How and why Fintech is gaining popularity
As a fin-tech leader, Gaurav Anand is constantly looking to create solutions with outsized returns. At Namaste Credit, which he founded and led, Namaste Credit is digitally transforming the SME lending ecosystem in India. With a full stack platform built on new-age tech that democratizes SME lending & brings transparency for all stakeholders. Strong academic credentials including best in class Masters in Business Administration (MBA) degree, Chartered Financial Analyst (CFA) and Financial Risk Manager (FRM) certification with a distinction.
In the age of technological advancements and disruptions, the Fintech industry has indeed been a saviour when people were struggling, especially amid the pandemic. The traditional model of lending has the inherent nature of excluding the larger set of borrowers (including businesses) who may be in dire need of funds but do not become eligible due to inadequate credit history. For a country like ours where proceeding and processes are never-ending, Fintech has definitely made lives easier. The growth of Fintech in the country has ridden on the back of behaviour change in payments. According to studies around 65%of all adults and 78% of those aged between 18 to 34 years use online payment services today. As a result, India has become the third-largest Fintech ecosystem across the globe.
Pandemic in the last two years has unquestionably accelerated the growth of Fintech, post an initial dip and we are now seeing even greater adoption of digital transfers, payments, insurance and other services. The online transactions with the help of UPIs and online transfer have developed immediate payment solutions. The need of immediate money transfer and payment options has become seamless because of digitalization.According to the industry studies and statistics,
● A considerable chunk of incumbent financial institutions (88%) believes that part of their business will be lost to standalone Fintech companies in the next five years
● Investors are choosing Fintec has a new options for increasing profits
● Digital banking services are taking over: 46% of people exclusively use digital channels for their financial needs
● 77% of traditional financial institutions plan to increase their focus on innovations to boost customer retention
● The total transaction value of digital payments grew from $4.1 trillion in 2019 to $5.2 trillion in 2020
The key factors driving the Fintech sector are:
1.User friendly
Fintech provides firms and businesses with everything at the click of their finger. Loans, online transfers, financial advice, financial solutions and a lot more is provided to business owners. They can focus easily on business goals rather than being occupied in lengthy traditional bank and financial procedures. Cohesive domain and consistent web design makes the user experience delightful. Today borrowers, wants to have a fast and convenient on boarding process. The comfort of handling the process from your home without actually visiting the lender’s premise has made it popular.
2.Security
“Increasing security features around consumer data and transactions is leading to rise in user trust. OTP, double authentication add to layers of security. These methods increase that data security that is stored on a cloud platform. Legal regulations ensure penalties in case of any mishap leads to higher security protocols.
3.Deep service levels
Fintech firms, gathering insights from user data, is continuously evolving the scope of services/offerings being made to users. The data analysis of user’s purchase and surfing habits on social media is really helpful for the business owners. The new technology is helping them to understand consumer behaviour, competition and demand supply ratio. The information is important to stay relevant in the fast changing market.
4.Inclusive
Fintech is bringing into its gamut an entirely new set of users, uncared for by the traditional banking system. Poor, women and middle class were not active on the length banking system. Fintech technology has made it easier for them to stay connected with their financial accounts with just one click and from the comfort of their home. A new section of user base has created with the help of this technology.
5.Burgeoning talent in the field
The exciting new generation with the love for technology is brainstorming new ideas for the Fintech world. The asset-light business model is created to follow in the system. The model helps to conduct a gain value operation with lesser resources. This helps in the reduction of capital investment and increase innovation and development.
6.Creativeness
While banks and insurance businesses tend to adopt the same methods and approaches, Fintech start-ups never stop experimenting with these processes. They come up with unconventional solutions to modern problems making the fin-technology popular. These start-ups are not only creative and innovative about using and experimenting with technology but also engage in new business models which can be huge for the industry.
7.Simplicity
In case of handling funds and using financial services, people resist from going the hard way. Easy and simple solutions in financial apps attract customers and keep them content with the services. Fintech companies being customer- centric use such optimal and easy-to understand methods to address customer issues.
Financial technology market is the fastest growing markets in the world and is meant to disrupt the market with its constant new advancements. With the same pace of developments and powerful analytical capabilities Fintech is definitely going to be the backbone of the banking sector. Experts reckon that the number of financial service users worldwide grows annually by 15-20% and the number is expected to increase with years to come.Fintech in India has become a sizeable industry only in last 3 to 4 years and has a long road ahead of it to transform the entire space.
In the age of technological advancements and disruptions, the Fintech industry has indeed been a saviour when people were struggling, especially amid the pandemic. The traditional model of lending has the inherent nature of excluding the larger set of borrowers (including businesses) who may be in dire need of funds but do not become eligible due to inadequate credit history. For a country like ours where proceeding and processes are never-ending, Fintech has definitely made lives easier. The growth of Fintech in the country has ridden on the back of behaviour change in payments. According to studies around 65%of all adults and 78% of those aged between 18 to 34 years use online payment services today. As a result, India has become the third-largest Fintech ecosystem across the globe.
Pandemic in the last two years has unquestionably accelerated the growth of Fintech, post an initial dip and we are now seeing even greater adoption of digital transfers, payments, insurance and other services. The online transactions with the help of UPIs and online transfer have developed immediate payment solutions. The need of immediate money transfer and payment options has become seamless because of digitalization.According to the industry studies and statistics,
● A considerable chunk of incumbent financial institutions (88%) believes that part of their business will be lost to standalone Fintech companies in the next five years
● Investors are choosing Fintec has a new options for increasing profits
● Digital banking services are taking over: 46% of people exclusively use digital channels for their financial needs
● 77% of traditional financial institutions plan to increase their focus on innovations to boost customer retention
● The total transaction value of digital payments grew from $4.1 trillion in 2019 to $5.2 trillion in 2020
The key factors driving the Fintech sector are:
1.User friendly
Fintech provides firms and businesses with everything at the click of their finger. Loans, online transfers, financial advice, financial solutions and a lot more is provided to business owners. They can focus easily on business goals rather than being occupied in lengthy traditional bank and financial procedures. Cohesive domain and consistent web design makes the user experience delightful. Today borrowers, wants to have a fast and convenient on boarding process. The comfort of handling the process from your home without actually visiting the lender’s premise has made it popular.
2.Security
“Increasing security features around consumer data and transactions is leading to rise in user trust. OTP, double authentication add to layers of security. These methods increase that data security that is stored on a cloud platform. Legal regulations ensure penalties in case of any mishap leads to higher security protocols.
3.Deep service levels
Fintech firms, gathering insights from user data, is continuously evolving the scope of services/offerings being made to users. The data analysis of user’s purchase and surfing habits on social media is really helpful for the business owners. The new technology is helping them to understand consumer behaviour, competition and demand supply ratio. The information is important to stay relevant in the fast changing market.
4.Inclusive
Fintech is bringing into its gamut an entirely new set of users, uncared for by the traditional banking system. Poor, women and middle class were not active on the length banking system. Fintech technology has made it easier for them to stay connected with their financial accounts with just one click and from the comfort of their home. A new section of user base has created with the help of this technology.
5.Burgeoning talent in the field
The exciting new generation with the love for technology is brainstorming new ideas for the Fintech world. The asset-light business model is created to follow in the system. The model helps to conduct a gain value operation with lesser resources. This helps in the reduction of capital investment and increase innovation and development.
6.Creativeness
While banks and insurance businesses tend to adopt the same methods and approaches, Fintech start-ups never stop experimenting with these processes. They come up with unconventional solutions to modern problems making the fin-technology popular. These start-ups are not only creative and innovative about using and experimenting with technology but also engage in new business models which can be huge for the industry.
7.Simplicity
In case of handling funds and using financial services, people resist from going the hard way. Easy and simple solutions in financial apps attract customers and keep them content with the services. Fintech companies being customer- centric use such optimal and easy-to understand methods to address customer issues.
Financial technology market is the fastest growing markets in the world and is meant to disrupt the market with its constant new advancements. With the same pace of developments and powerful analytical capabilities Fintech is definitely going to be the backbone of the banking sector. Experts reckon that the number of financial service users worldwide grows annually by 15-20% and the number is expected to increase with years to come.Fintech in India has become a sizeable industry only in last 3 to 4 years and has a long road ahead of it to transform the entire space.
