There are three areas in which Fintech disruption will be felt most strongly. There is also a second wave of disruption that is impacting the insurance and asset management industries. Banks are using new technologies to streamline their operations. This promotes the shift away from physical channels toward digital/mobile delivery. A majority of bank leaders feel that FinTech is or should be a strategic partner. FinTech companies are used by more than 75% of banks for their services in consumer banking, payments, and money transfer.
Impact of Fintech on Banking
It has been long known that FinTech startups have the potential to disrupt traditional financial services. Due to the decline in confidence in banks. the financial crisis, some of this talk was more optimistic than realistic. Our common term for FinTech is the start-up businesses that we refer to as “FinTech.” They have definitely played up their differences with banks (and fair game to them) and promoted themselves as being better at providing a lower-cost service thanks to new technology.
The question of whether these new forms of finance will replace banking and usher into a new era in finance is still open to debate.
In India, India was an emerging market, and depository institutions were not interested in cashless payments. Card readers are expensive hardware pieces that can only be used at established shops. These point sales devices were also dumb. Even though lenders had information on a store that swiped a lot of cards from them, advance money to retailers based on that information required multiple sales calls. It was not worth the effort back then. This is even more true now, with India’s digital revolution putting plastic in the shade. Two out of ten transactions are made with credit or debit cards — most often to purchase higher-value goods and at larger retailers.
The Indian FinTech landscape has been undergoing rapid changes over the past few years.
The explosive growth of eCommerce and the widespread adoption by the masses of mobile technology. This resulted in the rapid adoption of digital payments and the realization of the Government’s vision for Digital India. These digital payments companies are able to offer more utility than digital commerce, thanks to demonetization.
These are exciting times for startups that can capitalize on the opportunities and grow their business. I’d like to share my thoughts on the market potential these FinTech companies or startups might tap into, as well as the market factors they need to understand in order to establish and grow their business.