Fintech company Finin in partnership with SBM bank launches itself as a neobank. SBM bank is a wholly-owned subsidiary of State Bank of Mauritius in India, focussing on saving rather than lending.
Finin in a press conference stated that it will provide features such as a detailed breakup of user spending and send prompts if they exceed pre-set limits and automatic sweeps of money into liquid funds. The bank aims to open 50 thousand accounts in six months. The bank will mainly target white-collar workers and freelancers and has a waiting list of 15,000 people before launch.
The main aim of neobanking is to provide complete digital banking which is cheaper, faster, and can integrate the entire financial portfolio in one single platform. Finin has already secured funding from Astir Ventures, Unicorn India Ventures, and PointOneCapital in a pre-series funding round. Finin Founder, CEO, Suman Gandham said that RBI permission is not required to use the term neobank. The company will bank more on revenue from wealth management operations rather than a lending fee. Wealth management operations include products like insurance and mutual fund.
The customer can avail neobanking service by downloading the app and after downloading, the bank will issue a saving account and a VISA-powered debit card. The customer can integrate all their banking accounts at one place via our platform, this way the company understands the person’s savings and spending behavior, and using data analytics, AI, and ML, the company will give the person hyper-personalized banking services.
The Bengaluru-based Fintech start-up Finin also has a six-month roadmap to launch wealth management services including mutual funds and insurance, followed by disciplined consumer lending.
The SBM bank promotes saving by providing an interest rate of 5% for saving account balances below Rs. 5 lakh and 6% for anything higher than it. The company also offers FD interest up to 7.5% for terms of 2-3 years and these factors are likely to be a key pull factor for Finin. The customer has to rely on the SBM Bank branch network for banking activities that need physical branch presence which will be a flip side because according to the SBM website, branches at present are confined to New Delhi, Chennai, Bangalore, Mumbai, and Hyderabad.