Indian fintech unicorn Slice has acquired a 5% stake in The North East Small Finance Bank, a legacy bank in the North-East region of the country, in a move to expand its services and reach. Slice struck the deal on March 8 after receiving approval from the Reserve Bank of India (RBI).
The deal is expected to help the digital payment and credit company expand its offerings and establish a strong presence in the banking sector.
Slicing Through the Competition: How Slice is Making its Mark in Indian Fintech
Slice is an Indian fintech company offering prepaid cards and “Pay-Later” options to its users.
Since receiving a prepaid pay license from the RBI in 2021, the company has been on a growth trajectory. In a move to becoming a major hub for all financial needs, Slice has also added term loans and credit lines to its services.
Founded in 2016, The North East Small Finance Bank is a legacy bank with a strong customer base. The partnership was welcomed by the bank’s management and there is a strong belief that it will help the bank offer better services to its customers, helping them compete better with newer players in the market.
The move is an indication of the growing thrust by fintech firms to partner with licensed banks in India.
Slice may also explore further investments in the bank but those discussions have yet to be finalised.
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Slice will be able to leverage the bank’s existing infrastructure and customer base and use these advantages to boost its services while mitigating some of the risks associated with being a standalone fintech company.
“We are excited to partner with this legacy bank and offer our customers a wider range of financial services,” said the CEO of Slice, Rajan Bajaj. “This is a strategic move that will help us reach more customers and offer them a seamless banking experience.”
Slice’s rapid growth and expansion since its founding in 2016 have put the company in a leading position in the fintech space. Having raised over $100 million in funding, Slice has a valuation of over $1 billion, making it a unicorn in the Indian fintech ecosystem.
With a mission to simplify financial services for young Indians, fintech company Slice offers a range of services to millennials and Gen Z customers who are looking for quick and hassle-free financial solutions.
In a space where most companies are looking to take shortcuts, Slice has made a name for itself by being compliant with all regulatory requirements, which has allowed it to expand its services. In July 2022, the company received approval from RBI to operate as a card fintech company and offer credit services to its users.
Indian Fintech Traditional Bank Stake Acquisition Rises
Private sector banks are the underdog in the banking sector in India as it is dominated by public sector banks, which account for around 70% of the market share. Fintech companies like Slice have been disrupting the industry with new products and services that public sector banks are struggling to keep up with.
Several other fintech companies have also acquired stakes in traditional banks in recent years. For example, Paytm, one of India’s leading fintech companies acquired a 30% stake in a CreditMate in 2021.
Regulatory Environment and Market Growth Prospects
The Indian fintech industry is expected to grow at a rapid pace in the coming years with technological advancements that address growing cybercrime security issues.
The relatively unsaturated market presents a major opportunity for fintech companies like Slice to expand their services and reach more customers. According to a report by KPMG, the digital payments industry in India is expected to grow at a CAGR of 12.7% from 2021 to 2026, reaching a value of US$ 10.07 trillion by 2026.
Slice’s strategic stake acquisition move is expected to help the company capture more of this market while increasing its service quality and customer base. This could be a sign of an accelerating new trend of technology being integrated into banking to make customers’ lives easier.
Whether Slice takes advantage of this opportunity to corner more market share before their competitors come for a bigger “Slice” of the pie remains to be seen.
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