TRADITIONAL BANKS AND financial institutions are caught in a Catch-22 situation as they strive to meet the demands of savvy consumers in a constantly disrupted digital age. The issue at hand is that these financial institutions rely on a legacy model that supports the back-end operations across core functions. This model, based on antiquated code, is not developer-friendly, cloud-native, or easily scalable, leading to high maintenance costs and long development times.
Meanwhile, tech companies, eager to integrate cutting-edge fintech products to boost average revenue per account (ARPA) and reduce customer acquisition cost (CAC), are grappling with high cost of multiple integrations, long development times, regulatory licences, and a need for stable technology. They are also reluctant to build systems from scratch, as it would detract from their core business.
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Enter Falcon. A fintech startup that offers banking-as-a-service (BaaS), a term that today encapsulates modern financial technology powering the world’s next-generation of financial institutions and fintech products or, put simply, “the backbone of the future of finance”. By embracing innovation, these institutions can remain competitive and continue to provide valuable services to their customers.
Co-founders Priyanka Kanwar and Prabhtej Singh Bhatia leveraged advancements in the fintech sector since the arrival of UPI Credit and OCEN (Open Credit Enablement Network) to create a comprehensive, full-stack BaaS platform that enables customers to launch payment, card, lending, and account products in a day by embedding APIs/SDKs or using no-code solutions.
Having built the new-age beer brand Simba from scratch, Bhatia (also a board member at Board of Control for Cricket in India) identified the limitations of traditional financial institutions in this rapidly changing landscape while serving his target market. Says Bhatia, “Since 2020, the banking-as-a-service ecosystem in India has attracted investments of $470 million to shake up financial services. Falcon’s core IP is ‘the technology of the next decade,’ enabling financial institutions and startups to tap into one of the fastest-growing segments – digital lending.”
Started in January 2022, Falcon’s platform has been designed for global expansion, with 70% stack extensibility, making it well-positioned to enter markets in the Middle East and Southeast Asia. As demand for new-age and co-branded credit cards linked to UPI credit is surging among banks and NBFCs/tech players, Falcon’s stack supports both secured and unsecured credit cards.
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The two co-founders, who acquired valuable insights during their journey with Kite (a B2B2C suite, built on Falcon’s issuance platform, that enables banks, neobanks, NBFCs, and fintechs to rapidly launch commercial payment solutions), anticipate that Falcon’s growth will continue to soar in the next 18 to 24 months, as it brings cutting-edge technology for digital lending, credit card stack, and new licenses to the market.
BaaS, a globally tested model, has reached a tipping point in India and is projected to reach $21 billion by 2030. This is due to its cloud-native, modular, and developer-friendly stacks that are gradually replacing legacy systems, as well as the trust generated by regulatory and government support. Banks are investing in BaaS partnerships, and several major players have launched fintech products via BaaS in India over the past two years.
Considering the growth of the BaaS ecosystem and accelerating demand, Falcon has introduced four new product lines in the past year, experiencing an average monthly growth rate of 129% since its last funding round. Falcon’s customers span across various industries, including universal banks, payment banks, NBFCs, and tech companies in sectors such as wealth management, agri-tech, education, new economy, healthcare, and more.
ON A NEW TRACK
* Banking-as-a-service (BaaS) segment is set to reach $21 bn by 2030
* Falcon’s BaaS plat-form enables clients to launch payment, card, lending and account products in a day by embedding APIs/SDKs or using no-code solutions
* Clients include NBFCs, universal banks, payment banks and more