{"id":1574,"date":"2015-01-23T11:00:15","date_gmt":"2015-01-23T05:30:15","guid":{"rendered":"http:\/\/gtm360.com\/blog\/?p=1574"},"modified":"2021-11-05T20:09:46","modified_gmt":"2021-11-05T14:39:46","slug":"banks-have-nothing-to-fear-from-neobanks","status":"publish","type":"post","link":"https:\/\/gtm360.com\/blog\/2015\/01\/23\/banks-have-nothing-to-fear-from-neobanks\/","title":{"rendered":"Banks Have Nothing To Fear From Neobanks"},"content":{"rendered":"<p><a href=\"http:\/\/gtm360.com\/blog\/wp-content\/uploads\/2014\/12\/STOCK-300x300.jpg\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"alignright wp-image-2084 size-medium\" src=\"http:\/\/gtm360.com\/blog\/wp-content\/uploads\/2014\/12\/STOCK-300x300-200x200.jpg\" alt=\"STOCK-300x300\" width=\"200\" height=\"200\" srcset=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2014\/12\/STOCK-300x300-200x200.jpg 200w, https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2014\/12\/STOCK-300x300-100x100.jpg 100w, https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2014\/12\/STOCK-300x300.jpg 300w\" sizes=\"auto, (max-width: 200px) 100vw, 200px\" \/><\/a>According to the Economic Times article <strong><a href=\"https:\/\/www.readability.com\/articles\/ptfa7lwv\" target=\"_blank\" rel=\"noopener\">Brokerages\u2019 Retail Pain Is Banks&#8217; Gain<\/a><\/strong>, banks have stolen a march over neobanks in the e-brokerage space in India. Cheaper access to funds and greater trust &#8211; &#8220;no one lost money with a bank&#8221; &#8211; are two major factors that have gone in favor of banks.<\/p>\n<p>Based on personal experience, I&#8217;d add better CX as one more factor.<\/p>\n<p>I&#8217;d signed up for an e-trading account with a leading private sector bank back in the late &#8217;90s. I continue to use it over 15 years later &#8211; although not as often as my RM would like me to, but that&#8217;s another story! My e-trading account is connected to both my bank and DEMAT accounts. (For the uninitated, DEMAT is what an electronic security repository is called in India.) As a result, movement of\u00a0money and shares between my three accounts is seamless. So much so that:<\/p>\n<ul>\n<li>I&#8217;ve never written \/ received a single cheque for any of my stock purchases \/ sales after onboarding this platform<\/li>\n<li>I\u2019ve forgotten the name of those paper slips I used to fill for depositing and transferring shares in my pre e-trading days!<\/li>\n<li>I don\u2019t recall having to visit the bank&#8217;s branch even once after going there to open my account more than 15 years ago.<\/li>\n<\/ul>\n<p>In contrast, the new crop of nonbank e-brokerages that came into existence in the early 2000s are\u00a0isolated from funding sources and security repositories. Their customers have to deal in cheques for sale \/ purchase of stock. They need to make frequent visits to their bank branch and the e-brokerage&#8217;s office to drop and pickup cheques and other paper instruments.<\/p>\n<p>Despite all that friction, nonbank e-brokerages were able to gain a foothold in the initial days. I attribute their early success to a growing market, their cheaper brokerage rates, more aggressive advertising and, above all, the modest user experience expectation of the Indian consumer who had just then started dabbling with Internet and ecommerce.<\/p>\n<p><a href=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2014\/12\/bt-fi.jpg\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"alignleft wp-image-2140 size-medium\" src=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2014\/12\/bt-fi-200x88.jpg\" alt=\"\" width=\"200\" height=\"88\" srcset=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2014\/12\/bt-fi-200x88.jpg 200w, https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2014\/12\/bt-fi.jpg 630w\" sizes=\"auto, (max-width: 200px) 100vw, 200px\" \/><\/a>In the last 5-7 years, Indian consumers have gained exposure\u00a0to many e-tailers and online travel agencies that deliver a highly frictionless experience. As a result, they expect superior UX in all their online interactions. Unfortunately, the e-brokerages&#8217; convoluted operating model fails to fulfill their heightened expectations. It was a matter of time before customers spurned the lousy CX offered by nonbank e-brokerages. Seems like that day has finally come.<\/p>\n<p>In the end, friction has precipitated the rapid decline of retail e-brokerages.<\/p>\n<p>I&#8217;ve been complaining about friction in Internet Banking and other digital banking processes for a long time. It&#8217;s so ironic that banks should actually trump neobanks with superior Customer Experience &#8211; at least in this one category of financial services.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>According to the Economic Times article Brokerages\u2019 Retail Pain Is Banks&#8217; Gain, banks have stolen a march over neobanks in the e-brokerage space in India. Cheaper access to funds and greater trust &#8211; &#8220;no one lost money with a bank&#8221; &#8211; are two major factors that have gone in favor of banks. Based on personal &#8230; <a title=\"Banks Have Nothing To Fear From Neobanks\" class=\"read-more\" href=\"https:\/\/gtm360.com\/blog\/2015\/01\/23\/banks-have-nothing-to-fear-from-neobanks\/\" aria-label=\"Read more about Banks Have Nothing To Fear From Neobanks\">Read more<\/a><\/p>\n","protected":false},"author":4,"featured_media":2140,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6,8,1],"tags":[],"class_list":["post-1574","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bfsi","category-it-marketing","category-mandatory-category"],"_links":{"self":[{"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/posts\/1574","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/comments?post=1574"}],"version-history":[{"count":9,"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/posts\/1574\/revisions"}],"predecessor-version":[{"id":8595,"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/posts\/1574\/revisions\/8595"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/media\/2140"}],"wp:attachment":[{"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/media?parent=1574"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/categories?post=1574"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/tags?post=1574"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}