Fintech in India drives economic development
The rapid advancements of fintech is shaping the world of finance and impacting many industries. Fintech in India is one of the fastest-growing markets, as well as the world’s largest, according to the Research and Markets report. Globally, the fintech implementation rose to over 60%, according to Ernst & Young report, of which a major portion was contributed by emerging markets such as India and China, who topped the adoption chart with 87%.
Main drivers of fintech in India
Fintech in India could not have emerged in the market so fast without the increased adoption of the internet and improved digital resources. However, the absence of trust toward digital methods of payment by customers as well as the rising threat of cyber and data security breaches, are challenges to market growth.
The value of the fintech market in India is estimated at ~INR 1,920.16 billion in 2019 and is expected to reach ~INR 6,207.41 billion by 2025.
Furthermore, the Research and Markets report notes that the, “The industry is witnessing increased application of artificial intelligence (AI) and Big Data for enhancing personalized offerings. New business models like Neobanks are expected to revolutionize the Indian fintech market.”
Neobanks: expanding services to the underbanked
Neobanks have become a disruptive force in the banking world. These digital banks are a perfect example of the latest fintech services to operate directly and exclusively online without the need for physical bank branches.
Through a mobile app, neobanks appeal to all types of customers by providing a seamless digital service that’s quick and efficient.
Neobanks offer the same service offerings as a traditional bank, which includes, checking and savings accounts, payment and money transfer services as well as financial education tools, including budgeting assistance.
Such a model would develop unique and innovative replicas that may help with assessing risks, as a Deloitte report noted. “Leveraging big data, machine learning, and alternative data to underwrite credit and develop credit scores for customers with limited credit history will improve the penetration of financial services in India.”