Model of a Payments Bank and Opportunities it presents

Prashant a friend (Working as a branch manager @ Pvt Sector bank) from Bhopal called up few days back and had a straight question “What are the opportunities for a banker in Payments Bank?”

Below mentioned is the part 1 of that conversation, the objective is also to present authors understanding of what kind of business model a payments bank can explore.

Prashant is a career banker with approx. 10 years of experience and has primarily worked in branch banking starting as a teller and currently managing a GL of 100 cr as branch Manager.

Author: To understand the job opportunities * we need to understand the revenue streams “PB” can work on,

Few that come as a starting point are

1. Liabilities: Deposit, CASA
2. Insurance: Life and General
3. Mutual Funds
4. Pension
5. Prepaid cards: Travel, Gift, Meal etc
6. Merchant Acquiring
7. Lead generation for credit based banking products: Small business loans, Personal loans, credit cards and other retail assets

Prashant: Is this all or there are other avenues?

Author: As I shared these are just the starting point and I am sure many more avenues will evolve like

1. Distribution points for Flipkart/Amazon and others
2. Distribution and collection points for college/school application form and fees.
3. Acting as CSC (Common /Community Service Centres) and providing access to govt. services

Prashant: So who all (among us banker’s) can take a plunge

Author:

1. Payments and Cash Management Professionals: To start with core product resource, then business development, client on-boarding/integration and services team.

Product: Those who have worked in (Core domain work experience of 4-5 years and above )

• Salary (1) and G2P (Government to People) (1) subsidy payment space.
• Cash Management (1)
• Savings (1) and Current Account (1)
• Fixed Deposit (1)

Business Development: Segment specialists like Govt. (1), SME(1), Mid (1)  and Large Corporates (1).

Client On-boarding and Integration Team (3-4 people to start with): Helping govt./large corporate in documentation, product demo and IT integration.

Prashant: Do you think so many people are necessary to start with?

Author: Yes, to start with the bank should have atleast 1 resource in each of the above categories I have placed a number (1) in bracket to provide further clarity. This is the core liabilities generation team for the bank and it shouldn’t compromise on this front.

Prashant: Don’t you think the role’s mentioned above are same as traditional banking?

Author: Yes they are, but the key difference is in the approach one will undertake. All of the above needs to be reimagined from the perspective of much lower (From traditional banking) per customer relationship value with a technology solution that is provided keeping the lowest common denominator (the end consumer) at the core of everything that is productised and taken to market.

So apart from product expertise the HR/recruiting manager will have to explore the candidate on what I call as the

“CQ”: Creativity Quotient

and

“PPQ”: Passion Perseverance Quotient

The presence of above three will be the key to produce the market relevant product.

Prashant: That’s quite a High Expectation from HR and Recruiting Manager ?

Author: Yes it is but you need to see that with Payments bank we possibly will change the face of banking in India and the one that will have ramifications globally. Also with low per customer revenue (and 21 new players (PB and Small Fin. Bank), more than 100 old players vying for the same pie) not many will have the luxury to have high acquisition cost driven product. So the organisation, HR, recruiting manager will have to look at candidate keeping above points in focus.

Prashant: Great, listen getting in a con-call I will give you a call back. Sun with Payments bank these monstrously long con-calls will go kya ?

Author: Keep guessing but believe me your guess will be just as bad as mine J …