How tech banks are beating neobanks?
IDFC first is interesting spin off to compete in neobank segment.
Welcome to the 202nd edition of the GrowthX Newsletter. Every week I write 2 pieces on startups & business growth. Today’s piece is going to 95,300+ operators & leaders from startups like Google, Stripe, Swiggy, Razorpay, CRED & more
Every fintech startup wants to be a neobank. But, almost no one is solving conventional banking troubles. Interestingly, a 5 year old bank is using tech to stuff neobanks should have done - here's the full story 👇
Some context, I moved on from my Axis bank account after 15 years - the reason? a hell lot of spam even with Truecaller. But, the trigger was the bank made me walk into a physical branch every time I had to do foreign remittances.
So I did something I never imagined, I picked up a new savings account just to do foreign remittences. But, I didn't know what I was getting into -
It took me 5 minutes to open a savings account, 2 minutes to do video KYC with a person on a live call right inside the IDFC mobile app. Next 24 hours, I got a debit card & chequebook delivered. My goodness - this speed is something I have not seen from a bank.
Savings accounts are a pain and the easiest product to sell to a new customer. But, banking thrives on cross-selling. And every freaking bank in the country is after their customers to push loans/ credit cards/ mutual funds and more.
What Ditto Insurance is doing with insurance, I would argue IDFC first is doing with banking. They are focusing on product led sales. The whole IDFC app is designed for cross-sell.
I would pay money to my bank for it to freaking not call me for loans. 60 days in, I have not received a single spam call from the bank - true aha moment. I am sure this model has its limitations when it comes to scale but onboarding has been a killer if nothing less.
Think like a bank and behave like a tech company 💰
It will be interesting to see this whole space with Jupiter Money, Fi Money & others solve cross-sell without spamming the sh*t out of their customers.
That's all for now 🪄
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I also wrote a larger piece on why Slice merged with Northeastern Bank to get out in the open for competing in the "Neo bank" space - it's the only way a startup with no banking license can survive any RBI regulation.