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As most of the country has excelled in fintech adoption, it grew at 64% rates across the globe in 2019. The adoption rates in the Netherlands with 73% and the UK and Ireland with 71% lead the charts, conversely, emerging markets China and India are ahead of this trend and growing with 87% adoption rates.

Since fintech firms witnessed a fourfold increase in investments, India's fintech ecosystem has seen rapid growth. The country has outshined in fintech adoption and leads the charts with its counterpart China. This growth has been largely attributed by effective government initiatives, including India Stack, Digital India, UPI, among others.

There are three things that can be held accountable for making cash-driven India make online financial transactions confidently, the demonetisation drive in 2017, the e-commerce wave, and mounting smartphone penetration. These occurrences have led to the various fintech firms to speed up their services to especially Tier II and III markets in India, where accessibility of online payment services is still a major issue. For them, financial inclusion is a watershed moment, as they are plummeting their angsts regarding how or where their money is going on an online platform.

Shifting Towards Digitisation

It is the fact that financial services will never be the same again in India with this big wave of digitisation. And this is the biggest boon and time for fintech companies to push their boundaries, as the willingness of the people of India to try out something new is rapidly increasing.

According to NASSCOM, the Indian fintech software market is likely to touch $2.4 billion by 2020. So, for the fintech players, this is an enormous opportunity to reach and engage the unbanked customers, people who live in rural areas and who are yet to experience the benefits that come with financial inclusion.

Amid the factors that fortified or dispirited users from switching to a Fintech service, a report from EY Global FinTech Adoption Index 2019 reveals, 27% of the respondents chose a FinTech service for its pricing, while 20% chose services that had a simpler process for the opening bank account. In contrast, trust was the main factor in Japan, France, and Chile, for not choosing a FinTech service over banks.

Changing the Rhythm

Besides this growth and trend, education and awareness are major factors that can boost the business growth of the fintech market. These roadblocks could lead and prevent people from fully coming under the umbrella of financial inclusion. However, fintech players are now organising training sessions for their target consumers to ease them into leveraging their services and becoming comfortable with processes. Even, companies, government, and other regulatory bodies are taking efficacious initiatives to foster them.

The regulatory bodies have often cropped up with draft regulations to support government initiatives. Over the last three years, the RBI has drafted regulations around payment banks, mobile money, NBFC-AA and P2P lending that support financial inclusion. The central bank has also adopted a comprehensive slant while doing this. It issues discussion papers on proposed policy changes and takes stakeholders feedback.

In rural areas, millions of small-scale businesses operating here and cumulatively contribute to the country’s GDP. So, financial inclusion will enable them to reach the sky that ultimately resulting in an increasing contribution to the Indian economy.

Most players are even making a regional connection by engaging people across geographies and easing seamless access to financial digital services for them. With offering online services in different regional languages that assist to breakdown the language barrier, companies are getting new customers to experience the digital platform.

In cessation, India has made large strides in this space, but for shifting towards the next level, regulators must identify the need for a coordinated effort for fintech policy development. Also, fintech companies have to focus on continuously staying ahead of the curve and coming up with new, ground-breaking, and prolific services for their customer.