Financial technology or "fintech" describes financial services using innovative technology. The technology innovation has brought a big revolution across the world in the field for digital payments. These innovations have changed our life and business. And, it also expanded the boundaries of the banking industry and financial firms.
The impact of the demonetization in India was loud and clear. People experienced the pain while the dealing with financial transactions as it was a big blow on the velocity of money. This event has brought a big opportunity for digital platforms in the country.
According to ET, in India, banks are using fintech players to qualify good customers faster and give on the fly credit. The digital platform is getting a huge response, as one-third of the bank's customers are under 30 years of age preferred this platform for their banking practices.
The financial technology software services market in India is expected to touch USD 14 billion by 2020 from the existing USD 8 billion and of late, more than 600 fintech start-ups are offering their services in the country. When it comes to adopting the finance technology, China tops the list followed by India in second place.
Grow of Fintech:
According to the Fintech Ecosystem Report, the fintech investment touched to USD $15 billion in mid-August 2016 and it would touch to USD $150 billion in next 3-4 years. The latest technology innovations like artificial intelligence (AI), robotics, biometric application, block chains, peer to peer lending etc., are propelling the growth of fintech globally.
Emerging the startups in the fintech sector are giving tough challenges to the financial firms and pushing them to adopt the new financial technologies. The global investments in the fintech startups are increased by 10 percent and the entrepreneurs, as well as investors, are showing their keen interest to get associated with these startups to witness the next big revolutions in the world.
In the digital payments segment, fintech companies have dominated this space. PayPal is the leader in the digital payments in the USA and Europe, while Apple Pay and Android Pay are considered top companies in the mobile payment segment. In China, top companies in this space are Alipay and WeChat.
Fintech in India:
The volume of digital payments has increased in 2016-17 by around 55 percent in India and the credit goes to the demonetization. The debit card usage has been increased significantly in India, it is gone up by 104 percent, while the POS installation by the merchants increased by around 83 percent. The average growth of the fintech in India was recorded at 28 percent CAGR for last five years.
There are plenty of opportunities for the fintech startups in India as the people are considering digital payment than cash payments. The mobile and internet penetration are helping people to adopt the digital payment system in the country.
The revolution of in the finance technology is going to help Indian economy as well, as Reserve Bank of India (RBI) is spending around Rs. 21,000 crore in currency circulation per year. Adopting digital payments could save this huge amount of money in the country.
The expansion of the fintech in India is the next big revolutions that all of us are going to witness. And, it is the big opportunity for the entrepreneurs and investors to tap the prospects in the financial domain. The innovation in the financial domain is also going to help SMEs and small businesses in India.