XpressBanking.com: online financial services

Abstract

Offering: Xpress Banking is online banking services platform that will help consumer to find the best lending products suitable for their individual needs. It is a one stop online portal for banking services where the consumers can compare the products from the banks and the NBFCs (Non Banking Financial Corporations).Team: Guruprasad Bangle and Pankaj Mittal, classmates at IIMB, are the founders ofXpressBanking.com. Pankaj has about 8 years of experience in the banking sector in USA and has worked for Barclays and Capital One bank. Guruprasad has about 8 years of experience in the ERP domain and worked in IBM and SAP and also has start up experience. Customer Pain Point: Currently, the customer has to spend lot of time to find out the exact offerings of different financial institutions offering the different lending products. Lack of assistance in documentation, asymmetry of information on various lending products and long time period required for loan processing are other pain areas that customers face. Xpress Banking Solution: Xpress Banking is a one stop online portal for banking products which provides lower search costs for consumers with a large selection of products ranging from banks to NBFCs. The online portal backed by CSRs shall be complemented by an offline assistance model that will have field sales agents assisting consumers in the loan process. The consumer will have a choice of the following banking products: Home Loans, Vehicle Loans, Personal Loans, Credit Cards Total Addressable Market: The addressable market typically consists of the urban households with access to internet. Currently, the market comprises of around 60 million customers in India, factoring an internet penetration of around 30%. The total revenue that can be targeted is about Rs. 6370 Crores across urban India. Xpress Banking will capture a fraction of this opportunity. Business Model: Xpress Banking will use different marketing mediums such as Social Media, SEO, Mobile Applications and Partner Websites for advertising and creating awareness. Once the customer data is collected, he is given the option to select the online model or the Offline Assistance model. Both the services are offered free to the consumers but the bank will be charged 0.7% -2.0% of the loan amount as commission for every loan disbursed through Xpress Banking. Key Success Factors: General awareness of the portal among the consumers, good online and offline customer service and the adoption of E-commerce in India will be the key success factors contributing to growth in this business. Service Roadmap: In Phase 1, Xpress Banking shall be piloted out of Bangalore. The online model shall be operational in the next 4 months. The rollout of the Offline assistance model to other cities will be done in a phased manner and be completed across 8 cities by 2015.Competition: There are a few competitors such as bankbazzar.com and apnapaisa.com. These portals are lead generators for the banks and do not provide offline assistance in documentation. There is also an exhaustive list of banks offering loans that have an online presence as well, but they lack product variety and customer service. Financials: Major expansion of the offline assistance model and setup of infrastructure in the 8cities in Year 1 and 2 will delay the break-even to Year 3. In steady state, Xpress Banking shall have about Rs. 20 Crores of PAT on revenue of about Rs. 58 Crores. Using a 10% growth rate Xpress Banking will have a terminal value of Rs. 220 Crores in 5 years and the NPV is aboutRs.112 Crores. Risks: Government Regulations, dependence on banks for the final disbursement and macroeconomic factors are some of the perceived risks.