Key Trends That Will Revolutionise Indian Fintech In 2021
Financial Technology or ‘fintech’ has come a long way from automating everyday financial services. Today, India is one of the largest fintech markets with an adoption of 87%, one of the highest across the globe. According to reports from BCG and FICCAI, India’s fintech industry is estimated to touch up to $150-160 billion by 2025. Following are the key fintech trends that are projected to influence the Indian financial services market through the current year
Open banking ecosystems
During the pandemic, several banks adopted open banking via Open APIs and have started offering a major chunk of their banking services outside their firewalls. This trend is expected to grow through 2021 as more and more customers demand digital services. For open banking platforms to gain real momentum, fintech players need to focus on tighter security this year.
The rise of neo banking
If the first wave of FinTech was payments going digital, the second is led by neo banks. Neo banks are usually digital-only banks that have no physical presence, offering banking like services. For years, digital-only banking or neo-banking had not been able to kick off big time in India because of RBI restrictions but with the rising demand, many internet-first banks like YONO (by SBI), Digibank (by DBS bank) and Kotak 811 (by Kotak bank) have started to gain momentum.
Digital-first insurtech to gain popularity
2020 saw the insurance game transform from traditional offerings to smaller, digital offerings for specific purposes like covid care, etc. This year, digital-first aggregator platforms across the value chain will offer customers end to end solutions right till after-sales service, creating merger opportunities between traditional insurance and insurtech players.
Autonomous finance to start picking up
Fintechs offering autonomous finance will start picking up as automation takes the burden of decision making off consumers’ minds with reliable AI and ML models. In a contactless world, this innovation will allow fintech solution providers to take over repetitive tasks for consumers across the country.
The digitization of SMEs
Over the next few years, fintech will focus on enabling SMEs to optimize their business operations by digitizing ledgers and managing receivables as well as providing credit.
Going big with bite-sized transactions
Small investments and insurance options will lead to an increase in fintech allowing smaller transactions that are preferred by the younger generation and rural India, where large ticket sizes are a rarity.
Fintech responded to the pandemic with innovative offerings to revolutionise the sector and keep transactions as contactless as possible. By adopting intelligent platforms and pursuing robust strategies, Indian fintech is gearing up to confront the challenges of the post-Covid world. With venture capitalists turning their attention to new-age financial services models that leverage AI/ML, the future of fintech in India looks bright.
To take a look at how DCT has revolutionised organisations in the finance sector and helped them ramp up their scale of operation and delivery, take a look at our case studies here.