Back in the day, we stood in long queues to pay our bills, apply for a loan, and/or open a bank account, and even corporates ran around for payments or getting a new business. Slowly and steadily, however, we witnessed a completely different world around us that we had not seen before. A new wave of ease, speed, and comfort surrounded us and the term ‘digital’ was coined in our lives. Everything traditional slowly became everything digital in the business-to-consumer (B2C) and the business-to-business (B2B) space. From booking tickets for a vacation to buying forex, everything shifted online.
This revolution is called ‘fintech’, as we all describe it now, and fintech players equipped with utmost dedication, passion, and disruption are the country’s new hope for complete financial inclusion.
With time and innovation, countless fintech startups are now operating in our country, working towards making our country a developed and digitally empowered nation. With the advent of fintech startups in India, we all have a new hope for leading a better and advanced life surrounded with new opportunities and jobs. It has become a big convenient boon for small and medium enterprises since now they can grab and gain from opportunities which they were previously deprived of, or which were difficult for them to get hold off. Fintech has been a relief for them to run their businesses effectively.
For consumers like us, it has given us a more advanced approach to solve the problems we face. The digital phase has made it easy for us to get things done, be it insurance, loan, or personal payments, to name a few.
Yes, we all agree that fintech has revolutionized the way we lead our lives now, but has it been able to revolutionise the lives of all parts of our society? Has it reached every nook and corner of our country? According to a recent report by JP Morgan, fintech firms in India have only succeeded in catering to 23 percent of the elite/affluent section of the Indian economy while a huge portion still remains untapped. It also states that fintech players are mostly serving the rich and affluent sections of society, leaving behind a 600-million-strong population which comprises of lower- and middle-income groups, making fintech usage significantly high in large cities in India.
There still exists a trust deficit when it comes to making online payments. Fintech startups are working towards bridging that gap, but we still have a lot to cover. Rural India is still lagging behind with an adoption rate of 33 percent on account of numerous factors, including poor literacy, limited access to telecom/delivery platforms, and the inability to pay for even the relatively lower costs of fintech services. We are witnessing technological changes, but they are yet to reach the underserved sections of society. Existing and upcoming startups in the fintech space carry huge scope for these people.
Fintech firms also have been trying to modify the SME lending space by using technology to make it more transparent. If fintech startups continue to disrupt the space with their innovative ideas and solutions, they will soon reach the undisrupted markets, and the underserved areas will have more growth opportunities. With increasing smartphone and internet penetration, it has become even easier for these players to reach the lower- and middle-income group and expand their services to them.
Understanding the gaps and potential, startups have started to tap India’s vast and underserved market in financial services and technologies. Indian consumers in the smaller areas, with the help of fintech players, are slowly becoming more accepting towards UPI platforms and mobile phone wallets like Paytm, Ola Money, Mobiwik, etc., though a huge market is yet to be tapped. Fintech startups are striving towards making Indian consumers embrace the use of mobile payments for day-to-day transactions.
They are trying to facilitate rapid adoption. Online shopping, investments and online stockbroking, and investment sites are slowly becoming increasingly popular. Small and medium enterprises are now resorting to online lending and borrowing-for-ease and other credit facilities. Even forex has witnessed a huge disruption, making foreign exchange accessible, easier, and cost-effective for SMEs, end-consumers, and established players. With the conscious efforts made by fintech players, India will soon occupy the top position at the global fintech table in the near future.
With the fintech players vigorously trying to disrupt the small- and middle-income Indian consumers, they will soon get accustomed to personalized digital experiences. As adoption increases, Indian consumers are likely to start demanding ‘bank grade’ services like 24x7 access and more attractive rates and fees. With the fast growing fintech ecosystem, Indian startups will soon lead the way to India’s financial inclusion. With almost a billion mobile subscriptions, digital will also dominate the existing traditional channels, thus encompassing the whole of India in the fintech bubble.
Anand Tandon is the Founder of Myforexeye Fintech Pvt Ltd, India’s first full-service forex company.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)