What Is The Future Of Fintech In India
Fintech, or financial technology, means the incorporation of technology into financial services intending to enhance their offerings and delivery to clients. It is a developing industrial sector that undertakes technology to optimize financial activities. This fast-advancing industrial sector provides for both consumers and corporations in several ways. Fintech offers an apparent range of facilities, starting from mobile banking and insurance to cryptocurrency and investment activities.
In this pandemic, while every other sector has witnessed a plunge in development, the Fintech industry has flourished as COVID-related regulations halted physical activities and advocated contactless transactions. A research study carried out by a global consulting firm in affiliation with the Federation of Indian Chambers of Commerce and Industry (FICCI) claimed that India’s Fintech enterprise ought to reach US$150-160 billion by the year 2025. Also, 33 Fintech investment deals valued at US$647.5 million had been closed in the Indian marketplace during June 2020.
Key developments steering the fintech revolution in India
- Mobile banking and no-cash transactions
The fintech industry constitutes a considerable segment of mobile banking. Consumers have been progressively asking for smooth digital access to their bank accounts, mainly on mobile devices. With the emerging digital-first banks, or “Neobanks”, nearly all leading banks now offer some kind of mobile banking. In this pandemic-afflicted economy, the preference for non-cash transactions is predicted to surge considerably, presenting greater opportunities for digital wallet providers. As per a new study by ACI Worldwide, greater than 70.3 billion real-time transactions have been executed globally in 2020, up by 41% from the preceding year.
- Cryptocurrency and blockchain
The inception of cryptocurrencies and blockchain is advancing in collaboration with fintech. Blockchain is the technological medium that enables cryptocurrency mining and marketplaces to survive, and both blockchain and fintech are accountable for enhancements in cryptocurrency. As per the Market Research Future, the worldwide blockchain in the fintech marketplace is predicted to increase from USD 231.63 million in 2017 to USD 6700.63 million by 2023, with a CAGR of 75.2% throughout the forecast period.
- Supply-related aspects
The advancement of Fintech in India is powered by numerous macroeconomic aspects:
- Government initiatives – Government assistance is a major aspect, not only from the regulatory perspective but additionally in presenting vital enabling From broadband infrastructure to the incorporation of internet facilities in rural regions or digital literacy and financial applications, numerous governmental activities have multiplied the growth of the Fintech sector in India. These constitute initiatives such as Startup India, Digital India program, E-RUPI, license for bills banks, India Stack, and many more.
- Investments in the Fintech industry – Following worldwide trends, India’s Fintech atmosphere has visibly evident increment in the latest years, turning it one of the world’s biggest and fastest-developing Fintech markets. As per Tracxn’s database, the overall quantity of Fintech investment until June 2021 was US$20.8 billion, with 36% of the finances incorporated in the last 2 years and adding it up to US$8.6 billion.
- Demographic opportunities – The overall range of internet users in India has expanded from 795.18 million in December 2020 to 825.30 million in March 2021, recording a quarterly increment rate of 3.79%, according to statistics by the Telecom Regulatory Authority of India (TRAI). The active number of internet users in India is predicted to multiply further, especially propelled by an excessive rate of rural adoption. Further, it is expected that by 2030, India will include 140 million middle-earnings and 21 million high-earning households, steering the demand and development for the Indian Fintech platform.
- Fintech and the wealth management sector
Fintech corporations have remodeled the wealth management industry in a little amount of time, yielding wealth for investors at a lower value and in an organized way. India, alongside China, incorporates the world’s fastest-developing fintech marketplace and with the finest adoption rate.
Albeit ‘insurtech’ is swiftly turning into its industry, it however comes within the circumference of the fintech circle. Since insurance is quite late in embracing technology, numerous fintech companies are collaborating with conventional insurers to aid in automated operations and growth coverage.
As the need for financial transactions, payments, and internet banking increases, the consumer experience and the capability of fast responding to regulatory modifications is turning into a matter of great importance. Soon we will witness how and at what scale the fintech industries will preserve to thrive in the industrial market.