How Indian fintech players are making a mark globallyManish Khera
Memoirs of innumerable global entrepreneurs – including Steve Jobs and Mark Zuckerberg – include India as a critical milestone in their journey. They inform us how their individual trips to country during their days of struggle positively affected their success story and made all the difference. In fact, Bill Gates tries to visit India once a year and admits that these trips inspire him in a new way every time.
India, well-known for its ancient roots, culture, diversity, and knowledge, has something or the other for everyone. The nation is home to world’s second largest population, is the seventh-largest country by landmass, and could have, perhaps, become the world’s fifth largest economy (in terms of current GDP) overtaking both France and the UK of late.
India’s geographical and cultural miscellany automatically make it an inimitable market full of unique challenges – including some of its long-standing financial ones. And thankfully, these challenges are currently being addressed by the emerging fintech industry of the country.
‘In’-tech: the rise of India’s fintech
The fintech sector, though establishing its roots in India in the last decade itself, largely remained in oblivion for the general public. It was only after late-2016’s demonetisation drive that brought the sector into the national spotlight. Within a few months, a majority of Indian fintech platforms experienced an exponential growth and significantly increased their consumer base.
Earlier, the fintech operations were also largely limited to the urban regions of the nation. This changed thereafter. Another positive development triggered by the demonetisation drive was that it simultaneously acquainted the market with other fintech platforms – including fintech lenders, insurtech platforms, robo-advisories, and so on – and generated greater traction for them. Indians more proactively started adopting digital technologies and gradually made them a part of their day-to-day lifestyles.
The government, at the same time, left no stone unturned to further catalyse the ongoing development. It had already launched UPI as early as April 2016 and followed the move with the launch of BHIM by the end of the year.
It must be noted that the indigenously-developed UPI, while being real-time interbank payment mechanism, was also cost-effective and could be adopted by any financial entity including existing fintech players.
This was even before developed markets like the UK and the US launched such a technology. The government also created a sandbox environment to support the collaboration between banks and fintech companies.
This, while further providing a fillip to the ongoing fintech operations, increased the digital footprint of Indians; a trend that continues till date. Now, as much of a Gordian knot that the Indian market is, its diversity and inherent technical complications are also advantageous for the Indian fintech platforms.
It naturally gives them and their developed solutions an upper hand vis-à-vis their global competitors. A majority of bottlenecks that prop up in our developing nation – including low digital adoption, absence of data, infrastructural challenges, structural reforms needed, and so on – are not experienced amongst the Western economies.
So, every viable tech-driven solution developed in India can be easily scaled within other nations. For instance, today, Indian fintech lenders are shunning the conventional approach and are leveraging avant-garde mechanisms to drive credit penetration. This includes tapping digital remittance data – such as PoS-based and mobile wallet-based transactions – to assess, say, a merchant and provide him or her an unsecured loan.
Cutting-edge technologies like Artificial Intelligence and other technological solutions complete the loan processing within a minute from application. Now, cost-effective and time-efficient approaches such as these are easily scalable in western countries where a majority of transactions are through cashless means.
In conclusion, such solutions can also be scaled in other developing nations that are facing the challenges similar to the Indian market in general (or its certain market segment) or even a geographical region. With that being said, a majority of Indian fintech players have already initiated their global operations and soon others will join the bandwagon. This will obviously happen after the Indian market or a majority of it gets tapped.
So, it is not about ‘if’ India will emerge as a behemoth in the global fintech market, it is about ‘when’. Whenever this happens, it will be nothing short of a spectacle. Indian brains, which have for so long shined in the Silicon Valley and are today leading global technology giants including Google and Microsoft, will be seen working their magic here in India and giving birth to the “Googles and Microsofts” of tomorrow.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)