2019, The Year for Fintech

Ever since the world has become one enormous marketplace, we have witnessed a constant change in how business takes place. It has been further fueled by new technologies and rapidly growing customer expectations. Even the highly regulated banking and finance sector in recent times has witnessed a constant transformation of its business models to stay ahead in these disruptive times.

Currently India’s mobile is growing significantly. Every year, 100 Million smartphone users are flowing in the market. This also means that mobile platform sector is on a fast-growing pace. According to Credit Suisse, India payment market is now $ 200 billion and will become $ 1 trillion in 2023. Google, Amazon other major players are jumping in the market and preforming various business in mobile payment and finance platform.

However, a large portion of the population still doesn’t have access to basic banking services, let alone credit facilities. Over the past few years, efforts to drive financial inclusion in India have delivered mixed results. Access to bank accounts has increased dramatically, driven by a strong policy and regulatory push. But the usage of these accounts, and the uptake of formal financial services beyond savings accounts, has remained exceptionally difficult.

Financial infrastructure is not well established in India. People do not deposit their money in the bank because it is a low-credit society. Online payment is also the same. We knew the problem and planned accordingly to provide benefits through financial technology to unbanked users. We started as utility service and not financial service which helped us accumulate users who don’t have bank accounts which made it easier for us to understand our customer needs and deliver accordingly. Currently True Balance has 70 million downloads and aims to bring financial freedom to primarily unbanked users by giving them a safe, fast and convenient transacting experience while also bringing them under the umbrella of financial inclusion right on their doorstep.

When it comes to the financial service ecosystem, Fintech industry plays a crucial role in determining how the industry moves forward. Today Fintech disruptors are constantly changing how everything works. Digital lending, online payments, insurance have got a new meaning. Transactions have become easier and smoother with the rise of the fintech applications. Visualizing the scenario, banks and traditional financial institutions are either partnering with the fintech companies or developing their own solutions.

Fintech industry now plays a significant role in the financial services value chain and few trends that will boost the fintech industry is -

Data & Analytics: Data is crucial to the fintech ecosystem. Understanding that the unbanked population do not have CIBIL data, it becomes imperative for a company to build a strong data analytics function. Firms should introduce the process of unique credit scoring systems or alternate scoring systems to build a data bank of the unbanked population to analyze data on user consumption, the kind of apps they use, calling and SMS pattern etc.

Beyond Metros: To truly make India a digital nation it is important to get the unbanked population come online. While there are firms catering to the urban metros, it is the tier 2 and tier 3 markets that hold the real potential. Brands should modify their business models to move into financial services for that section of economy who need money for living as small loans to fulfill their basic needs. Services are meant to empower Indians beyond just the metros and create greater financial inclusion. Brands should focus on providing financial services, products and items suiting their needs like- Recharge pack, Insurance, Small loans etc. which makes it easier for the users to make their daily transactions.

Intelligent Services: Studying customer patterns and behavior, brands can personalize the interface to suit a user’s specific usage preference. This will help the fintech players to deliver the next level of personalization for users performing banking activities. Service like UPI has become increasingly important for seamless transactions. Also, a service like Pay Later offers customers the ease of availing services without the pressure of instant payment which is also beneficial for a customer as well as a brand.

Item Scalability – Item Scalability determines business success. The fintech industry is at a nascent stage in India with a lot of possibilities. One must see in advance what business position they are in and where to expand. Every firm should have multiple opportunities to expand their services into various fields which will eventually determine their growth.

Fintech service firms in India are currently redefining the way companies and consumers communicate on daily basis. India will become the next destination for fintech companies. Early movers and adopters will foresee and witness major gains soon, and users are becoming clearer on their preference for tech-based banking.

Cheolwon Charlie LEE
CEO, True Balance