WayneX is proposing a neo-bank called WayneX NeoBank that will provide digital banking solutions without physical branches. It will target the B2B segment focusing on SMEs requiring less than Rs. 10 lakhs in annual credit. The business model estimates breaking even by year 3. WayneX will differentiate by offering a complete solution for low tech adoption customers, leveraging its existing payments infrastructure credibility and synergies. Customer acquisition, engagement and retention strategies include referral programs, community building and personalized offers. Regulatory compliance and scaling to diverse customers present risks to overcome.

1. WayneX:
The next gen NeoBank
Team Mavericks | IIM Bangalore
Arjun Mehra | Madhur Butke | Raja Ram Pandey | Sajmal Yousef
Challenge 3.0

2. Neobanks are attracting huge VC money, globally & in India...
Neobanks are Fintech firms that provide digital
banking solutions such as payments, money
transfers, lending, etc. using the internet & do not
have any physical branches
Integration with
non-banking apps
Frictionless
payments
AI-based
personalised offers
Money management
insights
Overview of
transactions
Savings &
Investments
Typical features of a neo-bank
0.964 0.877 2.1 3.8 4.6
35
43
60
98
109
0
20
40
60
80
100
120
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
2016 2017 2018 2019 2020
NeoBanks: Global Deal Flow (in $ Bn)
$BN Funding #Rounds
Neo-banking space is seeing a 5 yr. CAGR +68%
VC fund inflow globally.
$8M $304M
2016 2020
India:
Deal Flow
Indian neo-banking
space has seen
CAGR 106% funding
growth with ~30
operational firms.
Situation Analysis Market Evaluation Positioning Differentiation Business Model Business Development Inclusive Growth
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[1]
[1] Traxcn (extracted on August 15, 2021). Internet First Banks - Traxcn Business Model Report 2021
[2] Traxcn (extracted on August 15, 2021). Sector Snapshot, India, Internet First Banks
[1]
[2]
[2]

3. … and can potentially overhaul India’s fin ecosystem.
Even after PMJDY, 56% Indian population does
NOT have active bank accounts due to the following:
Physical access: (only 6.2 commercial bank
branches/1L) Banks find it hard to maintain branches
with low amount and volume of transactions.
High Maintenance Charges: In a low-income
country like India, high costs like Cash Handling (Rs.
50-150/txn.), IMPS charges (Rs. 1-25), Card
Replacement charges (Rs. 50-500) etc. & other
hidden charges can push customers away.
Low Financial Literacy: Average financial
literacy score are 11.9/21 (data submitted by FinMin
to RS), thus most don’t understand best use.
90% Indian population (also MSMEs)
don’t have access to financial credit.
MSMEs in India also
face the below issues:
Rare access to formal credit
Heavy documentation
Requirement of financial
records; most small
business work with cash
Slow speed of fund disbursal
Neobanking can provide essential benefits, both to
the customers and banks, themselves.
Digital model:
accessibility
Higher savings
rate
Low Acc. Maintain.
charges
Real time
availability
Transparency
Servicing the
unaddressed
Easy compliance
and KYC
Enable
microtargeting
Lower operating
costs
Digital model
allows scale
Access to data for
underwriting
Quicker product
dev & integs.
C
U
S
T
O
M
E
R
S
B
A
N
K
S
Situation Analysis Market Evaluation Positioning Differentiation Business Model Business Development Inclusive Growth
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[3] Kapur, R. &; Reddy, R. (January 2020) Financial inclusion in rural India: Banking and ATM sector in India, Grant Thornton
[4] Aggarwal, R. & Raj, A. (November 2019) A wider circle: Digital lending and the changing landscape of financial inclusion, PwC.
[3]
[4]

4. WayneX should target B2B banking for higher growth & profits,…
Comparing using Porter’s Five Forces…
Competitive Rivalry
LOW (New Market)
BASIS OF COMPTETITION
Product innovation
-Trust & partner banks
-Customer base (adds
credibility)
MODERATE
BASIS OF COMPTETITION
-Product innovation
-Trust & partner banks
-Customer base (adds
credibility)
Bargaining power of
buyers
LOW
-High switching costs
- Creats a lock in
MODERATE
-Low switching costs
Bargaining power of
suppliers
Moderately HIGH
-Individual depositors (low)
-Partners (high)
-VCs (high)
Moderately HIGH
-Individual depositors (low)
-Partners (high)
-VCs (high)
Threat of substitutes
LOW
-Existing banks
LOW
-Existing banks
Threat of new entrants
LOW
Entrants need tech, funding,
partner banks
LOW
Entrants need tech, funding,
partner banks
Porter’s Force B2B B2C
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B2B Market Evaluation
B2C Market Evaluation
• WayneX can serve either: Retail customers (B2C) or Business customers (B2B)
• Profitability of both the markets have been evaluated via two approaches:
o In Quantitative approach, TAM, revenue and profits have been estimated using
certain assumptions.
o In Qualitative approach, Porter’s 5 Forces framework has been used to
compare the profitability of both the segments
Insights
• Quantitative analysis: Similar profitability; B2B has a higher growth (13% Vs 6.7%).
• Qualitative analysis: Favours B2B given a lower competitive rivalry & buyer power.
WayneX should target B2B segment for higher profitability

5. … focusing on SMEs requiring <Rs. 10L credit annually.
Small Credit Requirement ( < 1 M ₹) Large Credit Requirement (>1 M ₹)
Formal Credit Access
(Formal Financial Statements
Available)
• High cost/txn., low profitability for banks.
• Lower fund reqmt./borrower, so hedged risks.
• Fin. Data available for AI models, so serviceable.
• Only major effort is to digitise the existing model
for scaling and micro-targeting.
• Existing Credit Gap: $ 11 Bn
Already being served by Banks / FI
Informal Credit Access
(Formal Financial Statements
Unavailable)
• Highly unaddressed market, with eq CIBIL 650.
• Already paying high rates, so easy to convert.
• Can be served with the help of emerging
technologies like Artificial Intelligence, relevant
data is an existing challenge.
• Constitute 90% of India’s MSME sector
• Existing Credit Gap: $ 209 Bn
Secured loans required
Transaction Size
Credit
Access
Status
1
2
3 4
WayneX should start with segment 2 initially to enter into the market and then expand into segment 3, with enough data to predict
the credit worthiness of users in segment 3. Both the segments commutatively presents a credit gap of $ 220 Bn in Indian economy.
Target User Personas
2
3 The Gig Worker - Rajesh
Male, Age 25-40, Lives in Pune
Edu: ITI Inc: ₹ 3 L / yr
- Rajesh provides carpentry services
- He has 3 labourers to assist him
- Often he requires credit to purchase tools;
which is met by local money lenders.
- He documents record of purchases,
income and payroll on paper
- He provides hand written invoices to the
customers which are not GST compliant
Local Entrepreneur – Sachin
Male, Age 30-50, Lives in Roorkee
Edu: Graduate Inc: ₹ 10 L / yr
- Sachin owns a convenience store in town
- He is educated, comfortable with tech
- His business runs on credit cycles, which
includes suppliers and buyers
- He maintains the record of all business
transaction on Tally ERP
- He uses multiple accounts for meeting
business and personal needs
Pain
Points
Long time requirement for opening current account (2-3 days)
Only registered enterprises get formal credit from Fin. Insti.
High transaction fees and time required by banks
High lending rates offered by informal lenders
Access to Formal credit requires collateral and guarantee as
well other documents like Balance sheets, turnover reports.
Traditional banks asks addition of payee details and have
cooling off period
Traditional banks does not facilitate bulk payments
Traditional accounts fails to track payments across multiple
accounts, provide analytics and business insights
MSMEs lack financial literacy and awareness
Credit Access Monetary Transactions
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[4]

6. An ideal positioning world be “trustworthy complete solution”.
Synergies with existing Business of WayneX
Access to Early Adopters:
• WayneX already has partners with hundreds of retailers while serving
its ecommerce customers.
• These partners can be easily onboarded as the early adopters of
WayneX NeoBank.
Serve as Transaction facilitating platform:
• WayneX has data of its partners like, what they sell, what they
purchase, their locations, etc.
• WayneX NeoBank can act as an e-comm txn facilitator b/w buyer &
seller, reducing the credit cycle, thus incentivising users to onboard
Reduce credit risk with data:
• With the transaction data of existing partners, WayneX has
information about the Cash Flows of the users.
• Using this information WayneX Neobank can offer customised credit
and interest rates depending on business health of the MSMEs.
Leverage existing credibility of Payments Infrastructure:
• The payment portal which is used by millions of users for digital
transactions, establishes a certain credibility in FinTech space.
• Manoeuvring this, WayneX NeoBank can build the trust in the minds
of prospective users.
Positioning WayneX NeoBank
Low High
*
*
* Does not offer credit
User’s Tech Adoption
Completeness
of
Solution
Low
High
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Insights
WayneX should be positioned as –
“A single trustworthy solution which will satisfy all the banking needs
of a business who’s technological adoption is low.”
Characteristics of Target
Users:
• Trust in the product is a
prerequisite.
• Traditional businesses with low
technology adoption.
• Low manpower necessitates a
need for complete solution.
• Require no clutter, simplistic
UI/UX in the product.
• Doesn’t want to juggle with
multiple solutions.

7. WayneX shall include the following features & tech. to create a
strong differentiation…
From the above KANO Model, we extract the below features for early-stage:
Feature Category Added Features Rationale
MUST BE All -
MORE THE BETTER All Low Impact/Effort
DELIGHTERS Marketplace Integ.
Established e-comm
has many sellers
Marketing Core Tech. Cust. Support
Basic Technology Stack
Differentiation & Lock-in for the sellers
Analytics:
GA, HotJar, Clevertap
Advertisement:
Custom Audiences,
LinkedIn
Marketing Automation:
Optimizely, Google
Optimise360
Language &
framework:
React, custom-built site
Content Hosting:
AWS CloudFront,
CloudFlare
DevSecOps:
Report URI, AMZN SES
Credit Underwriting:
In-house, CreditVidya
Live Chat Technology:
ZenDesk Chat
Cust. facing differentiation Process differentiation
Credit analytics,
reinforced by
smartphone data,
reducing risk costs
Use Open Banking
API for sourcing &
integrating fin info
dashboards.
RegTech to detect
potential risks,
learning from previ-
ous regulatory failure
Smart Contracts
using blockchain to
sign using cryptogra-
phical keys digitally.
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8. For regular usage
100
FREE
Pay-outs/month
Post 100 Pay-outs:
IMPS/UPI
< ₹1,000 ₹2
<₹50,000 ₹4
< ₹50,000 ₹8
NEFT / RTGS ₹3
Personalised credit
rates & offerings
• Dashboards
• Bulk Pay-outs
• API Pay-outs
• Pay-outs Links
• Approval Workflows
• Insight & Reports
• IMPS, NEFT, RTCS
WayneX
Basic
WayneX
Basic
For growing enterprise
300
FREE
Pay-outs/month
Post 300 Pay-outs:
IMPS/UPI
< ₹1,000 ₹1.5
<₹50,000 ₹3
< ₹50,000 ₹7
NEFT / RTGS ₹2
WayneX Basic + ₹ 2.5L
assured credit
• WayneX Basic
• Business Analytics
• Guided A/c opening
• Scheduled Pay-outs
• Priority Support
• Current Account
• Expense Mgmt.
WayneX
Plus
WayneX
Plus
Full Power of WayneX
FREE
Pay-outs every
month
WayneX Basic + ₹ 2.5L
assured credit
• WayneX Plus
• Full Access and
Support for integrating
with
WayneX E-Comm
WayneX
Pro
WayneX
Pro
Business Model & Financial Estimates
WayneX can target breakeven by Year 3.
**Refer to Appendix for detailed calculations & base case assumptions
With the following bus. model, we can expect to break even in Year 3.
Rs. 5,000/yr. Rs. 15,000/yr.
FREE
Situation Analysis Market Evaluation Positioning Differentiation Business Model Business Development Inclusive Growth
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9. The below steps shall guide business development:
KYC automation and onboarding support
Referral program for customer acquisition
(Provide financial incentive or tools at
discounted rate)
Use existing platform customer data and
target existing MSME customers
Create a separate platform and provide
financial education
Understand customer operation and
provide customized product support
CUSTOMER
ACQUISITION
CUSTOMER
ENGAGEMENT
CUSTOMER
RETENTION
Use of expense management tools for
financial insights for customers
Craft personalized message and weekly
newsletters
Use push notifications for offers and
recommendations
Build community and gather community
feedback for product development
Use AI based chatbot for instant query
resolution
Provide customized gifts and monetary
reward on achieving transactional milestone.
Use of business management tools
such as budget trackers, investment
automation, card management
systems, goal setting tools etc.
Use of AI for intent classification of
customer queries and query resolution
without latency
Attract Convert Close
Touch Point Experience Capabilities
Locking-In Problem Redressal Premiums & Gifts
Situation Analysis Market Evaluation Positioning Differentiation Business Model Business Development Inclusive Growth
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10. Summarising the development to deployment process…
Deploy NeoBank
Robustly test the app
Add security
Dev. Customer App
Build the core
Duly considering the benefits, costs & risks, firms can choose to:
Develop in-
house solution
Outsource back-
end development
Use white label
Bank-as-a-service
6-10
Months
Estimated time required for
launching a NeoBank app with
primary features, including
development, testing and
deployment.
1. Develop the API
2. Transaction
Processing
3. Back-office tools
1. Accounts
2. Credit / Debit cards
3. Payments
4. Transaction history
5. Chat Help Desk
1. Active Security
2. Passive Security
3. Customer Friendly
Privacy
1. Unit Testing
2. Integration Testing
3. Security Testing
4. User Acceptance Test
5. Regression Testing
1. Dev Ops
2. Regular Updates
3. Distribution Channel
Start-up stage Growth stage Maturity stage
Metrics to Track Associated Risks & Challenges
• Scaling up in by targeting specific set of customers which can be catered by
us.
• Finding Indian banks and financial institutions for partnerships which are
strategically and technologically compatible.
• Complying to stringent legacy regulations mandated by the RBI
• Regular security upgradations to keep up with upcoming technology and
standards
• Maintaining differentiation with new neobanks coming up with diverse offerings
• Competing with traditional banks which has high number of existing users and
high capital reserve.
• Alignment with user
personas
• Number of register
users
• Monthly Active Users
• MoM Growth rate
• Sources of traffic
• Total payment volume
• CAC
• Organic User
Acquisition
• Customer satisfaction
Index
• Number of issues
raised by users
• User LTV
• Click through rates
• Daily app opens
• New User / Repeat User
• LTV of Users
• No. of Acc. Closings
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[5] Kalinin, K, (July 21, 2021), How to create a Neobank from scratch in 2021, topflight. https://topflightapps.com/ideas/how-to-build-a-neobank/
[5]

11. WayneX, through the NeoBanking model, can create essential
social and economic impact for India.
Higher
smartphone &
internet
penetration
supporting
Neobank
adoption
Increasing use
cases for
Neobanks,
generating more
data & gaining
acceptance.
Development of
robust enabling
tech (BAAS,
OpenBanking)
enhancing
usability
Potential
strategic
partnerships
with Neobanks
& traditional
firms.
Key drivers of digital financial inclusion, including…
Leading to enterprise-level impact driven by working capital,
credit access, better reporting, cross-border payments etc…
Finally contributing to macro-economic impact…
Better product
offerings & inventory
Capital for tech
upgrading
Empowering India’s
20% women-run SME
MSMEs contributing
to national GDP
SMEs causing 110M
workers’ welfare
Generated data for
targeted policies
Recommendation
Just a few Neobanks won’t be able to serve
India’s huge market quickly, hence:
License technology platform as a white-
label solution to potential new Neobanks.
Thus, ensuring social impact and business
sustainability.
Neobanking can thrust trust building both on the bank’s side and
the customer’s side.
Incentive to
ensure good
credit behaviour.
Ensuring timely
filing of GST,
EPFO, MCA.
Making credit
underwriting
predictable.
Transparent
feeds of charges
& deductions.
TRUST
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[6] Rajan, S, Chawla M & Sahni Prapt (2019), Powering the economy with her: Women entrepreneurship in India, Google, Bain & Company.
[7] Beniwal, V. ( May 11, 2020), India reopens economy, but millions of SME workers stay home, The Economic Times.
[6]
[7]