Just two weeks ago we reported on Daily Fintech that the Indian SME banking sector had received a $30 million funding injection, with Tiger Global leading a round into Open, a neobank targeting the sector.
In that same article, we surveyed the booming Indian neobanking space, and drew your attention to another player similar to Open, NiYo. This neobank wants to own the banking relationship with salaried employees in India, offering 50% salary advances via its platform, at 0% interest. It also has a multi-currency Visa travel card and a tax-saving feature for employee expense management.
Just a few days ago, NiYo hit the headlines in its own right, with news another big funding fish, Tencent, was part of an even bigger $35 million round into the business.
Talk about stealing the spotlight from its competitor.
While there’s the usual chatter about new products and doubling down on distribution, it’s reported the neobank is also on the acquisition hunt, and open to bringing oboard other startups that can fast track its overall vision.
There is a slight irony in the fact that as neobanks like Open and NiYo rise, parts of the industry are in severe decline. Nowhere was this more evident this week, than the (somewhat) shocking news stalwart Deutsche Bank will retrench as many as 18,000 of its global workforce in the coming weeks. The dramatic impact technology has had on certain aspects of the two divisions feeling the brunt of the cuts at Deutsche – equities and fixed income – could have some viewing the move as a bellwether for other inefficient parts of legacy banking. No one can deny business banking is right up there – NiYo and Open are being funded because of it.
While there is no defined news on the extent to which Deutsche’s Indian operations will be affected (their equities team is a small operation), it’s worth remembering India’s huge role in processing and supporting offshore teams. The flow on effects of high salaried, and often highly leveraged employees in Western countries losing their income in a market where replacement jobs are thin on the ground, is all part of a growing concoction of financial chemicals that could pop the global asset bubble. It only takes one prick, after all.
At least in India, the opportunity for re-invention and growth in the financial technology space is abundant, where payments and banking innovation is flourishing thanks to a lack of legacy systems and throttling regulation. Might be time for a sea change for some of those ex-Deutsche employees, who are fed up with the bright lights and ruthlessness of Manhattan and London.
Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech. Jessica Ellerm is a thought leader specializing in Small Business and the Gig Economy and is the CEO and Co-Founder of Zuper, a new superannuation startup in Australia.
I have no commercial relationship with the companies or people mentioned. I am not receiving compensation for this post.
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