Start-ups with innovation and revolutionizing technology, have brought about a radical change in traditional financial services. As per a report by NASSCOM, the global FinTech software and services sector is expected to boom as a USD 45 billion opportunity by 2020, growing at a compounded annual growth rate of 7.1 per cent. By creating a highly integrated ecosystem that brings with it the expertise, experience, technology and facilities of all the entities together, the growth and market success of any FinTech comes from connecting, engaging and sharing ideas across vibrant communities and networks. We are living in a tech era, therefore no one can miss out on using technology driven financial services. The flourishing effect of FinTech start-up has been catalysed by an increasing demand for digital financial products by consumers, rampant rise of connected devices and support of venture capitalists. The government also seems to be taking notice of this space. The launch of the Interoperable Payment System, Unified Payments Interface (UPI), etc. in the year 2015 and policies of the RBI for regulating the P2P lending platforms and thus getting them to register as NBFCs) are some examples of the efforts taken by the government.
Technology is hitting every segment and financial segment is certainly not excused from it. FinTech startups are contributing mainly to make this segment more efficient as they are enabling new technologies to make buying and selling process easy through easy payment methods. As people are becoming more receptive towards the new ways of payments, startups are also innovating new technologies which are essential for this industry’s fast growth. Aside from the new technologies, a number of new financial institutions, startups and regulatory bodies are also coming up and it opens the door to experimenting with traditional payment methods.
FinTech, a fast growing sector in India: Last year gave birth to multiple opportunities of reforming methods of developing a user friendly payment environment. This led to the emergence of abundant FinTech startups and the institutions, which acted as a key enabler for promoting financial services in India. Indian market is anyways at a nascent stage with a lot to offer by FinTech startups. It may be payments, banking, insurance, financing, etc., every segment is super attractive.
The Indian FinTech Sector Ecosystem: The FinTech industry in India is primarily under the control of government. The recent moves by the government have added over a million of un-banked individuals into the banking sector, thus giving the FinTech startups a great field.
Trends in the Indian FinTech Industry: FinTech innovations are not only modernizing the payment processes, but also offering value added services and an interactive marketplace. By helping the end consumer through technology FinTech firms are also helping in financial planning and investing. Easing out the payment process, peer to peer lending and payments through apps, insurance deals, etc. are not only improving the financial sector, but also gradually replacing traditional banking processes.
Emerging Startups in the Indian FinTech Industry: While big names like PayTM, Freecharge, Policy Bazaar, MobiKwik, BankBazaar.com, Lendingkart, etc. have established their base Vistaar Finance, muSigma, Capital Float, CreditSudhaar, Mswipe, Milaap, FINO Paytech, Money on Mobile, Capital Float, Ezetap, Bank Bazzar, Chargebee, Faircentm and many others are keeping the momentum on in FinTech space.
Some key challenges:
-Long and complex sales cycles
- Complex regulatory environment
- Lack of education among the people
In conclusion, it’s a great time ahead for a FinTech business. The market is full of opportunities for emerging startups and even banks and other financial institutions are becoming co-creators for FinTech startups by collaborating with them to embed new services and technologies that improve customer experience and drive efficiency. With digital solutions strategy for making the products and services like wealth management, lending, payments, etc. taking pace, FinTech is and will create transformational waves across the financial ecosystem in India.