CXOToday has engaged in an exclusive interview with Kushal Rastogi, Founder, CEO, CTO at Knight Fintech
Q1. Please tell us a little bit about the business, its area of expertise, and the services it offers.
At Knight FinTech, we specialize in providing cutting-edge solutions tailored for financial institutions. Our product offerings span across – Co-lending, Digital Lending, and Treasury Management. These offerings are designed to improve operational efficiency and customer service, enhance digital experiences, comply with regulations, mitigate risks, and increase agility in the competitive financial sector.
One of the fundamental aspects of our approach is the ability to integrate seamlessly with existing Core Banking Solutions. This means we can enhance systems without requiring institutions to replace their current setups. We achieve this through a Digital First, API-driven approach that aligns with the existing infrastructure, ensuring a smooth implementation and zero disruption.
Our goal is to equip our clients with the necessary tools and strategies to succeed in a constantly changing industry, always maintaining a strong commitment to excellence.
Q2. Are there any major issues the business has currently come across? If yes, share details.
A significant issue currently impacting our business is the extended decision-making process within banks and financial institutions. This delay often arises due to the complex regulatory environment and the need for multiple levels of approval within these organizations. As a result, our projects and implementation procedures’ timelines are affected.
Also, a lot of our efforts are dedicated to educating clients about our products and assisting them in enhancing their understanding and getting used to the technology, which further adds to the time and effort invested.
We’ve, however, created a significant mark in the industry and built credibility, due to which the decision-making process is faster than before but still takes a lot of time. We are also organising training workshops for our clients on a regular basis to be able to better use our solution and make the most of it.
Q3. What are the goals and missions of the business? Briefly describe the experience since the company’s inception.
Since its inception, Knight FinTech has been committed to revolutionizing India’s traditional banking practices through advanced technology. Our mission is to help banks and financial institutions navigate today’s complex financial landscape by introducing state-of-the-art technologies that foster growth and maintain a competitive edge.
My co-founder, Parthesh, and I bring diverse international experiences and insights. Early on, we recognized the constraints of legacy banking systems and crafted a range of transformative solutions including Co-lending, Digital Lending, and Treasury Management. As the needs of the financial sector have evolved, we have broadened our services to cater to the needs of our partners.
Our journey has been rewarding, marked by navigating a competitive startup environment where few succeed. We’ve created significant value, forming partnerships with over 70 financial institutions, including 8 out of 12 public sector banks. As leaders in the co-lending ecosystem, we support government and RBI initiatives for financial inclusion, having disbursed over 20 lakh loans, currently at a rate of about 3 lakh per month, and holding a 70% market share in the co-lending infrastructure space.
Looking forward, we aim to enhance our solutions and expand product offerings to continue leading the transformation of the banking industry.
Q4. What sets the business apart from rivals as its most distinctive quality?
Knight FinTech stands out in the fintech sector through strategic innovations and operational efficiencies. Our agile methodology enables rapid adaptation and refinement of products, responding swiftly to the financial sector’s changing needs. In 2023 alone, we launched three new products—Supply Chain Finance, Securitization, and Credit Rating & Monitoring—tailored to meet emerging client demands.
Our comprehensive suite manages the entire loan lifecycle from origination to collection, integrating all banking operations efficiently. This end-to-end solution simplifies processes for our clients and reduces the need for multiple systems.
A key differentiator is our pioneering product, Knight Utopia Co-lend™, the industry’s first complete co-lending solution that enhances collaboration between banks and NBFCs. This middleware allows banks to leverage NBFCs’ reach and underwriting expertise, while NBFCs benefit from banks’ low-cost capital, promoting financial inclusion.
We are also quick to deploy solutions and go live within just three weeks. This rapid implementation is invaluable to our clients, helping them minimize operational disruptions and quickly realize the benefits of our solutions. The company also focuses on building a strong culture that focuses on innovation and growth and follows a customer first approach.
These core attributes have set us apart from competitors, making us leaders in financial technology solutions.
Q5. How does technology help Knight Fintech deliver their services?
At Knight FinTech, technology is at the core of everything we do, enabling us to deliver our services with precision, efficiency, and scalability.
Firstly, we utilize advanced AI and machine learning across our product range, from automating underwriting in our digital lending solutions to deploying predictive analytics for risk assessment. This use of AI minimizes manual errors, accelerates service delivery, and enables us to provide personalized solutions based on robust, data-driven insights.
Our systems are designed with an API-driven architecture, which facilitates seamless integrations with existing banking systems of our clients. This ensures zero disruption and allows for a smoother onboarding process to sophisticated fintech solutions without extensive overhauls.
In terms of process efficiency, we incorporate automation and OCR technology to streamline document processing and reduce manual data entry. This not only cuts down on paperwork but also speeds up processes and reduces the chances of human error, freeing up our partners to concentrate on strategic decisions rather than administrative tasks.
Lastly, considering the sensitive nature of financial data, we implement comprehensive cybersecurity measures to safeguard our systems and data. Our security framework includes robust encryption, continuous monitoring, and regular audits to ensure that our clients’ information remains secure and protected against cyber threats.
By integrating these technological advancements, Knight FinTech not only boosts the operational capabilities of our clients but also ensures they are well-prepared to navigate the complexities of the modern financial landscape both efficiently and securely.
Q6. Amount of funding in the inception year? Did the business get any seed funding?
Knight FinTech did receive seed funding, marking the beginning of our financial journey. This initial investment was the first of four rounds of funding that we’ve secured to date, culminating in a recent Series A round. Each round has bolstered our financial foundation, enabling significant strides in expansion and innovation.
The seed funding was particularly instrumental, providing us with the essential resources needed to initiate our operations, invest in research and development, and start penetrating the market. This early support from our investors not only demonstrated their confidence in our vision and potential but also set us on a strategic path toward growth and technological leadership in the fintech sector.
Q7. How has the market for co-lending & digital lending evolved over the years? What are the unique challenges and risks that you see in the present market and how can knight fintech fill that gap?
The co-lending and digital lending sectors have dramatically transformed in recent years. Initially, traditional financial institutions hesitated due to concerns about technological integration and regulatory compliance. However, with digital transformation propelled by consumer demand for more accessible financial services and increasing competition from fintech’s/neo-banks, these sectors have evolved significantly, especially in markets like India, where financial inclusion is crucial.
Today, a major challenge in co-lending and digital lending is integrating diverse technological platforms between banks and NBFCs. This complexity is compounded by the need for seamless communication and strict regulatory compliance. Additionally, credit assessment in underserved markets remains difficult due to the lack of traditional banking histories.
Knight FinTech addresses these challenges with solutions, by seamlessly integrating with existing infrastructures, thus minimizing implementation friction and enabling rapid deployment. Our API-driven approach and advanced AI and ML technologies enhance the lending process and act as a single source of truth for the disjoint systems, facilitating business between banks and NBFCs, enabling banks to reach new market segments and helping NBFCs access bank capital.
Knight FinTech not only adapts to but also anticipates market dynamics, preparing our partners to capitalize on the opportunities in the expanding co-lending and digital lending spaces.
Q8. What sort of marketing difficulties did the business encounter?
Initially, as a new entrant in the highly competitive fintech industry, one of our main challenges was building brand recognition and trust in a sector filled with established fintech’s. Developing a brand that resonated with both traditional banks and modern NBFCs required a meticulous and strategic marketing approach. This approach was crucial for clearly and effectively conveying our unique value propositions to stand out in a dense market.
Additionally, gaining access to banks’ core banking systems (CBS) and building trust was a significant hurdle. Banks are naturally cautious about integrating new technologies with their core systems, which are critical to their operations. Overcoming this scepticism to establish credibility and demonstrate the security and reliability of our solutions was essential.
However, due to our robust product offerings, we were able to quickly establish partnerships with multiple banks and NBFCs within a relatively short period. This early success helped to solidify our reputation and build momentum in our expansion efforts.
Q9. What goals does the business have for its expansion in the next year?
Knight FinTech remains steadfast in its commitment to pioneering innovation and transformative change within the banking sector. The company endeavours to expand its product portfolio, deepen their market penetration, and forge even stronger partnerships with leading financial institutions. Knight FinTech also aims to establish a strong presence in international markets, partnering with leading financial institutions to address banking infrastructure challenges worldwide. By staying at the forefront of technological advancement and market dynamics, the company is poised to continue driving positive change and unlocking new vistas of opportunity in the ever-evolving landscape of modern banking.
