&nbsp;<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/04/banner.webp" alt="M2P Fintech" title="" width="100%" height="529">Decades back, our banking systems were massive local servers poised at a physical location of a bank. The conversation between branches happened only at a specific time. Any transactions that occurred after were reserved for another day.The local servers handled the heavy load of deposits, account openings, loans, and credit processing in its designated area. So, going to the bank to avail these services required planning downright to its every tiny detail.Fast-forward a few decades, banking has taken a its digital avatar where traditional banks and new-age neo banks compete for customer attention and retention. Traditional banks are now making the hard choice of restructuring the legacy systems. But, they face the unique challenge of data management and processing.Just to render swift and intelligent services, they need to leverage analytics, break down data silos and restructure data according to the needs of the business. The vast amount of data generated brings the points of scalability and flexibility into focus. It has driven banks towards a service-based delivery model.The primary challenge that banks face is in consolidating data and offering contextual banking. The legacy systems are often limited by performance and horizontal scalability. They also have a minimal understanding of polymorphic data handling capabilities.This is where APIs come to the rescue; as banking is a global transaction exercise, they seamlessly integrate as a plug-n-play platform. With <a class="link" href="https://m2pfintech.com/blog/neo-banking-101-all-you-need-to-know/">neo-banking</a> and <a class="link" href="https://m2pfintech.com/blog/open-banking-a-primer-2/">open banking</a> on the rise, <a class="link" href="https://m2pfintech.com/blog/api-the-power-that-drives-new-age-banking-ecosystems/">banking APIs</a> offer the following benefits:<ul class="list-node" id="78x0lme2c"><li>Multiple platform data aggregation and gain a higher share of target customers</li><li>Enhanced operational efficiencies with automated processes</li><li>Niche digital user experience</li><li>Potential to scale complex operations with minimal effort</li></ul>Many banks have integrated APIs as microservices and adapt cloud-based processes whilst reducing their dependency on the core banking system. Furthermore, APIs have helped improve a bank’s or any financial institution’s native service and offerings.To sum up, APIs have enhanced banking services and have helped craft a user-driven experience that focuses on experiential generation.<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.

Transactional to experiential banking- The Paradigm Shift

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/05/banner-1.webp" alt="M2P Fintech" title="" width="100%" height="529">On April 7, the Reserve Bank of India made several key announcements concerning <a class="link" href="https://m2pfintech.com/blog/disruptive-business-enablers-prepaid-payment-instruments-ppis/">Prepaid Payment Instruments (PPIs)</a> at the Monetary Policy Committee (MPC) meeting. These measures could potentially impact the banking/FinTech sector and bring about changes in Digitalization and <a class="link" href="https://m2pfintech.com/blog/fintech-a-catalyst-for-financial-inclusion/">Financial Inclusion.</a><h2 class="heading-node" id="04b0" style="text-align: justify">Interoperability of digital wallets is now mandatory</h2>All full-KYC PPIs and Payment Acceptance Infrastructure must be compulsorily interoperable.<a class="link" href="https://m2pfintech.com/blog/why-payments-interoperability-is-a-must-for-todays-generation/"> Interoperability</a> through <a class="link" href="https://m2pfintech.com/blog/upi-the-driver-of-economic-growth-and-inclusion/">UPI</a> among digital wallets was already achieved by RBI back in 2018, but it wasn’t a very widely used method for payment transfer. Now to extend the reach of digital rails, interoperability through UPI or otherwise, has been made a mandatory feature.<h2 class="heading-node" id="b0ff" style="text-align: justify">Increase in permitted outstanding balance</h2>A payments bank can now raise the limit of the end-of-day balance to INR 2 lakhs (previously INR 1 lakh). This move is to incentivize PPIs to move to a <a class="link" href="https://m2pfintech.com/blog/know-your-customer-kyc-the-need-for-authentication/">full-KYC</a> structure and interoperability. The new move is expected to encourage financial inclusion of a wider customer base.<h2 class="heading-node" id="eda2" style="text-align: justify">Cash withdrawal from digital wallets</h2>Digital wallet holders can withdraw cash from their prepaid wallets at ATMs and/or swipe to pay at retail establishments. Previously, cash withdrawal was allowed only for full KYC PPIs issued by banks. The recent move brings uniformity among PPI players and bolsters the banking infrastructure, particularly in underserved areas. Bringing wallets at par with Bank Accounts in terms of service offering.<h2 class="heading-node" id="d9bb" style="text-align: justify">RTGS and NEFT enablement</h2>It is proposed that PPI issuers, card networks, White Label ATM operators, and Trade Receivables Discounting System (TReDS) can now take membership in CPS (Centralized Payment Systems) and access Real-time gross settlement (RTGS) and National Electronic Funds Transfer (NEFT). It was previously restricted to banks. This move is expected to improve the services of PPI issuers to their customers and minimize settlement risk.<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/image.webp" alt="M2P Fintech" title="" id="tbptd8z27" width="100%" height="529"><h2 class="heading-node" id="3a06" style="text-align: justify">What does it mean for the Banking sector and FinTech?</h2>Through these recent announcements, the RBI has opened up the extent of Banking services, to larger FinTech players. It is expected that this move will help relieve stress on traditional banks that cater to a wide base with limited legacy technology.FinTech players can take over the load, offer banking services (except credit offering) on par with traditional banks, and penetrate underserved areas of India. It will further increase the penetration of digital payments in the country especially the Tier-3 to Tier-6 centers. According to RBI, these new guidelines will promote the optimal utilization of Payment Instruments like wallets, cards, etc. as infrastructures such as PoS devices, ATMs, QR Codes and Bill-payment touchpoints are still scarce.Though banks will continue to handle the crucial aspect of lending, it will be interesting to see how PPIs, wallets, and other payment systems will now compete in the banking ecosystem. It will be an evolving process for Fintech companies who are partnering with the PPI license holders to issue co-branded prepaid cards for providing loans to their customers. The array of services that these FinTech’s offers will diversify and they will be able to ensure user satisfaction by providing <a class="link" href="https://m2pfintech.com/blog/neo-banking-101-all-you-need-to-know/">Neo-banking</a>-like facilities.These announcements acknowledge the capabilities of FinTech players and the gaps in the system that they can effectively fill. This is also an endorsement of the enormous potential of the industry. It remains to be seen how payment companies ride this wave, innovate, and offer end-customers seamless payment experiences.<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.

RBI’s new guidelines for PPIs. How will it impact the FinTech industry?

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Artboard-1-copy-7-1-2.webp" alt="M2P Fintech" title="" id="5dyid3ffz" width="100%" height="356"><h2 class="heading-node" id="bf40">Welcome to Team M2P Star Highlight</h2>This month, we are unraveling the hidden facets of our ever-elusive genius Kurukshetran or Kuru (as he is fondly called by his colleagues). Known for his quiet and observing nature, Kuru is a dedicated developer who also dabbles in part-time game development.When discovering Kuru’s facets, we also realized that he is a hopeless romantic. He had serenaded his love interest with the songs of the Maestro Ilayaraja. With a vision to build his own Startup, Kuru shares his aspirations, inspirations, and ambitions in life right from untangling a complex code to his journey in <a class="link" href="https://m2pfintech.com/">M2P</a> so far.<h2 class="heading-node" id="d349">What is your job, and how would you describe a typical/busy day at M2P?</h2>Officially a developer but a game nerd, I handle code development and product integrations. One of my primary responsibilities is to write and iterate the code that completes the puzzle. I also handle a team of four and monitor the code progress. Our core systems are my specialty, and I can answer any queries that arise on the same with my eyes closed. My typical day at M2P starts with our team meeting, answering any emails or queries that have risen from the client or bank, and monitoring our product integrations.Along with other team leads, I often get into discussions about code, and brainstorm solutions. I have a candid chat regarding any random conversations that pop up on our radar. On a busy day, the routine remains the same, but you will find me and the team huddled in the conference room discussing the ways to sort out the issue.<h2 class="heading-node" id="e45b">Did you always want to be a developer, and how did fintech become a part of it?</h2>Mostly, yes. I wanted to be in this field primarily because of my Uncle. He is a technical architect and is almost a walking Wikipedia in his domain. His enthusiasm and passion inspired me to choose this field. Coming to the fintech part of the question, I actually kind of stumbled into it. Game development was my focus, but due to a couple of setbacks in college (laughs it off), I worked as a temp in many companies. Through a common friend of my father’s, I got placed in M2P as a full-time employee and to date has been…<h2 class="heading-node" id="0f0a">What was your first challenge in M2P?</h2>I faced my first challenge in <a class="link" href="https://m2pfintech.com/">M2P</a> during the sixth month of my employment. I had to simultaneously get certified and build a solution for the MasterCard Switch. I didn’t have much insight about MasterCard protocol or the TCP/IP working during those initial days. Also, MasterCard was placed in Singapore; I had to come into the office early, say by 5 or 6 am, which was quite a big challenge for me as I was never an early bird. But, I am proud today to say that I conquered the challenge in a month as opposed to the stipulated time of 2 months. During that process, I got a better insight into the fintech domain and how my role as a developer plays an important part.<h2 class="heading-node" id="3fb5">What is your personal satisfaction with this job?</h2>Continuing from my last answer, my personal satisfaction in this role is that I enjoy complete autonomy. Our company founders have given the concept of ownership to each and every individual in the company. I don’t need to feel apprehensive while putting forth my solution or thoughts. They are welcomed. My personal feeling is that I am working in my own company. That’s the freedom my lead has given me in terms of the technical perspective.<h2 class="heading-node" id="340c">What will you like to do outside of M2P?</h2>Before coming to M2P, I used to go to my Uncle’s office and try to understand development’s nuances. They were primarily into game development. I observed them and understood their working methodology, right from their thinking process to the tools they use to launch a game. Based on those observations, I will try to imitate the game build. For example, I modeled a game after Super Mario, and it is now in its 2D form. I mostly mimic the gaming mechanics. Game development is my passion, and I am also a part-time gamer. You will often find me experimenting in both.<h2 class="heading-node" id="1f3a">What’s something that most people don’t know about you?</h2>I am a hopeless romantic and a die-hard fan of the Maestro Ilayaraja. I relentlessly pursued a girl during the four years of college. Then, one day I worked up the courage to propose to her. I came to the college early, by 7 am, and with my friends’ help, I decorated the classroom with flowers and streamers. I burned a list of Ilayaraja’s most romantic songs on a DVD and played them as she entered the classroom. Sadly, she never said yes or no but left me clueless till the final year.<h2 class="heading-node" id="20b3">Is there any difference in the way you work pre and post-pandemic?</h2>No, not much, actually. I have always been a self-motivated person and like to finish my work on-time. The only difference I see is the absence of the office’s physical presence and working with my colleagues. But I have improved myself a lot during this lockdown. I have enhanced my language and communication skills.<h2 class="heading-node" id="7e5f">What would you love to build/develop if you have unlimited resources and time at your disposal?</h2>I have already done, I think. I have used Machine Learning techniques to build a signature Video KYC solution. This COVID-19 had brought forth a unique solution for account openings: video KYC, and I was intrigued by it. I wanted to build a better version of it and have used AI-ML techniques to build a crude version, and it is still in the works.<h2 class="heading-node" id="0605">Anything else you want to share?</h2>When I came to<a class="link" href="https://m2pfintech.com/"> M2P</a>, I was basically an individual contributor, and all I thought was that my job is just coding. But, today, I have learned managerial and leadership skills that have molded me into a better person.<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 our Tech G(K)uru

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/05/Artboard-1-copy-7-11.webp" alt="M2P Fintech" title="" id="hwrpiz4dg" width="100%" height="317">Often, the country’s self-employed and underbanked section shies away from accessing formal credit lines as they do not satisfy the banking formula. Traditional financial institutions staunchly rely on asset-based lending where they have an asset to fall back on in case of default. But, it ignores those millions of potential borrowers who perhaps are viable choices than salaried defaulters.Also, the on-going pandemic has forced many industries to shut down their business. With the economy slowly getting back-up, these segments are still in search of funds. In the absence of credit scoring and strong financials, scores of MSME and SME’s have succumbed to high-interest loans or credit flow decline. But coupled with the right tools and innovation, cash-flow-based lending can help revive them.Nevertheless, the landscape is now slowly shifting, with many upcoming FinTech's and NBFCs focusing on cash-flow-based lending. Cash-flow lending takes into account the revenue generation capability of the individual/enterprise based on various factors such as seasonal or market demand. The interest rates and tenure of the loan are adjusted accordingly. This method of lending doesn’t come under the regular pattern of 12-month EMI repayments.<blockquote class="block-node" id="ivntz2hml">Inspired by the country’s FMCG sector’s ingenious move, this movement is termed “Sachetization,” where good things come in small doses.</blockquote>Sachetization was spurred off by India’s FMCG sector to capture all facets of the market. They realized that the significant market shareholders were not the ones who could not afford large-ticket items in a single purchase. Starting from shampoo packets to instant coffee, sachetization has a long-standing relationship with the Indian economy. Now, P2P lending has also adopted this model through the means of cash-flow-based lending.For example, with data insights and cash-flow lending, a farmer can take out loans to reap a better harvest. He need not pay the usual cycle of 12 months but rather avail a customized loan with a repayment tenure based on his crop production. The same formula can be tailored to a different set of customers like fishermen who has an off-season of 4 months due to the monsoon.Many financial service providers are now partnering with new-age FinTech's to offer sachet loans to their target customers. They are currently restructuring the formula by deploying technology to better understand the MSME/SME’s financial needs.In a nutshell, making cash-flow-based credit available to every segment will be a small solution that has the ability to spearhead complete <a class="link" href="https://m2pfintech.com/blog/fintech-a-catalyst-for-financial-inclusion/">financial inclusion</a>.<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.

Sachetization inspired cash-flow lending

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/05/Artboard-1-copy-7-1-3.webp" alt="M2P Fintech" title="" id="1rpwrq7ge" width="100%" height="447">Like every other English, the term over-banked has its share of meanings:<ul class="list-node" id="23k37tfcl"><li>It denotes a place with an excessive number of banks.</li><li>It also indicates people with too many bank accounts.</li></ul>But the true meaning of the word is that your watch is malfunctioning, and you need to get it repaired.Coming back to the people’s perspective of the overbanked, they are the ones who are financially literate with efficient money management skills. They get the most out of their bank accounts as banks operate on a minimum balance model with numerous benefits for every account category.In countries like the USA, the overbanked often rely on sites like Mint.com, Personal Capital, or LearnVest to manage all their accounts in one platform. They can oversee and make decisions while having a 360° view of their financial activities.In fact, one of our customers, Finin, a Bengaluru-based startup and India’s first-ever neo-banking platform, offers the functionality of viewing different bank accounts aboard their platform. They offer account aggregation, bill and subscription management, smart budgeting, and goal-based saving.With all bank accounts in one place, the app would understand the bill, subscription, and EMI cycle of the consumer and tell you what your future expenses will be. The initiative is to build a savings first consumer-focused <a class="link" href="https://m2pfintech.com/blog/neo-banking-101-all-you-need-to-know/">neo bank</a> that will collate the many concepts related to wealth management into today’s Fintech scenario.Such apps would take what is known as a&nbsp;“Nudge approach,”&nbsp;where it will alert you about your spending behavior. With Artificial Intelligence and Machine Language, an individual’s saving and spending behavior is also understood, thereby providing a hyper-personalized service.The Overbanked tend to make decisions based on how much they gain; thus, the “relationship” with an institution is usually dismissed. This is where FinTech's use hyper-personalization as a hook to reel in today’s millennials. They aim to create an incredible user experience for the overbanked with financial literacy and freedom at its core.<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.

Why do the overbanked need Fintech?

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/04/banner-1251-2.webp" alt="M2P Fintech" title="" id="g4x9lr2sv" width="100%" height="356">Bridging the shortcomings of traditional banking through integrated value chains and regulatory requirements, <a class="link" href="https://m2pfintech.com/blog/neo-banking-101-all-you-need-to-know/">neobanks</a> today offers a holistic twist to banking services. User-friendly and completely digital, these banks work on referral-based acquisition and competitive pricing.With no banking license of their own, neobanks partners with traditional banks to offer their service suite. While this might be a pain point, neobanks target niche micro-segments like the Gen-Z because of their higher transaction volumes. Coupled with Data Analytics, neobanks bring forth innovative solutions to help individuals keep better track of their finances.For instance, our client Finin, India’s first neo bank, has brought on a feature where users can have a unified view of their bank accounts via their platform. It helps a user to keep better track and plan their financial journey.<h2 class="heading-node" id="27ed">Unbundled Banking</h2>Neobanks today are focusing on offering one type of product/service with complete functionalities. They operate with customized tech stack modules aimed at niche segments with user convenience as the focal point. Some of the top global neobanks are Revolut, Monzo, WeBank, Chime, etc.Paradoxically, legacy banking institutions cannot create these experiences as they face redundant processes, <a class="link" href="https://m2pfintech.com/blog/why-payments-interoperability-is-a-must-for-todays-generation/">interoperability</a>, etc. Fintech professionals realized that an obsolete technology stack was limiting the interoperability of traditional banking. This, in turn, guided the notion of Unbundled Banking, with neobanks steering the helm.Unbundled banking further narrowed that focus on customer experience, user convenience, and simplified processes. In this approach, anyone can launch banking products minus the need to go through a rigorous process of setting up a bank.<h2 class="heading-node" id="d0fd">Neobanking Revenue Model</h2>Neobanks operate on a strong cost-efficient model backed by less complex IT systems. So, their revenue model depends on the kind of products and services offered by them. Cross-selling of products/services to niche customer segments also acts as a secondary revenue stream for neobanks.They are driven by data-based decisions that depend on a decision-making model. Neobanks gather consumer data and analyze them and predict consumer behavior. These predictions help to offer customized services to their target customers. By deploying AI-driven chatbots, video chats, and data analytics, neobanks are available to customers as a cost-effective banking service right at their fingertips.Neobanks cross-sell and generate secondary revenue streams with a range of customized offerings suitable to customer’s needs. They also offer payments and accounts back-end platforms for other fintech companies to build their own interface on top of it.<img src="https://miro.medium.com/max/1400/1*ccQft1zHg2RQupLqXoK1YA.png" alt="Neobanks’s revenue model" title="" width="100%" height="227">Plug and Play solutions with 3rd party service providers with ease and data insights. With this, they can offer a range of products and services based on customer appetite and financial goals to boost up the secondary revenue lines and opportunities for cross-selling.&nbsp;Boosting lending options to customers and the SME sector will help generate revenue options.<h2 class="heading-node" id="6d68">Neobanks &amp; the less-digitally savvy users</h2>The audience that comprises this segment is often elderly and rural customers; capturing their trust is quite an uphill task for neobanks. They gain such customers with a free account and low fees and budgeting tools and cash projections based on past spending, and ‘savings pots’ for spend categorization. Offerings like High-Yield Savings Accounts and easy money movement through lower fees &amp; charges are some ways.Neobank growth can be accelerated through adaptable services and convenience in money transfer like cheaper lending rates and better rural audiences’ products. Creditors can choose borrowers and information from diverse sources and technology-based lending.&nbsp;Like how social media platforms have pulled in rural customers, neobanks also need to create awareness through their user-friendly applications.Reduced data rates &amp; smartphone prices will also encourage rural customers to use neobanking apps and gain trust.<h3 class="heading-node" id="e927">Neobanks &amp; Transparency</h3>The issue of banking transparency is closely linked to <a class="link" href="https://m2pfintech.com/blog/fintech-a-catalyst-for-financial-inclusion/">financial inclusion</a>. Neobanking transparency can be improved through dashboards, reports across products with enhanced interfaces, and easy-to-understand services such as payments, payables and receivables, and bank statements. They must explain real-time notifications, any charges, and penalties incurred by the customer too. They should send instant alerts to customers to know exactly what is going on with their account.<h3 class="heading-node" id="2fb2">Security &amp; Privacy</h3>Neobanks were the primary users of security-enhancing models. These were MCC block, single-use <a class="link" href="https://m2pfintech.com/blog/all-you-need-to-know-about-virtual-cards/">virtual cards</a>, and tokenized online transactions. They rely on security and safety when designing platforms, like data localization or 2-factor authentications (2FA) for card-based transactions.Neobanking enables third-party financial service providers (TPPs) to access customer data from banks or financial institutions. They must maintain robust online anti-fraud systems and inform customers of breaches as soon as it happens.Customer permission is required to ensure data privacy or share certain information with banks or providers. For instance, if the customer gave consent, they can share financial data like spending habits and regular payments with other banks.Providers must comply with <a class="link" href="https://m2pfintech.com/blog/gdpr-in-a-nutshell/">GDPR regulation</a> and data protection rules. They must provide transparency on how and for what the data will be used, for how long before they get a customer to sign up.<h3 class="heading-node" id="04ca">Trust</h3>Neobanks have strong drivers for securing their customers’ accounts, which are reputation management &amp; consumer perception. Developing trust can also be a challenging factor for loyal traditional banking customers.&nbsp;Fines, data breaches, and attacks can significantly damage consumer trust in non-traditional banks. Therefore, neobanks must protect consumers from mobile Trojans phishing scams and account takeover attempts. They can earn consumer trust through advanced authentication concepts such as dynamic linking, device binding for mobile apps, mobile application shielding, and transaction risk analyses.Strong privacy and data protection policies like removal of hidden fees and charges can help build consumer confidence in neobanks.<img src="https://miro.medium.com/max/1400/1*0VH_WhJDpgy4AEpgB9ivEA.png" alt="Advantages of Neobanks" title="" width="100%" height="227">Neobanks are trying to simplify the ways of transacting through digital mediums through:1. Simplified process with minimum steps to complete with minimum redirect for the transaction/payment 2. Tightly tying up and different players in the ecosystem (Retailers, Digital Service Providers, Issuer and Acquirer banks, etc.) 3. Standardization across devices and internet browsers 4. Compatibility across platform and technologies 5. Educating conventional customers on digital payment and ensuring that money is safe.<h2 class="heading-node" id="1e23">Neobanks Vs. Traditional Banks</h2>Traditional banks are focused on product-centric models, meaning high verticalization of products, no strong communities built around the brand/product, increased customer acquisition cost, and legacy technology infrastructure.But currently, traditional banks have been increasingly offering unique products and services to customers. One might wonder how neobanks will continue to differentiate themselves from conventional banking as a result.Neobanks can tackle product competition by keeping the focus on a platform-centric model. For example, high community engagement with the product, product horizontalization with best-in-class apps, open-banking APIs, and capitalize on a mobile-only approach for the low customer acquisition cost. A lower dependency on 3rd party providers and real-time data integration and management might help too. Above all, customer-centric organizational design and customer needs to drive data architecture.Neobanks create an ecosystem of services around their infrastructure, shifting the banking value from branches to their <a class="link" href="https://m2pfintech.com/blog/the-world-of-apis-how-they-power-fintech/">API</a> layer.&nbsp;They expand their user base by providing services on a 3rd party platform or offering 3rd party services on their platform.The neobanks’ value propositions &amp; CLV is based on lower costs, personalized insights, predictive intelligence, user-friendly interfaces, easy accessibility, and simplified processes.<h2 class="heading-node" id="17cf">The Global Way Forward</h2>On a global scale, neobanks are on an upward growth trajectory in Europe, followed by America. The real neobank growth is being unlocked in the APAC region, with many countries devising their virtual banking systems.Hong Kong, Taiwan, and Singapore have already implemented virtual banking licensing, with Thailand and Malaysia following suit.In India, neobanks are still nascent. Still, they are playing a leading role in helping small businesses to manage finances conveniently and comprehensively. The data below shows that the Indian neobanking market is growing fast:<ol class="list-node" id="701721vxm"><li>Average market maturity of India is 2–3+ years compared to 5–6 years+ in Europe and the US.</li><li>Number of neobanking players in India has gone up in the recent past compared to global markets.</li><li>Fund raised by Indian neobanks have gone up to $168 million</li><li>Indian neobanks are boosting up the competition through value-added services apart from standard offerings.</li><li>Indian Government supports the MSME sector through different schemes that open up Indian SME neobanks opportunities.</li></ol>Neobanks are expected to explore strategic partnerships with&nbsp;established traditional banks to grow in India. The Reserve Bank of India (RBI) has not permitted a digital license to neobanks yet. RBI has initiated the change by providing a license to small finance and payment banks, to begin with. Banking Industry experts are hopeful that RBI will also work on policies to approve banking license for digital-only or neobanks soon in the post-covid-19 era. This will keep the fate of neobanks blurry.<h2 class="heading-node" id="c577">Conclusion</h2>Fintech will continue to push neobanking as the new normal. The pandemic is just a catalyst to ignite the digital transformation. Neobanks are challenging mainstream traditional banks. They are backed up by digital backing licenses and control most of the value chain from front-end to back-end.Till then, neobanks in India will have no option but to continue partnering with the traditional banks to offer services.<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.

Neobanking - The Rise of New-age Banking

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/banker.webp" alt="M2P Fintech" title="" id="45u491evk" width="100%" height="356">It was a much-awaited holiday season and the beginning of the new year. Without any surprise, the entire <a class="link" href="https://m2pfintech.com/">M2P</a> team was geared up and raring to go! As we started interacting with our colleagues to know more about them and their teams, here’s what we got, an impromptu interview with our Accidental Banker, Vivek.Engineer by education and Banker by profession Vivek Prashanth has deep expertise in branch banking, managing alternate payment channels, liaising with program partners, and working with card networks. With an innate flair for constant learning and as a curious person by nature, he made a pivotal shift to Fintech just to experience the best.As he treks his program management career, he realized the technological facets of modern financial organizations. He sees what it is to be in the world of API-led banking or payments and to be in a new role of program frontrunner. So, let’s see how he describes his journey with M2P and how it helped him discover his hidden expertise and celebrate his realm of interests.Before that, a small gold pick for your read! Vivek is a dedicated family man and an avid cricket fan who gets up early in the morning just to see a perfect square cut or a jet-speed Yorker.<h2 class="heading-node" id="36c6">So, what brought you to M2P?</h2>As a client, I partnered with <a class="link" href="https://m2pfintech.com/">M2P</a> for a QR payment project. During those interactions, I got to experience the work-culture prevailing at M2P and got inspired by the same. It was also a happening start-up, which offered loads of cross-functional learning opportunities and more choices than banks and other traditional roles do. And again, I was quite interested in working in a fast-paced start-up environment, and M2P was a perfect fit.<h2 class="heading-node" id="4b82">I heard that you’re the one behind every program that runs on the M2P platform. So, what’s your role at M2P, and what’re some of your key responsibilities?</h2>Here at M2P, I lead the operations from banking, card ops to finance operations. Managing BAU (Business As Usual) and providing post live support to banks and partners are some of my primary responsibilities. For instance, once a program goes live, it comes to my radar. From then on, I manage the E2E (End-to-End) lifecycle from accounting, reconciliation, and settlement to customer service.<h2 class="heading-node" id="6743">Any favorite project at M2P, and why?</h2>In fact, my first assignment happens to be my favorite project. We were building a Forex product with YBL, and I was the go-to person for new products like cross-border payments at that time. And I am happy and fortunate for the chance to lead the same!<h2 class="heading-node" id="93c5">Is there any difference between working in a bank and working at a fintech?</h2>Yes, absolutely. Firstly, you get more insights into the Fintech industry. Secondly, there are umpteen and unique learning choices that traditional positions might not or cannot offer. Banking by itself has a lot of restrictions that limit your latitude widely. Thirdly, when you are in this space, you understand how technology, business, and other back-end banking systems work. It is not only about being in a program partner role; actually, you are on the other side of the hustle, interacting with clients and business executives. Not only could you receive requirements, but also see how the product shapes up from scratch and through its lifecycle.<h2 class="heading-node" id="930f">Having said that, what’s the most exciting thing about working in the banking and payments sector?</h2>The evolution of banking and payments is something that fascinates me. New product development and different use cases in the payment sector that solve niche challenges make it even more enjoyable. By working in this domain, we could make an impact.<h2 class="heading-node" id="9379">If you want to highlight what M2P means to you, what would it be?</h2>M2P is like a must-be-cherished soundboard for me. Indeed, it has taught me flexibility, role diversity, and growth. Agility, quick turn-around, and instant product roll-out are three phrases that accurately capture the essence of M2P. Significantly, the pace at which a solution gets formulated, designed, and delivered is quite impressive.<h2 class="heading-node" id="586a">What’s your preferred working style or culture?</h2>As I said earlier, in an environment like M2P, agility and dynamics are inevitable elements. To nourish the same, I prefer not to confine myself to a fixed routine but often set or reset priorities keeping flexibility in the nearshore and schedule workdays around projects!!And usually, I don’t opt for rigid timelines. Instead, I would list the tasks at hand, approach folks to plan a timeline for the project, and motivate the team to commit to the deadline. This approach, indeed, builds accountability within the group. By pushing them to explore and pursue new projects, I allow them to learn something new and implement something incredible beyond their comfortable palette.<h2 class="heading-node" id="d2f6">What skills have you best mastered over the years?</h2>As a banker, I have been working with and managing large teams for a while. So, without a twist, team management is one of my strengths. Other competencies include developing professional rapport, effectively communicating and negotiating with cross-functional groups, engaging customers, and rendering them quality service. At M2P — I have fortunately had the full vicinity of how a back-end banking system works.<h2 class="heading-node" id="c5f5">What fascinates you about payments and the work you do?</h2>It’s an evolving industry. The business, products, and everything in the company is changing. It might be a regulatory change or a newly coming out company or a product that brings something new to the ecosystem. It is happening and fast-moving. These developments motivate me to learn more than whatever we know now, as we might get outdated in a month or two.<h2 class="heading-node" id="7028">Tell us anything about you that we don’t know?</h2>I don’t usually sugarcoat anything! Sometimes I may not sound like a soft-spoken person since I’m a reality checker. I was a zonal level runner-up for volleyball and badminton. I listen to music a lot, especially lyrical melody music.<h2 class="heading-node" id="5651">How do you keep yourself updated about payments and card transactions?</h2>I talk to people, especially in M2P. When you talk to people, you get to know about current affairs. When you talk to clients, you get to know about the industry and how it works. I do read, but maybe not that much. I get more information from people than paper.<h2 class="heading-node" id="b8ba">How do you motivate your team?</h2>Firstly, Learning is one thing that I always look for. So, I insist my team members to keep learning and rise above themselves on every possible occasion.Secondly, you have to talk to them, empathize with what they’re going through. Regarding their career and growth, you have to push them by saying, ‘You can do it!’. I will let them figure it out themselves, revert to me for any show-stopper, guide them in the right direction, and provide resources.<h2 class="heading-node" id="5138">How have influences like Bill Gates influenced you as a banker?</h2>To be frank, I got influenced by our company founders rather than thought leaders. This is because they have achieved great heights, starting from a humble background and always value family and culture.<h2 class="heading-node" id="30c9">One favorite memory after joining <a class="link" href="https://m2pfintech.com/">M2P</a>?</h2>One was the elevation in my career last year. Second is when we go out to meet clients or to a bank, people recognize me. Those moments are my cherished memories!<h2 class="heading-node" id="6fd2">Three words to describe Vivek</h2>Organized, shrewd, and bankable<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 our Accidental Banker

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/05/gametech-2.webp" alt="M2P Fintech" title="" width="100%" height="529">It’s quarantine, and Sam is busy playing Among Us with his friends. As he progressed through levels, Sam wanted to upgrade his avatar to match his friends. That’s when he came across the in-app buy button. As he had linked his cards to Google, Sam immediately purchased the avatar and continued his gaming journey.Now you might be wondering, why is gaming featured in a fintech newsletter? Well, here is our unique angle to it:GameTech is a fresh vertical that combines <a class="link" href="https://m2pfintech.com/blog/fintech-101-discover-the-3ws-of-fintech/">financial technology</a> and the gaming industry into one.With the onset of the pandemic, Gamification has integrated itself with our lives. Paradoxically, this lockdown also saw increased connections with the family through heritage games like Ludo. However, many had also turned to mobile gaming as part of their lockdown activities.While most online games offer in-app purchases that enhance a player’s gaming experience, like upgrade their avatar or unlocking bonus features that help them advance in the game. This means that thousands of gamers are now opening their <a class="link" href="https://m2pfintech.com/blog/the-rise-of-digital-payments-2/">digital wallets</a> to take advantage of the slashed prices and limited offers that are often irresistible to pass up.This is why online gaming is now a part of the fintech ecosystem.According to Newzoo, the games market will account for $174.9 billion by the end of this year. This figure is a $15.6 billion increase from a forecast done in the beginning stages of COVID.On a global scale, online gaming was once dependent on <a class="link" href="https://m2pfintech.com/blog/credit-card-processing-a-definitive-guide/">credit cards</a> and ATMs for purchases. But since then, the gaming industry had rolled out a robust payment structure to streamline gamers’ transactions.India’s gaming market is projected to be $1 billion by 2021, a significant increase from $260 million in 2016. Indian gamers view it as a competing platform to bond with their friends. This mindset has run deep in India’s Tier 2 and Tier 3 cities, where the adoption of apps and in-app purchases is the highest. A result of this consumer behavior has led to revenue generated from customizable avatars and virtual coin packs arising from the apps. Revenue was also generated from ads that gamers needed to watch to receive extra features in the game.This response has prompted e-gaming businesses to change their models from download volumes to one engineered on consumer engagement and experience. With more than 400 gaming start-ups trying to make online games interactive for India’s 500 million smartphone users, the game tech industry looks at two-folding investments within a few years.Gametech in India is a market worth tapping into for its immense potential. With the current scenario, we hope to see India become a key player in online gaming in the coming years.<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.

Gametech- A rising star in the fintech world

<html><head></head><body><img class="alignnone size-full wp-image-2580" src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/05/Artboard-1-copy-8-13.webp" alt="M2P Fintech" width="100%" height="100%">

<a href="https://m2pfintech.com/blog/pci-dss-the-payments-armour/">PCI DSS stands for Payment Card Industry Data Security Standard</a>. A collaboration between top reputed <a href="https://m2pfintech.com/blog/credit-card-processing-a-definitive-guide/">credit card</a> brands such as American Express, Discover, JCB, Mastercard, and Visa in 2004 resulted in PCI-DSS launch. Organizations who store or process, or transmit the cardholder data either as clear or in an encrypted manner should comply with PCI regulations.

A short survey showed that most people give the above description when quizzed about PCI-DSS. When we further probed them about the levels present in this compliance, we came up short. So, we came up with a quick read of the PCI-DSS compliance levels.
<h2 id="6c0f" class="rz sa ps bn ds sb sc sd fr se sf sg fv sh si sj fz sk sl sm gd sn so sp gh sq dr">PCI DSS Compliance levels</h2>
Divided into four levels, the PCI Compliance levels are based on the number of credit or debit card transactions processed by a business annually. These levels determine what needs to be done by an enterprise to remain compliant.
Level 1:
Applies to merchants who process more than six million real-world credit or debit card transactions annually. An authorized PCI Qualified Security Assessor will conduct an annual internal audit and an on-site evaluation of the organization to:
· Authenticate the assessment’s scope;
· Evaluate technical information and documentation;
· See whether the PCI-DSS standards are being met;
· Assist and guide the compliance process and
· Also, evaluate the compensating controls
On successful evaluation, the QSA will present an RoC (Report on Compliance) to the organization’s acquiring bank, thereby demonstrating its compliance.
Level 2:
Applies to merchants who process between one and six million real-world credit or debit card transactions. Security testing reports on network hosts and applications should be completed on a defined frequency. The RoC is also applicable for level 2 organizations.
Level 3:
Applies to merchants who process annually between 20,000 and one million e-commerce transactions. A yearly assessment must be done using the relevant SAQ (Self-Assessment Questionnaire)along with a quarterly PCI scan.
Level 4:
Applies to merchants who process annually fewer than 20,000 e-commerce transactions or those who process up to one million real-world transactions. They must complete a yearly assessment using the SAQ and a quarterly PCI scan.

<h2 id="7604" class="rz sa ps bn ds sb aed sd fr se aee sg fv sh aef sj fz sk aeg sm gd sn aeh sp gh sq dr">What is this Self-assessment questionnaire?</h2>
PCI-DSS lists several kinds of SAQs for every level, and it is also based on how the merchant processes card information. Given below are some of the types of SAQs applicable to levels 2–4:
SAQ A: Merchants who outsource their entire card data processing to certified third parties. The transactions also include e-commerce transactions.
SAQ A-EP: Applies to E-commerce merchants who outsource their payment processing but not the site’s administration.
SAQ B: Applies to E-commerce merchants who don’t receive cardholder data, but they have control over the process through which data is redirected to a third-party payment processor.
SAQ B-IP: It applies to merchants who don’t store cardholder data in electronic form but will use IP-connected point-of-interaction devices. These merchants may handle either card-present or card-not-present transactions.
SAQ C-VT: Applies to merchants who process cardholder data via a virtual payment terminal.
You must select the right SAQ because every level has compliance requirements based on how payment card data is processed.

<h2 class="rz sa ps bn ds sb aed sd fr se aee sg fv sh aef sj fz sk aeg sm gd sn aeh sp gh sq dr">How to become a PCI DSS compliant</h2>
The PCI DSS specifies six control objectives for an organization to achieve compliance:
1. Build and maintain a secure network
2. Protect cardholder data
3. Maintaining a vulnerability management program
4. Implementing strong access control measures
5. Regular monitoring and testing of networks
6. Maintaining an information security policy

<h2 id="2e3a" class="rz sa ps bn ds sb aed sd fr se aee sg fv sh aef sj fz sk aeg sm gd sn aeh sp gh sq dr">The penalties of non-compliance</h2>
As cardholder data is considered personal data, a PCI DSS breach can also be regarded as equal to a <a href="https://m2pfintech.com/blog/gdpr-in-a-nutshell/">GDPR</a> breach. If PCI regulations are not adhered to, organizations will face severe financial penalties or even lose their facility to accept card payments.
In short, PCI-DSS is a standard that ensures trust, business continuity, and safety of the cardholder data.
<a 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 href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.</body></html>

Product

About

Resources