FinTech Industry is Helped by Open Banking System

Globally, banking is changing, and people are looking for ways to manage money better. These innovations in banking have led to open banking and bank APIs gaining much attention. They link FinTech with the banking sector. With technological advancements, anyone can now access banks directly from their fingertips.

What exactly are Open Banking and Bank Apps?

Open Banking refers specifically to an online banking platform that allows customers to consent to trusted third-party service providers securely accessing their bank accounts. Bank APIs is the interface that allows these third-party vendors to access customers’ transaction history and make payments on their behalf.

What is the future evolution of FinTech in India?

India’s rapid growth in the financial services industry means the country has the potential to be Asia’s largest economy in this sector over the next twenty years. The trend is driven by two factors: rising incomes and increased government attention toward inclusive growth.

The main economic takeaways include that fintech is predicted to increase India’s gross domestic product by $950bn USD (GDP) in 2025. It will also decrease poverty in the country and enhance financial inclusion. India’s GDP will rise by 21 million additional jobs created through digital banking.

According to the study, without considering risk, India’s fintech could offer a 9% better return on investment (ROI), than the global average for the future. It also noted that digital payments could reach $1 trillion in India by 2030.

There is a lot of potential for smartphone penetration

India has more than 433 million smartphone users. This makes it the second most popular country to use smartphones. Despite this, India has the greatest opportunity of all: 31% of the country’s population uses smartphones. This ranks number 19 on the global list for smartphone penetration. That means 69% of the population still has to go digital.

According to the report, “Technology leapfrogging is telecommunications,” and “rapidly expanding cell phone penetration” is “crucial to India’s future fintech sector development.”

Focus on Fintech clusters

Researchers discovered that India’s finance sector is more heavily influenced than other sectors. This led to the discovery of a number of established fintech clusters.

“India’s Financial Services Sector has a high spatial concentration within one city, as it does in most other countries around the world.” Mumbai, the home of regulators and the central bank, had the largest cluster.

The study also identified clusters of technology-focused clusters. These included blockchain, and IT hubs in New Delhi, Hyderabad, Bengaluru, Karnataka, and Kerala.

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