StartupTalky presents Recap’22. This is a series of interviews in which we conduct in-depth discussions with founders & industry leaders to understand their growth in 2022 and their predictions for the future.
Neobanking, also known as “challenger banking,” is a type of digital banking solution that uses technology to offer banking services through a mobile app or online platform rather than through traditional brick-and-mortar branches.
A full-stack cross-border neo-banking solution is a type of digital banking solution that offers a wide range of banking services and features to customers, including account opening, money transfers, bill payments, debit/credit card services, and other financial services. Additionally, this type of solution provides cross-border capabilities, allowing customers to make transactions and access banking services in multiple countries.
The neobanking market in India is expected to grow at a significant rate in the coming years. The market for neo-banking in India is expected to grow at a CAGR of around 40% during the forecast period of 2021–2026, according to a report by Mordor Intelligence.
For this Interview, we invited Mayank Goyal, Founder & CEO of moneyHop, and we talked about the growth, challenges, insights, and future opportunities in the Neobanking industry.
StartupTalky: Mayank, what does your company do? What was the motivation/vision with which you started?
Mayank: moneyHOP is a full-stack cross-border neo-banking solution that enables individuals to send and spend money conveniently and economically across the globe. The company provides a Multi-currency bank account and a Visa card via a mobile app through which users can seamlessly exchange currency on-app, in real-time at near zero markups, spend abroad in respective local currencies, and also do cross-border remittance entirely digitally via the app.
moneyHOP aims to simplify cross-border banking and provide borderless banking solutions to global citizens. moneyHOP’s instantaneous, cost-effective, and user-intuitive contactless remittance service offers complete transparency and significantly reduces the total transaction costs of sending money abroad. All in all, moneyHOP’s state-of-the-art, tech-centric, customer-focused solutions are designed explicitly to build the next-generation digital banking platform that promises a never-seen-before cross-border banking experience.
StartupTalky: What is/are the USP/s of your products?
Mayank: USPs of the HOP App are:
- One Multi-currency bank account for all international transactions.
- Real-time currency exchange (GBP, Dollar, Euro)
- Lightning speed Account set up
- One app for all domestic and international transactions.
- Debit+ FX cards are all available as One Global Card
- Smart card controls
- Best interest rates up to 6%
- App-based digital remittances
StartupTalky: How has the neobanking industry changed in recent years, and how has your company adapted to these changes?
Mayank: The cross-border banking industry in India has undergone significant changes in recent years due to various regulatory and technological developments. Some of the key changes that have occurred include:
Increased use of technology:
The adoption of digital technologies has led to an increase in online banking and cross-border transactions, resulting in faster and more efficient services.
Regulatory reforms:
The Reserve Bank of India (RBI) has implemented various reforms to improve the regulatory framework for cross-border banking, including the introduction of the Liberalized Remittance Scheme (LRS) and the External Commercial Borrowings (ECB) framework.
Increased focus on compliance:
The RBI has implemented stricter regulations to ensure compliance with anti-money laundering and counter-terrorism financing laws, leading to increased compliance costs for banks.
- Increased collaboration between banks and fintech to provide state of the art
user experience for the end users at an economical price. - Increased transparency and digital experience for the end user.
moneyHOP came into being at the cusp of the COVID-19 pandemic and hence
everything that we have built is paperless, presence less, and cashless. It also happens to be one of the principles that we abide by and the vision that we want to propagate for cross-border banking in India. COVID-19 has acted as a catalyst in the digital adoption of cross-border banking including currency exchange, outbound remittance, etc because people wanted a product that they can use from the comfort of their homes and don’t want to expose themselves to the risk of catching the virus by visiting branches and filling in paperwork. We believe what demonetization did for the betterment of digital domestic banking, COVID-19 has done the same for the cross-border banking space.
StartupTalky: How do you stay up-to-date on the latest trends and developments in the neobanking industry?
Mayank: There are a few things I do to be updated on the latest developments and trends in the net banking sector.
Reading industry news and publications: Many trade publications and websites provide updates on the latest developments in the cross-border banking industry.
Attending conferences and events: Conferences and events focused on fintech
and neo-banking space provide valuable opportunities to learn about the latest
trends and developments, as well as network with other professionals in the
industry.
Participating in professional organizations: Joining professional organizations, such as IAMAI or TIE can provide access to industry updates, educational resources, and networking opportunities.
Upskilling: Continuing education courses and certifications to keep up with the latest technology and trends.
StartupTalky: What key metrics do you track to check the company’s growth and performance?
Mayank: Different business units within the organization have different KPIs to teach but overall we track month-on-month growth in transactions volume, total unique users acquired, repeat rate, cost of customer acquisition, profitability per channel, revenue growth, month-on-month fixed and variable costs, etc.
StartupTalky: What were the most significant challenges your company faced in the past year and how did you overcome them?
Mayank: One of the biggest challenges that moneyHOP faced last year is building our flagship product with the highly regulated nature of the financial services industry. In order to operate in this industry, one must navigate a complex web of regulations, including those related to licensing, data privacy, and financial inclusion. This can be a significant barrier to entry and can limit the ability of these startups to scale their businesses.
To overcome this challenge moneyHOP took can a number of steps:
- Partner with established financial institutions: In order to ensure credibility and avoid any regulatory hurdles we have partnered with established financial institutions like Visa and SBM bank. These partnerships provide the best of both worlds for the user: regulatory coverage of the bank and agility of the fintech.
- Seek support from industry associations and accelerators: We have
partnered with a number of fintech associations and accelerators such as IAMAI which provides us with guidance on regulatory issues and helps to connect startups with potential partners and investors - Invest in compliance and regulatory affairs: We have hired a team of legal professionals in order to ensure that the company and products meet regulatory requirements and avoid any potential legal and reputational risks.
StartupTalky: What are the different strategies you use for marketing? Tell us about any growth hack which you pulled off.
Mayank: moneyHOP has seen a 30% month-on-month growth over the last year and a half. We were able to achieve this growth through the combination of offline and online sales channels. moneyHOP not only uses digital channels like Google ads and social media for awareness and conversion campaigns but it has also partnered with several foreign education and foreign travel ecosystem partners across pan India, through which we obtain a high level of conversions.
StartupTalky: What are the important tools and software you use to run your business smoothly?
Mayank: There are a number of important tools that we use for our work are:
- Customer relationship management (CRM) software: We use HubSpot as a CRM, to manage customer interactions and to collect data that can be used to track sales leads, customer inquiries, and customer service issues.
- Project management software: We use Jira as a project management tool to, track, and collaborate on projects, assign tasks, set deadlines, and monitor
progress. - Accounting and financial management software: We use Zoho books to manage financial transactions, including invoicing, billing, and payroll. It can also be used to generate financial reports and analyze business performance.
- Human resources (HR) software: We use RayzorpayXPayroll to manage
attendance, employee data, and benefits, and also to track employee time off,
performance, and training. - Marketing/Product automation software: We use a lot of automation tools in the marketing and product side like Hubspot, Botspace, Mixpanel, etc to automate marketing tasks like push notifications, email campaigns, social media posts, and lead generation.
- Collaboration and communication tools: We use Slack and Gmail for
collaboration and communication with team members and partners remotely
StartupTalky: What opportunities do you see for future growth in your industry in India and the world?
Mayank: Following are the top 4 opportunities I see in the industry:
Better Payment Rails: Fintech companies are leveraging faster payment
mechanisms to offer seamless cross-border banking services. For instance, India
and Singapore are working to link their payments system to enable low-cost
digital transfers via UPI.
With UPI, cross-border transactions can be completed quickly and securely, without the need for intermediaries such as banks or payment gateways. This can greatly reduce the costs and complexity of international payments, making it easier for individuals and businesses to conduct cross-border transactions. Additionally, UPI has the potential to facilitate cross-border trade and commerce, which can contribute to the growth of the Indian economy.
Distributed Ledger Technology (DLT): Distributed ledger technology, also
known as the blockchain, has the potential to revolutionize cross-border payments by providing a secure and transparent platform for financial transactions.
By using a decentralized database, distributed ledger technology allows for the creation of a tamper-proof record of transactions that can be accessed by all parties involved.
This eliminates the need for intermediaries thus facilitating the transfer of funds
between countries, which can significantly reduce the cost and time required for
cross-border payments.
In addition, the use of smart contracts, which are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code can further streamline the payment process.
While there are still challenges to be addressed, such as scalability and regulatory compliance, the adoption of distributed ledger technology in cross-border payments has the potential to greatly improve the efficiency and security
of global financial transactions.
Emerging markets: As economies in emerging markets continue to grow, there is an opportunity for cross-border banks to expand their operations and tap into new markets. This includes providing financial services to individuals and businesses in these markets, as well as partnering with local banks to offer joint products and services.
New products and services: The cross-border banking industry is constantly evolving, and there is an opportunity for banks to innovate and offer new products and services to meet the changing needs of their customers. This could include the development of new payment methods, investment products, or financial education and literacy programs.
StartupTalky: What kind of difference in market behavior have you seen within states in India?
Mayank: The level of financial literacy is directly correlated to the adoption of digital financial services. This is less dependent on states but rather on cities where the overall education level is higher.
We have also observed that in cities where primary education is better, the adoption across the age spectrum is high since the younger generation help the older population migrate to digital solution.
StartupTalky: What lessons did your team learn in the past year and how will these inform your future plans and strategies?
Mayank: One key learning we have had in the last few years is that the key to building a successful business is having deep conviction in the vision and following it with perseverance and grit. The market conditions will change over the course of the business but it’s important to follow your vision supported by the data.
We started this business in Jan 2020, not knowing that it could possibly be the worst time in the last century to start a cross-border business but we stuck to our conviction and have seen a big turnaround in our business.
StartupTalky: How do you plan to expand the Customers, product, and team base in the future?
Mayank: We want to offer a truly a global banking experience for consumers and businesses in emerging markets and to that end, we want to hire folks who believe in this vision and can help us make this vision a success.
We are expanding our teams in London and Dubai to make sure we have global coverage for our global products.
Lastly, we want to do more work around direct-to-consumer marketing in order to build brand awareness and become a household name for cross-border banking products.
StartupTalky: One tip that you would like to share with people reading this article who want to get into entrepreneurship?
Mayank: Starting a business can be a challenging but rewarding experience. Here are some tips that may be helpful for those who are considering entrepreneurship:
- Do thorough research and planning before launching your business
- Be willing to take risks and be persistent.
- Network and seek out mentors
- Stay up to date on industry trends and changes
- Find solutions to problems, not the other way around
But most importantly don’t chase valuations. Build a sustainable and profitable business and money will follow. Be true to your vision.
We thank Mayank Goyal for spending his valuable time and sharing his learnings with all of us.
