Fintech has quickly acquired traction in India. Aside from the many Fintech companies in the BFSI industry, the growth of technology-driven startups in the arena has resulted in unparalleled market innovation. The vast market has a variety of distinct issues that are currently being addressed using cutting-edge technology and concepts. As post-pandemic normalcy sets in, India is on the verge of the next stage of fintech innovation.
Legacy organizations are increasingly turning to new technology to decrease inefficiencies and enhance the customer experience. We foresee a collaborative ecosystem to develop in the country where modern entrepreneurs will explore and generate solutions on the regulator’s sandbox platform utilizing industry expertise and massive investment company funding. It is where Fintech companies, new ideas, and innovations will significantly influence. These new-generation businesses do not suffer the structural obstacles that typically stifle innovation in big corporations.
To reach this level of joint development, big BFSI institutions must become more comfortable cooperating with new-generation disruptive Fintech companies. The route to fintech progress cannot be forged only by major legacy corporations or startups but via coexistence and collaboration. Let us have a look.
What exactly is fintech?
Fintech (Financial Technology) refers to firms integrating current technology to deliver clients automated and better financial services.
Defined, it refers to a range of financial transactions that take place without the help of a human, such as money transfers, depositing a check with your smartphone, skipping a bank branch to apply for credit, seeking funds for a company beginning, or monitoring your investments.
Fintech trends to watch in 2022
The FinTech field has witnessed tremendous expansion with the advent of contactless payments. It has not only given birth to new and creative financial firms but also made millions of internet users’ lives simpler. Traditionally, banks served as a conduit for services involving the exchange of money and services. The tendency is projected to continue as technology advances with a slew of new inventions, features, and upgrades.
1. Accelerating payment technologies
Regarding fintech applications, faster and more secure transactions, creative and simple payment methods, increased worldwide accessibility, and so on are expected to be at the top of the list. Customers are more likely to utilize applications that provide services such as one-tap payments, pay-later features, and so on.
2. Banking transparency
The Open Banking idea is hastening this digitization. It is an API-driven method that allows banks, FinTechs, and micro-lending organizations to offer their services using safe, authenticated, effortless, and integrated client data. As a reaction to rising client demand, several nations are enacting legislation that requires banks to provide open banking as part of their services.
3. AI/Machine learning evolution
On the app stores, several banks and FinTech applications have adopted AI/machine learning for different vital areas of their operations. These are examples of loan sanctions, fraud detection, risk monitoring, investment forecasting, and so forth. Blockchain is another game-changing technology accelerating the rise of AI/ML in finance.
4. Banking-as-a-Service (BaaS)
Banking-as-a-Service and platform ideas are changing daily and emerging as a practical and cost-effective approach to delivering financial assistance to consumers. BaaS supports partnerships with banks to deliver tailored and regulated financial services to consumers, with banks monitoring regulations as well as operations and the platform in charge of client acquisition, servicing, and so on.
5. Employee Benefits through the Internet
Fintech companies are seeking to digitize cash-intensive businesses, eliminate physical checks, launch cheaper goods, and so on, fueled by tech-inclined rules and employee satisfaction for faster payouts. Employers may improve their employee experience by combining fintech and HR procedures. It may also assist businesses in optimizing their products by providing digital services such as on-demand disbursals, access to earned earnings and payslips, and so on.
Some data on the expansion of the fintech industry:
- Approximately one-third of Indian customers use at least two or more fintech services daily.
- India and China have the most effective fintech adoption rate (87%) among all developing economies as of March 2020.
- Despite COVID-19 disruptions, India’s fintech sector is predicted to grow at a CAGR of 22.7% between 2020 and 25 to reach INR 6,207 billion
Growth drivers powering India’s fintech revolution
Some of the primary drivers of the development and success of Indian FinTech businesses include:
January Dhan Yojana:
- 1 billion or more bank accounts.
- Smartphone penetration is high, with 1.2 billion mobile users.
- India Aadhar, UPI, Bharat Bill Payment System (BBPS), and GSTN are examples of open API platforms.
- Favorable government initiatives include Digital India, the National Payments Council, UPI, tax breaks on surcharges, etc.
The blockchain market in India is predicted to expand at a 37% CAGR through 2024.
The flagship effort of the Government of India is to create a robust startup ecosystem in India.
Identity Formalization (Aadhar):
Biometric identity database with over 1.2 billion people registered
A novel business model:
Implementation of new business models enabled by technology such as AI and machine learning fintech companies India.
Consumer lending Fintech companies account for 17% of all fintech businesses in India. Credit is in high demand in India, from commercial to consumer loans.
10 of the most reputable Indian top fintech companies are included below.
To begin with…
Lendingkart is one of India’s most popular loan services. Its primary business offerings are classified into four broad areas.
Blackseed is a cutting-edge credit platform that helps fast-growing businesses. It provides customized financial solutions for small and medium-sized businesses, startups, and experienced developers and promoters.
Alternative credit and alternative real estate debt are their essential products.
3. DMI Finance
DMI Finance, one of the older participants on our list of fintech companies India, was launched in 2008. They want to rethink credit transfer in India.
It is one of India’s prominent fintech NBFC firms. They provide digital lending with an emphasis on personal, MSME, and consumer loans. They provide complete online underwriting and loan management platforms. They mainly collaborate with B2B organizations, particularly big fintech companies and technology-driven aggregators.
DMI Finance provides business financing, home finance, and asset management services.
MoneyTap is an Indian company that specializes in personal loans. They provide credit lines of up to 5 lakhs online. Customers have the option of repaying in affordable EMI terms.
They may stay for up to 36 months. Furthermore, they are only required to pay interest on the amount utilized.
They provide a variety of loan options for a variety of personal applications. There are loans for school, vacations, weddings, durable consumer items, renovations, and more.
MoneyTap distinguishes itself with flexible borrowing, safe and secure loans, and a no-collateral strategy.
5. SATYA Microcapital
The products of SATYA Microcapital are designed to meet the credit needs of the ‘Bottom of the Pyramid’ sector. They assist them in obtaining operating finance. As a result, they are financially and socially empowered.
Acko specializes in automobile and consumer durable goods insurance. Customers have used their extensive resources and shopping recommendations to get the best auto, bike, health, and electronics insurance.
Unnati’s goal is to make farming more efficient by using digital technology. Their ultimate objective is to use technology to empower farmers.
Unpredictability is a major contributor to agricultural losses. This agri-based fintech startup in India increases openness in the agricultural industry, lowering risks. Unnati’s solutions provide crop-specific advice and support farmers at every stage of the agricultural lifecycle.
Zerodha, one of India’s biggest fintech companies, is an online platform for investing in equities, mutual funds, derivatives, and other financial instruments.
Kite is one of their user-friendly trading systems. dIt is a flagship platform that simplifies market data and delivers it in charts and an easy-to-understand user interface. With its excellent visualization, the Zerodha interface assists consumers in gaining insights into their assets. Customers may also purchase commission-free mutual funds. It may also send directly to the customer’s Demat account.
Another investment platform on our list of the best fintech businesses in India is Tyke. But here’s the rub.
Tyke clients may invest in early-stage enterprises. It assists them in locating these companies by industry. Following that, it assists them in tracking their KPIs through a user-friendly dashboard.
Furthermore, it assists entrepreneurs in developing a personal and professional network to seek money. They may also monitor their user engagement and investor updates.
WazirX is one of India’s most well-known and biggest fintech companies. It is a cryptocurrency and bitcoin trading platform. They provide safe services by conducting frequent security audits. Furthermore, since they employ identity verification systems to conduct KYC procedures, they speed up sign-up processes.
Their trading platform is accessible through the web as well as mobile applications. Furthermore, WazirX offers a hyper-scalable technology that allows them to fulfill soaring demand in seconds. Its user-friendly site includes graphs and visuals for a more enjoyable trading experience.
The Future of Fintech Following the Covid-19 Pandemic
Without question, fintech has a promising future in India. Collaboration between the conventional banking industry and this dynamic sector, supported by further government efforts, might provide considerable potential for India’s top fintech companies to develop and thrive.
The Indian fintech sector is the fastest growing worldwide, with 67% of the more than 2,100 Fintech companies founded in the previous five years. As India’s technological and financial hubs, most fintech companies India base their operations in Bengaluru and Mumbai. In the second quarter of 2020, India concluded 33 new fintech investment transactions totaling US$647.5 million, compared to US$284.9 million in China. The Indian fintech sector is now worth US$31 billion and is predicted to rise to US$84 billion by 2025.