The Exchanges

Q What were the other thesis when you started NEO?

A So the other thesis was that if you don't want to go to a branch, then you would want a digital experience which is Cutting edge. You don't want an app to have glitches. You really want an experience, which is seamless. Um, just like, you know, you would have the best of the other apps, which were available back then. So that was the idea that you kind of convert, make it everything digital. And you kind of provide a service to a average customer, which a typical high value customer would get with an RM. So with the RM, you will have the ability to, RM will come and guide you right or wrong, whatever it is, but at least the RM is there at your backend call. You don't have to go to the branch, et cetera. So with digital, it is like a digital RM available to you to do anything. You want to order a checkbook. You want to, um, you know, you, you want some kind of, um, uh, leave delivered to you. You want, uh, um, a check to be deposited. A lot of this stuff could be, uh, money to be transferred all of this. You could do it. Um, Through the app. That was the whole concept.

AI assessment note: “So the other thesis was that if you don't want to go to a branch”

Q And what, what are the first areas that you picked up when you started?

A So we wanted to kind of change the, the salary landscape. So in us, salary was paid every 15 days in India, it was paid every 30 days. So we thought, why don't we bring that in? So that was the original idea with which we started. Um, and salary account is a very stable business. Uh, banks love it. Banks love it because the Casa keeps growing very good for cross sell. So I also came with the idea that let's create a different salary account and, uh, with the whole digital flow. So no branches. And a salary account will be the kind of best combination. So that's what at that point in time, we came in with, and then we, when we started, we realized it's really, really complicated because, because you cannot, uh, do that business unless you are a bank. And as an outsider to start a business where you are integrating with the bank into their core banking system in, uh, was practically impossible. So it took us almost, Four years before we could roll out the first co-branded savings account.

AI assessment note: “we wanted to kind of change the, the salary landscape.”

Q And when did the current pivot towards the travel tech happened?

A That was 2018. Uh, 2018 is we rolled out our first, uh, new global card. Um, we tested it in, in IMs, um, and, um, to exchange students. And we realized that, you know, this is a really good value add to the customer because till then, Getting Forex card, getting Forex itself was very painful. Then you load it, you pay some money, you use it, you save some money, unload it, you pay some money. So we came up with this whole revolutionary concept in 2018. That was we convert your debit card into a, or a credit card into a, into a Forex card. You, you use it like a normal debit card when you're in India, when you travel abroad, that's your Forex card. Don't need to do anything. So absolutely revolutionary. Um, I think probably the best product even today in, in cross border. Um, so that was the idea. So we started in 2018, we did in 2019 and as we were scaling came. So naturally for two years, nobody was traveling. So the card was not needed. So we had to do the pivot into traditional new banking and trying to do all that. And once the kind of, uh, settled down in 22, we again, um, came back to what we like doing. So we loved the product because It was a category creator, uh, really good value add to the customer and, um, uh, yeah, and, and generally gets you the kind of customer where you can cross sell some stuff and be profitable in long run.

AI assessment note: “That was 2018. Uh, 2018 is we rolled out our first, uh, new global card.”

Q So tomorrow, if you had to get a banking license, what would you have to be to get a banking license?

A For somebody like Neo, um, to get a banking license that, um, the only way is to get a small bank license. So there are three kind of licenses available, small bank, payment bank, and the full universal bank. Universal bank naturally has its own terms and conditions. Very difficult. Small bank license, of course, it's on tap. Uh, you can apply and, uh, based on what consumers you are serving, uh, does regulator find you to be safe or not? Uh, it may be issued to you. If government is still issuing a few small licenses, of course, they are, they are regularly issuing small bank licenses, uh, cooperative banks are getting upgraded to small banks, uh, and BFCs can apply and, um, have a fair chance at getting it. So it is not easy by any stretch of imagination, uh, but it is also not impossible. Um, definitely. So what is like, what would have been great? So for example, in, in Europe, you've got the digital license, which is very separate from everything else. And in fact, all our neighbors take Singapore for that matter. It's Island for that matter. They've got a digital bank license available. So that is one thing, uh, on which regulators have not had the conviction that why should we have any digital license when our own traditional banks can do digital business. So that's something maybe our problem that we've not been able to convince them that we can add value, uh, to the cu…

AI assessment note: “the only way is to get a small bank license”

Q And the other country knows that this person is not coming here to settle, right? Yeah.

A The other person, the Malaysia, the reason I gave the example of Malaysia and not the other countries, because others are still developing. I mean, you, I, even maybe Thailand or Indonesia are not too far away from India and per capita income. But Malaysia is a developed country. It's a very, very good, good country. So for them to have a confidence that Indians will not come and settle down here. Um, and they find enough jobs and opportunities and reasons to be in India is very, very good sign for, for us. I think the Schengen visa also, like my first visa, when I took in, uh, 2005, I was traveling for 17 days. I got the visa for exact 17 days. If I had missed my flight, I would have, I would have been a illegal person there. To today where they're saying, okay, we made a policy that if you have been there last year, I'll give you two years now or three years now. If you go and come again after two, I'll give you five years. So it's a dramatic shift, uh, from what, what people thought of Indians, um, back then and now. So I think it is really, very, very proud.

AI assessment note: “for them to have a confidence that Indians will not come and settle down here”

Q And, and why, uh, bet the company on travel so much? Like what's the numbers in, in terms of overall India travel spends, category spends, or overall market size?

A So when we started, it was, uh, we didn't look at the market. Honestly, we just look at the value, what we can create and are we doing something different? Um, and that product point in time, we were probably the only, Come in the world doing it. Now in India itself, we've got 30 people doing a zero for it. So yeah, yeah. So it, it was, uh, uh, just the excitement of building a new product. Uh, and then we realized that, you know, with this excitement, as it always happens, that if you build a beautiful product, the market will find itself. And we had some setbacks in terms of, um, regulator, uh, challenges with our partner banks and all those things, but irrespective, um, we have kind of managed to navigate, uh, through all that. And the market is, is grown much more rapidly than what we would have thought. The Indian students going abroad to study was used to be half a million. Five years ago is 1.1000000 now. And almost everybody is either doing a post-grad or a undergrad there. So unexpected growth and continuing. Similarly, the number of Indians traveling abroad now for most countries, There the country's travel strategy depends on Indians reaching there. That's a dramatic change.

AI assessment note: “when we started, it was, uh, we didn't look at the market.”