Finovate Blog

• State Bank of India unveiled MSME Sahaj, a digital lending solution for micro, small, and medium enterprises (MSMEs).
• The tool leverages data from the applicant’s Goods and Services Tax Identification Number, bank statements, and credit card payment histories to underwrite a loan for short-term, working capital.
• MSME Sahaj will be available on State Bank of India’s YONO digital banking app.

State Bank of India (SBI), the nation’s largest bank, announced a new digital lending solution for micro, small, and medium enterprises (MSMEs) this week. The new offering, MSME Sahaj, is a web-based digital business loans solution for MSMEs’ invoice financing.

“The launch of MSME Sahaj aims to provide the fast and most intuitive lending solution, further solidifying our position as the leading MSME lender in the country,” said SBI Chariman Dinesh Khara.

MSME Sahaj is what the SBI is calling a “data-driven invoice financing credit assessment engine.” The holistic tool will allow MSMEs to apply for and receive a loan within 15 minutes. The system will also automatically close the loan on the due date.

Leveraging data from the applicant’s Goods and Services Tax Identification Number, bank statements, and credit card payment histories, MSME Sahaj allows businesses to take out a loan against their GST registered sales invoices of up to around $1,200 (₹1 lakh).

“MSME Sahaj – Digital Business Loans for Invoice Financing will offer a proposition to our existing Micro SME units who are part of the GST regime to get immediate on tap short term credit for working capital requirement through digital mode on SBI’s Yono app,” said SBI MD – Retail Banking & Operations Vinay Tonse.

SBI said that the purpose of the loans is to offer businesses a quick way to access short-term credit on its digital banking platform, YONO. YONO, which stands for, “You Only Need One” is a mobile app designed to meet a variety of customer needs, including banking, investment, insurance, travel booking, and daily shopping needs.

Photo by cottonbro studio

• Monzo is implementing new security controls to limit fraud occurring from stolen devices.
• In order to transfer funds over a user-designated amount, users can implement one of three security controls, including authorizing funds from a specific geolocation, asking a friend or a family to confirm the transfer, or photographing a printed QR code.
• The new controls will be implemented in addition to Monzo’s biometric and PIN authentication fraud checks.

U.K.-based digital banking platform Monzo announced some new security controls today. Writing in the company’s online community forum, representatives from the Monzo’s product security team unveiled a new security feature and three new, user-imposed controls to further protect consumers.

“We wanted to tell you about some new controls we’ve been working on that we’ll be launching soon,” the team said. “The security feature will let you add an extra layer of protection on payments and pot withdrawals over a daily allowance – to help stop fraudsters in their tracks, even if they get hold of your phone.”

Monzo built the new security feature in light of the fact that many users manage their financial lives on their phones, and devices are often lost or stolen. According to the BBC, one mobile phone is stolen every six minutes in London.

The new, optional security feature will allow users to set up daily allowances for sending bank transfers and withdrawing money from an Instant Access Savings Pot. If users want to move money that amounts to over their daily allowance, they will undergo an extra security check that will be comprised of one of three suggested controls. The controls will be implemented in addition to Monzo’s biometric and PIN authentication fraud checks.

The three new controls include:

• Known locations
  Users choose a specific location from which they plan to send large sums . Monzo recommends users use their home, office, or any location that fraudsters may not be able to access.
• Trusted contacts
  Users will ask a close friend or family member who also uses Monzo to double check bank transfers and savings withdrawals that total more than the user’s daily allowance. The user will need to consent to their selected friend or family member seeing some details about their funds transfer. After consent is received, Monzo will ask the friend or family member to confirm the user’s identity and verify that it looks safe by calling the user.
• Secret QR codes
  Monzo will email the user a confidential QR code to print out and keep in a safe digital location, or store digitally on a stationary device. The QR code includes a high-security password that only works with their account and does not include any personal information.

While users will only need to use one of these methods to move money over their daily allowance, Monzo is requesting that users set up at least two of these three controls so that they have a backup. In the event a user cannot pass any of the three extra security controls, they will still be able to make the payment and access their money by confirming their identity with a short selfie video.

Users will also be subject to additional security checks in the event they want to change their controls or modify their allowance amount.

“Our aim with these new controls is to create an experience that’s both secure and simple – so we wanted to delve deeper into how we approached the design and product development process,” the security team explained. “We had to think carefully about how to add a new layer of (optional) friction over our existing security measures, to help stop fraudsters and reassure customers. While still making sure people can make payments and move money in a way that’s easy to use and convenient.”

While these extra controls add a necessary layer of fraud protection, they also add a considerable amount of friction for users. I can’t imagine asking a friend or family member to take time out of their day for a call in order to get their permission to use my own money. I’d rather default to Monzo’s fail-safe option– confirming my identity with a selfie video. That said, the fraud controls could come in handy for limiting very large transfers or for putting funds on hold when traveling.

Photo by Fernando Arcos