August 31, 2020
Growth of FinTech in India
FinTech is basically a combination of technology and finance. It refers to a new generation of companies that leverage cutting-edge technology to offer financial solutions. that are significantly for efficient and effective than those provided by traditional financial institutions.
Technology has been used by the financial institution for many years. With the turn of the millennium, technology started playing a more crucial role in the financial sector. Fintech is not a replacement for traditional banking services; rather it is a result of the inevitable evolution of the banking space. Banking services are now provided with the added convenience of the technology. The sector does this with the help of technology intelligence, intricate algorithms, machine learning, and big data, which are swiftly replacing traditional financial practices. Backend by such a powerful armory, Fintech is completely changing the corporate landscape in multiple industries and reinventing the way companies gain access to finance.
Landscape of Indian Fintech
Traditional banking functions are being taken up individually by various companies that are creating a separate construct of the service. Firms are now specializing in certain banking functions:
- Digital Lending: These companies provide flexible options for financing to SMEs and consumers. Technology is being used to create better financial products, improve customer experience, and increase the speed of loan approvals. Some companies in this space are Indiabulls Dhani, Home credit and Lendingkart, etc.
- Payment Services: These companies allow individuals and businesses to accept payments without even swiping a card. Payments are made online via using QR code, UPI, and wallet transfer. Users just need a smartphone to use this service. Paytm, Phone pe, Google pay is the part of the services.
- Saving and Wealth management: The companies help individuals save money as well as make and manage their own investments. The software helps to quickly compare different options so that they can make decisions. Scripbox and funds India are to name a few.
- Remittances: Inward and outward remittances can be complex, time-consuming and expensive. Oxigen and Pay world are among the notable remittance platform.
- Point of Sale: Companies operating in this segment provides card swipe machine that enables customers to make the cashless payment process easy. Mswipe and Pine Labs are larger service providers in this space.
- Insurance: Fintech has helped the insurance sector transform from being document-heavy to becoming paperless. Several new companies are increasing the ease of decision at the consumer end by aggregating insurance provider data and simplifying the application experience. Policy Bazar is one of the best examples of it.
Factors supporting fintech in India
- High adoption of technology
- Internet penetration
- Government policies
- Increasing financial inclusion
- Investor getting more interested
- Movement data poor to data rich
- Huge working population
Future of Fintech in India
- The global fintech sector is expected to become $45 billion in value by 2020, a growing at a CAGR of 7.1% India would play a critical role, given that the highly supportive. The Indian fintech market is expected to reach $2.4 billion.
- India’s fintech industry certainly had the wind in its sails coming into this year according to research from Accenture, investment in Indian fintech companies grew from $1.9 billion over 193 deals in 2018 to $3.7 billion over 198 deals in 2019.
- One of the prospects. One of the factors that could propel the growth further would be a partnership between this dynamic sector. Collaborations between the two can bring together the best of both worlds and offer a unique product to a larger number of people in India.
- Recent Partnerships between Fintech companies and banks suggest that two entities did not need to complete but they need to be co-operative. While banks can offer voluminous amounts of money for lending purposes, Fintech companies bring technological expertise, customized credit products, and advanced data analytics to the table.
- The FinTech sector has a young business that needs help in researching their true potential Incubators and accelerators can mentor these businesses and assist them in competing against the big player in an extremely challenging, and cost-conscious Indian market.
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