The Teknospire cloud-based 'bank-in-a-box’ solution enables banks and financial institutions to build a digital ecosystem; services can be disbursed via B2C interfaces or assisted channels such as digital touch points or agent networks.
Technology may have transformed the banking sector in India, but not all banks have benefited. As many as 56 regional banks and thousands of smaller cooperative banks don’t use technology, continuing to record transactions on Excel sheets, as core banking technology is expensive. But Bengaluru-based Teknospire wants to change that by making banking technology available to every financial institution at a low cost.
Founded by Vishal Gupta in 2016, Teknospire offers banking software as a solution over the cloud. It has signed up over 10 banking institutions in Africa and Asia and two Indian financial institutions in India use its cloud-based “bank in a box”.
Earlier, Vishal ran a mobile payments company. His startup began by offering a salary automation platform to civil servants in Zimbabwe. The open API design helped the platform to seamlessly connect to government payrolls and corporate ERPs. In 2016, they helped build a customer base to use the platform to pay bills, recharge, and transfer funds.
“That’s where we came up with the Bill Automation Platform or micropayments digitisation. It assists the customer to pay electricity, broadband, DTH bills, or get mobile recharges at their convenience at no extra cost,” Vishal says.
Teknospire next geared up to help banking agents use the digital platform. The company built a product around “digital branches” for existing product offerings, delivering banking to the customer’s doorstep. With a stable ecosystem and tested platform, Vishal approached smaller cooperative banks to extend their reach to rural areas.
A lean banking layer, or Agent Banking solution, was a new addition. Soon, Teknospire was helping avail merchant payments/banking, agent banking, automatic reconciliation, and micropayments as solutions with omnichannel interfaces.
The best part is that all these modules are standalone operations, enabled with open API architecture. This helps banks, NBFCs, or microfinance firms sign in for all modules as one suite, or opt for one module of their choice.
“This brings down costs significantly for a small bank. They do not need to work with large IT companies for such technology,” Vishal says.
The cost of a core banking solution can run up to Rs 7 crore, depending on the size of the bank, but Teknospire can provide solutions for Rs 70 lakh.
Teknospire has expanded its reach to countries like Mozambique, Zambia, Nepal, Bangladesh, Zimbabwe and India. Quick adoption of its flagship banking platform “FinX” in four countries has helped; the company has completed over 20 million transactions on its digital platform.
What is FinX? It is a digital banking platform that ensures financial institutions can grow digitally quickly without capital, resources, and integration dependencies. FinX integrates with the CBS/ESB of all sponsor banks via open API-based interfaces. This lets smaller banks carry out micro-payments in semi-urban and rural areas where setting up branches and executing banking operations are capex intensive. Smaller financial institutions can enjoy their brand equity in their respective markets while riding over the core connectivity engines through sponsor banks.
FinX offers services such as lean banking, mobile banking, digital wallet services suite, micro-payments switch, digital cash management, cash collections platform, analytics engine, reporting and reconciliation platform, merchant payments platform, and more. Services can be disbursed via B2C interfaces or through assisted channels (digital touch points /agent network).
“When we approached our first client in Africa with a demo, he narrated how manual processes were time-consuming and prone to human error. The client was troubled with digitisation needs for few hundred thousand employees for payroll and monthly deductions,” Vishal says. Teknospire accepted the challenge to deliver a digitisation solution for this transaction set and offered an on-ground solution in Zimbabwe in a record four weeks.
“Our solution was also promoted by the civil servants' salary bureau to a few corporates, leading to Teknospire’s first revenue streams,” Vishal says. The company has invested $1 million so far and most of it is raised from friends and family. It works with two business models: an annual maintenance fee or pay-as-you-go.
Teknospire uses Oracle Cloud infrastructure; some of the startup’s production paying customers are on Oracle cloud. The startup is testing other applications, including BI and Oracle Linux.
How clients are working FinX
“We have expanded our customer base significantly over the last 12 months, towards digitisation at the last mile,” Vishal says. He speaks about the services they have provided to some clients.
Manndeshi Bank, Mhaswad, Maharashtra: The bank uses Teknospire’s digital banking platform for loan disbursements/ premium collections via the agent network. This gives the bank real-time visibility of transactions and easy reconciliations. Manndeshi does upwards of Rs 2 crore transactions on the FinX platform per month.
MaKash (Manappuram Finance - NBFC, Valappad, Kerala): Manappuram has a PPI license and Teknospire has deployed its FinX platform in a wallet avatar for loan disbursements, collections, value-added services delivery, insurance services integration, and gold loan disbursements at the consumers' doorstep. The platform’s connectivity with NPCI and UID and ease of eKYC has made the loan disbursement and consumption process completely digital.
NDASENDA, FN Solutions, Zimbabwe: NDASENDA is integrated with five banks in Zimbabwe (ZB, CBZ, POSB, NBS, AGri Bank), and offers agency/digital banking services via B2C and agency network interfaces. NDASENDA integrates with all the value-added services available in Zimbabwe and processes 2 million-plus transactions per month. NDASENDA also connects into the civil servants' payroll, serving 600,000-plus civil servants on their salary deductions at source and processing payments to banks/wallet systems.
Tafika, Pan African Building Society, Zambia: The NBFI serves as a mid-size banking institution catering to the army and farmers’ ecosystem. Tafika has, over the last few months, shut down all physical branches and ATMs, and is now a 100 percent digital bank.
eBazara, Africom Delta Corporation, Mozambique: The distribution company has a huge footprint at the last mile in Mozambique. eBazara offers a web/mobile app and USSD interfaces for VAS through retail outlets across the country. It is in the process of integrating with multiple banks now.
“The bank in a box is our USP; it overturns the multivendor ecosystem that banks otherwise need to handle to provide digital solutions to their customers,” Vishal says.
The future for Teknospire
According to CB Insights, as many as 61 startups are going after retail and commercial banking, and have raised $3 billion across 173 deals since 2013. This group includes four unicorns— Nubank ($4 billion), Revolut ($1.7 billion), Atom Bank ($1.3 billion), and Brex ($1.1 billion). In the first 10 months of 2018, the cohort of 61 startups has seen investors participate in 53 investments worth $1.72 billion, which is 57 percent of the $3 billion raised in the last 5 years.
These new-age banks can work with Teknospire, which can help them get up to speed with the digital era.
Teknospire’s revenues are close to $400,000-$500,000 ARR, and the company is targeting to get to close to $1 million. Vishal, who wants to be a “change agent” in the future of banking, seems to have hit the right chord with his “bank-in-a-box” technology.