August 5, 2019
Earlier in March this year, we launched the India FinTech Report 2019, which was a grand success. The report received terrific feedback and has been used in numerous startup pitch decks and FinTech presentations. It was also quoted by many media houses and agencies. The report was a comprehensive study of the Indian FinTech ecosystem, encompassing both core FinTech segments (Payments, Lending, InsurTech, WealthTech, and Corporate Banking) as well as the less-discussed-but-emerging segments like RegTech, Cybersecurity, Blockchain, and Beyond Banking (PropTech, AgriTech, and HealthTech). We are frequently requested to share insights and snippets from this report, so we decided to run a series of articles covering various segments one at a time.
In the first article of this series, we are going to focus on the Corporate Banking section of the India FinTech Report 2019: the primary drivers & inhibitors and the key startups that are present in various segments of Corporate Banking. However, before diving deeper into it, let’s take a look at the Corporate Banking segment as a whole.
Corporate Banking broadly refers to ﬁnancial services provided by banks to corporations, ranging from SMEs to large corporates. It is also sometimes referred to as ‘Business/Wholesale Banking.’ While Corporate Banking encompasses Payments, Credit, and Investments for enterprises, this section focuses on key subsegments for the FinTech ecosystem to address viz., Transaction Banking (Cash Management & Treasury Management), Forex & Treasury, and Capital Markets. These segments typically cater to high-value transactions in large volumes from a banking operations point of view and form the key segments where FinTechs can add value through intermediation, akin to Consumer Banking.
Cash Management is used to deﬁne the concentration, collection, and disbursement of cash. Cash management services were originally a paper-based system that involved high risk and high processing costs. Now, with digital advancement, Cash Management services in India have evolved to provide its customers with assurance for eﬀective collection & payment, and proper disbursement of free funds, helpful at the time of an urgent cash requirement.
Here are some of the key FinTech Indian FinTech players in Cash Management:
Giddh oﬀers an accounting software which provides invoicing and accounts receivable & payable solutions. The platform allows its user to create invoices, set reminders to send them to their clients, and receive an update once they have been paid. The solution is widely used by the business owners and SMEs in coordination with banks.
Invoicera oﬀers an accounts payable & receivable management software, which enables users to assign payment terms, track numbers to purchase order & sales, manage online recurring payments & subscription billing, balance all transactions, and analyze their business. The software is used by SMEs, corporates, and freelancers.
fonePaisa is an accounts-receivables processing application which allows users to track their invoices, set reminders, receive the payments, and close their outstanding receivables. The solution is used by banks, FIs, corporates, & SMEs.
Billing360 is an invoicing and cash ﬂow management platform which allows its users to create invoices, track, and automatically send reminders for the overdue invoices. The software is mainly used by SMEs and business owners.
Treasury Management includes management of an enterprise's holdings, with the ultimate goal of managing the ﬁrm's liquidity and mitigating its operational, ﬁnancial, and reputational risk. Digitization has helped in a cost beneﬁt to the treasurers. The use of applications and APIs has been instrumental in changing the way treasury is conducted. Here are the key functional areas of Treasury Management:
Front-Office: The front-oﬃce is responsible for internal/external dealing and pricing & decision support.
Money Management: The money management function is responsible for all money management activities in the organization from forecasting to liquidity management and bank account management.
Risk & Position Management (Middle-Office): The treasury group’s risk management approach varies as per the strategy but usually includes ﬁnancial risk (including foreign exchange and interest rate risk management). Depending on its approach to risk management, this function does analysis and benchmarking. The middle-oﬃce is also responsible for the management of counterparty risk and limiting.
Treasury Operations (Back-Office): Treasury operations or back-oﬃce is responsible for the processing of deals and transaction made by the department. The back-oﬃce manages conﬁrmations & settlement and, in some cases, accounting as well. The back-oﬃce may also be responsible for managing communications with the group’s entities where treasury activities are performed locally.
Here are a few of the key Indian FinTech players in Treasury Management:
IndoInvesting oﬀers a Treasury Management Solution (TMS) that allows users to manage their SLR and non-SLR portfolio, liquidity, and risk. The software is used by banks and SMEs.
IBSFinTech oﬀers the treasury management software, which enables its users to monitor risk to enhance their treasury performance through technology to mitigate risk and manage liquidity requirements. The software solutions are used by corporates and ﬁnancial institutions.
Trade Finance Management represents cash ﬂow in commerce and international trade. It includes lending, the issuance of letters of credit, factoring, export credit, and insurance. Companies involved with Trade Finance include importers & exporters, banks & ﬁnanciers, insurers & export credit agencies, and service providers.
Here are a few key FinTech Indian FinTech players in Trade Finance:
SimplyFI is a blockchain and AI-based trade ﬁnancing platform which facilitates supply chain ﬁnancing and e-invoicing of supply in real time. The company provides collateral-free trade ﬁnance; and uses DLT & AI for credit analysis, reduces settlement, reduces custodian & counterparty risk, and increases transparency. It also offers instant chat support for negotiations. The platform is used by buyers, sellers, banks, and transporters.
9thRoute is a blockchain-based trade ﬁnancing and management platform. It provides ﬁnancing through its banking partners and investors. It uses AI for faster processing of the transactions and to maintain regulatory & compliance requirements. The platform is mainly used by SMEs.
Krypc provides a blockchain-based trade ﬁnancing platform, which allows users to integrate with trade ﬁnance products for real-time information ﬂow. It uses a DLT solution to maintain security standards for digital and scrutinized transactions. The platform is used by banks, insurance, FIs, and corporates.
KredX is an online invoice discounting platform which connects enterprises looking for ﬁnancing with investors looking to earn higher short-term yields with lesser risk. It provides collateral-free working capital in 24–72 hours. The platform is mainly used by SMEs.
M1 is an online invoice discounting and bills of exchange platform which provides supply chain-related cash ﬂow ﬁnance through an open bid process through multiple ﬁnanciers. It offers its service through digital exchange platform which integrates all the stakeholders, buyers, sellers, and the banks, thereby facilitating less paperwork and quick payments. The platform is mainly used by MSME suppliers, banks, and FIs.
Tallyx oﬀers a blockchain-based trade platform, which allows buyers & sellers to manage their end-to-end transactions better and raise working capital across various supply chain ﬁnancing programs. The company uses DLT for secure, faster, and automated transactions. It also provides its customers with Toki – an asset-backed token. The platform is mainly used by SMEs and supply chain companies.
Akasa Labs uses IoT for consignment monitoring along the entire trade cycle to track goods in the trade process and increase transparency in the supply chain ecosystem.
automaxis is a blockchain-based platform for documentation issues in cross-border trade to ensure a digital, secure, and speedy transfer of a bill of lading by focusing on network and the transfer of ownership in real time.
Capital Markets refer to a broad spectrum of tradeable assets that includes the stock market as well as other venues for trading different financial products. Capital Markets can beneﬁt from the use of blockchains at every stage of the value chain – from pre-trade custody to security servicing stages.
Here are a few of the key FinTech Indian FinTech players in Trade Finance:
Rupeeseed provides end-to-end trading solutions that include an order management system, risk management system, and mobile & web trading terminals for clients and dealers. It is a Mumbai-based startup which was founded in 2011.
Capital Quant Solutions Pvt Ltd is a boutique ﬁrm focused on providing analytics for capital markets. It helps organizations make better and timely trading decisions by combining insights from multiple streams of data to generate algorithms for markets the key objective to which all product and service oﬀerings from CapQuant are aligned. Capital Quant oﬀers FinStinct, a trading analytics product that uses advanced machine learning and statistical techniques to analyze large volumes of data to derive actionable intelligence from it.
You can access the India FinTech Report 2019 and more FinTech reports & analyses through our Inner Circle subscription.