Today, India is home to the third-largest startup ecosystem (9,300 tech startups) and an abode to the third-highest number of unicorns (companies with a valuation over $1 billion). So there’s no doubt that India is an epitome of innovation, thanks to startups building solutions aimed at solving locally relevant issues. But in this era of unicorns, soonicorns and IPOs, while it’s easier to get caught up in the stories of startup successes, startup failures are becoming more common.

Albeit other reasons for this failure — ‘no market’ need or the lack of alignment among founders and investors, the biggest and most tragic reason for some promising businesses to fail within the first year or two is primarily because of not knowing how they can best manage their financial challenges.

I have sailed the same ship and witnessed other entrepreneurs who did their due diligence, created reasonable financial projections and yet struggled to pay for unforeseen expenses. In the early stages of a business, even a relatively small expense that is not accounted for in the company’s budget can make it difficult to pay bills or make payroll.

It’s important for businesses to not only think beyond just sourcing working capital for operational and day-to-day expenses but also adopt a new-age banking solution that will help the business with entire money management within the organisation, in addition to borrowing working capital.

And, if you ask, why I can’t do all of these with my existing bank, ask yourself how many business hours has your team spent on manual labour, dealing with buggy software and complex infra systems? The most important factor for Indian businesses is to have issues resolved at the first point of contact, and to receive the same level of experience and service, over and over again.

A ‘one-size-fits-all’ traditional banking solution doesn’t suit the business banking needs of new-age businesses. Therefore, the lack of an intelligent tech infrastructure has led to the birth of neo-banks. These exist to simplify banking for businesses, accelerate and supercharge every aspect of a business’s financial operations — from accepting payments and managing cash flow to reconciling transactions and flexible payouts. In its nascent stage, neo-banks are taking over the fintech industry. Let’s understand this difference better.

This year will mark yet another significant progress in innovations in financial services. How neobanks manage obstacles like regulation and compliance, security, API integration, and how they will come together with traditional banks to build intelligent solutions will be an interesting watch for all of us in 2020.

(The author is CEO of Razorpay)