A latest report by Deloitte, an industry-leading audit and advisory service provider has spelled a period of celebration for the Indian FinTech market. According to the report, the sector, which was successful in attracting a funding of nearly $270 million last year (2016), has emerged as one of the top five markets when it comes to the value of capital funding and investments in the sector.The report said, “India remains one of the largest markets where the structural enablers to setup and incubate FinTech have come together strongly and at an apt time.”
The joint report furnished by Internet and Mobile Association of India, and Deloitte also stated that in medium-term, one can expect FinTech players in the Indian subcontinent to merge their position in urban and metro centres and work towards extending their services to rural and semi-urban pockets of the country as well in the next three-five years.
Explaining the reason for the admirable growth of FinTech in the country, the report mentioned that the coming together a lot of different factors have worked out in favour of the industry. It also explained that though India is doing great, the developing economy still has a long ground to cover when it comes to acquiring the Global numero uno FinTech market position.
According to the report, “Combination of steady economic growth with low penetration of financial services and availability of supporting infrastructures such as internet data access, smartphones along with utility infrastructure including Aadhaar based authentication and India Stack capabilities are likely to provide the required impetus to India’s FinTech sector.”
The report also specified that Payments and lending can be considered as the most likely candidates for breakout in the short term as the new FinTechs are focused on offering cashless digital payments services.
Explaining why lending is a possible candidate for breakout in short term, the report said that low penetration of retail and MSME credit along with faster turnaround time and the promise of a better experience has resulted in the creation of a strong proposition for customers.
FinTechs in majority of the other segments including insurance, banktech, investment management and personal finance management have adopted the market making process and are currently only into specific market niches. According to the report, if provided with right value proposition and confidence of the customers, these segments are capable of churning out their own break out moments.
The joint report by Internet and Mobile Association of India, and Deloitte also specifically that although technology has been a key enabler for the sector, but the level of adoption has unfortunately not been proportionate.
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