KOHO
FINANCIAL TEAM 1
INC.: •ASHRUJA A (2013015)
•JANARTHANAN S (2013044)
FACING A •KISHORE GNANA DHAYALAN J E (2013060)
NEW •MAHAABIRAMI M (2013066)
•MITHRA DEVI L (2013070)
BANKING •NITHYA BHAGAVATHY R (2013081)
ERA
KOHO- 2015 by Eberhard.
Banking Experience
• People Trust company
• Galileo Financial Technologies
INTRODUCTI • Visa Inc.
ON Initial product offering:
• Prepaid Visa card
• Mobile app
Unique Feature: Providing users with two
balances.
2019- Real time balance
Introduction of Premium
updates, Cashbacks,
account for $9/month,
reduce foreign exchange
$84/year.
fees.
Combination of two
unique fintech business
models Main source of income-
Contd. • Digital wallet
• Digital Banking.
Merchant discount rate.
Tremendous savings Offer low-cost products.
DIGITAL WALLET BUSINESS MODEL
Restoring Financial balance
Custom content to educate users on how to manage
& save money
• Growth
MARKETIN • Customer Acquisition
G Mobile App-> Gathered data and real time insights
(spending habits)
Login and usage activity-once to 8 times/month
Hyper target specific customers with similar personas
STAKEHOLDERS
Venture Capital firms expected company to grow further.
• Increasing Customer Acquisition
• Entering new markets
• Developing new products or services.
VCs expected- 10 times size of investments.
Targeted Millennials - Prioritized Convenience, Value, Trust.
Main value Proposition- Powerups Cash back program(1.5-5.0%).
Benefit for both sides: Increased sales for merchant, Cashback rewards for customers.
OPEN-BANKING
Framework that enabled Third Party Providers to securely access Consumer
Financial data
Fintech companies were able to leverage Financial data only available to banks
through the consent of customers allowed fintech companies to understand
consumers better
benefits included innovation lower barrier to entry, efficiency and
standardization
It poses major security and diversity risk
Required many stakeholders to share information
This led to predatory lending and risk from hackers
OPEN-
BANKING To reduce crime, Canada imposed Personal Information
Production And Electronics Documentations Act (PIPEDA)
Companies have to transparently share the information
collected
Hence industry constantly underwent regulatory changes
Findings From Consumer-Directed Finance : The Future of
Financial Services
• Develop a white paper regarding an open banking framework
to support Canadians financial health.
• Screen Scraping (involves sharing password to access data)
method used for sharing Financial data.
• Emphasized the importance of Integrating
1. Consumer Privacy
2. Protection when designing user experiences
REGULATION 3. User Interfaces
• Financial Institutions and Start ups needed to incorporate
tools and processes to educate consumers about the usage
of financial data.
• Governments and Fintech start-ups needed to look other
markets.
• To regulate Fintech innovations in Europe PSD2 & GDPR.
• Open Banking Implementation Entity.
COMPETITION
STACK FINTECH DROP TECHNOLOGIES AMERICAN EXPRESS COMPANY
Free mobile banking alternative Mobile shopping platform that Employed closed loop business
that provided rewards rewarded users for purchasing model – Issued cards and process
behaviour the payments
Leveraged machine learning to Leveraged open banking API It could leverage to attract
provide customizable tools merchants and incentivize higher
spending
Competitive advantage Competitive advantage included Amex members had access to
included free foreign exchange using user level data to uniquely many perks such as airport
and crypto currency services target specific groups of users lounge access and high cash back
using machine learning values
algorithms
Did not raise any public funding Had to satisfy many regulations High exposure to credit risk and
rounds merchant adoption difficulties
ALTERNATIVES
Continue current business model Expand to open-banking capabilities
without any external investment
Most of the revenues were derived from MDR fees Require major investment in infrastructure to build
Major costs included marketing cost and salary of an API
employees Move into crypto currency services
This led to cost saving to both shareholders and
users But have to catch up on competitors to get market
share
Should Koho continue with current strategy or invest in new
technologies?
To diversify its products, satisfy stakeholders and have
competitive presence, Koho should invest in new technologies.
SUGGESTIONS
Build open-banking API and offer crypto services.
How could Koho deploy latest 25 Million USD investment to
satisfy stakeholders?
Use the fund for infrastructure development for new products
Hire new specialists with knowledge in API and Crypto
How could Koho’s marketing strategy be improved to
acquire more customers?
Use the power of Big Data to channelize targeted
advertisements
Highlight their USP and presence in all products
SUGGESTIO
NS How changing Fintech regulations affect Koho’s strategy?
Adopt best practices followed by Fintech companies of
other countries
Follow transparent process in using sensitive data of
customers
