The term ‘fintech’ refers to the development and use of software, algorithms, and mobile applications. The technology can also be embedded in hardware, such as smart, connected piggy banks or trading platforms that use virtual reality (VR).
A Fintech platform allows users to conduct routine tasks such as depositing checks, transferring funds among accounts, paying bills, and applying for financial aid.
Fintech – or financial technology – has grown rapidly since 2014, when consumers, investors, and regulators started to take notice of the growing industry. Fintech has undergone changing market dynamics and it currently lies at the crossroads of finance, technology, and entertainment.
There are more and more financial services providers and early-stage fintech startups trying to cater to end users’ needs and shape the future of finance.
There are six areas in which the largest fintech startups operate: Banking, Payments, Investment and Wealth Management, Insurance, Currency and Exchange.
In 2015, Indian fintech witnessed the launch of numerous start-ups, incubators, and investments from public and private investors. Fintech’s rapid growth provides businesses and customers with unprecedented financial control.
Future predictions for Fintech Research show that fintech organizations fared relatively well against COVID-19 impact in 2020.
Digital payments in India have increased tremendously in recent months, with more than 5.7 billion transactions a month, worth nearly two trillion dollars (total digital payments) in September’21. With 25.5 billion real-time transactions in 2020, India is home to the most real-time online transactions, surpassing the US, UK, and China combined.
Indian Fintech is one of the fastest-growing markets in the world. More than 67 percent of the 2,100+ FinTech companies operating in India today have been established in the last five years. The Indian Fintech industry was valued at $ 50-60 Billion in FY20 and is expected to reach $150 Billion by 2025.
The increasing adoption of financial technology products and services in India has resulted in the following trends.
In India, neobanks operate as a layer 2 fintech solution built on top of legacy financial institutions. Nevertheless, with the acquisition of PMC Bank by BharatPe and the entry of UK-based Fintech Revolut, a full-scale digital bank could soon spring up.
The Indian stock market saw only 3% participation in 2019, compared to 55% in the US. The anticipated value of total equity in the Indian stock market was $990 billion in FY21, and it is expected to rise 2.3 times to $2.2 billion in FY26. Increasing consumer awareness and demand for financial securities as well as a large addressable market make investment technology a lucrative business opportunity in India.
Insurtech is the fastest-growing fintech subsector in terms of market size. The addressable market is expected to grow fourfold from $87 billion in 2022 to $339 billion in 2025. For the next three years, the rapid adoption of non-life insurance covering health, education, vehicles, and other areas will drive the growth of insurtech.
As a result of the Covid-19 pandemic, India’s small and medium-sized enterprises are adopting digital financial products and services, propelling the demand for fintech SaaS solutions such as app-based accounting and bookkeeping, no-code payment aggregation, and equity cap table management. According to market analysts, the size of the fintech SaaS market in India is expected to explode by 2.7x in the next three years, from $4.6 Bn to $12.6 Bn by 2025.
Several established fintech startups in India are planning to go public this year, including MobiKwik, Navi Technologies, and Pine Labs. As a rule, the larger a company’s market share is, the better its chances of a successful IPO, which helps raise investor confidence. A significant market share is one of the key indicators used by analysts to determine a company’s competitive position. As a result, a wave of mergers and acquisitions is on the horizon. Moreover, companies are also likely to go on a shopping spree to ensure that they capture potential customers and new markets as soon as possible.
In recent years, the concept of buying now and paying later (BNPL) has become one of the biggest buzzwords in financial services. This is an innovative method of paying for goods and services. The big advantage of BNPL is that it’s an interest-free payment service that lets consumers delay or pay in installments (often fortnightly) over a period. Startups like Slice, Uni Cards, and others facilitate digital payments and physical cards through BNPL, allowing the merchant network in this space to move beyond the world of e-commerce. India’s BNPL market is estimated to reach $43 billion by 2025.
Even the sharpest critics of the sector can’t overlook the fintech market’s incredible growth pace. The fintech market is extremely competitive and requires an upfront investment, but even its harshest critics can’t ignore the impressive growth rate of the market. It utilizes innovations such as
These are the most important technological tools that make financial transactions faster and more efficient.
Regulators across the globe cannot ignore the size of this market, and the repercussions will be felt for years to come. In the future years, the Fintech business will continue to expand. Fintech predictions indicate that the market will continue to grow and thrive in 2021, especially as the innovation sector provides new resources to customers dealing with the pandemic’s residual consequences. With more people making mobile payments, the fintech market is expected to reach a valuation of $150-160 billion by 2025 in India.
For the fintech industry to attain its full potential, it would require $20-25 billion in investments from now until 2025. Banks too on their part must adopt innovative technology-driven solutions or avoid losing financial technology pioneers.
Thanks to the expertise of an advisory board of fintech pioneers and thought leaders, Hyderabad Angels serves as a unique hub for the nurturing of ideas, mobilizing investments, and forging partnerships for start-ups across sectors in Technology covering Agriculture, Space, Fintech, Health care and Deep tech. HA is looking for Fintech startup’s in Neobanking , Lending tech and BNPL Startup’s
