Finlatics Investment Banking Experience Program - Project 1 1. A good combination would be A (Engineer with an MBA degree) and C (an international transfer remittance software). Prior Knowledge Assuming Arjun is a software engineer or a computer science engineer, with a master's degree in business management, it makes sense that he builds a transfer remittance system, which would ideally require a passion for coding and finance. Prior kmowledge won’t necessarily guarantee his success but having an expertise in these fields can be tremendously value additive to his business. His experience in IT will help him with the complexities of designing the system, which is the steppingstone of his start-up. And the skills acquired during his MBA will help him to lead a team to create an efficient and a secure system. Ease in getting funding FinTech sector is a very attractive sector for investors right now. Investors have gotten very good returns on their investments in this sector and several start-ups in this space have done very well. This is an opportunity for Arjun, as he might be able to get funding at a favourable valuation. Growth Potential Over the last few years, the world has been adopting to digitalised payment systems. Events like demonetisation and covid-19 pandemic were key catalysts behind the success of UPI, which was initially not very popular, After what happened with Russia and SWIFT, many countries are looking for an alternative mechanism. Hence the idea to create an international transfer remittance is filled with potential. Possible Stumbling Blocks and The Way Out According to the reports by RBI, 98% of the remittance transfer is dominated by 42 authorised dealers. Therefore, Arjun may find it difficult to capture a market which is dominated by competitors. But the point of distinction can be the cost of remittance which is the USP of Arjun’s product. If Arjun can create a system with reduced cost, then his product will be able to capture a major chunk of the market share. Another challenge that Arjun will face is the ever-evolving compliance requirements in FinTech. An international remittance system will require constant monitoring of regulatory frameworks of various countries and building a bridge between the technology team and the legal team. An advisor or a partner who is experienced in this field take on this role and also mentor Arjun in it. Similar Stories1. PayPal Established in 1998 as Confinity, PayPal is one of the oldest online payment systems in the world. ‘PayPal Mafia’ as its founders are famously called, come from diverse backgrounds, most of whom had a degree in science or management After leaving PayPal, the ‘PayPal Mafia’ have continued to work and invest together since the company’s 2002 sale to eBay. Between them, they've founded, funded, or led some of the world’s biggest tech firms. 2. Razorpay Founded in 2014 by IIT Bombay and NIT Allahabad alumni, Harshil Mathur and Shashank Kumar, Razorpay is the only payments solution in India that allows businesses to accept, process and disburse payments with its product suite. It gives you access to all payment modes including credit card, debit card, net banking, UPI, and popular wallets.2. Arjun must give the most emphasis on advisory henefitfi this is because of following reasons: + Arjun has to comply with laws regarding payments system, hence he will require a lot of legal assistance and advice regarding fulfilment of such regulations. Hence with an investor who has an expertise in this sector can advise Arjun who will receive a lot of benefit from the investor's experience. + Since there are many competitors in market, Arjun will have to follow an aggressive marketing strategy to get market recognition. This is one of the areas in which an experienced investor will come in handy because he/she must have already helped many start-ups in their portfolio to create marketing strategies. + Ifthe investor is from IT sector, then he/she can also advice Arjun regarding the safety measures that are to be implemented in the produced system. Hence Arjun will also get help in the core areas of business as well. + After successfully launching the system in India, Arjun can also modify the system as per the requirements of banking and other institutions, for this purpose investor can advise him about the ways through which diversification can be done. + Advisory benefit will give the maximum advantage to Arjun when he has to go through the bureaucratic process of submitting various forms and getting required approval for commercial launch of the system.