Knight FinTech’s Kushal Rastogi on transforming banking infrastructure

Kushal Rastogifounder and CEO of Knight FinTechhas an extensive background in finance and technology.

For 14 years he dedicated himself to the world of finance, primarily focused on asset management—including hedge funds, and building systems and algorithms for large financial companies. Kushal and his co-founder, Parthesh Shah, has worked in the financial ecosystem for 12 years, learning how large financial institutions. They now aim to transform the banking infrastructure with Knight FinTech.

The company specializes in financial technology for banks and financial institutions within treasury and credit, and strengthens more than 40 institutional customers. Knight Fintech’s Integrated Treasury Management solution helps institutions in business-critical tasks such as reducing risk and increasing returns while handling various regulatory and compliance issues.

Credibility and trust

“A lot of things have to fall into place to start working, especially building credibility and trust”, says Kushal in a conversation with Sanjay SwamyManaging Partner in Priven Advisors—investment advisor for Prime Venture Partners.

He adds that “human relationships and trust were built” when they started working with some big clients.

Both founders worked to build a strong brand and credibility in the sector. Their primary goal was to work with small banks and understand their needs. They considered managing a large part of the balance sheets of businesses – sometimes a third of their assets – as an important step forward. This is how they can convince their clients of their working capabilities, improve the return on their assets and reduce the risk of their liabilities.

The company will then show its previous work with the small banks and the value created for larger institutions to collaborate further and gain more exposure.

Co-lending

Knight FinTech enables and facilitates co-lending— a form of lending where two or more parties jointly lend money to another party (the borrower). It generally implies banks and NBFCs (non-bank financial companies) fintechs.

Together with the customers, all parties benefit from this type of operation. While banks reduce their risk (as they share it with NBFCs), NBFCs get more customers, hence more revenue. From the customers’ point of view, when risk is reduced, interest rates go down, leading to “cheaper and faster money”, sums up Kushal.

In the end, the system benefited as it became more competitive: more companies work with more clients.

Kushal estimates that around 10% of the bank’s assets will go to co-lending in the next 3-5 years.

Future

“Definitely, it’s a global approach. I think the next 12 months is the focus on India. Once we achieve the size and scale in another 12 months, that would be a good time to start global expansion. In the long term, we want to expand globally Banking-as-a-service and lending-as-a-service have become global phenomena, adds Kushal, defining the company’s vision for the coming years.

You can listen to the entire episode here.

Timestamps:

04:30 – Solving difficult problems for large financial institutions

17:15 – Gain the trust and confidence of a large company

36:00 – Challenge of building two products at a young company

45:00 – Future plans for Knight FinTech and global opportunities