Foreign groups are looking to acquire Indian fintech sector

Indian Fintech brings “technologically enabled financial innovation that could result in new business models, applications, processes or products with an associated material effect on financial markets and institutions and the provision of newer financial services. With more than 2,000 fintech companies in India investments in fintech start-ups have risen dramatically in recent years. We have witnessed the quantum of investment, attracting a record $24.2bn of investment this year already.

Ease of capital helped fintechs to drive innovation as well as their business model. India has historically been a cash-based society, consumers are increasingly adopting digital wallets, creating an opening for the company. The Boston Consulting Group in its recent report stated that there will be a $ 100 billion value creation opportunity and that India is strongly poised to realise a fintech sector valuation of $150-160 billion by 2025.

The Key Drivers for fintech start-ups in India includes:

# Availability of capital and vibrant investment ecosystem.

# Favourable demographic in India ( more than 65% below the age of 35 years) having appetite for innovative technology

# Low penetration of financial services for a majority of population (unbanked, rural regions, as well as small and medium-sized enterprises( SMEs)

# Government initiatives and regulatory forbearance to fintech

# Increased mobile and internet access

# Large percent of the population are millennials and they want a new kind of banking product

# Reduced infrastructure and transaction cost through usage of cloud-based services and IndiaStack and finally advancement in technology.

India has the world’s second-largest unbanked population, following China. A survey says 87% of Indians regularly use a fintech product, the highest rate in the world, which is about 64%. By 2025, India’s active internet population is set to hit 900m with the world’s largest millennial market. It is helping to channel the highest fintech adoption in the world. We are simply witnessing the announcements by the Indian conglomerates (TATA, RELIANCE and ADANI) groups have stepped up efforts to launch their own super apps and gain an early advantage.

We have also seen Paytm raising Rs 16,600 crore through IPO, Reliance has just bought JD, Tata group is on an acquisition spree, Bajaj has stepped up its wallet business. What we can see there is a clear race for India's super app on the lines of Chinese giants WeChat and Alipay is set to get hotter. The space for Super apps to come in India looks vibrant as we don’t have a super app that is in the league of WeChat yet.

However, we have Paytm, bridging the gap by offering the users to make digital transactions, shop, buy flight and entertainment tickets, insurance and several other similar services. Going forward, we will hear the announcements from other players also to come with the Super app including Amazon, Flipkart, Bajaj, SBI and WhatsApp to join the competition.