Gaurav S Profile picture
May 18, 2019 12 tweets 3 min read
1: The global banking industry is showing signs of renewed health:

i. Deep capital reserves-Tier-1 capital is at decade-high ~12.6%.
ii. High liquidity: Loan-to-deposit ratio fell to~90%, as comp. to 120% in 2007
iii. Innovation: Investment in digital capabilities & partnerships
2: Banks have taken an axe to costs, yet profits remain elusive (falling ROE and P/B Multiples), leading to depressed valuations.

The unstoppable march of ‘Four Horsemen’ —Disintermediation, Commoditization, Unbundling/Rebundling, and Invisibility— continues.
3: Technology is breaking up traditional value chains into new stacks.

—Traditional Model: Banks vertically integrated. Competition between banks with similar offerings.
—New Model: Modularization. Specialized service providers compete on product innovation and distribution.
4: Forcing rapid changes in playbook & operating models: From→ To:

- Short-term Profitability → Customer Obsession
- Mass Standardization → Mass Customization
- Limited Products →Diverse Products
- Channel Islands → Integrated Ecosystems
- Fragmented Products→Focused UX
5: To succeed, a digital-bank needs to (re)design its operating DNA and build core capabilities around:
6: There are several independent strategies to build a digital bank:
i. Just a front-end, based on the existing core. No own license.
ii. Develop new front-end solutions on existing core and own products.
iii. Front-ends with own modern core banking, own products, and license
7:
iv. Independent bank with own modern core. Proprietary and 3rd party products
v. BaaS i.e. Core banking products offered to the business, FinTechs, Telco's, No B2C.
vi. Open API’s for 3rd party developers, in order to focus only on core products
8: Neobanks are shaking up traditional banks’ business by offering exciting digital and customer-centric solutions. Digital disruption is the driver. Business-Model is a challenge for many. The jury is out on long-term economic viability and scale beyond early adopter base.
9: Several existing internet co.’s ‘greedily’ expanding into FinTech categories will be disappointed. Success demands a departure from today’s models and competencies to scale new growth models.
10: It helps to critically assess:
—Where to play?
—What network plays to follow?
—How to monetize ecosystem play?
—How to set up critical building blocks?
—How to solve for ‘trust’?
11: New growth models need a new approach, plan for profitability, and network investment. The new tech will create more equality and surplus.
12: Above are some quick tweets from several private discussions, this month, about ‘Neo-banking’, with regulators, FI’s, FinTech co.’s and big banks. I’ll write a long post on this sometime soon.

<end> #fintech #neobanks #bank #asia

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More from @Gaurav1105

Jan 1, 2021
Next 10 years in FinTech.

The Fintech tsunami is happening, and there is no way back.

Long thread 🧵👇🏼
1) In 2030, the largest “bank” in the world will not-be-a-bank.🏦 Think- Square, Stripe, Affirm, AntFin, PayPal, etc. Many large asset categories are still untouched by Fintechs, and once that starts to happen, several new ~$100BN - $500BN 💰 companies will be created.
2) Major economies will have low or no-Cash 💵; primarily due to ‘digitization-of everything’, and CBDC. Major central banks will transition to a digital currency paradigm, where national currencies will compete on features (like software does) as well as economics.
Read 26 tweets
Dec 26, 2020
A decade ends. A new decade begins.

Some learnings and insights at the intersection of Life, Health, and Wealth.

#Thread 🧵 👇🏼

1) “Be Water, My Friend.”

2) Success stories start with failure.
3) Consistency creates luck. *Designing life for luck* is Art. Great Success = Some Talent + A Lot Of Luck*. Let the natural order of things emerge. Understand the language of the Universe. Align with it. Self Discipline carries you further than luck.
4) Wealth is not about money, but about options. Getting wealthier is a choice. Freedom is the biggest wealth. Everything else is just a means to get that freedom. Changing your belief system and expanding your vision takes courage.
Read 24 tweets
Dec 13, 2020
1/n: In the new decade, the fin-services sector will look beyond the current open banking ‘phase’ and towards a future of fintech enabled marketplaces and complete financial automation, where the traditional banking model is turned on its head and requires a dramatic rethink,
2/n: emphasizing:
1) Experience over Products;
2) Data over Assets;
3) Partnering over the build or buy;
4) Shared access over ownership.
3/n: FinTechs are now increasingly global, and threatening traditional banks by ushering in product-stack changes- from ‘un-bundling to re-bundling’, from ‘mono-line to multi-line’.
Read 12 tweets
Feb 14, 2020
Technology is reshaping the operating-model of financial institutions fundamentally. Some thoughts:

1/ Banking & credit are the lifeblood of capitalism, and Credit and Debt play a big role in driving demand and economic growth.
2/ The line between deposits and lending is becoming blurred as cash-flow is delivered “as a service”. Non-traditional data makes it possible to create new products and serve new customer categories and markets.
3/ Deposit accounts are no longer the locus of control for customers as the center of the retail customer experience shifts to financial-management platforms, reducing interaction points between large banks and customers.
Read 10 tweets
Jan 1, 2020
Some learnings at the intersection of banking, credit, & tech.

1) Banking & credit are the lifeblood of capitalism.

2) The most conservative lender is only one severe credit cycle away from failure.

3) Banks fail, Sovereigns default. Hundreds of banks fail every 10+ years.
4) Be wary of banks that obsess overgrowth. Growth at an exceptional rate is a red flag in banking.

5) Government (Fiat) money ≠ Sound money.

6) Human civilization flourishes in times and places where sound money is widely adopted.

7) Bitcoin is a monetary system.
8) Lending is simple but it’s not easy – it’s a business.

9) Credit is older than money & Fintech.

10) The only way banks get in trouble is because of their bad loans.

11) The only good loan is the one that gets paid back.
Read 9 tweets
Sep 1, 2019
I've been studying China 🇨🇳 for almost a decade now.
Fascinated by its ancient history, cultural transformation, hi-tech prowess, neo-capitalism, wealth creation, debt crisis, & global domination.

Here're some good documentaries👇🏼that explain China's past, present, and future
1) New Money: The Greatest Wealth Creation Event in History (2019)


2) The People's Republic of The Future


3) Too Big For China | Startups - Full Documentary 2018
4) China A Century of Revolution 1976 1994


5) History of Hong Kong - From British Colony to SAR of China


6) China Does Capitalism Better Than America
Read 7 tweets

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