The advancement of the Indian economy is driven by increasing the pool of business that want to participate in generating economic growth. Fintech, which combines new technologies to broaden financial transactions, is one of the cornerstones of economic growth in Indian. Large groups of the population are now able to draw loans and pay bills with new technology that has helped increase Indians economic output.
Growth in 2020
India’s growth potential continues to remain upward sloping. According to NASSCOM the trajectory of fintech growth is accelerating and could hit US$ 2.4 billion by 2020. There is also further room for the fintech market to grow in India as the market sized is relatively small compared to China. The latest data from NASSCOM shows that in 2019, venture capital investments into Chinese fintechs were more than 10 times larger than those in India. There is an opportunity sell new types of financial services and products to the unbanked Indian population.
Opportunities present themselves to startups as well as large corporations who are vying for a market segment within the fintech space in India. Across Europe and Asia different segments are beginning to find sustainable growth. London has become a hub for investments into fintech financial solutions, while China has become well known for facial recognition. Cybersecurity has also become a subsegment of financial technology with its hub emerging in Israel.
Opportunity in Under Banked Companies
The opportunity to provide financial technology to the underbanked has been noted by the International Finance Corporation, were India’s current credit gap is around INR 16.6 lakh crore. Majority of these are small-ticket loans sought by new to credit customers who are either unserved or underserved by traditional financial companies, allows fintech startups to bridge this credit gap by offering flexible loans. These low-cost digital payments use innovative delivery models and data science to assess creditor’s creditworthiness to avoid payment defaults.
Driving Banks and Analytics
Gather data and combining banking assistance has allowed start up to leverage their business models and show a growing need. The banks and working with fintech companies which is helping to enable a smoother operation for consumer and business. They provide seamless fund routing and merchant payments on mobile applications. Also, fintech startups are working to bridge the gaps in sectors such as insurance, wealth management and remittance.
The information that is used helps with the sales and marketing process. Using mobile data to show investors where business needs can be exploited has helped startup companies provide a business model. Fintech has also made data-driven customer insight a focal point. The adoption of technologies such as AI, blockchain, robo-advisors among others is bringing traditional banking ecosystem to India. This has increased investors knowledge of how to trade cryptocurrency with app.
What Has Fintech Created
Fintech has driven opportunities for financial inclusion and sparked a culture of innovation and entrepreneurship. Tech-enabled credit assessment and bill paying has brought commerce to areas that were under banked. Fintech has created a faster and more secure money transfers environment and improved wealth management options.