support each other in this venture to promote digitization, hence easing the banking experience for millions of micro-entrepreneurs and homepreneurs.

Some other Indian neo-banks like BankOpen include- NiYO, 811 by Kotak, Yono by SBI and InstantPay. Monzo, a neobank from the UK, after garnering more than a million customers, is now reportedly going to enter the US market. Some other notable fintech mobile apps across the globe are- Tyro Payments, Volt Bank and Xinja (Australia), bunq and N26 (Europe), Atom Bank, Revolut and Starling Bank (UK), Simple (USA) and WeBank (China).

How BankOpen started?

The vision –

The startup was founded by serial entrepreneurs Anish Achuthan and his wife Mabel Chacko in 2016. They found the inspiration for BankOpen after having come across the financial issues faced by small businessmen across the country. In Ahmedabad, one of their clients, a small businessman has an average of 59 transactions from his customers in the firm’s bank account every few hours. Prior to using BankOpen, the firm had to juggle all day to figure out where these transactions originated from or went to. It was because, on their bank statement, they only see one-line description of a transaction’s detail.

The pain points –

CEO Anish Achuthan in an interview told that, “Traditional banks have either not addressed these small needs, or charge huge amount for their own solutions that is not feasible for a small business.” With over 100,000 customers (around 20,000 coming onboard every month) BankOpen processes about $5 billion in transactions each year. Within the next one year, BankOpen aims to grow its customer base to 1 million. Today it is competing with a handful of startups including InstantPay, but the CEO is of the view that much of the market remains untapped.

The solutions –

The two-year-old Bangalore-based start-up automates accounting and GST, tax filing, bookkeeping, and reconciles bank transfers, cash and cheque payments. In addition to this, it also manages invoicing, payouts, payroll & accounting in one place. It uses a payment gateway powered by Stripe, whose other clients include Google, Microsoft, Amazon, Spotify and Uber.

Team building –

• Zwitch, the previous digital payments venture by Anish Achuthan and Mabel Chacko, was acquired by digital payments firm CitrusPay in September 2015.
• Following the acquisition, Ansih Achuthan joined CitrusPay as vice-president of new initiatives and business head, whereas Mabel Chacko headed the firm’s digital marketing.
• In 2016, the duo quit CitrusPay and founded BankOpen.
• In July 2017, BankOpen raised $250,000 from Amrish Rau, CEO of PayU India and Jitendra Gupta, managing director.
• In November 2017, BankOpen appointed former TaxiForSure chief financial officer Deena Jacob as head of revenue and growth and CFO.

Why is India a Billion dollar market for Fintech/Neo Banking?

In the past 5 years, the SME sector in India has grown as a lively and dynamic sector in the Indian Economy. They play a significant role in Nation’s cross-platform development, but the one aspect that plays a major role in their success is- efficient banking and financial management. Till recently, SMEs faced issues like difficulty in managing multiple bank accounts, bandying out payments to employees, bookkeeping of daily spending. Neo-banking is one good way to drive digital innovation in this sector by providing its clientele with personalised products that not only add value, but also ease their burden effectively.

At the Singapore FinTech Festival in November last year, Indian Prime Minister Narendra Modi introduced attractive policies and plans to invite investors to the Indian landscape amidst the largest ever gathering of FinTech firms. “I say this to all the FinTech companies and startups: India is your best destination,” he said, as the keynote speaker. “Less than 50 per cent of Indians had bank accounts in 2014. Now, it is nearly universal. So today, more than a billion biometric identities, more than a billion bank accounts and more than a billion cell phones give India by far the biggest public infrastructure in the world,” Modi had said. He became the first world leader to address the festival that was launched in 2016 and was in its third edition last year.

Financial Technology and Its Scope In The Developing World:

A Nigerian FinTech startup NetPlus provides simple and reliant digital payment system to the consumers of the nation who initially used to be cynical when it came to using e-commerce. Nigeria has now embraced the platform. Several developments like these have given a boost to evolving markets such as Indonesia, Brazil, India, Nigeria, etc.

London, San Francisco and Singapore, were earlier reserved as the FinTech hubs but the scenario has been changing rapidly. Now these developments are driving investors to huge rewarding markets in developing countries as well, since the growth opportunities here are massive. This shift in the market has now gained a significant attraction and developing nations are experiencing tremendous growth in investments across FinTech and RegTech.

Also, several financial establishments have planned to open up new premises in these countries that is a clear indicator of what is expected to come our way in 2019.

BankOpen and EngineerBabu:

The two companies collaborated in order to build something unique. With EngineerBabu’s expertise in Fintech and BankOpen’s idea they took the first step i.e. MVP. The goal was to a unique integrated payment gateway for customers, so they can accept bank transfers via virtual accounts that auto-categorises their income and expenses. It supports multi-bank connect from 60+ Indian banks to BankOpen.In addition to this, BankOpen is the first API banking platform in the entire region of Asia. The developer friendly banking APIs lets developers easily integrate banking & payments into their applications or accounting systems. From instant account creation to mass payouts, the APIs help the users create a tailored solution which meets their unique payment needs. The simple and easy to integrate REST APIs are built with seamless security in mind that support mass processing. There are no loops, be it a mass payout or mass account creation, all the heavy lifting is taken care of for the customers.

How To Start A FinTech Mobile App Company?

If you have never traded Bitcoins and aren’t sure how stocks work, there’s still a solid chance that you might have used some sort of FinTech services— online banking solutions or mobile payments. In fact, the adoption of fintech globally reached 33% in 2017, as compared to nearly half, 16% in 2015.

The top 3 FinTech Companies and their funding, niche and current values are as understated-

1. Stripe– Got a funding of $685 millions in a total of 9 rounds. It is now valued at $20 billions. It’s niche is- Online Payment Service.
2. RobinHood– Got a funding of $539 millions in a total of 5 rounds. It is now valued at $ 5.6 billions. It’s niche is- Trading and Investment.
3. Lu.com/Lufax– Got a funding of $1.7 billions in 2 rounds of funding and is now valued at approx. $10 billions. It’s niche is- Peer-to-Peer Lending and Financing platform.

Fintech definitely isn’t the easiest industry to target and when all the pitfalls are taken into consideration – It takes time, effort and sweat to create a successful FinTech company. To launch a startup in such a frivolous and competitive domain, it takes a lot of expertise and creativity. The immense and rapid pressure is on the tech companies to deliver huge results. Still, if you believe that you have what it takes to solve the financial issues for your users through innovative means, go ahead. You will be needing the right people by your side.

At EngineerBabu, we have experts when it comes to crafting products that engage your audience, sets your brand apart while helping you achieve your goals. We focus on making sure that the mobile apps and websites we develop for you are both useful and easy to use. Feel free to reach out to us for any consultations.

How Much Does a FinTech Mobile App Cost?

To estimate the cost of any new business venture, the resources including manpower, and the time taken by them to finish the task is what will help you to reach to an estimated figure. When it comes to app development, several factors will decide the costing. It might vary depending on the niche of your app, the target-audience and their population size, the scope of the application you’re going to build, the platform it would be launched on (iOS or Android), etc.

But generally speaking, a Business Analyst takes around 10-15 days. A UI developer would take 15 days to finish his design. Then there are front-end, back-end (for iOS and Android platforms) and testing developers that usually take 70 days, 60 days and 15 days respectively. When all of this is done, the final cost would be around 20,000-30,000 USD for one app.

A lot of other steps are involved in developing a mobile app and you can manage your finances wisely if you know how to balance them by— knowing the regulations, discovering your edge, hiring the right talent along with the right tech stack, creating an MVP (Minimum Viable Product), getting funded and building resourceful partnerships.

EngineerBabu’s Concept in FinTech Mobile App?

Fintech mobile app start-ups are bound to focus more on the customer experience and services in the digital era and engage with the established industry contenders. In the long run, Fintech will be investing more in risk management, innovation techniques and partnerships through collaboration which will be of great aid to both the banking sector and Fintech mobile app companies. The sector also has to innovate the business models and find their place in the B2B sector.

Furthermore, traditional financial contenders will be exploring growth opportunities through new monetization models. As a result, banks will have the benefits from the financial technology company’s knowledge about developing the insights for needs of their customers. New age customers are looking for smooth on-demand transactions and good interpersonal relationships. Hence, what we will be witnessing 2019 onwards is, massive opportunities for Fintechs to add value by artificial intelligence, employing big data, machine learning in the financial services. FinTech is going to be the second-most significant transformation in Finance, since the first permanent banknotes. Fintech is constantly maturing and developing, and many fundamental tasks still need to be explored.

Our team at EngineerBabu makes sure to incorporate our knowledge about this dynamic sector while we create the best website and application platforms for you. With more and more FinTech firms, central banking will surely take a backseat as lenders and borrowers are matched with each other to make a more stable credit exchange. This significantly newer concept has the potential to completely change the way banking functions. FinTech is taking the age-old method of lending and borrowing without the existence of separate institutions while challenging the territorial habits of banking services and traditional insurance.

We at EngineerBabu excel in creating fintech products utilizing the latest tech stacks and we possess immeasurable domain expertise in developing these products. This is why so many of our clients have gone on to acquire record funding from renowned investors, including this most recent developments in the case of our client, BankOpen.

Have an idea that could change the face of the Indian FinTech market? You can visit our website for more information, or directly contact us here.

The post How to build a Fintech App, like BankOpen? appeared first on EngineerBabu Blog.

“You have to, to serve these markets, re-imagine how money can be managed and moved because there’s going to be more change in the next five years in financial services than happened in the past 30.”

– Dan Schulman, CEO PayPal

Thus, there is absolutely no denying the fact that technologies will continue to invade the age-old financial industry. Riding on the fintech bandwagon, many millennials and innovators have reinvented their businesses and made a hefty profit in the transition.
But, how do you even start?
With tons of startups entering the market every month and billion-dollar giants running the show, it can be quite hard to get your piece of the pie.

The 5 Best Fintech Startups and Their Recipe for Success

What’s better than to learn from those who have already made it big, so before delving into the recipe for success, let’s first look at some trendsetters in the current fintech setting, and what has been their secret ingredient.

1. Stripe

• X-Factor:
  • Ease of Integration
  • Tools
  • Competitive and Crystal Clear Pricing
  • Customized
  • Better Customer Support
• Niche: Online Payment Services
• Funding:
  • Raised a total of $685M in 9 rounds.
  • Now valued at $20B.

Stripe’s impeccable functionality and meticulously designed API has helped create the best possible product for the consumers. It has undoubtedly become a one-stop destination for the creation of subscription services, crowd-funding platforms, an e-commerce store and more. This tech company has been able to build an economic infrastructure for the internet by helping out businesses of almost every size. It combines a payment platform with applications that put revenue data at the heart of business operations.

2. Robinhood

• X-Factor:
  • Laser focus on target market (millennials)
  • Viral marketing strategies
  • Clutter-free interface
• Niche: Trading and Investments
• Funding:
  • Raised a total of $539M in 5 Rounds
  • Now valued at $5.6B

It could easily be touted as the top fintech company of this year. In order to keep the fees down, the company abstains from opening storefronts and renders no additional tools. Aptly named after the popular fictional character, it is helping the less economically privileged grow by using and betting on rich people’s money. The fintech app has eliminated all brokerage fees that have traditionally been associated with initiating a buy or sell. It earns money through its Robinhood Gold accounts for premium members and by collecting interest from cash holdings and stocks just like a bank. The app is clutter-free and straight-forward, making it easy to use for everyone.

3. Lu.com/Lufax 

• X-Factor:
  • Broad product offering
  • Diverse liquidity avenues
• Niche: Peer-to-Peer Lending and Financing platform
• Funding:
  • Raised $1.7B in 2 rounds of funding
  • Now valued at approx. $10B

Lufax has grown to become China’s largest fintech company in less than four years. It is considered to be China’s most innovative non-SOE financial institution. The number of registered users on Lufax surpassed 14 Million recently. Lufax takes complete advantage of the latest big data and IT offerings, and clouts the most advanced risk assessment models and risk control systems.

4. Paytm

• X-Factor: 
  • Extremely high brand awareness
  • Strong marketing campaigns
  • Word of mouth
  • Strong investments from big-wigs
• Niche: Online payments
• Funding:
  • Raised over $2.2B in 4 funding rounds.
  • Now valued at approx. $15B.

Touted as India’s largest mobile commerce platform – it has 80 Million active monthly users and processes around 5 million transactions every day. Paytm tries to maintain an open culture where everyone is a hands-on contributor and feels comfortable sharing ideas and opinions. Paytm’s team spends hours designing each new feature and obsesses about the smallest of details.
Paytm’s approach is quite simple – To design something they’d use.

5. Klarna

• X-Factor: Business Model
• Niche: Online Payments
• Funding:
  • Raised $681.7M in 13 funding rounds
  • Now valued at north of $2.5B

According to its CEO, Klarna’s mission remains the same, even after 12 years of its formation – To make paying as simple, safe and above all, as smooth as possible.
This simple vision has helped Klarna become one of the largest banks of Europe.
Klarna’s pay later policy has proven to be a tremendous success across Europe. Try it first, pay later, lets users pay 14 or 30 days after delivery depending on the store. Besides, there is also an option of paying in installments for its users.
They have a user base of almost 60 Million and has some 90,000 registered merchants on their platform.

So, what is it specifically that differentiates these exceptional startups from the rest of the crowd?

You might have observed that some of the words used to describe all of the listed products were – “simple” or “easy.” This can’t just be a coincidence.
Simplicity and ease-of-use are powerful differentiators that can separate any product from their competitors. The simplicity of these products gave them a competitive advantage over other established giants.
Mentioned below are the 7 steps you need to consider in order to establish a successful Financial Technology startup.

STEP 1: Identify your Niche

Fintech is a broad term and has a lot of dimensions to it. The classification of Fintech really depends on various circumstances.
It may refer to a specific set of start-ups and companies, or it may apply to initiatives enabled by technological innovations that contribute to the development of the financial segment.
There are many domains in fintech to consider, here are some of them:

• Fund Movement, or transactions by giving or receiving payments.
  • Currency
  • Payment Solution
  • Remittances
• Fund Placement, or the financing of planned or unplanned financial regulations.
  • Saving
  • Investing
  • Borrowing
  • Alternative Financing
    
• Data Management, to get insights for improving decision making
  • Financial Management Tools
  • Research and Data

For starting a fintech company, one must be crystal clear of the target market and the problem they are looking to address. Besides choosing a domain, your product should cater to a specific audience, e.g., a country, a state, a city or a particular demographic. However, it is always better to launch your startup locally first and expand to the global market later if needed.

STEP 2: Know the Regulations

The banking and finance industries are highly regulated ones’ and for obvious reasons. The regulations are why financial service industries can be tough to break into. Several laws have been put to place to ensure that these sectors are protected from frauds. Also, these regulations can immensely vary depending on the country, state or region you want to operate in.
The arrival of Fintech has ushered in new ways of handling and making money, and thus, have created a grey area for regulations. This has been drawing the attention of lawmakers. 
So, whatever domain one wishes to venture in, it is of vital importance to thoroughly understand the regulatory measures that apply according to the demographics and geography.

STEP 3: Discover your Edge

Every unique product or innovation that has been able to disrupt a sector successfully has always been the one that has done something differently.

There couldn’t be a better example for this scenario than Robinhood. With their unique business strategy and viral marketing campaigns, they were able to successfully disrupt the trading and investments domain. Their distinctive business offering, like charging zero commission proved to be an instant hit amongst millennials with limited pocket.
The fintech industry is getting crowded. Many innovations are already underway. Still, a critical entrepreneurial question to ask is if your product/venture will be able to offer something unique and of high importance.
The danger for startups is to become a “me too.” If there is already an entity that is established and doing well in your niche, then you should divert your focus to something new and innovative.
Thus, it is vital for new-age fintech startups to focus their attention towards developing a product that offers a service or a feature that is exclusive to them. There needs to be some sort of nuance that your solution must provide.
This distinction would serve as the disruption that you might have been looking for.

STEP 4: Hire the Right Talent along with the Right Tech Stack

• Hiring the right talent
A successful enterprise is made from its people. Therefore, hiring crème-de la-crème from amongst the crowd is of vital importance. If your city has a limited talent pool, then attracting good talent becomes quite tricky.  
In such cases, the best decision for a startup would be to hire a software development team offshore (consider India!). This not only cuts significant costs for up-and-coming startups, but also provides a solid team of specialists with specific domain knowledge and relevant experience.
If you are on the lookout for creating a great product and are considering hiring a software development company, then look no further, we have compiled a list of the best financial app development companies.
• Choosing the right tech stack
It is must for every fintech product to have a customized software. No decent startup relies on third-party CMSs or frameworks to handle their transactions. Additionally, no ready-made solution can match the performance capabilities of a custom designed software.

With finance, comes along the risk of data breach. Therefore, data safety is one of the most critical aspects of Fintech App Development.
Every startup needs to ensure that their product is secure and all the sensitive data is encrypted and stored in the cloud.
Recommended Read: How Much does Mobile App Development Cost?

Step 5: Start by creating an MVP (Minimum Viable Product)

I strongly recommend starting with a Minimum Viable Product first.
For beginners, an MVP is a development technique in which a new product or website is developed with just enough features to suffice for the early users of the product. The final product, with all the elements, is only designed and developed once the feedback is received from the initial users.

There are numerous advantages of following this process, primarily:
1. Cheaper: An MVP saves you a considerable amount of investment because you’re not required to develop extra functionalities that may have compromised the product anyway. These cost saving are essential because you don’t know for sure whether the consumers will like the product. Through MVP you can test the waters and then dive into the deeper end of the pool.
2. Effective: Using the MVP approach means you end up with only those features that you require the most, so, there is comparatively less façade, and your product turns out cleaner and simpler.
3. Faster: Another benefit of an MVP is the Speed of Development. You’re not trying to create a perfect product right away; it serves as a platform to implement the idea, study its use, make amends and then proceed further. This makes the entire process a whole lot faster and easier.
4. Reduces risk: A startup with a Minimum Viable Product is more likely to receive funding from the investors, this is because an MVP gives you an opportunity to test the waters without directly building the final product. It allows developers to test the viability of your product amongst the target audience without requiring huge investments.
The lower the risk of the investment not paying off, the more likely investors are to fund your idea.

Step 6: Get Funded

Starting a fintech company is a costly affair. Making an incredible product requires talent, and talent isn’t cheap. As traditional organizations are trying to acquire fintech talent for themselves, startups would inevitably face competition in hiring. If your venture isn’t looking to partner with professionals who can create the entire product range, then stay prepared to shell out a reasonable amount for talent.
Now, if you don’t have deep pockets, it becomes quite difficult to stay afloat in this volatile domain. Thus getting an investor onboard becomes essential to not compromise on the product quality.
What entices Investors?
With the current wave of excitement around fintech. The global venture capital investments have crossed almost $17B. This, however, could also be a bane for early age startups, because the competition for funding is snowballing exponentially. VCs are getting more and more selective, and are seeking out companies with truly game-changing offerings.  
Thus, it is required to make your value proposition more and more enticing.

Step 7: Build Partnerships

It is as essential for up-and-coming fintech startups to develop alliances with relevant institutions, as is getting funded.

Partnering is an excellent approach to build muscle in innovation and transformation. In which you can learn at minimal cost and minimum risk. The primary reason for partnering pertaining to this specific domain is, ‘Credibility.’
It could be hard for users to trust an emerging entity, and that too in such a volatile domain. Thus, when you are associated with a relevant name, it becomes comparatively easier to sail through those hurdles. Financial institutions also bring along a large customer base and comprehensive customer data.
Thus partnering can provide a considerable boost to startups and together they could improve product efficiency and build highly accessible products.

Wrapping Up

Fintech may not be the easiest industry to target. With all the pitfalls in consideration – It takes sweat, time and effort to create a successful fintech company. It demands expertise, creativity, and honestly, a lot of grit to launch a startup in such a frivolous and competitive domain.
There are numerous opinions highlighting the supposed discord between the slow-evolving realm of finance and the highly disrupting world of technology. The pressure on tech companies to deliver huge results rapidly is immense.
Still, if you believe that you will be able to solve financial issues for your users through innovative means, go ahead. You will also need the right people by your side. A team with strong technical skills and impeccable domain expertise will definitely help in building something great.

Just be shrewd with how you do it.

After all,
Fortune favors the bold.

From helping organizations like BankOpen to dozens of startups worldwide, we at EngineerBabu have a track record of building highly successful fintech products.
And several have even gotten funded!
That’s precisely why we understand the ins’ and outs’ of this realm and how to scale a business to tremendous heights.
So, If you are on the lookout for solid domain expertise and a trusted name in the industry, contact us right away.

Recommended Read:

• FinTech in 2019. Trends to watch out for the next big year!
• Digital Transformation in Finance

The post How to Start a FinTech Company – 7 Things You Should Know appeared first on EngineerBabu Blog.