Newer opportunities of investment into fintech companies

India is amongst the fastest growing Fintech markets in the world. The Indian Fintech ecosystem sees a wide range of subsegments including Payments, Lending, Wealth Technology (WealthTech), Personal Finance Management, Insurance Technology (InsurTech), Regulation Technology (RegTech) etc. India remains one of the largest markets where the structural enablers to set up and incubate fintech have come together strongly and at an apt time. Combination of steady economic growth with low penetration of financial services and availability of supporting infrastructure 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 FinTech market has continued to help expand access to financial services during the pandemic, especially, the emerging market has seen strong growth in all types of digital financial services. The digital payments landscape has also grown rapidly over the last decade. India has globally positioned itself as a benchmark in digital payments owing to its resilient payment infrastructure, market practices and proliferation of digital payments across various segments which include both retail and merchants.

Fintech has helped reduce the cost of providing services, making it reachable to more people while reducing the need for face-to-face interactions, which is highly essential for keeping the economic activity during the pandemic going. As the pandemic situation is getting better, many fintechs are under stress on a number of fronts. But, as the broader economy shifts from “respond” to “recover”, new opportunities may be created for some fintechs. A key question is how fintechs may leverage their unique assets and skills to seize new opportunities in the future.

It could be an opportune time to think big and act boldly. Fintech has transformed the customer buying experience, money transfer, banking experience, and much more. Businesses around the globe are adopting fintech technologies to retain existing customers and attract new ones. Their benefit lies in the technological advancement of their financial transactions and the customer experience their clients are left with.

Going forward, the fear once invoked by terms like artificial intelligence, cloud computing, or data sharing, has been relegated to the past, and the role of technology in the future of financial services is now accepted as being intrinsic to its success.

Dr. Deepak Kumar Sahu, President & CEO, VARINDIA