Why the regulator, RBI is issuing so many licenses? Making sense of it and finding opportunities for innovations.

1. Next Gen Banking
How Regulation and Technology is changing Banking in India
Ashish Banerjee, Technology Evangelist
@innomon

2. Agenda
New Banking Licenses
Technology Levers
What has Changed
New Opportunities

3. Why So Many Licenses?

4. New Licenses
Why so many types of Banks?
PPI (Prepaid Payment Instrument)
Payment Banks
Small Finance Bank
Scheduled Banks

5. What is Money
Money is a device for storing
and exchange economic value.
Storage of Value requires
Security and Stability
Exchange of Value requires
Agility and Innovation

6. Stability
Stable organizations are required for Security and Stability needed for Storage
of Economic Value functionality of Money.

7. Agility
Transfer of Value functionality of Money need Agile & Innovative organizations
for high velocity , low value money transfer.

8. Different Licenses for Agility and Stability
Transfer of Value: Agility and Innovations :
PPI (Pre Paid Instruments)
Payments Banks
Storage of Value: Stability and Security
Small Finance Banks
Focus on rural and unbanked population
Loans to small entrepreneurs and Self Help
Groups
Scheduled Banks
Too Big to Fail
Focus on conventional banking
RBI recognised that it is difficult for one organization to pursue the divergent
requirements for Transfer of Value and Storage of Value functions of Money

9. What Has Changed?

10. 100 = 10
Accounts opened in last 100 years equals the number of accounts opened in
last 10 years

11. For Bottom of Pyramid customers new Low Cost Innovations required for High Velocity low value transactions

12. Urban
PPI and Scheduled Banks will mainly focus on Urban population and top of
pyramid customers

13. Unbanked
Payments Banks and Small Finance Banks will focus on unbanked and rural
customers

14. New Opportunities

15. Urban
PPI and Scheduled Banks
Social Media is the new banking
channel
Mobile Banking Apps new
differentiators
Technology enabled Doorstep
Banking
Payments Innovations
Mobile commerce integration
IMPS (Immediate Payment
System)

16. Social
Social Media is the new channel
Twitter
Hashtag banking: Kotak
Money Transfer: HDFC
CRM integration: most banks
DM OTP
Facebook
Collaborative Saving: ICICI iWish
CRM integration: most banks
OAUTH Social Login
DM OTP

17. Doorstep
Your Home is our branch
Mobile POS:
E-commerce and Local Commerce
Doorstep Full Service
Cash Delivered at Home
Tablet based branch bank at home
Instant KYC
Instant pre-activated account
opening

18. Payments
Innovations and Agility
NFC POS
Payment Tokenization
NPCI UPI (Unified Payments
Interface)
Universal Payments Wallet
Social Payments and Split Pay
IMPS
Mobile Immediate Payment system
AEPS
Aadhaar Enabled Payment System
QR Code Local Commerce

19. Unbanked
Low Cost Innovations
BC (Business Correspondent)
Tablet App with Offline first
embedded biometrics
Universal Banking App
Financial Delivery Platform for Value
Added Services, like, Railway
Tickets, Micro Insurance, assisted
e-commerce
AEPS: Direct Subsidy Transfer
Human ATM and Micro ATM
Instant Inward remittance

20. Feedback Welcome at Twitter:
@Innomon