Can India unlock the next level
Representative image. Money control
FinTech has become such an integral part of the financial services ecosystem over the past few years that every sector now uses FinTech services for day-to-day activities. With this promise in the Fintech sector, even traditional institutions are revamping their services with advanced technology to keep pace with the growing FinTech sector.
As part of FinTech’s bigger picture, financial inclusion is one of its vital goals. The FinTech industry has grown exponentially and the wave of changes brought in by fintech has profoundly impacted financial inclusion and penetration. The emergence of a number of FinTech products in India has made it possible for people in the most remote areas to access financial services. It has also been beneficial since a country like India caters to a large population so it requires advanced technology.
FinTech Revolution: Progress and Growth
India has undoubtedly emerged as one of the fastest growing FinTech hotspots in recent years thanks to one of the world’s fastest growing economies. A number of concepts, such as mobile banking, secure payment gateways, mobile wallets and paperless lending, are already being implemented in India. The FinTech revolution has arrived. According to surveys, the Indian fintech industry currently has more than 20 unicorns.
There are many payment options in India such as Unified Payments Interface (UPI). During July alone, it handled more than six billion transactions, the most since its launch in 2016. The service provides instant authentication and authorization of money transfers. It is estimated that over five times as many UPI transactions are processed every month as there are mobile connections in India. In 2017, the National Payments Corporation of India (NPCI) reported UPI transactions of over Rs 10.62 billion. lakh crore in July. In just 6 years it has become one of the most used payment methods and will continue to grow.
New ways of banking are also becoming popular as a result of FinTech, neobanks are one such example. Neobanks is another Fintech product that is changing the way we bank, these banks work completely online without a physical presence. Neo Banks is essential in helping SMEs automate their accounting procedures, transfer and receive payments and use their platform to access third-party banking and business services. Indian start-up banks have received a fivefold increase in funding in the past year, and by 2030 this figure will rise to $215 billion.
More than 12 Neo banks are currently operating in India, including Jupiter, Fi Money, Razor Pay, Open Money, InstaPay, etc. According to industry estimates, user penetration in 2022 will be 0.7% and by 2027 it is expected to reach 1, 4%.
FinTech 2.0
By 2030, India’s fintech industry is expected to have an output of $1 trillion and generate $200 billion in revenue. Fintech financing increased by three times the previous year. A major contributor to this growth is also due to the government and its technology adaptation initiatives. The development of increased financial inclusion in the nation has been heavily dependent on the India stack and the innovation of FinTechs.
India will unlock FinTech 2.0 in the next few years, the nation presents a great environment for a FinTech revolution due to a number of factors including an innovation-driven startup scene, a highly favorable market, improved smartphone and internet penetration levels, a young population , and government-led efforts to promote the industry. In addition, the Indian FinTech business has greatly benefited from the increased public awareness of financial technology.
Furthermore, FinTech companies are now dealing with cyber security issues, real-time errors and other issues that customers face while working with their applications, and they are working towards providing an even more seamless user experience.
Digital economic empowerment
Digital financial empowerment is now the government’s focus instead of digital financial inclusion. With the help of Jan Dhan 2.0, gender sensitive policies, PM SVAnidhi Scheme, eKYC, digital onboarding and digital customer protection, this is being achieved and fintech will help in this goal.
With a significant shift towards a fairer distribution of investment across sectors, there will be more growth in other sectors such as Insurtech (insurance and technology), WealthTech (wealth management and technology), RegTech (regulatory technology), etc. There is room too much growth and opportunity in the coming years for the Fintech sector and this will lead to a FinTech driver ecosystem.
The author is the CEO and founder of Neofam, a neobanking platform
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