Cashfree Payments, a leading payments and banking API solutions company, today announced the launch of an industry report titled “Changing the Retail Banking Landscape Through Savings Account APIs”.‘. The report takes a deep dive into India’s savings account API landscape, the innovation it enables, and how it’s changing the future of retail banking in India. It also presents the views of established and emerging fintech players in the Indian retail banking space, on various key aspects, ending with a proposal for a new regulatory model for a licensed BaaS intermediary. This will create a “superfintech,” enabling white-label front-end business correspondents, “neo-banks,” and other fintech models operating on the bank-fintech partnership model.
The report points out that APIs can “decentralize” banking, changing the way savings accounts of the future will be opened, accessed and managed. Savings account functionalities such as deposits, cash withdrawals, payments, fund transfers, among others, can be transformed into a set of APIs, each of which then becomes Banking as a Service (BaaS) products. ) to exploit. For banks, this allows them to decouple and enable core processes such as account opening, transactions, and account management through fintechs, creating new touchpoints with retail banking.
In the retail banking sector, there are significant opportunities for fintech players, including so-called “neobanks”, to respond to new and untapped markets. Banks have also recognized the monetization opportunity of fintech partnerships and are continually increasing the products they use through APIs and exploring new partnerships. In order to address this new-to-market audience, fintech players can leverage savings account APIs across the country to transform the retail banking experience for customers.
The report delves into the different forms savings account APIs take, as well as the specific use cases and innovation they enable in the space, including service offerings targeted for generation Y, agricultural markets, family-oriented financial services, etc. It also allows existing fintech and B2C markets to diversify by providing new offerings to their existing customer base. It discusses the specific benefits that API aggregators offer from an infrastructure perspective, aggregating APIs and providing APIs, SDKs, and no-code based solutions for quick and easy integrations. launching financial services.
The report explores the multiple options available for “neobanks” and other such players in the Indian regulatory space. The business correspondent channel is the most common, along with recently introduced guidelines for digital banking units (DBUs), allowing banks to leverage them to expand their digital footprint. Others include prepaid payment instrument licenses, small bank licenses, account aggregation framework, etc., each of which offers different capabilities to fintechs and comes with different restrictions. The DBU pathway adds to the pathways available for fintechs to engage with regular commercial banks, making it an important way to drive financial inclusion through the BaaS pathway as well.
From a regulatory point of view, in the case of “neobanks”, the Niti Aayog and the RBI through its report on digital lending have put forward proposals, but it seems that these will not be taken into account in the immediate. Faced with this, the report proposes an alternative solution, a regulatory model allowing BaaS-fintech partnerships via a “super-fintech” platform. It is essentially a licensing framework for a BaaS intermediary, enabling tiered access to banking and financial APIs, and enabling white-label CBs and other BaaS-based fintech models.
Today, rapid fintech innovation needs an equally dynamic regulatory framework. The framework proposed in this document aims to provide fintechs with the flexibility to integrate quickly, provide services from multiple back-end partners, and enable easy scalability, all under the oversight of the regulator. By aggregating APIs from multiple regulated entities, the role of a super-fintech will be to enable secure, efficient and aggressive delivery of banking services and even fintech innovations like Open Credit Enablement Network (OCEN).
Akash Sinha, CEO and Co-Founder, Cashfree Payments said, “It is with great pleasure that we launch this report on the rapidly changing landscape of retail banking. We are convinced that Bank-Fintech partnerships will power the next generation of banking services. Fintech innovation and bank-fintech partnerships are reaching the heart of banking today through neobanks, and customers can expect an exciting new retail banking experience.
With over 50% market share among payment processors, Cashfree Payments is now leading the way in bulk payouts in India with its Payouts product. Recently, India’s largest lender, SBI, invested in Cashfree Payments, further underscoring the company’s role in building a robust payment ecosystem. Cashfree Payments works closely with all major banks to build their core payment and banking infrastructure which helps power the company’s products, and is also integrated with major platforms such as Shopify, Wix, Paypal, Amazon Pay, Paytm and Google Pay. Besides India, Cashfree Payments products are used in eight other countries, including the United States, Canada and the United Arab Emirates.