Unravelling Fintech Infra and BankTech Opportunities

Vikram:

There is a halo of having built fintech systems in India which will actually spur adoption in global markets.

Anish:

This infra of enabling merchants and platforms and SME exporters to accept global payments is a big pain point among all the people we speak to.

Anand:

If not for these fintech infra companies would these consumer companies would have it on their top five priorities to launch FS, maybe, maybe not.

Anand:

Hi, everyone. Welcome to Matrix Moments. We have here the fintech team at Matrix Partners, Vikram, Anand and Anish. Vikram, you guys, most of you would already know, he’s been investing for over a decade and MD at Matrix Partners. I’ve been investing in fintech startups for a couple of years now, prior to this I’ve spent a decade in financial services doing banking, private equity, traditional finance and now investing in fintechs. Anish?

Anish:

Hi, guys. I also work with the fintech team here at Matrix, been investing with the fund for close to two and a half years, involved with a bunch of portfolio companies like Dezerv, OTO, Jodo and NAKAD. Look forward to the discussion today.

Anand:

So today we wanted to start an open discussion on bank tech and fintech infra. We have been spending some time speaking to experts in the banking and fintech domain to understand what are the emerging trends in the fintech infra space. Before we even start the discussion, Vikram, wanted to ask you, we have been investing in the fintech domain for ten plus years now, we’ve backed early champion companies in neo banking, lending, wealth, why haven’t we taken enough bets in fintech infra? There is a joke which goes around that we haven’t taken a bet because either it’s boring or sometimes even profitable, what’s your take?

Vikram:

So for our listeners this is what our fintech meetings look like where the two of them push me on my mistakes and this is sort of one of them where we have – this is a sector that we should have invested a lot more in and I keep telling these guys that whenever there’s a gold rush the people who are selling picks and shovels and jeans they make a lot of money. And that's the same thing that’s happened with the fintech gold rush where both fintechs as well as banks have spent a lot on technology and therefore some companies have gotten built, the likes of M2P, to name a few and there’s a bunch of others who have gotten created in that space. So I think we should have done more to invest in that phase 1 of bank tech in this bank tech, fintech infra in this country. We did invest in CreditVidya which was acquired by CRED, made an investment in journey with Abhishek. As well as Razorpay which I would argue has built some of the backbone infra across the ecosystem.

I think though I’ll talk about a few things that held us back and I think some of those things have changed today. So the few things that held us back, the number one was we looked around globally the biggest value was in this connectivity tissue between fintech’s, banks and how they were operating together and so on. And here a lot of that was built by the India stack, you have to give credit where it is due, to Nandan, Sharad, Pramod and the entire team at India stack they built all of this as a public good and honestly the fintech ecosystem wouldn’t be where it is today if they hadn’t done that for us. But on the flip side that meant a lot of the easy pickings on this bank tech space weren’t available here and so lot of that value was essentially captured as a public good and likely necessary in a country like ours because we wanted to drive financial services penetration.

Then there were all the smaller things which was will Indian companies pay for SaaS, what’s the sale cycle and so on. Those are sort of minor consideration but those are some of the things that sort of help us back. We definitely don’t want to miss out in this next wave of bank tech that gets created so that's what this podcast is about. I think Anand’s set it up as a brainstorm, we actually don’t have the answers but we have a few interesting hypothesis but please try to send us feedback, what you agree with, what you don’t agree with and it’ll really help us refine our point of view.

Anish:

So, Vikram, what has changed, we’ve had this BaaS thesis for some time now, we’ve seen the firsthand experience of some of our portfolio companies take a year or two to launch, do the integrations one on one, we understand how some of this works with banks but what has changed now?

Vikram:

So, the number one thing that has changed I think is every large bank and most small banks have a CDO that means someone’s life depends on it, on how they’re engaging digitally with their accounts, with their users but also with other fintech’s. So, there’s somebody whose like charter and life depends on this, so that's the number one thing that’s changed. And I think they’ve all made their early mistakes, they’ve all tried something that didn’t work and so on. And they’ve also figured out the process internally on how to adopt tech, one of the barriers was how does risk and compliance actually work. There were lots of different influencers on that decision and some of that has also been ironed out and CDOs have a pride of position in that org where they’re also able to implement this and they’ve figured it out. So I would say that’s one.

Second, I think both banks and fintech’s have realized that partnerships and in some ways not even co-optation its actually cooperation is the only way that they actually increase the pie for each other. And as long as that pie is growing there is enough room for everyone, I think that's the second thing that has changed.

And for the banks I think fintech revenue pools have become significant, I saw multiple analysts’ presentations this quarter which actually showcased the fintech partnerships that they’ve had. You can see that in the Axis Bank presentation, you can see that in the Federal presentation and so on, so it has actually become important enough that they’re showcasing this to the market and their partnerships to the market. And on the fintech side I think they realized they have to make big investments in the tech stack which is partly for their own good, I can call out two of our portfolio companies, one is OneCard which built the entire card stack inhouse as well as Razorpay which had to build a lot of the payment transaction stack and they had different versions of it for different banks and so on. And so that's actually overall ecosystem good that has sort of left behind. So fintech’s are ready to invest and it’s important enough on the bank side. What do you guys think?

Anand:

So even startups outside fintech everyone today wants to monetize and monetize quickly, they want to hit the market, they need model infra solutions and I think that is one another why now. The most interesting thing which I feel is the biggest why now, right, so for fintech infra to flourish I think open banking needs to flourish, for open banking to flourish open data should be there. Now if we look at each one of these, right, open banking I was going through numerous surveys done globally, right, there’s a shift in consumer trend wherein users are now more ready to sort of consume financial services at the point of consumption so that sort of boosts open banking. Open data and we’ll cover it in more detail but account aggregator could be the biggest push and there are global trend lines to this as well. In Europe I have seen that PSD2 guidelines which is Account Aggregator equivalent in Europe was one of the biggest triggers to sort of start the open banking flourish there. Even in US if you trace back to the 1990s when the accounting aggregation and data aggregation by some of the private players started that's when people started talking about open banking. So I think we’re here and now.

One more interesting thing which came across when we were chatting with bunch of bankers, I was in Mumbai a couple of weeks back, was that now it’s not limited to only the large banks. There are SFBs, smaller banks, NBFCs and everyone wants to be part of this value creation. They’re seeing some of the larger fintechs, larger banks hitting results and they also want in on it, so that is another big why now.

Anish:

No, completely agree. And I think the first wave of BaaS they’ve done three things, one is I think the first thing most important is functional tech, can I launch a product, it might take time but can I get it out of the door? Second is just in terms of pay as you go models, right, you don’t have to put in that few million dollars into the tech, make a pay as you go model, setup the agreement and then sort of get the product out rolling so that it’s a win-win partnership. And the third is just around the frameworks of the partnership and who does what, risk, compliance, a bunch of those things probably with a little bit of mistake but they figured it out. So all these three put together have laid that par for the course or the basic hygiene on which now fintech’s and banks operate. And that sort of brings me to the next question are we seeing the making of BaaS 2.0?

Vikram:

We definitely think so. And we want to play a role in creating that ecosystem. Let’s just split it up into a couple of things, right, so the first is actually the core banking system and there things have been slower to change. And I was maybe with some naivety and frustration I was asking some CIOs and CDOs, chief digital officers why aren’t you guys changing, you guys are supposed to be the champions of tech why aren’t you changing this core bank infrastructure very quickly. And they gave me an answer and that's when I realized how naïve I was, it was essentially that this is stuff that affects so many people life and the systemic risk is so high that there has to be a significant upside in changing this and there is what they’re seeing is a possibility of immediate downside and not enough upside. And so they’re like why should we make this decision. And just for context one of them was telling me that if our system is down for an hour that's it, it’s a – I mean we’re a top four bank and this would just bring the system down and RBI would be here in minutes. And so, when I think of it from that decision making point of view there’s no upside in them making this decision unless it is 10x better.

Anish:

And one of the founders once told me touching the CBS is like an open heart surgery.

Vikram:

Yeah, while the patient is wide awake. And that's exactly that, so the core banking system that's one, and the second is a lot of the product companies are not approaching that problem with a solutions mindset. And people will need to move from a product mindset to a solutions mindset especially in this space and there’s this wariness with SaaS founders that they’re perceived as a services company but I think you’ll have to become a solutions company as well as a product company. So that's one part which is the core banking system.

But the second part which is moving very quickly is because of all of these open protocols that are happening like Anand alluded to which is OCEN, Account Aggregator, then there’s co lending CBDC, ONDC, there’s a bunch of these open protocol systems that are happening borrowing from some of the architecture of UPI and so on. But in each of these just like the rise of UPI created a whole bunch of companies I think that's what’s going to happen with each of these open protocols which are then going to go into not just sort of work flow which is sort of very easy for a tech system to build a SaaS product around but also defining those business models as well. So both of which I think is very exciting for each of those spaces. So I think we’re going to see a lot of point solutions which happened around these open protocols and then once you have that point solution and it works then you can build a big company around it.

Anish:

Absolutely agree. I think the bar is also higher, now you're coming and seeing a lot more companies which have a nuanced GTM which start with a very specific product. There’s a very core where somebody is starting at the card stack, somebody is just starting with a,  somebody is ending at co lending stack and we’ve met a bunch of companies and we’ve also seen from our portfolio that the way for example OneCard looks at rewards you need a very nuanced thinking around how the tax stack behind that works. How Jupiter is thinking about for example lending, how some of our other early stage companies are thinking about launching their products, one of them is in wealth. So, yeah, I think there is an acute pain point in each of these sub solutions where you’ll want people to come up with 10x products.

Vikram:

And just on that, I think I was chatting with Anurag of OneCard on this and he said if today I had to start a company it would be in bank tech and that actually gave us a lot of confidence that we’re spending time in the right place.

Anand:

Which actually happened globally also, Marqeta was planning to start as a prepaid card company but then they saw the profit pools is higher in infra and they moved, Plaid planned to start as a PFM company and then they eventually ended up being a data providers and become one of the biggest companies in fintech infra. Some of the biggest tailwinds also are that in recent times we have always been talking that fintechs wants to do this, tech companies want to do this. One big change I'm seeing is that the bin providers, the FIs, they also are now more interested than ever, why, because they’re seeing a steep rise in their digital distribution of financial products and they understand that with time the share will only go up. So they’re trying to spend more and more and build the digital distribution capabilities. Even on the CBS bit, right, while that has been true for a long time I can see some early signs of this changing. I was speaking to some of the bankers and they were saying that now they’re realizing that for small ticket lending and real time lending they would have to go back and do that one big change, upgrade their CBS so as to not miss the explosion in personal lending. So, yeah, those are the tailwinds that gets me excited.

Anish:

So, Vikram, you alluded to AA, UPI, OCEN, India being a largely digital public goods economy whereas in the US you can set up private rails, much of it is monetized because it’s also setup by the one to one or a private protocol. Now a lot of founders say that, ies desh mein highway bhi banchuka hai, toll booth bhi laga diya hai, toll ka rate bhi fix kardiya ha. So do you see that as a bane, boon, glass half empty, glass full empty?

Vikram:

I think I can't think of any fintech founder or fintech investor who will classify it as a bane and honestly I wouldn’t be here if not for the public rails that have been built because every one of our companies today runs on those public rails. Using your analogy, right, highway bangaya hai, toll bangaya hai, but that usually increases the GDP of the economy because you’ve actually built those core infrastructure very quickly. And I think that's a way to think about it that, yes, the rails have been built, what that means is that you can actually build a much larger in the real world industrial GDP. In this case you can build much larger fintech GDP because you're able to access a large set of users immediately and very quickly. So, yes, you have to be much more thoughtful about building that solution and that industry but largely this is something which is a great thing. When I say you have to be more thoughtful what I mean is that pick something which is potentially classified as a niche but the forward trend line is very clear and depending on where you are you could take a bet on OCEN, you could take a bet on AA but build the best 10x point solution on that and then very quickly start offering other things which help the ecosystem players build products on top of it.

Anand:

Even Indian rails on some of the emerging infratech, right, CBDCs, I see that they’re also doing a wonderful job. RBI’s concept note on CBDC was one of the best white papers I have seen on Block chain. So, yeah, I also think that it’s a big move.

So moving on, Vikram, so one of the biggest questions which everyone keeps asking in these infra singular businesses is that how do you make money. First, do you see it as a fintech or a SaaS and India mein log SaaS mein paise dete hai ya nahe, and you have been investing and you’ve bagged so many SaaS startups as well, so what’s your point of view?

Vikram:

Yeah, I think this is one of those things that held us back and I realize that it’s a red herring. When you look at the banks and NBFCs and we’ve been privileged to back a few they actually spend a lot of tech. It goes into IT services companies, actually they’re buying a lot of tech globally so I think it’s a red herring because the actual data doesn’t bear it out. The largest clients in India for the likes of TCS, Infosys and so on will be the banks so the data actually is not true that they don’t spend on tech. Second, the question is what is your model and what is your business model, is it a SaaS business model, is it a fixed licensing type business model and when I say SaaS business model there’s an axis for growth, in a fixed field business model it’s a large license project based model, sometimes it’s just a time and money model and then there are transactions models. One of the things that I think we have to be very thoughtful about is, are you really a transactions model. What we’ve heard from the banks and yes, it is also convenient for them to say it but they are essentially saying why should we be paying you a transactions fee if you're not bringing us new revenue. If you are bringing new revenue and they have a lot of co-branded cards and things like that and big partnerships for example like OneCard or Razorpay where it is all new revenue and then there is new value add that they have done on the technology as well as adding the new merchant as well as the sales system as well as the customer service then they actually command a large transaction fee or large share of the transaction fee. But if you're actually just building tech and there are multiple users of tech and there are multiple dimensions on which those users are using tech that's actually a SaaS model. So then there is a depending on who you are but there is a monthly recurring revenue that you're paying and then after that there is some axis for growth and that acess for growth might be number of users within the bank, it could be number of customers that they’re calling, it could be API calls. So think in a more nuanced manner about what is that axis for growth and if you're not really adding new users I would think really carefully about just saying oh, we have a transaction processing model and a share of transaction fee.

Anish:

So, Anand, I think I kind of agree with what Vikram is saying and that's a good test for founders. I think you need to ask yourself whether it’s a bips model, it’s a SaaS fee model, time and money model and it’s important to set the precedence upfront. If you actually think you're adding so much value and you want to grow with the client ultimately what’s the best part of a SaaS business your client grows or a transaction business your client grows and you grow with them. So setting that precedence is important if you're building a transaction based business and on your question on fintech versus SaaS I think the revenue cohorts can look very similar to SaaS or even better than SaaS, right, you keep retaining a lot of your revenue, you start with one product, get into multiple products, transaction flow, the TPV, GMV that keeps growing, all these are good signs of it being healthy bank tech business.

Anand:

Yeah. And the data also supports it, right, we tried going back and figuring out is what’s the top down revenue pool, how much banks are spending. The number is a whopping 7-8 billion dollars, it’s 3.5 percent of revenue. In US it would be 12-13 percent, China would be at 4-5 percent so there is definitely a revenue pool to be made and I agree with Vikram that it’s been a red herring.

Moving on, Anish, we have been speaking about fintech infra, are there any spaces that you're excited about that you want to invest in and how do you go about selecting these, right, what’s the framework that you follow?

Anish:

So I think it’s simple as he said, find the gold rush and set up a stall next to it. So and if I just think about it what are the spaces today which founders are building and we’re excited about. Explosion of credit cards, we’ve seen Marqeta set an example globally. A bunch of them in India were doing, M2P, Zeta,were helping you launch a card,  short ticket contextual consumer credit exploring, seen a bunch of unicorns globally. Few of the companies we meet are looking to build in that space. There’s an uptick in securitization and co lending volumes post the dip.

Vikram:

I think let’s just stay on that first thing, right, broadly it is one explosion of consumer credit where we just see 200 plus million Indians getting access to some kind of short term credit, credit line, and it has to come about. And I think today’s systems at the bank are not geared towards that kind of transaction concurrency hitting their systems. So somebody has to build a system which actually talks to the fintech’s or talks to the external partners as well as talks to the banks.

Anish:

Yeah, and the variety of products, what works for the first 50 million will not work up to 200 million will not work up to 400 million. You know, you have amortization, bullet payments, just the variety of credit products which have come out and the innovation we’ve seen on the product side all of it has to be supported by the tech stack or the infra at the back end to be able to configure and offer this seamlessly, so completely agree.

Vikram:

Just to bring that to life, at the back end the core banking system is a simple system of credits and debits and then there is the product that the banks love is loans, there’s EMI, there’s a simple way of calculating interest. Whereas all of these short term products will have very different ways of repayment, collection, the way they’re calculating interest, all of that will change so there has to be almost a new transaction layer which is translating the back end into the front end and vice versa.

Anish:

Yeah. And on the B2B side there has been an uptick in the wholesale lending equivalent on the co-lending side as well as on the securitization volume side. We’ve seen a few players who’re going after that space to say it’s a boring space and not many people think about it. Not much of it is actually seen by us, it happens.

Vikram:

So give a sense of scale, what is the overall balance sheet at play.

Anish:

So before Covid we were at DA plus PTC plus securitization was around 1.75.

Vikram:

Let us spell out these things, DA?

Anish:

So direct assignment plus securitization plus co lending all these three are various forms of risk sharing or risk transfer between banks and NBFCs. That was around 1.75 lakh crores and that’s expected to hit 2-2.5 lakh crores this year, next year, so this is massive scale.

Vikram:

And this is core to the way the bank system works, right, and this is core to how as a financial system RBI is driving financial penetration. So this is sort of as aligned with the overall system as it gets.

Anish:

Yeah. And it enables NBFCs and banks to work on their strengths, NBFCs are very good at distribution, banks are very good capital providers and the balance sheet guys. So how do they come together and kind of transfer and share this risk. So very interesting space, we met a bunch of players I think that’s promising.

And the last one would be cross border payments, we have discussed about this time and again. We have had global examples of Airwallex or Rapid or Neam much closer to home that have created value. This infra of enabling merchants and platforms and SME exporters to accept global payments is a big pain point among all the people we speak to and I think in the next ten years we’re going to see a lot of disruption in this space.

Anand:

And there also in such a small space there are sub spaces, right, some people are trying the attack it through aggregation, there is whole set of universe of block chain based companies which are trying to build cases around CBDCs so that's an exciting space and we’re watching out if you're building something in that space do hit us up.

Vikram:

The only thing that I would add is we also spend a lot of time in the enterprise SaaS space investing in a bunch of pure software companies going global and I think the cadence and what founders are measuring in these startups is very different from a consumer startup. And I think the people building in this bank tech space or BaaS space have to take a lot of learnings from those SaaS guys and say initially what are we looking for. Initially what we’re looking for is a large set of users who are adopting very quickly and then monitoring those cohorts of usage and then figuring out how many of those cohorts actually convert into revenue and then figuring out how is your expansion and churn looking and just being very clear about that this is the kind of business that they’re trying to build. So I think there’s a lot of learnings in enterprise SaaS, in fact I was at SaaSBOOMi this year and I was happy to see a bunch of fintech startups there. I think SaaSBOOMi is a great place for the fintech startups to come and learn.

Anand:

So the question with SaaS is then you land and then you expand. So what are the adjacencies, how do you think about where do I start my business and where do I finally end up, what all can I expand into?

Vikram:

So I think you start with a wedge into the company in this case either it’s a bank or it’s a fintech or it’s an NBFC and in the SaaS parlance they call it insertion point into the stack but I prefer to think of it as a wedge. And you have a thin wedge and think of it as something very sharp that can get you in, so it’s usually a point solution where you're solving a acute pain point and it might be something very small, it might be like what’s coming top of mind is it could be signatures, it could be KYC. So it could be something which is a very thin point solution which gets you in and then after that you’re making sure it is getting into that point solution is getting into the primary work flow of the company, it could be a lending first work flow, it could be payments, whatever is that work flow that you're solving so that on every one of the transactions which is a lending transaction or it is a credit card transaction you’re in that flow. And once you're there and you're part of every API call, every large entry I think you will discover what are the other full solutions and product suite that you can build around. But I think it’s very important to get to that point solution.

The second I would take that point solution to multiple orgs at the same time. One of the things that we’ve seen is some companies get in with the point solution but then they realize hey, this client is really big and then they end up customizing and customizing and so then you do run the risk of becoming a services shop for that bank partner or that fintech that you're working with but I would take that point solution to multiple clients and customers and that then helps you say okay, this is a pattern that's emerging across. And then you start building and customizing.

Anand:

And after that I feel after you’ve actually cracked that point solution and figured that it’s working what we have seen is that you can go down three paths, either you know that your buyer is now impressed and he likes the solution, he trusts you and you start building more products for the same buyers, that is one. Second is you figure that that solution is exportable, you figure out geographies where the same solution with a little bit of tailoring you can sell to those clients. You go abroad and export it. And the third is that you go after vertical expansion, right, either you figure that you can actually go and build fintech or other products on that or maybe go back end and capture more share of the value.

Anish:

And what are the skillsets that we look for or are needed to build a bank tech play?

Vikram:

I think we do have a preference overall in the fintech space where we often say fin is more important than tech.

Anish:

Is this one of the space where we come closer to tech over fin?

Vikram:

Absolutely. That was my point that we would actually over index on people who can actually build on tech. Skillsets, tech of course and in most other fintech areas we actually have over indexed on fin versus tech.

Anish:

And in this new thing it’s tech over fin that's more important?

Vikram:

I think so because you’ll have to build scale systems where both the scale reliability, security and compliance are so important. I think some of those problems can only be solved by people who are very tech first. I think the other thing is how do you navigate this selling into let’s say a bank and a bank is a pretty complex entity where the buyer is different from the person who is involved in making the purchase decision, is different from the user. And so security and compliance the Caesars have a big role in getting a software approved or not. So you have to understand that you're going to have to navigate this system and stakeholder management and therefore your sales and actually your overall GTM has to take into account some of this.

Anand:

So I think it needs to be both, right, all the stuff that you mentioned on tech and also regulation is a big part of it. Offering tech and one is offering the whole regulation stack, right, and sometimes it’s not evident but it comes with the fintech infratech most of the businesses. So you should have that skill in your team to navigate the regulations and do things the right way. Yeah, those are the two things actually.

Anish:

We have to be from Chennai?

Vikram:

It helps.

Anish:

And is there a minimum cut off age, 40 plus?

Vikram:

I think the reason Anish is asking those questions is we have seen that being – well, because Chennai had this very high incidence of NBFCs and some of the small finance banks and so on and they were sort of co-developing, co designing some of these products together and so we’ve seen a bunch of these companies come out of there. And the gray hair does give some appreciation of the complexity of a bank’s processes which I just sort of stated before. So it definitely helps and it’s something that’s important. I think the larger thing is, you know, we were doing this conversation with one of the top four bank CEOs and I asked him how does this work, what do you look for in a partner like this. And he said the conversation needs to be a win-win conversation and lot of the times when people are coming in it’s a win lose conversation where they’re saying I’ll help you do this but then you lose on something else and you're sort of taking like a pie and you're just sort of dividing it and then it’s a tug of war. And by the way you're not going to win a tug of war against a bank. So, figuring out how do you actually craft this win-win which expands the pie I think is the scale.

Anish:

Got it. So, the last thing I wanted to cover is global expansion, do you think there’s enough time in India and you discussed some of the spends around that and is going global imminent and if yes why?

Vikram:

If global is part of your TAM I think you should do it from day zero, gone are the days when you said you would get your first 5 clients from India and then you would actually go global at the next step and so on and this is a learning for us from the enterprise SaaS space and you can see all experienced founders in the enterprise SaaS space build global companies from the get go. And so if you think that TAM is an issue I would be building global. Having said that I actually think the TAM in India is massive and the forward trend line on that TAM is even more so. So pick a trend line which you think is going to extend from the first 15 million accounts to the next 100 million to the next 200 million. And if you pick that trend line I think you can build a large company just in India.

Anand:

Yeah, totally agree with you. We agree. So I see there are two markets, right, either you can build for India and that TAM is expanding and TAM at least won't be an issue in times to come. But the second approach of going global also makes a lot of sense, we’re doing some data digging top down there would be 20 plus fintech infra unicorns in the US total market cap of around 150 billion dollars, even if you take out Stripe and Rapid it would be around 60-70 billion dollars. So the profit pools to capture it globally is huge, right, and even when I set aside the numbers and actually look at the impact it’s very big. So Plaid helped Varo sort of move their existing bank accounts, for Varo to succeed it was an important thing that people can migrate their bank accounts, Plaid enabled that. DriveWealth helped create the fractional US share investing market, right, which also is going to translate to India and I can keep giving examples. Marqeta enabled Uber Eats and some of the other DoorDash to start offering prepaid cart products. It could be argued, right, if not for these fintech infra companies would these consumer companies would have it on their top five priorities to launch FS, maybe, maybe not. So while India is a large market I think global trend continues.

Anish:

And I think we have two things which many countries don’t; one is a large pool of qualified engineers very strong tech talent which kind of helps build best in class global products. And second thing is working with Indian banks, they’re probably one of the hardest customers to sell to. We’ve probably some of the most- tightest regulations obviously in the best interests of the consumers and if you're able to build a product, ship it to them in the realm of a regulatory regime then your product is probably fit for lot of other geographies. There might be some tweaks, contextual, you might have to set up an entity where there might be some flows which are different, the systems might be different but largely the product I think will be robust enough to be shipped across.

Vikram:

And to that point in this fintech ecosystem made in India is a huge plus because you have been able to make and deliver at scale I think every other emerging market for sure is adopting tech which is made in India and of course NPCI and UPI has done a phenomenal job where every country wants that. And so there is a halo of having built fintech systems in India which will actually spur adoption in global markets.

Anish:

Yeah. I think wonderful discussion, it reminds me of Ashmo’s quote, Boring dhanda hai, but boring dhando mein paise banta hai. So it’s one of those businesses, high gross margin, probably takes a little bit of time to build and get off the ground but just keep reaping rewards after you scale. We’ve been actively looking to invest in bank tech and BaaS companies, please hit us up if you're thinking of this space. We’ve done the state of the fintech union report last year where we cover some of this on how the fintech ecosystem in India is looking to scale over the next 5-10 years and how we all can play an active part in that. Happy to brainstorm with entrepreneurs looking to ideate or just looking to jam with us for a session.

Vikram:

Thanks.

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