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Start-ups have an edge when it comes to super apps: Ex-SBI boss Rajnish Kumar

Start-ups have an edge when it comes to super apps: Ex-SBI boss Rajnish Kumar

Former SBI Chairman Rajnish Kumar has said that start-ups have an edge over legacy institutions when it comes to building super apps.

Changes in the digital world are happening very fast, Kumar said. Changes in the digital world are happening very fast, Kumar said.

Former SBI Chairman Rajnish Kumar has said that start-ups have an edge over legacy institutions when it comes to building super apps. "Their systems have become old-fashioned and changing those legacy systems is not easy. That's why you have so many startups in fintech space coming up because they don't carry the baggage," the ex-SBI boss told Business Today.

Kumar adds that legacy institutions particularly in the financial sector have their own advantages in terms of scale already achieved and customer trust. "These are big advantages and are not going to go away easily but in terms of capability to deliver innovative solutions, startups and fintechs are better placed," he said.

State Bank of India's (SBI) YONO, which has more than 37.9 million users, is well on its way to become a super app. Five years ago, SBI came up with an app YONO-an acronym for 'You Only Need One'. In the last three years, YONO has notched up impressive numbers: 37 million registrations, Rs 21,000 crore-plus loans, 77,671-plus daily cardless transactions and leads for Rs 10,000 crore of home and car loans. It also became the first digital bank in the world to break even in less than two years. 

"The journey of YONO started because the bank wanted to attract the younger generation. The idea was to build an online marketplace but when discussions happened we thought that it would be better if we go for end-to-end digitization and the way it was designed was it should have the banking application, plus the customers should be able to do their investments, and the online marketplace. So essentially it had all the elements of a super app," he added.

Changes in the digital world are happening very fast, he said. "Mobile applications are growing very fast and manifold. The number of mobile and internet transactions is neck and neck. The main difference which distinguishes a new-age company is their agility and ability to innovate around what the customer needs," he said.

According to Kumar, edtech and health tech sectors are one of the most promising when it comes to super apps. "New trends have been designed to fill a void which has been left by the legacy institutions in terms of the process and convenience," he said.

One of the concerns though, he adds, is around data privacy. "We need a very robust digital infrastructure. There are concerns around data privacy. The digital lending reforms are also catching up in the country," he said.

"As new things come up, regulations needs to change accordingly. Issues around crypto, data privacy bill, technology will bring its own challenges," he added.

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Published on: Feb 22, 2022, 7:48 PM IST
Posted by: Vinay Rai, Feb 22, 2022, 7:41 PM IST