Embracing ESG and Beyond In India CSR
Learn about the latest trends in the Indian fintech industry and how businesses are adapting to stay competitive in the face of economic uncertainty
Welcome readers. In this article, we take a closer look at new research from FIS, a global leader in financial services technology, which shows how businesses in India are embracing the next generation of financial technology to drive new growth in digital channels despite current economic uncertainty.
1. Introduction
Businesses in India are embracing the next generation of financial technology to drive new growth in digital channels despite current economic uncertainty, according to new research from FIS, a global leader in financial services technology. The inaugural 2023 Global Innovation Report asked financial services and non-financial business leaders in India about their business strategies and experience with embedded finance, Web3, environmental, social and governance (ESG) frameworks.
2. Embedded Finance reflects a new reality in India in 2023
Embedded finance is when consumers have unique, tailored financial services delivered to them when they need it by non-financial companies. Embedded payments are most familiar to consumers, enabling the speed and convenience of paying for goods and services within an app, with just a single click. New use cases across banking, lending and investments are emerging, and the effort to deliver embedded financial services is accelerating rapidly in the country.
More than two-thirds (71%) of financial services and fintech firms will invest significantly in the development of embedded financial products within 12 months, according to the study. 44% of financial services and fintech firms investing in embedded finance believe it will increase revenue. 37% of non-financial firms that see an impact from embedded finance on their business will respond by increasing their technology or R&D budget in the next 12 months.
Fintech in India: Insights into key trends and impact on businesses
| KEY TRENDS | IMPACT ON THE COMPANY |
| Built-in economy | 84% expect a moderate to large impact |
| DeFi | 86% expect a moderate to large impact |
| Framework for environmental, social and governance (ESG). | 84% expect a moderate to large impact |
| The Metaverse | 85% expect a moderate to large impact |
| Cryptocurrency | 83% expect a moderate to large impact |
3. DeFi and Metaverse: Competitive advantage, but the risk remains
Web3 focuses on decentralized infrastructure and includes concepts of cryptocurrency, DeFi and metaverse. According to the research, India has greater investment in Web3 initiatives compared to global counterparts. Businesses are convinced that to remain competitive, it is essential to deliver all financial services in an end-to-end experience. 84% of respondents believe that DeFi, which uses blockchain and digital asset technology to manage financial transactions, represents a major growth opportunity for their organization.
However, a higher percentage (89%) asserts the need to better understand the risks of decentralized finance before participating. Surprisingly, 61% of non-financial businesses believe it will be strategically important to have a presence in the metaverse in the next 12 months. Almost two-thirds of all respondents from India (60%) already have or are developing products or services in the metaverse. 32% of respondents agreed that cyber security is the biggest concern in the metaverse.
4. Framework for environmental, social and governance (ESG).
ESG frameworks are designed to promote social responsibility and environmental sustainability. 84% of financial services and fintech firms expect a moderate to large impact from ESG frameworks in the next 12 months. Among financial services and fintech firms, 49% of respondents believe ESG frameworks will increase revenue. Among non-financial companies, 34% believe that ESG frameworks will increase revenues.
5. Conclusion
Despite the current economic uncertainty, businesses in India are turning to innovation to succeed in 2023 and beyond. The research shows that key areas of fintech, such as embedded finance, DeFi, ESG, metaverse and cryptocurrencies will have a large or moderate impact in the short term, and companies are investing now to prepare for an impending increase in demand. Companies that take action now are more likely to maintain or achieve a leadership position in the market as the next era of digital services emerges.
(CopyRight@IndiaCSR)
