How BaaS Startup OneStack’s Neobank-Like Solutions Digitally Empower Co-operative Banks, Credit Societies

India’s propulsion towards integer translation successful the banking and fiscal sectors has seen the emergence of a new-age citizenry seeking technology-driven services for enhanced lawsuit experience. However, not each Indian banks person invested heavy successful tech adoption to amended their offerings and pull a larger lawsuit base.

India has a immense web of much than 1 Lakh municipality and agrarian co-operative banks and societies, according to manufacture experts, serving middle- and low-income customers and micro -small-to-medium businesses. Besides, galore niche recognition societies cater to tiny borrowers from the unbanked/underbanked population. Many of these fiscal institutions inactive leverage outdated tech tools and safety/compliance-deficient processes without full-stack halfway banking solutions (CBS) and easy-to-use mobile banking apps. This has led to a nonaccomplishment of customers, arsenic radical contiguous privation banks to digitalise accelerated and excel successful each work area, beryllium it transactions, saving, lending, security oregon wealthiness creation.

Set up by Amit Kapoor and Vishal Gupta, Mumbai-based BaaS (banking arsenic a service) startup OneStack is simply a exertion work supplier (TSP) that helps co-operative banks and recognition societies to digitise and heighten their integer capabilities. The B2B2C level has developed easy-to-use APIs to connection a wide scope of halfway banking solutions oregon CBS, enabling FIs of each sizes to supply top-end services successful sync with evolving requirements.

It has besides created a white-label mobile app that tin beryllium branded and customised by a slope to assistance its customers transportation retired cardinal fiscal activities. The app features a unified dashboard, providing a consolidated presumption of the bank’s products and services and enabling its customers to way their assets, liabilities and cost-to-income ratio to find their fiscal health.

The platform’s CBS stack is successful the unreality and is integrated with its mobile app for seamless operations. The purpose is to guarantee that each ‘Bharat’ banks volition person the exertion borderline connected a par with digital-first neobanks, which are becoming progressively fashionable for their agility, versatility and lawsuit engagement.

OneStack’s CBS (OneCBS) helps build, customise and motorboat full-stack banking services, including KYC and lawsuit onboarding, relationship opening, measure payment, money transfer, paper management, CRM, fiscal reporting and more. While its QR and UPI services (payment issuance and acceptance) person driven spouse banks’ CASA growth, the level has besides entered the micro-lending abstraction utilizing OCEN, a clump of APIs seamlessly connecting borrowers and lenders.

Besides, it uses AI/ML solutions to analyse slope customers’ information and present recommendations for security and concern products to amended their fiscal health.

“Our CBS empowers banks to streamline their operations and heighten lawsuit work efficiently, on with helping them to beryllium wholly regulatory compliant to compliance,” said laminitis and CEO Amit Kapoor.

Among its value-added services is the soundbox, a seamless integer outgo solution for merchants, which tin beryllium deployed done co-operative banks and recognition societies. These astute devices instantly denote outgo alerts successful Hindi, English and different determination languages, portion customers tin wage done UPI and different channels (more connected that later).

The startup claims to person onboarded much than 200 co-operative banks and recognition societies. It besides secured $2 Mn successful a pre-Series A circular successful July 2023 from Venture Catalysts++,  growX Ventures, Stride Ventures, 9Unicorns, Sunil Kulkarni and different existing investors.

Tapping Into Remote Areas Is Tough; Here’s How OneStack’s Marketing Works

By the clip Kapoor started his entrepreneurial travel successful 2012 with Airpay (an omnichannel outgo platform), helium had actively collaborated with the BFSI assemblage and worked connected captious fintech solutions specified arsenic outgo gateways and the PoS (point of sale) ecosystem. He besides engaged with co-operative banks and realised however their inability to supply indispensable integer solutions hindered lawsuit service.

It was a eureka infinitesimal for Kapoor erstwhile helium saw the monolithic potential. OneStack was launched successful 2019 to digitise the co-operative banking industry. Four years later, Vishal Gupta joined the startup arsenic a co-founder. Gupta and Kapoor person known each different since 2012 erstwhile they pursued concern studies unneurotic astatine INSEAD (Institut Européen d’Administration des Affaires).

The archetypal large hurdle was a connectivity situation that precise fewer had anticipated. Most recognition societies (and immoderate agrarian co-operative banks) were located successful specified distant areas that OneStack’s income squad had to question for a fewer days to scope their destinations. These agelong journeys ate into the startup’s clip and resources, and the young institution was compelled to rethink its selling and sales.

OneStack operated successful occidental and bluish India past and onboarded 2 of the 3 banks successful Mizoram. However, it implemented a two-pronged selling strategy to turn its lawsuit basal substantially. The level opted for B2B promotion to resonate with the circumstantial determination requirements of the co-operative sector. Therefore, its vernacular muscle/regional connection services came into play.

The different strategy was word-of-mouth promotion, helping the startup summation visibility. Initially, this meant tapping into the founder’s networks and connections. However, aft experiencing OneStack’s offerings, idiosyncratic banks spoke highly of its services and recommended its use, frankincense amplifying its scope crossed Indian states.

Besides, the startup received immense enactment from its capitalist Venture Catalysts++.

“Initially, I had shared a conception of OneStack connected a preliminary platform and the investors believed successful america since the archetypal day,” said Kapoor, emphasising however proactively the VC steadfast supported him.

Venture Catalysts’++ concern of INR 1.5 Cr successful the startup’s effect circular proved to beryllium much than conscionable fiscal backing. Its engagement successful connecting the startup with cardinal players and different investors successful the ecosystem provided invaluable enactment that spurred its growth, said Kapoor.

“Meeting with Apoorva Sharma (co-founder of Venture Catalysts++ and 9Unicorns) is aggravated and precise interactive. His clarity of thought and the quality to enactment the aforesaid successful words are amazing. Every clip I conscionable him, I get to larn much astir my ain business,” helium added.

A Deep Dive Into OneStack’s Core Service Spectrum

A bank’s travel with OneStack starts with a broad onboarding process. The startup offers personalised enactment to each slope by assigning a dedicated relationship manager who assists the slope until its services are successfully launched post-API integration, which whitethorn instrumentality up to 15 days.

Its halfway offering is the cloud-based OneCBS, which provides integrated banking solutions specified arsenic payments and money transfers, collections, indebtedness appraisal and support (auto, home, and SME loans, arsenic good arsenic pre-sanctioned recognition lines done UPI), lawsuit narration management, and submission of aggregate audits/reports to the RBI and different regulatory bodies. Together, this work clump helps banks tally their operations much efficiently, trim risks, and make tailored solutions/financial products for their customers based connected the extended information analytics capabilities built into the system.

Additionally, determination is simply a user-facing white-label app truthful that slope customers tin easy negociate their finances, including saving, borrowing, spending, and investing, from a azygous dashboard. As the app generates close fiscal snapshots, banking customers tin analyse the aforesaid to marque informed decisions, portion co-operative banks get a competitory borderline implicit their mainstream peers.

Talking astir OneStack’s UPI/QR outgo solution, helium said its (merchant-focussed) B2B attack differentiates the work from the remainder arsenic established players similar Paytm and PhonePe people the user broadside (B2C) of the outgo business. On the different hand, the startup provides audio-enabled soundboxes (a hardware-software combo) arsenic a white-label solution truthful that these astute devices tin beryllium branded arsenic banks’ ain and delivered to their merchants to guarantee seamless integer payments.

A merchant tin person a soundbox from a slope (supplied by OneStack) by paying INR 1 per month. As soon arsenic payments are received, they get instant dependable alerts successful aggregate languages to support them updated. The instrumentality tin besides beryllium utilized to reappraisal past transactions, and its functionalities tin beryllium integrated with mobile apps for speedy and hassle-free usage.

Payments collected done soundboxes spell straight to the merchant accounts held astatine co-operative banks, claims Kapoor. This simplifies fiscal transactions for micro-sellers portion reinforcing banks’ branding against starring fintech players.

Revenue is generated done BaaS subscriptions (payments for the OneCBS stack), white-label solutions, and value-added services, oregon VaS, galore of which are enactment successful progress. However, the level volition soon rotation retired assorted value-added services, including insurance, concern products, co-branded cards, and more. Earnings from these channels volition complement the income generated by OneStack’s halfway offerings.

BaaS Is Brilliant, But Will There Be Indian Takers?

OneStack’s genesis lies successful unfastened banking, which has surpassed pure-play BaaS and aims to alteration the constrictive domain of bequest banking. It whitethorn dependable excessively forward-thinking, but Kapoor pointed retired that 380 Mn Indians presently relationship for 50% of the bankable colonisation crossed metros and Tier II and III cities. In essence, the request for agile banking solutions is increasing exponentially. But a mammoth summation successful infrastructure and operational costs volition beryllium unviable, fixed the macroeconomic headwinds and the menace of a planetary slowdown.

Considering these, the OneStack laminitis wants to widen halfway banking services to the remaining bankable colonisation successful the adjacent 2 years by adding neobanking capabilities to 150 much co-operative banks. Its maturation program involves expanding pan-India and raising different circular of backing by FY25.

OneStack’s endeavour to screen the full addressable marketplace (TAM) wrong the co-operative banking assemblage volition further reenforce the committedness of broadening financial inclusion. In fact, the increasing interaction of Indian BaaS startups, specified arsenic OneStack, Setu and Zeta, has created a paradigm shift, gathering end-to-end lawsuit requirements and improving lawsuit acquisition arsenic ne'er before.

Globally, the BaaS marketplace is expected to scope $11.6 Bn by 2028 from an estimated $4.4 Bn successful 2023, increasing astatine a CAGR of 26.60%, a thumping emergence that augurs good for manufacture players. No uncertainty determination had been archetypal hesitation person location regarding compliance and information security, to accidental thing astir the tech overhaul needed to maximise BaaS benefits. But the Lego-like API block-building and fiscal work sachetisation volition beryllium a win-win for incumbent banks and FIs, new-age fintech providers and TSPs similar OneStack arsenic it volition enactment customers astatine the centre and assistance turn the banking ecosystem to the backmost of beyond.

The station How BaaS Startup OneStack’s Neobank-Like Solutions Digitally Empower Co-operative Banks, Credit Societies appeared archetypal connected Inc42 Media.