The collaborative efforts of accounting and innovation have resulted in a significant shift in banking, venture, trading, and digital money. This evolution has resulted in the popularity of the phrase "Fintech," a short form for the term Financial Technology. With the expansion of the Fintech Market in India, the entire business world has seen significant alterations in money-related processes and budgetary installations accomplishments. The Fintech sector in India has experienced an exponential surge in funding over the previous few years, with investments totaling more than $8 billion already recorded across different phases of investment in 2021. You might be shocked to learn that India has the greatest FinTech adoption rate globally, at 87%, substantially higher than the world average of 64%. As a home to over 2,100+ FinTech companies, India is the third-largest fintech ecosystem in the world. Out of the existing 2100+ financial technology companies in India, 67% were established in the past 5 years. The past 65 years have been nothing less than phenomenal for FinTech in India. Many things have changed since the introduction of credit cards in the 1950s. ATMs revolutionized cash withdrawals from banks and the advent of the internet in the 1990s catapulted the fintech industry to new heights. Electronic payment structures, web-based business practices, portable banking, and bank digitalization have also resulted in a substantial change.
The Indian Fintech industry is now concentrating on lending to both customers and MSMEs. At the same time, this industry now includes more traditional financial insurance services, personal finance, and gold lending. Let’s look at a few segments in FinTech India.
Fintech companies India enter this market through services such as payment gateways, card networks, application programming interface (API), and payment security. Third-party application providers (TPAP), prepaid card/Wallet, bill payment, QR code payment, payment aggregator, and point of sale are among the consumer-centric services available (POS). Corporate cards, B2B payments, and invoice payments are examples of business-centric services. The biggest participants in this area include Paytm, PhonePe, MobikWik, and Google Pay.
Lendtech includes the following: lenders and providers of Buy Now Pay Later (BNPL) services, Al and anti-fraud technology, data interchanges, marketing, and insurance services such as personal loans, salary loans, gold loans, vehicle loans, school loans, and peer-to-peer lending. Google Pay, M-Swipe, and Razor Pay are positioning themselves as prominent financing systems for customers and retailers.
Insurtech is the application of technological advancements to obtain savings and efficiency from the present insurance business paradigm. It does more than only supply digital communications. It enables carriers to manage schedules and increase the productivity and effectiveness of their adjusters, including mixed workforces made up of direct-hire employees and third-party contracts. Fintech in Insurtech can be used to provide services like claims processing, a sales platform, underwriting risk management, insurance infrastructure API, and a policy administration system. Policy Bazaar is a market leader in this category.
WealthTech combines money with technology to deliver digital solutions that enhance personal wealth management, investing, and portfolio management. The growth of digital payment methods, e-KYC via Aadhar, online money transactions and online investment reports has enabled the emergence of a fully automated asset management system. The use of Big Data, artificial intelligence, and deep learning to analyze investment alternatives, improve portfolios, and manage risks are examples of advancements. Zerodha and Small case are two notable companies in WealthTech in the FinTech market.
Regtech uses technology to manage regulatory processes in the financial industry. Its primary tasks include regulatory monitoring, reporting, and compliance. The rising use of digital products has increased data breaches, cyber-attacks, money laundering, and other fraudulent activities. By leveraging big data and machine learning technology, it decreases the risk to the compliance department by providing real-time data on money laundering operations undertaken online.
Digital transactions currently account for 98.5 percent of total non-cash payments. According to Statista, suppliers of UPI in India reported 2.8 billion digital payment transactions totaling more than five trillion Indian rupees in June 2021. Payment gateways, payment processing, cash delivery, online payments, and several other banking solutions are all made easier and faster by neo banks. A few examples of Fintech services used in digital banking are - API providers and aggregators, banks with open APIs, banking as a service, and core banking. Paytm, PhonePe, RazorPay, etc., are the leading fintech organizations in India in the field of digital payments.
Several Fintech company in India have made it to the headlines for their phenomenal work, services, and notable success. Following are a few leading companies that are the future of FinTech in India.
Let’s look at a few more statistics before we tell you the future of FinTech in India.
What do these figures and statistics suggest? Fintech firms are changing and remodelling themselves to adapt to future technology to make India the Fintech hotspot. India has a mix of Fin Techs evolving quickly and users willing to adopt digital platforms. Though the FinTech sector in India is tremendously growing, it still needs to learn how to tackle the issues that might arise when these companies expand beyond the urban areas. What we see today is merely a speck on the canvas, and things are just beginning to change.
Financial technology (FinTech) uses technology and innovation to enhance financial activities.
Paytm, RazorPay, Zerodha, Policy Bazaars are a few leading FinTech companies in India.
Each financial institution is governed to ensure the safety and security for customers to utilize. However, generally, fintech is more flexible, whereas banks are tougher because fintech enterprises do not have a single regulator.
Yes, FinTech is a rising sector. Financial services and technology have reshaped the business, creating attractive professional opportunities. Most businesses are transitioning to digital technologies to make them more efficient and error-free, which will raise the demand for skilled workers.