Robert Kiyosaki, author of the book explains smart ways to escape this “rat race”. I have summarized the book for your quick, better understanding. Please note that this book has very big impact on my life and my goals.
Summary from the Book:
I used to stay in a hostel when I did my engineering. My home was not very far, (just 220 km) and I used to go home on alternate weekends or once a month. Whenever I went home, my father always gave me money for pocket-expenses. At that point of time, I never understood how my dad ensured this continual flow of cash whenever required. However, once I started earning & looked back, I discovered how difficult it was to ensure constant money flow when it is most required, like over the weekend or in the first week of month. Professionally, when I started working in the Liquidity management domain, I thoroughly understood the nuances of it and started appreciating the liquidity management of my father and its need in the corporate world.
With the COVID-19 pandemic, customers are wary of visiting branches. This has really given a booster to digital banking.
Neo banks, also known as Challenger banks or smart banks, are digital banks with no brick-and-mortar physical branches. The Fintech, which does not use legacy banking systems or pre-existing infrastructure, can be qualified as a bona fide Neo bank.
Since a decade, Neo banks are popular in Europe, Japan, the US, and Australia. They have started their operations in India for a few years. It will take some time before they become disruptive and transform the banking landscape. As of now, Neo banks, partner with existing banks because they do not have a banking license.
With no backlogs of legacy systems and out-dated business processes, Neo banks are considered highly flexible and adaptive to new technologies. Thanks to zero overheads of physical branches and manpower in those branches, they have an overall lower cost structure and are able to offer attractive interest rates for deposits and loans both.
Cloud-based Neo banks offer –
- Omnichannel and Immersive customer experience
- Contextual offerings
- 24×7 Customer support using chatbots, AI and ML
- Scalable infrastructure
- Highly automated services like auto reconciliation, regulatory compliance-ready reporting.
- Cash flow forecasting with AL and ML-based predictive alerts
- Meaningful spending insights using AI
- Open banking compliant API
- Automated and digital workflow thereby reducing processing time to a few seconds/minutes
- ML based risk Analyser
- Innovative features like goals-based savings
Normally, Neo banks operate in targeted and un-served segments like
- Tech-savvy millennial
- SME and mass at the bottom of the pyramid who are ready to adapt to new technology to earn little more interest
- Niche banking service like payments, budget, receivables and spend management
- Provide Forex cards, credit cards, personal loans
Some notable Indian players are Open, NiYo, Yono, Kotak 811, PayZello, Instantpay, Yelo, India Post Payment Bank, EzoBank, and Zeta.
These Neo banks are here to stay and grow by leaps and bounds in the coming days. And they are going to disrupt conventional banking as Airbnb, Ola/Uber had disrupted the traditional models.
Due to the recent demonetization in India to curb black money & fake money menace, one of my family friends was complaining about cash shortage. I asked him, “why don’t you use credit or debit card for online shopping? You will not have any issues.” He replied that he was scared of using credit and debit cards for online shopping, so I explained to him as following on how to use the virtual card for online transactions, instead of real debit or credit card. Read More…