Fintech in India
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Increasing outreach of mobile technology and internet is set to change the Financial sector for good. This article by Sarang Khanna, Content Marketing Executive at iPleaders, talks about the massively increasing scope in the FinTech landscape of India.

At a time when all companies are brainstorming whether there is still more innovation left to do in their respective sectors, FinTech and E-commerce continue to be on the horizon setting new trends in delivering innovative products and services. FinTech is the sum of finance and technology, and in the past few years, it has definitely changed the way we use financial  services.

FinTech companies are leveraging technology to provide services usually offered by banks and financial institutions that are more innovative and cheaper. At the end of the day, FinTech will only benefit the consumers who will get lower prices, safer products and overall a better user experience.

At this juncture, India has created an ecosystem that provides start-ups an opportunity to exponentially grow into big businesses. Right from delving into a range of unexplored segments to engaging with foreign markets, FinTech start-ups are delivering innovation that was previously difficult to achieve.

Let us see how this space is making our lives easier every day.

FinTech in Banking Financial Services and Insurance (BFSI) Sector

In recent times, a plethora of startups have populated this dynamic space, especially in the Banking, Financial Services and Insurance (BFSI) sector. Even Non-Banking Financial Companies (NBFCs) are not lagging behind in order to enter this field and make the most.

According to the EY FinTech Adoption Index of 2017, India has made a jump to the second place, only behind China, in adoption of FinTech services in the whole world. The adoption, in fact, is so high that in a survey done for the same index it was found that the average customer from the sample had used more than 2 FinTech products just in the last 6 months. Which FinTech services are you using to make life simpler?

The space which is obviously predominantly driven by online payments in India also has a lot of other applications which are soon catching up amongst the high tech Indian youth. Let’s see what all is being powered by this beautiful marriage of finances and technology today.

Peer-to-peer Lending (P2P)

P2P lending has emerged to become the hub of the wheel in the FinTech ecosystem. Many argue that the success of P2P is because it embodies all character traits of what an ideal  financial technology solution must look like – quick, cheap, and meant for the greater good.

After the 2008 crisis, banks became risk-averse, loans got tougher to obtain, and all financial institutions altered their operations. P2P then came as the answer and empowered investors still willing to lend money to individuals and businesses alike. Soon, companies bought in and used alternative credit models to provide consumers and businesses with faster and easier access to capital.

It is an inexpensive and accessible model that runs on a sense of social responsibility and not to feed a bank’s balance sheet. It is here to only stay and grow.


Payments have been on the forefront of the consumer adoption of FinTech in India. With the spread of smartphones, affordable mobile internet, and with a little additional help from notebandi, apps like PayTM, MobiKwik, Freecharge, etc. have flourished. The advancements in this field have allowed businesses and individuals to make or accept payments without needing merchant accounts.

Mobile wallets are so popular now that all top banks have a digital wallet facility to go with their savings accounts to ease transactions. Initially a cause of worry for the banking sector, but both fintech companies and banks have now realized that it is best to collaborate rather than to compete. To capitalize the most on its increasing applications, both sides cannot operate independently. With more liberalized KYC (Know Your Customer) norms, online payments are on their way to only get easier. You can visit here to learn how your startup or business can create e-wallets and how you can conquer this highly unexplored space.

Cryptocurrencies and Blockchain

I am betting you have heard of Bitcoins by now? I mean, who hasn’t? The underlying technology behind all cryptocurrencies, including Bitcoin, is blockchain that has incredible potential to change the financial sector for good. Without getting much into the technicalities, blockchain is simply a decentralized ledger which can never be erased or altered once it comes into being. It is called as Distributed Ledger Technology (DLT).

Data on blockchains is distributed amongst various different sources and does not exist on a single centralized system, which, theoretically, makes it incorruptible. This helps add accountability and proofs in transactions. Other applications of blockchain include smart contracts, digital identities, etc. which can self-execute themselves and in turn accelerate the whole process while making it more secure than ever.

Artificial intelligence in banking is another aspect that demands mention with uses that can transform banking and investment. More is discussed at length on the same in this report by PWC on FinTech Trends in India.

Hindrance, for now, to use blockchains to their highest potential is the collaboration required between FinTech startups and banks. However, with the numerous benefits of DLT, blockchain is poised for rapid growth in India in the years to come.

Personal Finance and Investment Services

Financial planning and investments have also moved with the times and are now catering to more customized needs of everyone. The digital financial advisor is no longer the phone-calling, portfolio-managing, product-selling human being. FinTech has given a level playing field to smaller startups who can provide quality financial advice amidst the bigger financial players.

Young companies like PolicyBazaar, FundsIndia, BankBazaar, etc. are providing personal help to individuals on saving, managing and investing their finances. Revising old business model and reaching out to the new and most prized customer audience – the millennials. Globally, the adoption for financial planning is only 10%, while in India it’s much higher at 20% according to the FinTech Adoption Index.

Similar trends are visible in the investment sector with 20% global adoption rate compared to India’s 39%. With the growth in the do-it-yourself attitude, the consumer today is becoming smart and not shy in investing both time and money in understanding how to manage finances through FinTech.

Government Incentives, Policies, and Regulations for FinTech

Initiatives by both RBI and the government have fostered growth in FinTech. This has created an even playing field and an environment of healthy competition and innovation. Government and regulatory bodies are actively interacting with major players to understand the market and accordingly ease operations. Both online and offline solutions are now working towards creating a safer financial system.

Modiji’s new formula of “IT + IT = IT” (Indian Talent + Information Technology = India Tomorrow) is a clear evidence that the government is attentively working towards promoting digitization in every field, including the financial sector. In an extremely conscious country like India, gaining mass acceptance, especially gaining trust with the consumer’s finances, was a challenge. Although, India is also a country to swear by our beloved Prime Minister’s words and if Modiji is encouraging the use and inclusion of FinTech, it cannot go wrong.

Various incentives and policies have been implemented by the government to promote FinTech and many are known to be in the pipeline. Digital KYC, Aadhaar-Enabled Payment System (AEPS), Bharat Bill Payments Scheme (BBPS) are continuing to ease payments and other transactions for all classes of the Indian society. The government support is only increasing in this dynamic yet fairly new sector and it is arguably the best time to be a key player in this landscape. One can learn more about rules, regulations, government assistance and how to get into the FinTech space here.

As the scope of this industry has increased over time, it now falls under the purview of four regulatory bodies in India, namely the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), the Telecom Regulatory Authority of India (TRAI) and the Insurance Regulatory and Development Authority (IRDA). Each of these are working together in shaping the future for FinTech through key initiatives.

Watch out this space for more on this!  


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