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Why Kuda's Business Model is so successful?

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Kuda’s Company Overview


Kuda is a Fintech company that operates as a digital-only bank. Founded in 2019 and headquartered in Lagos, Nigeria, the start-up is aimed at providing free, high-quality banking services to the African populace. Kuda is recognized as the first digital-only bank in Nigeria with a standalone license. The company's mission is to make banking more accessible, affordable, and rewarding for everyone. Kuda's services include free transfers, no card maintenance fees, and an automatic savings feature that helps users reach their financial goals. The company prides itself on its user-friendly interface, transparency, and the ability to provide its customers with a seamless banking experience. Kuda's business model revolves around providing digital banking services to its customers without the traditional banking costs. The company operates a mobile-first banking platform that allows customers to open a bank account, make transactions, and manage their finances, all through an app. The absence of physical branches reduces overhead costs and allows Kuda to offer its services for free or at a meager price. The company also leverages technology and data to provide its customers with personalized services and financial advice. Kuda's revenue model is primarily based on the interest margin from lending activities. While the basic banking services are free, Kuda generates revenue by lending out the deposits it receives from its customers. The company also earns revenue from premium features and services, such as overdraft facilities, which allow users to borrow money instantly through the app. Additionally, Kuda earns interchange fees from card transactions. The company's focus on technology and data analytics also allows it to assess credit risk more accurately, ensuring a healthy loan portfolio and a steady income stream.

https://kuda.com/

Country: Nigeria

Foundations date: 2016

Type: Private

Sector: Financials

Categories: Financial Services


Kuda’s Customer Needs


Social impact:

Life changing: affiliation/belonging

Emotional: provides access, design/aesthetics

Functional: saves time, simplifies, reduces risk, organizes, integrates, connects, reduces effort, reduces cost, informs


Kuda’s Related Competitors



Kuda’s Business Operations


Alternative currencies and banking:

Alternative currencies (also known as private currencies) are units of value issued by a private entity, such as a business or a non-profit organization. A private company or organization usually produces a private currency to serve as an alternative to a national or fiat currency, usually the country's standard unit of value. For example, mutual credit is a kind of alternative currency, and therefore any loan that does not go via the banking system qualifies as an alternative currency.

Customer relationship:

Due to the high cost of client acquisition, acquiring a sizable wallet share, economies of scale are crucial. Customer relationship management (CRM) is a technique for dealing with a business's interactions with current and prospective customers that aims to analyze data about customers' interactions with a company to improve business relationships with customers, with a particular emphasis on retention, and ultimately to drive sales growth.

Customer data:

It primarily offers free services to users, stores their personal information, and acts as a platform for users to interact with one another. Additional value is generated by gathering and processing consumer data in advantageous ways for internal use or transfer to interested third parties. Revenue is produced by either directly selling the data to outsiders or by leveraging it for internal reasons, such as increasing the efficacy of advertising. Thus, innovative, sustainable Big Data business models are as prevalent and desired as they are elusive (i.e., data is the new oil).

Community-funded:

The critical resource in this business strategy is a community's intellect. Three distinct consumer groups comprise this multifaceted business model: believers, suppliers, and purchasers. First, believers join the online community platform and contribute to the production of goods by vendors. Second, buyers purchase these goods, which may be visual, aural, or literary in nature. Finally, believers may be purchasers or providers, and vice versa.

Digital transformation:

Digitalization is the systematic and accelerated transformation of company operations, processes, skills, and models to fully exploit the changes and possibilities brought about by digital technology and its effect on society. Digital transformation is a journey with many interconnected intermediate objectives, with the ultimate aim of continuous enhancement of processes, divisions, and the business ecosystem in a hyperconnected age. Therefore, establishing the appropriate bridges for the trip is critical to success.

Data as a Service (DaaS):

Data as a Service (DaaS) is a relative of Software as a Service in computing (SaaS). As with other members of the as a service (aaS) family, DaaS is based on the idea that the product (in this instance, data) may be delivered to the user on-demand independent of the provider's geographic or organizational isolation from the customer. Additionally, with the advent[when?] of service-oriented architecture (SOA), the platform on which the data sits has become unimportant. This progression paved the way for the relatively recent new idea of DaaS to arise.

Disruptive banking:

The banking industry's disruptors are changing the norms that have been in place for decades. These new regulations, however, will only be effective until the next round of disruption occurs. Banks and credit unions must thus be nimble and responsive. We need audacious tactics. 'Disruptive Innovation' is a term that refers to the process whereby a product or service establishes a foothold at the bottom of a market and then persistently climbs up the value chain, ultimately replacing existing rivals.

Mobile first behavior:

It is intended to mean that as a company thinks about its website or its other digital means of communications, it should be thinking critically about the mobile experience and how customers and employees will interact with it from their many devices. The term is “mobile first,” and it is intended to mean that as a company thinks about its website or its other digital means of communications, it should be thinking critically about the mobile experience and how customers and employees will interact with it from their many devices.

Transaction facilitator:

The business acts as an acquirer, processing payments on behalf of online merchants, auction sites, and other commercial users for a fee. This encompasses all elements of purchasing, selling, and exchanging currencies at current or predetermined exchange rates. By far the biggest market in the world in terms of trade volume. The largest multinational banks are the leading players in this industry. Around the globe, financial hubs serve as anchors for trade between a diverse range of various kinds of buyers and sellers 24 hours a day, save on weekends.

Microfinance:

Microfinance provides financial services to entrepreneurs and small companies who may not access traditional banking and financial services. The two primary delivery methods for financial services to such customers are (1) relationship-based banking for individuals and small companies and (2) group-based models, in which many entrepreneurs pool their resources to apply for loans and other services together.

P2P lending:

P2P lending removes the intermediary layer from borrowing and lending, making financing a feasible financial choice for individuals. Peer-to-peer lending (P2P) is a kind of debt financing that allows people to borrow and lend money without using a traditional financial institution. Peer-to-peer lending eliminates the intermediary but requires more time, effort, and risk than conventional brick-and-mortar lending.

Two-sided market:

Two-sided marketplaces, also called two-sided networks, are commercial platforms featuring two different user groups that mutually profit from the web. A multi-sided platform is an organization that generates value mainly via the facilitation of direct contacts between two (or more) distinct kinds of connected consumers (MSP). A two-sided market enables interactions between many interdependent consumer groups. The platform's value grows as more groups or individual members of each group use it. For example, eBay is a marketplace that links buyers and sellers. Google connects advertising and searchers. Social media platforms such as Twitter and Facebook are also bidirectional, linking consumers and marketers.

Innovative retail banking model:

The design has no resemblance to a bank but more to a coffee shop. There is free wifi and a large number of iPads accessible for internet use. Automated teller machines (ATMs) are located around the perimeter of the coffee shop, allowing customers to conduct financial transactions. The workforce consists of a mix of coffee shop patrons and banking personnel who circulate and make themselves accessible. If you need services not available through an ATM, fully trained bank personnel can offer all services typically available at a conventional bank branch.

Easy and low-cost money transfer and payment:

This business model makes money transfers and producing and collecting prices more affordable and accessible to consumers. Sending and receiving the money to pay wages, settle business transactions, paying school fees, or supporting family members is typical for companies and people alike. It necessitates fast, dependable, and cheap money transfer services that enable money to be placed in one location and withdrawn in another in urban and rural regions alike.

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