Indian FinTech is all set to become a global force. The boom in this sector is quite a surprise. Despite adverse times that began with the outbreak of COVID-19 late last year and the economic troubles since the first quarter of 2020, the Indian FinTech trends have shown an upward trajectory. This is especially clear from the investments being made in this sector. Here are four trends that will make Indian Fintech a global phenomenon.
1. Lower costs with high innovations make India highest in adoption rate
The FinTech space in India comes for a low price and many innovative concepts and practices to make it much simpler for the consumer to use them. Owing to the ease of use and next to no costs for the end consumer, India scores the highest in the adoption rate globally. This FinTech trend makes it a force that is fast growing and being absorbed efficiently too.
We can identify a few key growth drivers.
- Nationwide identity formalization using Aadhar, that has over 1.2 billion enrolments, makes the FinTech space a natural winner.
- Deep banking penetration via the Jan Dhan Yojana, which has recorded over 400 million bank accounts leading to natural consumers of the same banking service on digital media.
- Significant smartphone penetration, 500 million Indians now use smartphones, 77 percent of whom are online.
2. Government policies and support have enabled healthy growth in the industry
Government policies like UPI, Digital India, National Payments Council, tax benefits on surcharges, to name a few, have led to positive FinTech trends in India. These are some key pointers that make Indian FinTech a force that can guide and dominate global scenarios.
The government has transformed the cash payments scene in the country in recent years. With the onset of habituation of digital payments and financial transactions, the FinTech horizons have widened.
3. More diverse yet stable financial service landscape
FinTech is inherently a less homogenous sector than usual banking sectors. Though the banks are also entering the FinTech space by introducing applications and offering financial products and services beyond the traditional banking processes, the private financial management companies have made the realm already diverse. These companies and organizations have offered better products at fair interest rates, giving the customer a wide variety of products to choose from and make the financial portfolios myriad. This FinTech trend is healthy for developing economic and financial stability and a promise of better returns.
4. Investments in the FinTech startups and companies have stayed enthusiastic even in COVID times
The most significant FinTech trend that can show the power of this industry in India and has the potential of making Indian FinTech a global force is the one where the statistics show enthusiastic investments in FinTech. Still, the investors have shied away from the overcrowded markets of payments and lending. They have entertained more convincing business models and series G and other companies to invest in for the security and promise of innovation they come with. The markets’ insecurities have deterred them from taking a keen interest in the startup gamut, but the volume of investments has not come down too much. In the 18 months between 2019 and the first six months of 2020, 263 deals were finalized.
Image : The Digital Fifth
As the demand for skilled FinTech professionals is rapidly rising, the Fintech startups in India are doing their best to lure, employ, and motivate top talent. Apart from good pay packages and ESOPs, these startups are also offering excellent Fintech training, learning, and growth opportunities for their employees to keep up with the latest trends in Indian and international FinTech landscape.
Neo-banking, which can be called a sunrise segment in India, has seen tremendous growth in the last 18 months window, 2019, until the first half of 2020. Over 15 neo-banks, which lie in the consumer and business banking in India are coming in, few of which are even set to launch for the end consumer soon. The wealth-tech segment has witnessed heightened interest in this time frame. Close to 183 new companies were added to the wealth-tech segment from 303 companies back in 2018.
Trends in the Indian Fintech highlight the spreading markets and the increasing customer expectations from the FinTech space. Now, the upcoming trends will see an enormous surge in the application of robo-advisory, and the tendency to go beyond the traditional financing patterns.