Fintech 2.0 is ready for a rapid roll-out, says Medici report

The fintech industry has laid a strong foundation in the country, and now newer business models and use cases are emerging, which will only strengthen the segment

Fintech 2.0 is ready for a rapid roll-out, says Medici report

Friday August 07, 2020,

3 min Read

The fintech revolution in the country witnessed the rush of consumers, startups, and financial institutions onto the digital platform where online peer-to-peer transaction had the dominance through various forms.

Medici, a global fintech research and innovation platform, in its India Fintech report 2020, noted,

“Over the last decade, the Indian fintech ecosystem has witnessed a plethora of innovations. The first wave of disruption in financial services was led by digital payment startups, followed by digital lending, wealth management, and insurtech startups.”


This evolution has now led to fintech 2.0, where there are new use cases emerging with completely different models. This has led to the emergence of new segments and also fresh innovations in the existing platforms in the fintech world. The following below are some of the emerging segments according to the Medici report.


Neobanks aim to redefine customer-centric consumer and business banking experiences. Problem statements being addressed include fully digitised account opening, free debit cards, instant payments, personal finance advisory, cash flow analysis and projections, GST-compliant invoicing, and accounting integration.

According to the report, with fintech segments like payments and digital lending getting overcrowded, investors' interest has shifted towards India’s neobanking.

In their efforts to become a part of the next wave of fintech innovation, venture capital and private equity investors have started to invest heavily in neobanking startups.

Digital lending

Today, digital lending fintechs are targeting the unmet demand from Indian MSMEs as well as consumers for credit. Many banks in India have so far focussed on highly creditworthy segments primarily due to a lack of credit history of others.

Now, with more access to data such as transaction, behaviour, app-based location information, social data, and more, these new lending models aim to increase this threshold by an additional 10–15 percent, which is a huge market opportunity.

In consumer credit, the urban population is likely to leverage fintech lending services to avoid heavy documentation. The rural population (which is new to credit) can benefit from alternative credit scoring mechanisms to avoid loan sharks. This would provide access to a market with over 300 million unbanked households.


India has witnessed a phenomenal increase in the wealthy population in the last few years. Against this backdrop, the country has see many advancements in the wealth management industry. There has been a democratisation of investment advisory services, where wealth managers are leveraging technology to offer low-cost investment advisory to mass segments.

The various technology platform in these areas include robo-advisors, thematic investment, discount broking models, ecommerce firms, and digital wallets, offering investment products, goal-based investing in mutual funds, etc.

Here, the UPI is acting as a key enabler for the wealthtech startups and also expanding their digital footprint.


The InsurTech landscape is quite nascent in India. The current insurance penetration is quite low, i.e., 2.76 percent in life insurance, and 0.93 percent in non-life insurance compared to the global average of 6.5 percent. ‘Lack of customer trust’ remains the key challenge facing the insurtech segment, and so far, industry players have found it as a hard nut to crack.

The players are able to attract consumers through various models like preventive insurance models, which cuts across segments like health, home, automotive, equipment, etc.

Sachet insurance has started to gain popularity, which is priced as low of Rs 10 to make it affordable for users to get covered under insurance worth lakhs of rupees.

Edited by Megha Reddy