A challenger bank is a relatively small retail bank set up with the intention of competing for business with large, long-established national banks. Rakhil Fernando is the CEO and co-founder of Kashmi – a challenger bank. He shares how he intends to win over the minds and wallet shares of millenials in the South East Asia.
Tell me a little bit about yourself.
What is your mission at the outset?
The mission is to create an end-to-end digital banking experience that draws disengaged, under-banked young people into the financial system by providing them with a feature-rich experience that appeals specifically to their needs.
How did you get your idea or concept for the business?
Our idea to launch the P2P function of our application was borne of a desire to solve a very real problem that we encountered daily – splitting bills and paying back dues. Once we successfully launched this aspect of our business and received positive feedback from our users who enjoyed using our interface, we also heard them say that they wished all financial services were just as easy. Global studies and trends supported this thesis. Therefore, we felt validated in building out a more robust financial services application that would give users full, digital management of their money straight from their mobile phone.
What is unique about your business?
We bring a host of banking services straight to our Millennial customer base free of charge. With the exception of Timo (Vietnam) we are the only company in South East Asia bringing these services and this model to the market. Our features, all the way from a 3-minute digital sign-up to a full suite of tools (including P2P transfer, retail spending, budgeting, savings and more), offer much more value than most existing mobile-banking applications offered by traditional banks. We are unique because we are a product designed specifically for Millennial needs (unlike mass market banking products) and we are also unique in our ability to reach and acquire these young users.
Who do you sell to and how do you get customers?
We would be marketing to young people (aged 18 to 35 Years) using a combination of online and offline marketing strategies.
Why will customers stay or do repeat business with you?
If customers choose to use Kashmi then they receive much more than just a mobile wallet – they receive an actual bank account (thanks to our partnerships with local banks). With this bank account, and the debit card that will be issued with it, customers can now access and manage their funds straight from their phone during their everyday lives.Unlike a simple mobile wallet that can be limited in use cases (merchant spending, financial management tools, investment vehicles, lending may not be possible), our model gives Kashmi users access to the full range of financial services that can only be made possible with a fully fledged bank account – and all without ever having to visit a bank branch again.
What have been the biggest obstacles?
As a startup, it can be quite difficult partnering with existing players in the financial services space. This could be because legacy players don’t understand the disruption we bring and cannot frame unique partnerships effectively and/or because it is difficult, with limited resources, to meet stringent industry requirements.
Who is your biggest inspiration or drive to do what you are doing?
We are inspired by other players like us that continue to push hard despite being pushed back. We’ve seen success stories around the world, many of which validate our approach and ideas, and we take confidence from these trends as we continue to strive to realize our vision. We do realize that sometimes most plans do not come into fruition, however the key is to understand what works and what didn’t and adapt.
What’s next for you and for Kashmi?
We are currently raising our second round of funding. We hope to use these funds to fully build out our digital banking platform
Hock Lai has 18 years of experience in the financial industry, having performed roles in both business and technology. He graduated from the National University of Singapore (Real Estate), Nanyang Technological University (Infocomm Technology) and Nanyang Polytechnic (Fund Management & Administration).
He is also a Fellow of the Singapore University of Social Science, advisor to FinTech Startups and mentor to student FinTech projects.
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