Initially, Fintechs competed with banks but found solace in the collaborations. The partnership model actually got a big boost during covid as many banks embraced digital far more aggressively. Here is a recap of the major partnerships that happened between banks and Fintechs in 2021.
An increasing number of banks in India are partnering with fintech companies. Nearly all the mid-size and large banks have partnered with at least 2-3 FinTechs to boost their operations.
Traditional banks no longer necessarily view FinTechs as competitors but instead often consider them valuable partners to expand their reach and engage with customers.
Similarly, FinTechs benefit from the strong balance sheets of the banks and the trust that they, as institutions hold in the economy.
The partnerships in 2021 mainly come about with the aim of co-lending, credit to MSMEs, expanding merchants acquiring business and more. Here is a recap.
DBS Bank-CredAble
In October, DBS Bank and CredAble partnered for trade financing, which will help pump liquidity and offer financing options to India Inc.
The partnership will help cater to the capital requirements for day-to-day operations of SMEs, MSMEs, and enterprises in the corporate supply chain.
CredAble, a FinTech platform provides working capital and related liquidity programs for enterprise supply chains.
Kotak Mahindra Bank-Pine Labs
Kotak Mahindra Bank tied up with Pine Labs in October to expand its point-of-sale (PoS) services to more merchants, especially retailers.
Pine Labs, an unicorn company supplies financing and last-mile retail transaction technology.
Through this tie-up, merchants will be able to get the advantage of Kotak Mahindra Bank’s PoS payment solutions bundled with Pine Labs’ technology stack to help grow their business.
Federal Bank-CredAvenue
Kochi based Federal Bank tied up with CredAvenue for portfolio management of its securitisation book and implemented CredPool, an institutional debt platform of CredAvenue.
As a part of the alliance, Federal Bank will digitally monitor its ABS & MBS pool assets, enabled by CredAvenue’s end-to-end securitization and portfolio buyouts and fulfillment solutions platform, CredPool.
The partnership was announced this year in October.
HDFC Bank-Paytm
Nearly a week after the Reserve Bank of India (RBI) allowed the private sector lender to start issuing new credit cards, HDFC Bank partnered with leading digital payments company, Paytm.
Through this partnership, the two financial institutions aim to build comprehensive solutions across payment gateway, POS machines and credit products including Paytm Postpaid which is a buy now pay later (BNPL) solution, easy EMI, Flexi pay, and more.
The partnership was announced this year in August.
ICICI Bank-Niyo
ICICI Bank tied up with Niyo, a neo-banking solutions provider to issue prepaid cards to workers of Micro, Small & Medium Enterprises (MSMEs).
The idea behind this partnership is to offer the cards to facilitate the payments seamlessly to small companies. With this card, workers of MSMEs will be able to access digital banking.
The partnership was announced this year in the month of January.
Axis Bank-BharatPe
In the month of October, Axis Bank partnered with BharatPe, a FinTech company that caters to small merchants to expand its merchant acquiring business.
Axis Bank is focusing heavily on digitisation, as a result of which it acquired BharatPe’s POS business (BharatSwipe) in August
With this partnership, the bank aims to scale up its acceptance of credit and debit card payments for BharatPe’s merchants using BharatSwipe.
Punjab National Bank-Lendingkart
Punjab National Bank entered into a co-Lending arrangement with Lendingkart, a FinTech company operating in the lending segment with a NBFC license.
With this partnership, PNB shall focus on digital underwriting and cash flow based lending of which, the ultimate beneficiaries shall be MSME Borrowers and small businesses.
The partnership was announced this year, in December
IDBI Bank- U GRO Capital
IDBI Bank signed a co-lending agreement with U GRO Capital this year, in the month of October.
U GRO Capital is a small business lending FinTech platform that aims to address capital needs of such businesses operating in select sectors.
The co-lending arrangement will work towards providing formal credit to underserved MSMEs at affordable rates for which IDBI bank will leverage the FinTech’s technology and multi-channel distribution reach.
SBM Bank India-Drip Capital
Drip Capital, a fintech company which offers solutions for cross border trade finance, partnered with SBM Bank India this year, in the month of July.
Currently, there are very few companies operating in this segment, but according to experts this segment will rise significantly in the near future.
SBM which is the first foreign bank to receive a license from RBI in 2019 as a wholly owned subsidiary of State Bank of Mauritius. The bank is aggressively partnering with FinTechs and to shape up their trade offerings.
https://bfsi.economictimes.indiatimes.com/amp/news/industry/top-banks-and-fintechs-partnerships-in-2021/88604384
