JOINING THE BANDWAGON Country’s biggest lender is joining the ranks of large corporates starting to tap into Bengaluru’s startup ecosystem and engage with early-stage firms
State Bank of India is joining the ranks of large corporates starting to tap into Bengaluru’s fertile startup ecosystem and engage with early-stage firms, as the nation’s biggest lender aims to catch up with new-age, tech-savvy rivals amid a major technology shift in the financial services landscape. Last month, SBI Chairman Arundhati Bhattacharya sat in the front rows of a startup session in the city, listening to how disruptive technologies and fledgling ventures are taking over the financial services industry .India’s largest conglomerates and other corporates are flying in to Bengaluru to get a sense of the startup world. A dozen startups pitched before an SBI team, which included two of the lender’s board members.
These startups included enStage, Novopay , Happay , Vote4Cash, Probe Equity and Capital Float.
“We were surprised to see how these people are developing working on technologies to solve some of the problems we didn’t even know existed. It was very interesting to see how pointsolutions by startups have the potential to impact the banking industry.“
SBI Chief Informa tion Officer Mrutyunjay Mahapatra said in an email to ET.
“In fact, we were so impressed by the overall concept that we have personally invited a few of these guys for demonstrations at our office for a larger group of audiences,“ said Mahapatra.
A number of old-worldly Indian conglomerates are now launching corporate accelerator programmes and incubators to leverage the potential of startups.
Many large traditional financial services giants such as SBI are fac ng disruption from the rise of new-age payments banks, mobile wallets and digital currencies such as Bitcoin.
“The rise of smartphones, payment bank licences from RBI, uni ied payment interface from the National Payment Corporation of ndia, the huge amount of global capital coming into the payment ndustry will all lead to disrup ion,“ Infosys cofounder and former chairman of the UIDAI Nandan Nilekani told ET in an nterview last week. “There is the rise of mobile wallets and also of ecommerce. Recharge alone is 3.6billion transactions a month. It is up to existing banks and others to create disruption or else a new startup will come and do it. I think it is very fertile situation for that.“
To engage with startups, SBI has decided to partner with iS PIRT. “SBI, as the leading banker to the nation, is keenly aware, keeping abreast of the changes and is desirous of `leapfrogging’ by adopt ing the technology innovations disrupting the banking industry ,“ said NRK Ra man, director at Tri max IT Infrastructure & Services and an iSPIRT adviser.
SBI has engaged with iSPIRT to understand the broad changes in technology landscape globally and the specific catalysts in India impacting financial services; interact with some of the innovative startups in payments, lending, analytics as well as find out how it can partner with them “to `leapfrog’ in new technology adoption within the bank and industry in general“, he said.
Another person directly familiar with SBI’s involvement with startups said SBI was attempting to create an ecosystem around its services that would compare with other more technology-savvy banks and financial services firms, and create a platform that would give users the maximum number of options for different solutions being provided by the startups -like Android’s “app store“ where users have access to a plethora of apps.
“SBI is like a large supertanker and its chairman has decided to take a sharp left turn right now,“ said this person, requesting anonymity. “It will obviously take some time before the results start to show.“
Source: The Economic Times