FINTECH (Finance + Technology) in India

by Legal Suvidha



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India, a nation with over 1.3 Billion populaces, is moving toward a progressive Tech-Finance partnership. This joint effort among back and innovation is redesigning the way value-based activities are taken care of. FinTech is the amalgamation of innovation in the back that offers more powerful budgetary arrangements than conventional foundations. Demand for Fintech is growing rapidly due to a large digitally-savvy population seeking newer technologies with greater convenience and the need for greater profitability by Financial Institutions.

Banking Sector:

Since Fintech is  a Combination of Finance and Technology , so the Banks that are the most powerful financial bodies  have been efficiently being supportive in carrying out the innovative tasks. For instance, e-wallets from the earliest starting point. The reason is basic, they give smoother back-end tasks and client cordial administrations. A few banks are taking it considerably further by working together with start-up FinTech associations to give better monetary administrations.

Startup companies:

In a creating country like India that energizes advancement, FinTech startup companies have an incredible potential for extensive development. Startup companies are making ready and making activities towards digitizing India. With the ongoing demonetization that urged natives to go moneyless, the advanced development has changed into a reality.

Government Bodies:

It's anything but a simple undertaking to stay aware of the quick mechanical updates occurring in a monetary industry. Be that as it may, the Indian Government has kept pace as well as made an activity called 'Startup India' and has given a devoted reserve of USD 1.5 billion to help up and coming and imaginative Indian startup companies.

Impact of Fintech Startups in Indian Market:

This new disruption in the banking and financial services sector has had a wide-ranging impact. Key service offerings to emerge on digital platforms include:  

Peer-to-Peer (P2P) Lending Services: 

Companies use alternative credit models and data sources to provide consumers and businesses with faster and easier access to capital. P2P lending allows online services to directly match lenders with borrowers who may be individuals or businesses. Examples are Lendbox, Faircent, i2iFunding, Shiksha Financial, GyanDhan, and MarketFinance.

Payment Services: 

Companies allow both private individuals and businesses to accept payments over the web and on mobile without needing merchant accounts. Transfers are made directly to the bank account linked to the payee in order to secure against fraud. Examples are Mobikwik, Paytm, Phone pe and Oxigen Wallet.

Remittance Services: 

A few startup ventures which are registered abroad, are trying to address the gaps in remittance transactions (both inbound and outbound) as the current process is cumbersome and expensive. These startups aim to disrupt the current monopoly held by firms like Western Union and MoneyGram.

Personal Finance or Retail Investment Services:

Fintech companies are also growing around the need to provide customized financial information and services to individuals, that is, how to save, manage, and invest one’s personal finances based on one’s specific needs. Examples are FundsIndia.com, Scripbox, PolicyBazaar, and BankBazaar.

Miscellaneous Software Services: 

Companies are offering a range of cloud computing and technology solutions, which improve access to financial products and in turn increase efficiency in day to day business operations. The scope of fintech is rapidly diversifying at both macro and micro levels, from providing online accounting software to creating specialized digital platforms connecting buyers and sellers in specific industries. Examples include Catalyst Labs in the agriculture sector, , Profitbooks (online accounting software designed for non-accountants), StoreKey, etc.

Equity Funding Services: 

This includes crowdfunding platforms that enable the funding of a project or business venture by raising funds from a large number of people. Such internet-mediated platforms are gaining popularity across the world as access to venture capital is often difficult to secure. These services are particularly targeted at the early stage of a businesses’ operation. Examples include: Ketto, Wishberry, and Start51.

Cryptocurrency:

India being a more conservative market where cash transactions still dominate, usage of digital financial currency such as ‘bitcoin’ has not seen much traction when compared to international markets. There are, however, a few bitcoin exchange startups present in India – Unocoin, Coinsecure, and Zebpay.

Challenges and opportunities for Fintech expansion in India

While digital finance firms have benefited from the government’s pro-startup policies and flexible regulatory conditions imposed by the Reserve Bank of India (RBI), formal institutions possess an established infrastructure and legacy that is not easily replaceable.

Fintech startups need to instill greater confidence among Indian customers, already known for being conservative in their financial preferences.

Figuring out how to market to their needs and influence financial behavior are some of the biggest challenges, as is setting up a strong and responsive regulatory infrastructure to keep a pace with the speed of technological innovation.

On the other hand, traditional banking and financial institutions can leverage their existing customer base and adopt digital products that nurture strong financial relationships while improving service efficiency and broadening access to meet changing needs.

Responding to these opportunities and challenges, banks like HDFC and Axis have launched mobile phone applications to ease digital transactions; Federal Bank announced a partnership with Startup Village to develop innovative banking products; U.K. giant Barclays is set to operationalize its fifth global fintech innovation center that will be located in India; and Goldman Sachs Principal Strategic Investments Group (GSPSI) is looking to invest in Bengaluru’s fintech startup scene.

Thus, the growth prospects in technological innovation may not necessarily produce a mutually exclusive relationship between traditional institutions and fintech firms in India.

What are some FinTech new companies in India?

PaySense

PaySense is a portable based stage that offers a credit extension benefit for on the web/disconnected buys to Indian shoppers. It offers moderate EMI anticipates retail buys and gives credit line up to 1 lakh INR (1500 USD). PaySense incorporates with India Stack to make online documentation and e-KYC process less demanding and straightforward for purchasers and furthermore gets the prompt endorsement for their credit demands.

CapitaWorld

CapitaWorld is a raising money stage, which is made as a one-stop answer for the budgetary prerequisites of store searchers (singular/specialist), as well as for reserve suppliers (banks/NBFCs/other high-total assets people and gatherings) and specialist co-ops (CA/CFA/CFP/venture financiers and other back experts). They have additionally constructed a man-made consciousness stage, where individuals can bring assets up in a mechanized manner.

The Money Club

The Money Club, a portable application accessible on google play store, causes you to spare, contribute or acquire money alongside your confided in individuals (companions, family or office associates) and it benefits you as well as each one of those individuals who join your Money Club. It depends on the Chit Reserve idea.

ePayLater

ePayLater is a purchase currently, pay later arrangement, which enables clients to influence numerous buys and pay for every one of them in one to go on a later date. ePaylater was established in 2015. In only 2 years, it has extended all over India and is currently incorporated in IRTC.

 



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