<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2023/01/Medium-2.webp" alt="M2P Fintech" title="" id="il8fa0frb" width="100%" height="157">Businesses record revenues and expenses every day. Ever wondered why it is important to accurately document these transactions? Maintaining accurate financial records is critical to the success of any business. It helps the management make informed accounting decisions and ensures a strong base for growth and operations. Payment reconciliation secures the financial health of a business. In the next few minutes, you will learn what payment reconciliation is all about, why it matters, its benefits, M2P’s Recon360, why it is a game changer, and how it works. Let’s dive in!<h2 class="heading-node" id="c692iadj7">What is Payment Reconciliation? Why does it Matter?</h2>Payment reconciliation is a process that ensures the accuracy of financial records by matching them with bank statements and world-leading interchanges, viz., transaction processing switches and core banking solutions. It is essential for businesses to ensure that every transaction is properly recorded and up-to-date. In today's age of digital payments, businesses are handling multiple payment gateways, interchange reports, settlement vouchers, and bank financial postings across different partners and touchpoints. Thus, it is imperative to keep track of all income and expenses for sound financial health. Businesses must balance their payments on a cycle and time zone-based reconciliation. It is a vital aspect of bookkeeping that ensures the integrity of financial records. This process must be performed regularly for data accuracy and compliance with financial regulations.<h2 class="heading-node" id="kqn6ucejv">Benefits of Payment Reconciliation</h2>Frequent, regular, and automated payment reconciliation offers the following benefits.<ul class="list-node" id="tf6p5m0yi"><li>Identifies and resolves errors in financial records</li><li>Tracks late or unpaid invoices</li><li>Helps maintain accurate financial records</li></ul><h3 class="heading-node" id="imxff9564">Identifies and resolves errors in financial records</h3>Payment reconciliation detects bookkeeping errors and unauthorized payments. By comparing internal and external records, businesses can identify discrepancies early on and quickly resolve issues related to cash flow or security breaches. This prevents fraud and ensures the financial stability and health of a business.<h3 class="heading-node" id="j617aalc8">Tracks late or unpaid invoices</h3>Reconciling payments on a regular basis helps businesses stay on top of late or unpaid invoices. Businesses can identify missed or delayed payments by comparing internal and external records and take action to follow up and collect them. The process not only saves effort and time but also prevents financial stress.<h3 class="heading-node" id="7bbllei6z">Helps maintain accurate financial records&nbsp;</h3>To make data-driven decisions, accurate financial records are a must-have. By reconciling payments regularly, businesses ensure that their financial records are accurate and up-to-date. Reconciliation demonstrates financial stability when there is a need to secure investments or loans. It also supports regulatory compliance and prevents legal repercussions.<h2 class="heading-node" id="nh8rexmnu">How Payment Reconciliation Works</h2>Payment reconciliation involves matching financial records with those from a bank, internet banking, NEFT, RTGS, and AEPS, for thoroughness and accuracy. By using a bank feed, the finance team can easily compare and verify payments made against accounts, thus maintaining accurate financial records. Payment reconciliation comprises two processes, viz., internal and external.<h3 class="heading-node" id="ln5z8t7hn">Internal Reconciliation</h3>Maintaining accurate records of transactions can be done using internal sources such as accounting software, spreadsheets, and other record maintenance systems. Some businesses keep physical copies of receipts, invoices, and billing paperwork as a means of maintaining records. However, this physical method could be prone to human error and may not be as reliable as digital record-keeping. Choosing the right internal reconciliation method is crucial, as it could involve harmonizing physical and digital records.<h3 class="heading-node" id="evguoznb2">External Reconciliation</h3>External reconciliation relies on transaction data coming in from external sources like bank statements that hold details of incoming and outgoing cash flow. As these statements are digitally generated and contain critical data pertaining to payments, they are reliable for accounting and reconciliation needs.<h3 class="heading-node" id="3xqe1i26g">Matching Internal with External</h3>As an ideal practice, businesses must match and cross-check internal and external records to reconcile the transactions. Entries in internal reconciliation should match those from external reconciliation. If there are discrepancies, businesses must get to the root of it to identify and resolve errors or breaches, if any.<h2 class="heading-node" id="emp5l9908">Types of Payment Reconciliation</h2>Depending on the complexity and transaction type, the payment reconciliation process can differ from one business to another. Here are common types of payment reconciliation companies follow.<h3 class="heading-node" id="cf0nbifgi">Rule-based reconciliation</h3>The rule-based reconciliation process is automated and uses predefined criteria or rules to match transactions between different accounts. These rules are programmed into the system, and the software automatically verifies matches and exceptions based on these rules. This method is highly efficient, saves time, and reduces errors compared to manual reconciliation methods. It can be customized to fit specific business needs, as the rules can be modified and updated as needed. One flexible approach to rule-based reconciliation is relaxed matching. Instead of deploying strict rules, it allows for some level of deviation or tolerance in certain parameters such as date and amount. This approach is less accurate, much faster, and needs less manual intervention. It is often used in high-volume and low-value transactions where speed and efficiency are prioritized over absolute accuracy.<h3 class="heading-node" id="pothdb3so">Card reconciliation</h3>Accountants use the card reconciliation method to compare credit or debit card statements to General Ledger (GL) accounts. It must be ensured that the information on a credit card bill and the information represented on the GL are consistent, as every business transaction is recorded within the GL and vice versa.<h3 class="heading-node" id="30lrzycdj">Cash reconciliation</h3>Cash reconciliation is used to verify the usage of cash from the register. The purpose of cash reconciliation is to ensure that the recorded cash balances and the bank statements match up. The cash reconciliation method enables businesses to detect inconsistencies and pinpoint the areas where the ledger and statement do not match up.<h3 class="heading-node" id="smzbl80w6">Digital wallet reconciliation</h3>The process of digital wallet reconciliation is similar to credit card reconciliation. The only difference is the mode of payment. It is recommended to report payments received via digital wallets separately. That way they can be compared with the necessary merchant reports to ensure that records are accurate and the numbers on statements make sense.<h3 class="heading-node" id="6lm630sk5">Real-time automatic payment reconciliation</h3>Automated payment reconciliation can accelerate month-end accounting close, reduce errors, and improve cash flow control. The ability to handle live transaction data is provided by real-time reconciliation for banks and other financial institutions.<h2 class="heading-node" id="kkee8uxpt">Challenges in Payment Reconciliation</h2>Payment reconciliation is imperative for any business. However, it comes with its own set of challenges. These challenges range from simple errors to more complex issues that can cause significant financial losses.<h3 class="heading-node" id="3d5w4wo5a">Manual processes</h3>Manual processes are prone to errors and time-consuming, thereby slowing down the reconciliation process. When transactions are recorded and reconciled manually, there is a greater risk of incorrect dates, transposed numbers, and other inaccuracies. Manual processes also make it difficult to keep up with the volume of transactions and identify discrepancies.<h3 class="heading-node" id="wr6ruhh5h">Data discrepancies</h3>With multiple payment partners and different types of financial transactions, it can be difficult to ensure that all the data received is consistent and in a similar format. When data from disparate sources are not consistent, it can be difficult to match transactions between different accounts. Inconsistent data that lacks standardization can lead to processing delays, inaccurate reporting, and erroneous reconciling. It can also cause difficulty in achieving compliance and identifying frauds and breaches.<h3 class="heading-node" id="gfcp9fiht">Lack of visibility and control</h3>In today's fast-paced business environment, real-time data visibility and transparency in financial reporting are must-haves. However, several businesses still depend on manual spreadsheet-based processes for reconciliation, which results in inaccuracies, lack of control, and visibility. This negatively impacts credibility, strategic decisions, and long-term success.To resolve the challenges explained above, several businesses are turning to automation and the use of best-in-class account or payment reconciliation software.<h2 class="heading-node" id="k69bej3lp">How can businesses choose the best Payment Reconciliation solution?</h2>Before choosing a reconciling solution, businesses must answer 3 crucial questions.<ol class="list-node" id="l9gin5cmh"><li>Is it platform agnostic?</li><li>Does it track and monitor real-time transactions?</li><li>Does it offer best-in-class data security measures?</li></ol>M2P’s Recon360 offers all this and more!<h2 class="heading-node" id="6f41len3j">RECON360 – Redefining Payment Reconciliation</h2>Recon360 is a complete solution for reconciling payments using automated data matching and instant monitoring of multiple transactions. The solution maintains financial records accurately and can be deployed seamlessly.<h3 class="heading-node" id="m3t0mpf4o">Key Features</h3><ul class="list-node" id="08uahal9i"><li>Automated, flexible, with extended data matching</li><li>Cloud &amp; dataset agnostic</li><li>Seamless deployment</li><li>Data qualification &amp; insight</li><li>Multi behavior system</li><li>Automatic exception management</li><li>Dynamic reporting engine</li><li>Instant regulatory compliance</li></ul>We also offer best-in-class features for business end users, that includes a dynamic reporting engine, dispute resolution, and exception handling to cut operating costs and achieve business goals. Want to make payment reconciliation work for you? Recon360 is the answer! Write to us at <a class="link" href="mailto:business@m2pfintech.com">business@m2pfintech.com</a> to get started!<a class="link" href="https://m2pfintech.com/newsletter/" target="_blank" rel="noopener">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox.Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/" target="_blank" rel="noopener">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech" target="_blank" rel="noopener">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

Recon360 - Redefining Payment Reconciliation

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2023/01/Fintech-trends-banner-2.webp" alt="M2P Fintech" title="" width="100%" height="358">2022 was a rollercoaster for the fintech industry. Macroeconomic upheavals, intensifying competition, and regulatory headwinds contributed to the great fintech reset. However, with advances in technology innovation, increasing digital adoption, and improving public infrastructure, the industry overcame hurdles and emerged stronger. Swimming against the tide with turnaround strategies and course corrections, fintech businesses collaborated, consolidated, and diversified to enable sustainable and accessible financial solutions without compromising on people, compliance, and growth. Now, the future of fintech is bright. Blurring boundaries and transforming the way people transact, fintech has been a beacon of hope to many. People across all walks of life and in remote corners without access to fancy smartphones and devices have been able to access digital banking and financial services just by using biometrics and other fintech-led payments. Fintech companies have played a phenomenal role in facilitating this financial inclusion without greater emphasis on security, speed, or convenience. Valued at around $132 billion in 2022,&nbsp;the fintech industry is estimated to grow at 25% CAGR to reach <a class="link" href="https://www.marketdataforecast.com/market-reports/fintech-market">$324 billion</a> in 2027. The ability to improve accessibility, drive inclusion, enhance customer experience, and reduce costs are key drivers behind the growth projection.&nbsp;&nbsp;<a class="link" href="https://m2pfintech.com/blog/future-of-core-banking-systems/">Core Banking</a>, <a class="link" href="https://m2pfintech.com/blog/rbis-new-digital-lending-guidelines-will-it-be-a-game-changer/">Digital Lending</a>, <a class="link" href="https://m2pfintech.com/blog/factors-and-psychology-behind-the-great-bnpl-allure/">Buy Now Pay Later</a> (BNPL), <a class="link" href="https://m2pfintech.com/blog/upi-the-driver-of-economic-growth-and-inclusion/">Unified Payments Interface (UPI),</a> Credit Cards, and other <a class="link" href="https://m2pfintech.com/blog/ready-to-sneak-peek-into-global-cashless-societies/">Cashless</a> Payment modes dominated markets, while Blockchain emerged resilient with RBI adopting the technology for CBDC. Collaborations, consolidations, and platformizations last year set a great tone for 2023.<h2 class="heading-node" id="qp5iitvs9" style="text-align: justify">Trends we can expect in 2023</h2>Consistent customer-centric innovations, partnerships between banks and fintechs, regulatory interventions, and better accessibility - all point towards a promising future for fintech. Here are a few trends we can expect to see in 2023.<ul class="list-node" id="jxu8ecnrq"><li><a class="link" href="#embeddedfinance">Embedded Finance</a></li><li><a class="link" href="#sf">Sustainable Fintech</a></li><li><a class="link" href="#af">Alternative Financing</a></li><li><a class="link" href="#sa">Super Apps</a></li><li><a class="link" href="#ai">Artificial Intelligence</a></li><li><a class="link" href="#cp">Contactless Payments</a></li><li><a class="link" href="#bc">Blockchain</a></li><li><a class="link" href="#mv">Metaverse</a></li></ul><h3 class="heading-node" id="embeddedfinance" style="text-align: justify">1. Embedded Finance &nbsp;</h3><a class="link" href="https://m2pfintech.com/blog/embedded-finance-101-the-bridge-connecting-tech-and-financial-services/">Embedded finance</a> will see exponential growth in 2023 with emerging models that will help businesses thrive. Valued at over <a class="link" href="https://www.simon-torrance.com/blog/EmbeddedFinance1#:~:text=Embedded%20Finance%20offers%20one%20of%20the%20most%20exciting,value%20of%20the%20world%E2%80%99s%20top%20thirty%20banks%20today.">7 trillion-dollar</a>, embedded finance enables smooth integration of financial services into non-financial platforms or applications. Subsets of embedded finance viz., embedded credit, embedded payments, embedded insurance, and embedded banking will majorly benefit SMEs, MSMEs, and other app-based businesses by helping them scale product offerings and customer lifetime value while monetizing their customer base. As the embedded finance space grows, businesses will have the leeway to lower expenses, increase revenue streams, and innovate to deliver personalized, customer-centric products and services, while fintechs handle the heavy lifting on technology, compliance, and delivery.<h3 class="heading-node" id="sf" style="text-align: justify">2. Sustainable Fintech</h3>As the world heads towards net-zero and decarbonization by 2030, fintechs need to take sustainability seriously. In 2023, financial health, <a class="link" href="https://m2pfintech.com/blog/how-m2p-maps-sustainability-with-finance/">sustainable practices,</a> and environmental well-being will be deeply interconnected. A recent Eurogroup survey shows us that 67% of consumers demand sustainability engagement from their bank. &nbsp;And according to a study by Cornerstone Advisors, 70% of Gen-Z and Millennial consumers wanted to track their carbon footprint. Customers are eager to understand how their spending habits affect climate change and if their financial service provider invests in businesses that harm the environment. Being transparent with sustainability practices, incentivizing sustainable engagement, and introducing metrics to track climate impact, could be starting steps to transform businesses into <a class="link" href="https://m2pfintech.com/blog/climate-fintech-fintechs-leading-the-green-tech/">green powerhouses</a>.<h3 class="heading-node" id="af" style="text-align: justify">3. Alternative Financing &nbsp;</h3>There was a time when traditional financial players dominated the lending industry. But those times are changing now. Secure alternative financing options from non-banking fintech companies are emerging rapidly. In fact, the alternative financing industry is valued at <a class="link" href="https://www.grandviewresearch.com/industry-analysis/alternative-financing-market-report">$6.62 billion</a> and is expected to grow at 20% in 2023. The lending industry is democratized with co-lending business models to serve versatile customers, SMEs, MSMEs, and businesses across size and scale.&nbsp;With more core lending players entering the game, evolving regulatory frameworks, and a vast consumer base in need and with access to equitable financial instruments, the alternative financing market is ripe for the taking.<h3 class="heading-node" id="sa" style="text-align: justify">4. Super Apps&nbsp;</h3>2023 will the year for <a class="link" href="https://m2pfintech.com/blog/super-apps-in-consumer-banking-what-role-does-open-banking-play/">super apps</a>. It will be the swiss army knife for businesses as it consolidates multiple applications and eliminates the need for customers and employees to toggle between disparate applications. Just one super app will be able to provide enhanced mobile-first experiences across an aggregated range of services for the growing digital-native generation. Gartner predicts that by 2027, more than 50% of the global population will be active users of super apps. So, it's high time financial businesses leverage the first-mover advantage and develop super apps that fuses the beneficial attributes of an app, platform and digital ecosystem.<h3 class="heading-node" id="ai" style="text-align: justify">5. Artificial Intelligence (AI)</h3>High on data and customer experience, fintech industry will rely heavily on AI for analytics, decision-making, and customer support. Facilitating seamless onboarding, compliance, product customizations, and payments, AI will be the game changer that reduces overhead cost and operational risk along with improving security, and sorting legacy issues. Valued at <a class="link" href="https://www.grandviewresearch.com/industry-analysis/artificial-intelligence-in-fintech-market-report">$9.4 bn</a>, <a class="link" href="https://m2pfintech.com/blog/how-is-ai-changing-the-financial-industry-top-6-use-cases-in-fintech-and-banking/">AI in fintech</a> holds a 16.5% growth potential. And Machine Learning (ML)-based models have been adopted by companies in the financial space to ace real-time target marketing and risk management. But here’s the billion-dollar question. Will AI ever replace humans in fintech? We don’t think so. &nbsp;Complement yes. But not replace.<h3 class="heading-node" id="cp" style="text-align: justify">6. Contactless Payments</h3>The pandemic made contactless payments and shopping the new norm. And there’s no turning back from there.&nbsp; Offering immense speed, security, hygiene, and convenience, technologies like NFC, RFID, and QR codes have simplified checkouts and have taken the payments industry by storm. Valued at $2.2 bn, the contactless payments market is expected to grow at 20% CAGR to reach <a class="link" href="https://www.businesswire.com/news/home/20220106005590/en/The-Worldwide-Contactless-Payment-Industry-is-Expected-to-Reach-12.6-Billion-by-2030---ResearchAndMarkets.com">$12 bn</a> by 2030. As research firms predict exponential growth in wearables, smart devices and contactless cards, fintechs must keep up with the demand for contactless payments.<h3 class="heading-node" id="bc" style="text-align: justify">7. Blockchain</h3>The future of <a class="link" href="https://m2pfintech.com/blog/blockchain-and-fintech-use-cases-and-applications/">blockchain</a> is solid despite setbacks like the crypto crash. Its inherent strength in security, transparency, speed, cost efficiency, and efficient storage will play out as Web3 and <a class="link" href="https://m2pfintech.com/blog/central-bank-digital-currency-cbdc-101-a-primer/">CBDC</a> adoption increases. Blockchain-based data sharing, smart contracts, payment tracking, peer-to-peer lending, encryptions, decentralized architectures and ecosystems, and cybersecurity will be key emerging trends in 2023. The fintech blockchain market size is expected to hit <a class="link" href="https://www.marketsandmarkets.com/Market-Reports/fintech-blockchain-market-38566589.html#:~:text=The%20FinTech%20blockchain%20market%20is%20expected%20to%20grow,Rate%20%28CAGR%29%20of%2075.9%25%20during%20the%20forecast%20period.">$6.2 mn</a> by the end of 2023. So, it's high time fintechs give blockchain some mndspace.<h3 class="heading-node" id="mv" style="text-align: justify">8. Metaverse</h3>Sparking some of the hottest tech discussions, metaverse shook the world with its decentralized, community-owned, virtual utopia. &nbsp;Though in the early developmental stages, metaverse is considered to be the next big evolution in the world of fintech, with the potential to transform how people work, shop, live, and transact. According to a recent Goldman Sachs research, metaverse could give rise to a <a class="link" href="https://newseu.cgtn.com/news/2022-06-13/Metaverse-valued-at-12-trillion-a-year-to-the-global-economy-1aKNYwIjyp2/index.html">$12 trillion</a> virtual economy with intense activity around cross-border payments, financial assets creation, safekeeping and trading. Leveraging Virtual Reality (VR) and Augmented Reality (AR), this virtual phenomenon enables fun and personalized banking and transactions. But the flipside of metaverse is the security concerns that may arise, which if addressed will hold massive promises for the fintech industry. With this we conclude our fintech trends for 2023. While it is challenging to predict exactly how fintech will unfold, we can say with reasonable certainty that 2023 will be an interesting one for the industry, India, and the world. What do you think of these trends? Let us know in the comments! Have a great 2023! Stay connected for the latest fintech news, views, updates, and more.<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox. Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

8 Fintech Trends to Look Out for in 2023

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/12/Blog-1.webp" alt="M2P Fintech" title="" width="100%" height="253">2022 is drawing to a close. And this year's last star of the month series is here!So, buckle up folks!Pave the way for Aditya Narasimhan, our VP of Product and Client Delivery.A table tennis coach, superjock, and fintech product delivery champion, Aditya is an inspiration to many. Master at the art of work-life synergy, this sportive M2Peer is a staunch believer of the fact that life never stops teaching, and he must never stop learning.Curious to know what makes Aditya shine? We were too.We got into a candid conversation with him to uncover his secret to success. But what we heard was even more amazing.Spoiler alert: Fun revelations ahead!Here you go!<h2 class="heading-node" id="t9kuaqxvj" style="text-align: justify">How do you usually start your workday?</h2>Learning is my passion. Each day I look forward to greater learning. I start my workday with simple prepping that involves breaking targets into smaller, digestible bytes and jotting down pending tasks in my to-do list. Then I get into action by completing a couple of tasks and sip heavenly coffee with a sense of accomplishment.Later I sync up with my team, understand and discuss their queries, ensuring that there is constant interaction irrespective of whether its work, fun, or travel.<h2 class="heading-node" id="cc258asf0" style="text-align: justify">What are your main responsibilities as VP - Product and Client Delivery?</h2>I recently moved to the role of leading development and delivery of Fleet Payments product. My responsibility here is to build the product by collaborating with various stakeholders like banks, fintechs, aggregators, and regulators.Hailing from a background in banking and commercial vehicle finance, it is exciting for me to blend my experience to create innovative payments methods around FASTag, fuel, and driver expenses. I enjoy helping commercial vehicle businesses by providing a bankable financial layer to endorse products like fleet payments management for fleet owners, fuel and toll credit systems for lenders, and neobanking for drivers.<h2 class="heading-node" id="a8gouebna" style="text-align: justify">How have you grown through the years as an M2Peer?</h2>It was a big gamble for me to join M2P. And I’m loving every second spent in the office. It's been a little more than 40 months in this organization. The experience has been great.I am thankful for being one of the first set of hires in Business Development (BD) and Product roles. Probably the only handful of people to have experienced the BD role, implementation, account management, bank interaction, and product development. I feel both proud and humbled to have contributed to all victories and new learnings.<h2 class="heading-node" id="dkrxqjhcj" style="text-align: justify">Is there a quote/saying that motivates you?</h2>Being a sports person, there are many quotes that motivate me. The most addictive one is this.‘The more you sweat in practice, the lesser you bleed in the battle.’And this is something I experience and correlate with M2P. They constantly re-engineer to improve the client’s experience. And so, we manage and thrive irrespective of the disruption.My next favorite quote is this from Benjamin Franklin.&nbsp;‘Being ignorant is not so much a shame, as being unwilling to learn.’And finally, another one of my favorite sayings is, ‘Everything happens for a reason.’<h2 class="heading-node" id="znst90n7h" style="text-align: justify">What's that one thing your colleagues don't know about you?</h2>I am usually an open book. However, there is some behind-the-scene action I’d like to share now.I enjoy acting and have played a few roles in Tamil cinema and soaps during my college days.<h2 class="heading-node" id="qwueyr54m" style="text-align: justify">Have you played a practical joke in college/school?</h2>Oh yes. I was a total prankster during college. Here's one of the pranks I recall.Now this was the time when pizzas were delivered to a location over just a call. My group of friends and I sneaked into the staff room when no one was around and ordered 3 large pizzas in the name of the principal from the landline there. It became a huge embarrassment to the school, and the principal had to pay for it. However, the information was leaked, and we were caught a week later. 😊<h2 class="heading-node" id="s7z5uoq8h" style="text-align: justify">What inspires you the most about M2P?</h2>The team of founders, across M2P and the recently acquired brands. Their quality of giving complete freedom with responsibility inspires me the most. Other inspirational traits M2Peers exhibit are great respect, constant learning, and ownership over their jobs.<h2 class="heading-node" id="zdoyk0bf0" style="text-align: justify">What's your idea of a perfect day?</h2>For a day to be perfect, it must be filled with as many insights as possible. And that makes me look forward to the next day.<h2 class="heading-node" id="hv0buv63g" style="text-align: justify">What was your career path before joining M2P, and how has it changed?</h2>Right from my school and college days, I was a passionate table tennis player and competed at the national level. So, during my master's degree, I was conflicted between going pro in table tennis or taking up a campus offer from Federal Bank.It was like a toss of a coin, and I’ve never regretted my decision.&nbsp;I started my career with Federal Bank and moved on with Cholamandalam Finance in the commercial vehicle lending space. That’s when I got introduced to M2P.&nbsp; My journey as an M2Peer has been both blissful and exciting so far!<h2 class="heading-node" id="blcy2d9vd" style="text-align: justify">What are your hobbies/interests?</h2>I’ve still kept my passion for Table Tennis alive. I coach these days and participate in events representing M2P, be it a corporate, state, or national event.I also train the Tamil Nadu Senior State Table Tennis Team every year. For this reason, I am grateful to M2P for allowing me to pursue my passion.<h2 class="heading-node" id="mjhb0wdve" style="text-align: justify">Anything else you want to share about M2P?</h2>M2P is an incredible place to learn and grow. You need to be curious and updated on the regulations, bank strategies, and fintech ideas to make necessary changes to your products and platforms. M2P has come a long way in identifying problems and developing innovative approaches to address them. This marks a significant milestone in its journey.I am grateful for the faith and exposure that M2P has offered me. I look forward for the great journey ahead.Kudos to all M2Peers!Stick around, until we get back with an awesome story of another M2P star.<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights directly to your inbox.Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

Meet Aditya Narasimhan, our Product Delivery Champ

Transform Digital Onboarding with VKYC Solutions

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/11/Star-of-the-month_Star-of-the-Month-Rajesh-Word-Press.webp" alt="M2P Fintech" title="" width="100%" height="447">The Star of the Month series is back! This November, we shine the spotlight on Srikrishna Thota, our business development champion. A shuttler and a movie buff, Srikrishna is a go-getter with a penchant for identifying strategic opportunities, nurturing relationships, and closing deals. His love for goal setting, learning, and exploring has enabled him to grow in leaps and bounds. As we spoke to him about what makes him the star he is, he took us along his amazing five-and-a-half-year journey from being a marketing executive to becoming a business development ninja at M2P. Curious to know what makes him a star M2Peer? Then, just swipe down. You may even find his secret to success.<h2 class="heading-node" id="466swiyhx" style="text-align: justify">How do you usually start your workday?</h2>I believe health is wealth. So, I start the day with a brisk 45-minute jog, which keeps me energized and productive. Then I catch up on current events and kickstart my work mode with a cool to-do list where I factor in client calls and meetings for the day. After that, I connect with my team to ensure we clear roadblocks and thunder into business expansions.<h2 class="heading-node" id="igiq7f834" style="text-align: justify">What are your main responsibilities at work?</h2> My major responsibilities include setting business expansion goals, formulating and steering strategies for revenue growth, overseeing lead generation and sales, negotiating client pricing, and implementing new market initiatives. Then I train and motivate my team to implement high-growth strategies and help them remove blockers if any.<h2 class="heading-node" id="tep698r34" style="text-align: justify">How have you grown through the years as an M2Peer?</h2>My journey as an M2Peer began five years ago with Syntizen. Learning curves were immense and still prove to be challenging, considering the market dynamics. I had a brief stint as a marketing executive in a media company before I started out as a BD manager at Syntizen. The role opened great learning opportunities in dealing with challenging clients, boosting sales, and making sure a solid foundation was laid for the growth of the business. Being in the startup environment, I was given the capacity to work in several roles and responsibilities. My hard work, consistent learning, and attitude to take responsibility provided the impetus for me to move forward very quickly. Learning new things every day is something I liked doing as a student and at work. I'm grateful to everyone for their understanding, constant support, and willingness to teach me new things. Learning is the biggest secret that made me grow over the years.<h2 class="heading-node" id="ufeqbbclb" style="text-align: justify">Is there a quote/saying that motivates you?</h2>I am passionate about learning. So, these quotes motivate me. “Develop a passion for learning. If you do, you will never cease to grow.” —&nbsp;Anthony J. D’Angelo Nonetheless, it’s the people around me that inspire me the most.<h2 class="heading-node" id="yuahvk4wp" style="text-align: justify">What’s that one thing your colleagues don’t know about you?</h2> I’ve been an open book most of my life. If there is a secret, then it is meant to be kept so.<h2 class="heading-node" id="qpxd42ywn" style="text-align: justify">Have you ever played a practical joke in your school/college days?</h2> Not actually.<h2 class="heading-node" id="9fz75gezh" style="text-align: justify">What inspires you the most about your workplace?</h2>My colleagues inspire me every day, especially the founders. I'm lucky enough to get the opportunity to work with them from day one. I’ve been with the organization through thick and thin, and the experiences have moved me to excel both in my personal and professional life. Thanks to my colleagues and founders for all the inspiration and support. &nbsp;Special thanks to Mr. Siddharth, who is such a lovely person to work with. He is very supportive and never stops motivating me. M2P is a great place for all new entrants to learn and develop their careers.<h2 class="heading-node" id="ya6vt0650" style="text-align: justify">What’s your idea of a perfect day?</h2> My day will be perfect when I close the best deals and contribute towards revenue and profits.<h2 class="heading-node" id="vue9fxu95" style="text-align: justify">What are your hobbies/ interests?</h2> I enjoy playing badminton and catching up on movies. Whenever I get free time, I reach out to spend quality time with family and friends.<h2 class="heading-node" id="k9pmhxvj8" style="text-align: justify">Anything else you want to share with your peers?</h2>I’m glad that Syntizen has joined the M2P family. The organization has grown tremendously over the years and still has a lot to achieve! Here are my recommendations to fellow M2Peers who are looking to achieve goals in life.<ul class="list-node" id="mg6g46abz"><li>Internal motivation is the key</li><li>Don’t depend on anyone</li><li>Try to handle any situation on your own</li><li>Learn from your mistakes and improve</li></ul>Cheers to the M2P family! <a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights directly to your inbox.Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

Meet Srikrishna Thota, our Industrious M2Peer

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/11/BNPL-Issuer-Th.webp" alt="M2P Fintech" title="" width="100%" height="296">The global ecommerce payments industry is constantly evolving to adapt to the ever-changing needs of the customer. With the pandemic fueling digital commerce, flexible payment options have become an element of convenience in online shopping. What started with basic debit/credit card payments now includes internet banking, e-wallets, Buy Now Pay Later (BNPL), EMI, and more. Among these, <a class="link" href="https://m2pfintech.com/blog/factors-and-psychology-behind-the-great-bnpl-allure/" target="_blank" rel="noopener">BNPL</a> is one of the most popular payment choices as it enhances the customers’ purchasing power.<h2 class="heading-node" id="vhq15h9fq">BNPL Footprint in India</h2>India is a budget-driven country, and BNPL is where financial inclusion meets budgeting. The country’s association with <a class="link" href="https://m2pfintech.com/blog/bnpl-the-rising-fintech-star/" target="_blank" rel="noopener">BNPL</a> has been on an upward trajectory since 2021, owing to the rising adoption of ecommerce platforms among the country’s large youth demographic. Currently, India has around 20–25 million BNPL users, and it is likely to reach 100 million by 2026, given the magnitude of its demand and inclusivity.&nbsp;<h2 class="heading-node" id="8dowitkj2">Challenges for BNPL Issuers</h2>In recent years, competition in the BNPL space has intensified, with incumbents going beyond their horizons to develop new, sustainable business models and traditional payments companies deploying their own models to stay relevant in the market. This not only unlocked the purchasing power and helped customers manage their finances by accessing affordable and low-cost credit, but also expanded the market for BNPL products. On the other hand, the vying put significant pressure on the <a class="link" href="https://m2pfintech.com/blog/six-profitable-bnpl-business-models-to-unlock-infinite-value/" target="_blank" rel="noopener">BNPL</a> companies to scale quickly. The role of BNPL lenders does not stop with just issuing credit lines to consumers. They ought to partner with fitting merchants and large aggregators to offer appropriate payment plans, empowering smooth transactions and superior customer experience. Let’s look at the challenges that every <a class="link" href="https://m2pfintech.com/blog/how-can-lenders-overcome-challenges-in-deploying-bnpl-solutions/" target="_blank" rel="noopener">BNPL</a> issuer must manage/address immediately.<ul class="list-node" id="8qvy9xw6r"><li>Onboarding of multiple merchants and aggregators</li><li>Customizing solutions for each merchant based on ticket size and lending rules</li><li>Managing end-to-end transactions such as billing, settlements, and refunds</li><li>Understanding the payment flow to increase the success rate</li><li>Handling schemes, promotions, and subventions</li><li>Analyzing and managing risks</li><li>Integrating multiple stakeholders to enable a number of checkout options</li></ul>Partnering and working with a fintech that has a deep understanding of the market can help BNPL issuers set up the right mix of merchants and aggregators, which is the key to make BNPL work at checkout.Keeping this in mind, we at <a class="link" href="https://m2pfintech.com/buy-now-pay-later/" target="_blank" rel="noopener">M2P</a> built a robust Merchant Acquiring &amp; Payment Processing Platform. The platform is an exemplification of features that help improve checkout financing, boost merchant experience, promote sustainable growth, and amplify the acceptance rate of BNPL at checkout.<h2 class="heading-node" id="ub1c3819a">Merchant Acquiring &amp; Payments Platform</h2>Our Merchant Acquiring &amp; Payments platform comes integrated with our BNPL stack that allows issuers to onboard merchants (online or offline) and payment aggregators instantly and integrate on checkout flow to go live in minutes. The platform is designed to scale with the best payment flows for higher customer acceptance and to support end-to-end checkout experience for all types of BNPL products like checkout EMIs and one-click payments. In addition, it offers complete transparency and control to the issuers in the merchant acquiring and payment processes.&nbsp;Thus, creating a win-win situation for all.&nbsp; Here is a quick overview of what our platform can do.<ol class="list-node" id="hj8oxq8fg"><li>Frictionless and Instant Onboarding: The platform enables automated DIY onboarding with built-in validations and operations that comply with the maker-checker workflows to establish frictionless, real-time onboarding. It facilitates instant DIY and assists onboarding for all types of merchants (online or offline) and Payment Aggregators. This allows merchants across geographies to do business on a single platform.</li><li>&nbsp;Supports all credit products: The platform supports all credit products on merchant checkout, like low-ticket convenience spends and EMI. This creates a robust interoperable shopping environment that renders flexible and smooth checkout experience, thereby augmenting customer loyalty, resulting in lesser cart abandonment, improved average order value (AOV) and transaction size, and increased sales. Such interoperability will significantly increase profits by creating new revenue channels for all parties involved. &nbsp;</li><li>&nbsp;Easy developer integration: Developer friendly <a class="link" href="https://m2pfintech.com/blog/api-the-power-that-drives-new-age-banking-ecosystems/" target="_blank" rel="noopener">APIs</a>, SDKs and plugins with a dedicated test environment to ensure merchants go live in minutes with minimal development effort. &nbsp;</li><li>&nbsp;Feature packed merchant dashboard: The platform empowers merchants to manage transactions, refunds, settlements, reconciliations, disputes, and much more from one single dashboard. This substantially improves operational efficiency and supports easy reconciliation.&nbsp;</li><li>&nbsp;Secure &amp; Compliant: The platform is <a class="link" href="https://m2pfintech.com/blog/pci-dss-a-quick-guide-to-its-levels/" target="_blank" rel="noopener">PCI DSS</a> Level 1 Compliant and regular internal security audits are carried out to ensure that the systems are compliant, and data is safe. It has an in-built fraud and risk management module to protect your business and customers from fraudulent activities.&nbsp;</li><li>&nbsp;Reduces cost and time: Traditionally, reports are manually generated, involving extensive manpower, time, effort, and money. Our platform’s automated billing, settlement reports, and reconciliation reports will reduce the operational cost and time consumed in monitoring and generating the reports. In addition, it also radically reduces the cost and a resource drain entailed in integrating payment methods into a merchant’s checkout. &nbsp;</li></ol><h2 class="heading-node" id="lat8t529s">What differentiates M2P's BNPL solution from others?</h2>Our BNPL stack comes with an in-built Merchant Acquiring &amp; Payment Processing system. It is a meld of seamless onboarding and merchant management system, integrated payments, refund processing, and risk governance. It facilitates multiple merchant or payment aggregator onboarding, merchant KYC, approval, and bank account addition workflow to assist in settlement and reconciliation. In addition, it enables merchants to run campaigns, cashback and rewards integrations for each transaction, dispute management and refunds management, and merchant plug-ins. Our transaction risk management runs a dynamic MCC/MID check for each transaction, limit management per merchant, and velocity checks for transactions. It also provides a comprehensive fund settlement and report module to generate T+1 settlement with merchants and detailed MIS reports and analytics based on the user behavior. In retrospect, with only 4% of the total population opting the pay later option, India's BNPL journey has a long way to go. Nevertheless, given the flexibility and inclusivity, the sector is steadily gaining ground in the country's financial ecosystem. It gives merchants of all sizes a chance to expand their customer bases to increase their average order values and sales. Want to be a market leader in BNPL? Write to us at <a class="link" href="mailto:business@m2pfintech.com">business@m2pfintech.com</a><a class="link" href="https://m2pfintech.com/newsletter/" target="_blank" rel="noopener">Subscribe</a> to our newsletter and get the latest fintech news, views, and insights directly to your inbox. &nbsp; Follow us on <a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a> and <a class="link" href="https://twitter.com/m2pfintech">Twitter</a> for insightful fintech tales curated for curious minds like you.

Simplifying Acquisitions and Payments for BNPL Issuers

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/11/Fleet-Drive-Blog-2-01.webp" alt="M2P Fintech" title="" width="100%" height="447">Logistics is the backbone of any growing economy. In India, the sector is valued at $250 billion and is expected to grow at 8% YoY to reach $330 billion by 2025. The road-based fleet industry, holding over <a class="link" href="https://rmi.org/insight/fast-tracking-freight-in-india-a-roadmap-for-clean-and-cost-effective-goods-transport/" target="_blank" rel="noopener">70% overall share</a> in freight transportation, is a synergy of about 15 million operational commercial vehicles that employ 20 million personnel. The upswing in technological innovations and government policies drive the fleet industry on the road toward digitalization.<h2 class="heading-node" id="m5ns2cs4k" style="text-align: justify">Growth and modernization of fleet industry</h2>Fleet businesses experienced significant revenue growth in the past few years for two primary reasons. One, the evolution of fleet management systems that enabled digital solutions like telematics-based route optimizations and the emergence of fleet aggregators. Fleet management systems have radically disrupted the rather traditional fleet industry by integrating modern technologies and services into the value chain. According to recent reports, fleet management systems as an industry is estimated to grow 14% yearly to 6.8 million units in 2025. As the current market penetration is hanging around 10% for the entire commercial vehicle industry, the growth potential is tremendous. The emergence of fleet aggregators has enabled seamless order and demand management and has generated great opportunities to stabilize and monitor productivity leading to sustainable profitability and growth. And two, the government of India had initiated several digital policies such as FASTag-based toll collection, digital e-way bills, and compulsory installation of GPS devices in commercial vehicles to tap into the day-to-day fleet operations data.<h2 class="heading-node" id="19bv0yegi" style="text-align: justify">Key operational challenges</h2>In spite of the brisk progression in digital adoption, the fleet industry grapples with operational inefficiencies and ineffectual resource utilization. Not all fleet operators have access to technology that helps them control costs and enhance operational excellence, productivity, and profitability. In this article, let's review the top challenges of fleet businesses and how we can help resolve the pain points. <h3 class="heading-node" id="1tw7390n0" style="text-align: justify">Truck owner&nbsp;fragmentation </h3>80% of the trucks running in the country are owned by small vendors with a maximum fleet of five or fewer trucks. These small fleet owners are outside the purview of digital tools and analytics. They lack a&nbsp;centralized platform for evaluating trip data to optimize cost and make better decisions to promote overall development and profitability. <h3 class="heading-node" id="gc9jqny5b" style="text-align: justify">Multiple stakeholders </h3>The mandates of the Indian government and ongoing digitization efforts have detangled some of the essential knots for the fleet business. However, onboarding and managing the fleet system is still a hassle. For example, FASTag wallet, fuel payments, <a class="link" href="https://m2pfintech.com/kyc-suite/" target="_blank" rel="noopener">KYC</a> of drivers, and vehicle registration on the Telematics Platform are arduous tasks involving multiple stakeholders such as Fleet Aggregators, Transporters, Oil Marketing Companies (OMCs), Banks, and National Electronic Toll Collection (NETC).Further, though the fleet payments ecosystem renders numerous digital payment solutions, they are essentially decentralized. This makes it impossible for the fleet operators to view or manage such payments/expenses under one roof. For instance, payment cards for fuel, toll booth payments via FASTag, and other miscellaneous expenses paid (via diverse modes) ought to be handled individually. <h3 class="heading-node" id="tr3d1qtao" style="text-align: justify">Capital allocation </h3>India has the largest road network covering about 98,000 km of National Highways, which is just 2% of the overall road network in the country. But 40% of the total traffic is concentrated on these highways. Nevertheless, the Indian commercial vehicle covers 300 km a day, which is relatively low compared to the global average of 500-800 km a day. A sizeable portion of this journey (~40%) is dead miles, implying trucks travel without load yet have some capital allocated for the return trip. This is done in anticipation of new orders during the return journey; otherwise, they risk missing out on orders due to a longer lead time in getting the capital allocated and the ideal vehicle at the pickup location. Due to the dynamic nature of freight orders, the capital allocated to a vehicle is not in line with the capital required for optimal utility. <h3 class="heading-node" id="bsbf6muja" style="text-align: justify">Limited access to credit&nbsp; </h3>There is a momentous improvement in the fleet industry due to the private sector participation in fleet aggregation and telematics services and government initiatives. However, lenders don't have complete access to payments and cashflows handled by the fleet owners. This results in inefficient credit decisions. For example, lenders have limited or no visibility to real-time reports in terms of daily distance covered, transactions on fuel &amp; FASTag, etc., per vehicle. This leaves lenders with inadequate information on vehicle capital utilization,&nbsp;which in turn results in inefficient credit decisions and low participation in providing working capital for fleet operations.<h2 class="heading-node" id="gjsxze3ag" style="text-align: justify">How can our centralized fleet platform help?</h2><a class="link" href="https://m2pfintech.com/fleet-drive/" target="_blank" rel="noopener">M2P'</a>s Fleet Drive serves as a centralized fleet payments management platform for the end-to-end business needs of the fleet operators, the telematics sector, and the lenders. Our platform serves as a one-stop solution for all fleet challenges by enabling harmonized payment management across trips and cohesive access to the capital for fleet operations. Our cutting-edge <a class="link" href="https://m2pfintech.com/blog/api-the-power-that-drives-new-age-banking-ecosystems/" target="_blank" rel="noopener">API</a>-driven technology stack ensures seamless integration of the stakeholders such as NETC, OMCs, lenders, telematics, and fleet aggregators, and provides the following benefit to the fleet industry. <h3 class="heading-node" id="p4pd974mg" style="text-align: justify">Seamless onboarding and integration&nbsp; </h3>M2P's API-driven Fleet Drive Platform fosters frictionless onboarding of vehicles and drivers. It also enables hassle-free, digital, and secure integration with stakeholders such as OMCs, NETC, fuel retailers, banks providing <a class="link" href="https://m2pfintech.com/blog/how-to-implement-the-best-prepaid-payment-instrument-ppi-for-your-business/" target="_blank" rel="noopener">PPI</a> wallets, and Enterprise Resource Planning (ERP) of fleet aggregators for trip payments management.&nbsp; <h3 class="heading-node" id="e22ukte1x" style="text-align: justify">Single wallet to manage all payments </h3>The platform allows fleet owners to manage payments across FASTag, fuel, and ATM expenses throughout the trip. It also empowers the fleet owners to switch unused funds across the driver FASTag and fuel account back to the master wallet, enabling real-time capital allocation.&nbsp; <h3 class="heading-node" id="9uinlnwb5" style="text-align: justify">Real-time control and visibility&nbsp; </h3>Our Fleet Drive Platform has a centralized dashboard that provides comprehensive visibility to all on-trip operations. Fleet owners can track active vehicles, driver location, wallet balance, limit management, and capital allocation across the fleet.&nbsp; <h3 class="heading-node" id="z6ppg8kcw" style="text-align: justify">Partnership with major Oil Marketing Companies (OMCs)&nbsp; </h3>The platform facilitates stakeholders with cross-functional opportunities like fuel cashback/rewards with no surcharge on fuel payments across partner OMCs. Our API-driven technology stack supports OMCs in onboarding transporters, integrating with payment wallets, generating statements and reconciliation.&nbsp; <h3 class="heading-node" id="x498k680b" style="text-align: justify">Add value with fintech layer&nbsp; </h3>Fleet Drive Platform provides real-time reports and insights for lenders to make accurate credit decisions. With its end-to-end integration across the fleet payments ecosystem, the platform makes sure the transactions are recorded and verified for each vehicle across the entire fleet. This ensures lenders have complete visibility of the capital utilization by each fleet operator and their vehicles. They are empowered to manage risk effectively based on their Business Rule Engine (BRE) and provide credit. For Fleet Operators, adding a fintech layer to the fleet operations value chain will help in handling cash flow management based on demand and route optimizations and getting credit access from lenders.<h2 class="heading-node" id="uwglbh6eq" style="text-align: justify">360-degree Fleet Payments Management</h2>Despite the numerous advantages of the modern fleet management system, its market penetration in the fleet industry is comparatively low and lacks the finance layer to enable efficacious and secure operations. It is imperative to amalgamate the data generated by telematics &amp; fleet aggregators with the fleet payments in order to render better insights and improve the decision-making ability of the fleet operators and lenders. M2P's Fleet Drive Platform employs an API-driven technology stack to seamlessly integrate all the stakeholders to create an efficient 360-degree Fleet Payments Management. For more information on our Fleet Drive Platform, write to us at <a class="link" href="mailto:business@m2pfintech.com">business@m2pfintech.com</a>.&nbsp; <a class="link" href="https://m2pfintech.com/newsletter/" target="_blank" rel="noopener">Subscribe</a> to our newsletter and get the latest fintech news, views, and insights directly to your inbox.&nbsp; Follow us on <a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a> and <a class="link" href="https://twitter.com/m2pfintech">Twitter</a> for insightful fintech tales curated for curious minds like you.&nbsp;

Optimize Fleet Payments through Fintech Innovations

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/11/co-lending-blog-02.webp" alt="M2P Fintech" title="" width="100%" height="661">Co-lending has been the buzzword in the BFSI sector since the RBI announced its new <a class="link" href="https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11991" target="_blank" rel="noopener">Co-lending Model</a> (CLM) in November 2020. While CLM was principally designed to bridge the gap between geographical limitations and lending opportunities, plus to expand credit distribution for priority sectors, financialists reckon it might just be the answer to the country's multi-trillion-dollar liquidity issue.&nbsp; Before we jump into why co-lending can be the solution, here is a quick intro to co-lending.&nbsp; For beginners, co-lending is an arrangement between two or more lenders to jointly loan out money to their target audience. RBI's guidelines necessitate banks and NBFCs to share the risk in a ratio of 80:20 (i.e., 80% of the loan with the bank and 20% with the non-banks). So, banks will lend to the NBFCs, and the NBFCs will lend to the priority sectors. And fintechs will serve as the cardinal technology layer for banks and NBFCs to achieve their co-lending objectives.<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/11/co-lending-blog-04-1.webp" alt="M2P Fintech" title="" width="100%" height="502"><h2 class="heading-node" id="2w795jbxr" style="text-align: justify">Co-lending backstory</h2>Although co-lending has been in the Indian market since 2012, it’s the disruption of BFSI by fintechs and new-age NBFCs between 2018 and 2022 that turned co-lending into a well-heeled business. Today, every leading business wants a piece of this pie.&nbsp; MSMEs play a pivotal role in India's socioeconomic development. According to the <a class="link" href="https://www.ibef.org/industry/msme/infographic" target="_blank" rel="noopener">Ministry of MSME</a>, India is home to about 7.9 million MSMEs and account for about 29% of the GDP. However, with the pandemic curbing the global market and slowing down domestic trade, the sector was one of the most impacted by the capital crunch, high-risk perception by banks, and all-time high inflation rates. Subsequently, over 65% of MSMEs were temporarily shut down for three or more months in FY21, and more than half of the companies witnessed a decline of about 25% in revenues. These circumstances made it clear that the MSMEs needed a helping hand in surviving the impact. What's more?&nbsp; A sizeable chunk of India's population falls outside the purview of formal financial systems. This population comprises self-employed small-scale entrepreneurs, women entrepreneurs, farmers, and other small borrowers. According to recent reports, the country has a 365 million underbanked/underserved population, creating an 8 lakh crore market for small-ticket loans. Wherefore, the government was obliged to set up a robust economic model to reach and cater to the monetary needs of this population, who serve as the backbone of the country's economy.&nbsp; In the wake of this condition, the RBI re-christened its co-origination framework as the Co-lending Model in 2020, with the prime objective of enabling frictionless collaboration of banks and NBFCs to increase the flow of credit in the MSME (Micro, Small, and Medium Enterprises), EWS (Economically Weaker Sections), LIG (Low-Income Group), and MIG (Middle-Income Group) categories, where banks take a backseat in lending owing to higher operating costs and credit risks.<h2 class="heading-node" id="kuxw2jr3b" style="text-align: justify">Why Co-lending?</h2>The priority sector has embraced economic hardships due to the pandemic and its repercussions. Industry experts believe the renewed co-lending model has great potential to significantly transform the sector. For one, banks can leverage the market outreach, loan origination, and servicing acumen of NBFCs, and NBFCs can bank on improved liquidity and profitability. In addition, per RBI's circular, NBFCs are the single point of interface for customers. They are responsible for loan origination, fund routing, servicing, and collection. Given their extensive reach at the grassroots level, better last mile connectivity, and customer relationship, NBFCs have established themselves as being more effective than banks in handling loan recovery/collection. Therefore, this approach is expected to augment the timely servicing of debt by the borrowers.Under the renewed co-lending model, the banks' finances and NBFCs' (customer reach and) capabilities meld with fintechs' technology. If exercised in the true spirit, RBI can score a hat-trick. 1. Render tailor-made and affordable financial solutions at the grassroots level 2. Catalyze the upraise of the priority sector from its economic hardships 3. Drive financial inclusion and accelerate the overall economic development of the country Learn more about the features of co-lending and why it is the future <a class="link" href="https://finflux.co/blog/co-lending-is-the-future-heres-why/">here</a>.<h2 class="heading-node" id="m5m618l46" style="text-align: justify">Advantages of Co-lending</h2>The fundamental goal of the co-lending model is to act as a seamless medium for large banks to extend their services to borrowers and MSMEs in the remotest regions, which are otherwise inaccessible. Further, the co-lending model opens up unique liquidity windows for market players, boosting their confidence, and enabling sustainable growth. For customers, co-lending helps build their portfolio. Under the co-lending guidelines, FIs can loan to many potential businesses that banks reject due to the absence of credit history. This facilitates them to rebuild a good credit history and qualify for other loans. Besides, NBFCs increase financial literacy among their underserved/unserved customers by educating them about co-lending and its terms and conditions.<h2 class="heading-node" id="5s7psfhby" style="text-align: justify">What's in it for Lenders?</h2>Extended reach&nbsp; NBFCs have a broader customer portfolio. They are capable of reaching out to potential customers in rural/remote areas who are underserved in banking and digitalization. NBFCs usually collaborate with fintechs to set up digital platforms that help them cater to the needs of borrowers across multiple geographies. Banks can take advantage of this to widen their customer base and provide the economically weaker strata with the funds they require. NBFCs have the advantage of having increased access to funds. Operational efficiency The digitalization and robust technology layer have led to superior quality services. As the entire co-lending process, from application to disbursal, is fully automated, it reduces the human effort and time consumed in processing a loan. This, in turn, strikingly lowers turnaround time for all processes. The digital approach has helped banks expand their scope into new segments while reducing the cost of capital for NBFCs. This implies low customer acquisition cost, more loan applications, lesser underwriting costs, disbursing more loans, and gaining more market share. Hence, the boost in operational efficiency. Shared risk&nbsp; CLM gives banks the opportunity and flexibility to partner with one or more lenders. According to the model, the risk is divided between the entities in the agreement. In this setting, banks benefit from an added sense of security and minimize the effects of loss. On the other hand, the primary challenge of NBFCs in India is the lack of established mechanisms to reduce the risk of defaults. Under the co-lending partnership, the losses on the loans/bad debts are shared between the partner banks and NBFCs. Thereby incurring a lesser loss. Improved credibility New-age companies looking to enter the lending business can build credibility for their brand through partnerships with major banks. Similarly, banks can tie up with established NBFCs to instill brand awareness. Want to implement a seamless automated lending process tool? Look no further. M2P’s core lending suite is what you need. Our core lending system takes care of the entire lending lifecycle without requiring any manual intervention.<h2 class="heading-node" id="dfkrvinwm" style="text-align: justify">How will NBFCs benefit from M2P’s Core Lending Suite?</h2>We are the only player in the industry to have a comprehensive product suite required for lending under one roof. Our core lending suite helps manage the entire loan lifecycle, including <a class="link" href="https://m2pfintech.com/loan-origination-system/" target="_blank" rel="noopener">loan origination</a>, <a class="link" href="https://m2pfintech.com/loan-management-system/" target="_blank" rel="noopener">loan management</a>, financial accounting, marketplace integration, app-based lending, <a class="link" href="https://m2pfintech.com/blog/steps-in-credit-underwriting-why-using-an-alternative-source-of-data-and-behavior-metrics-will-be-of-help/" target="_blank" rel="noopener">alternative data-based credit scoring</a>, dashboards, reporting, and analytics. <a class="link" href="https://m2pfintech.com/" target="_blank" rel="noopener">M2P’s lending program</a> is composable and built on Open API infrastructure, enabling you to develop customized programs and applications. We help you disburse credit in any form– cards, line, check-out EMI, embedded form, OD form, regular EMI, and asset-based​. In addition, our lending program has a robust LOS that allows you to configure custom workflows and change parameters on-the-fly without altering the code. With optimized TCO at all stages, constantly upgraded (quarterly) system, and bank-grade security, be market ready with our core-lending suite in a trice. To get down to the brass tacks of our system or for a demo, write to us at <a class="link" href="mailto:business@m2pfintech.com">business@m2pfintech.com</a> We will deep dive into how co-lending programs can be implemented using the Finflux platform, in the upcoming blog. Watch out this space for more insights.<a class="link" href="https://m2pfintech.com/newsletter/" target="_blank" rel="noopener">Subscribe</a> to our newsletter and get the latest fintech news, views, and insights directly to your inbox.  Follow us on <a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a> and <a class="link" href="https://twitter.com/m2pfintech">Twitter</a> for insightful fintech tales curated for curious minds like you. &nbsp;

Focus: Rise of Co-Lending Model

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/11/Super-Apps-in-Banking-blog_Word-press.webp" alt="M2P Fintech" title="" width="100%" height="479">Imagine an app that allows you to access your bank accounts, make payments, take out loans, handle your insurance policies, monitor your investment dashboard, and more—all in one!Wouldn't that be the epitome of convenience? Such nifty apps are no longer a fiction.&nbsp;Embrace yourself when we say these SUPER APPS are on their way to radically disrupt the way we know accessibility in digital banking.&nbsp;Before diving deep into Super apps in consumer banking, let us quickly recap what a Super app is.<h2 class="heading-node" id="ny0ld8tzi" style="text-align: justify">What are Super apps?</h2>A Super app is a single portal that powers a wide range of functions and services shaped around users' daily lifestyle needs. Technically, a super app is a collection of multiple niche applications that establish an ecosystem of fully-integrated third-party services aided by a payment system. This creates a mini operating system that acts like a digital assistant, working at the user's convenience as one can stay in the app to carry out a multitude of tasks.Although the concept has been creating massive buzz recently, it isn't new. Businesses like TenCent, Alipay, Grab, Paytm, and Gojek have been the frontrunners for years. Let us give you a quick overview of how some of these companies support an all-inclusive platform.TenCent is a Chinese company that started as a simple messaging platform (named WeChat). Once they built their billion-plus customer base, they slowly set up a network of services, including virtual wallets, payments, hotel reservations, taxi rides, medical consultations, games, and much more.An example that is closer to home is Paytm. In 2010, Paytm was launched as a payment application. Today, it offers a comprehensive set of services, including online shopping, credit cards, loans, repayments, microloans, BNPL, insurance, ticketing services, retail brokerage products, online games, and more on its platform. Given the platforms' extensive acceptance, several fintechs are now trying to recreate a similar model customized to their customer bases.<h2 class="heading-node" id="zehxh25s4" style="text-align: justify">What makes them Super?</h2>What marks off a Super app from a regular app is the element of multifunctionality, comprehensiveness, and data privacy. Further, it best suits businesses with extensive data and a large customer base. In addition, rendering a gamut of services and products through one application gives customers a sense of belonging, ownership, and safety, which significantly enhances the customer experience.Here are some of the key factors that contributed to the popularity and success of Super apps.One-click relevance: Provides customers with personalized overviews and product offers. Rolling everything customers need to transact through daily life into a Super app is one way to core relevance and success.&nbsp;Real-time communications: Chatbot interactions that offer real-time assistance, including upselling, fraud prevention, nudges, and recommendations.&nbsp;Connectivity: Anything from financial, business, lifestyle, and health to government can be accessed through one app.<h2 class="heading-node" id="n493lw6t3" style="text-align: justify">Super apps in Consumer Banking</h2>Super apps in the banking sector are a rare feat. Conversely, fintechs quickly recognized the potential of enabling ultra-personalization and budget automation using AI-powered financial assistants. They are keen to build Super apps that can leverage aggregators with established digital marketplaces to connect users with an existing ecosystem for digital banking and financial services.Ideally, a financial Super app is a multi-function digital banking and <a class="link" href="https://m2pfintech.com/blog/the-rise-of-digital-payments/" target="">payments</a> solution featuring financial services that are beyond payments. The app must enable consumers to perform most of their daily activities digitally, like bill and fee payments, purchases, fund transfers, bookings, tickets, subscriptions, investment management, and insurance purchases and management. Interestingly, the list can keep adding as many functionalities as possible to improve customer engagement and satisfaction.According to recent studies, about 50% of consumers use mobile application or website at least once a week to interact with their bank. This stands as a testimony that today's consumers and businesses expect their banks to be a tap away and swiftly adapt to their digital needs. Experts believe, with embedded finance and open banking, any provider can become a super app that serves as a gateway that delivers the ever-growing demand for convenience in the banking process — rather than just a series of disconnected/loose-ended financial services.When it comes to consumer banking, it's all about comprehensive experience in a Super app environment. And it takes more than just tech. It requires full partner-network management, a clear understanding of compliance, rights, responsibilities, liabilities, commitment to developing a broad-ranging ecosystem, and more. For instance, a <a class="link" href="https://m2pfintech.com/blog/neo-banking-101-all-you-need-to-know/">Neobank</a> can provide an 'N' number of financial products and services by integrating with regulated FI at the back end and tech-driven fintech at the front end.Essentials of Financial Super apps Intuitive user experience and interconnectedness are the cornerstones of a financial Super app. These will allow users to easily access all available features. Here are some of the key elements that a financial Super app must include:<ul class="list-node" id="52ez20cgw"><li>Shared wallet&nbsp;</li><li>Savings accounts&nbsp;</li><li>Budgeting tools&nbsp;</li><li>Bill reminders</li><li>Auto bill payments&nbsp;</li><li>Managing subscriptions&nbsp;</li><li>Investment options&nbsp;</li><li>QR code payments and rewards</li></ul><h2 class="heading-node" id="sw6d1s7fn" style="text-align: justify">How Open Banking powers Super apps?</h2>Super apps use financial data from multiple sources to create financial products and services to meet customers' needs.But how do they get to know what their users need?What provides them with the information they need to create an omni-channel experience?Enter Open Banking.Open banking is the foundation of interoperability in the banking sector. For novices, Open Banking system uses <a class="link" href="https://m2pfintech.com/blog/api-the-power-that-drives-new-age-banking-ecosystems/">APIs</a> to provide third-party financial service providers access to consumer banking, transactions, and other financial data from banks and NBFCs. To understand the working of Open Banking, read <a class="link" href="https://m2pfintech.com/blog/open-banking-a-primer-2/" target="_blank" rel="noopener">here</a>.The Open Banking system presents the platform with a spectrum of opportunities to tailor financial services to cater to each user's requirements. It employs advanced technologies like AI, ML, and Data Analytics to maximize personalization and build customer-relevant products by leveraging customers' data. Using advanced technology to analyze data and develop customer-centric products/services fosters data-sharing culture and data-driven decision-making across the ecosystem.With the help of Open Banking, Super apps can empower customers to check their account balances, make payments, track recent transactions, and perform other traditional banking operations from the app's digital wallet. This strikingly reduces the need to access a bank's app. In addition, as Open Banking expands into open finance and open data, Super apps can access and connect with a wide range of partners to augment go-to-market speed for new products and broader their customer base.<h2 class="heading-node" id="9eqqd85qv" style="text-align: justify">API Inference</h2>API infrastructure is the essence of embedded finance and open banking. A good API provider wraps intricacies like disputed payments and connecting to multiple suppliers inside the API system. This allows intended apps to work together in several ways and develop a comprehensive ecosystem. In addition, APIs empower Super apps to handle extensive, inter-connected data through multiple levels without disturbing the user journey. Fintechs leverage APIs to seamlessly incorporate functionalities into cloud-native apps. They employ full-fledged, mobile-first, customizable API stack to simplify consumer banking and enable end-to-end customer-centric retail offerings.Want to understand the nuts and bolts of Super apps? Write to us at <a class="link" href="mailto:business@m2pfintech.com">business@m2pfintech.com</a>&nbsp;&nbsp;To boot, what would an ideal Super app be for you? Let us know in the comments below.&nbsp;<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a> to our newsletter and get the latest fintech news, views, and insights directly to your inbox.&nbsp;Follow us on <a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a> and <a class="link" href="https://twitter.com/m2pfintech">Twitter</a> for insightful fintech tales curated for curious minds like you.

Product

About

Resources