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Whether payments, lending, stockbroking, insurance or neobanks, you name it, and the Indian FinTech ecosystem has it. India is among the fastest-growing FinTech markets in the world, and today more than 2,100 FinTech startups exist in India with heavy investments from the international markets. India is hailed as the third largest FinTech economy in the world and is expected to drive $150 billion by FY 2025 Various factors act as key enablers in making India one of the hotspots for FinTech expansion. India has favourable demography of people below the age of 35 having an appetite for innovative technology in the financial sector. There is a huge availability of capital, government initiatives and regulatory forbearance for the FinTech sector. India has also seen tremendous growth in terms of internet access and mobile access due to advancements in technology. Over the years, new trends have taken shape in the FinTech sector and new terminologies have been added to our day-to-day vocabulary like Universal Payments Interface, Bitcoins, Buy Now Pay Later (BNPL) model, Digital Banking, NeoBanking,Open Banking, and so much more. New-age FinTech companies have started transforming the face of India into a more digitised country through deeper penetration. It is evident that now tier 2 and tier 3 cities are also becoming attracted to the FinTech revolution, driving the future of financial services in India.
In addition to this, the Government of India's actions, such as demonetisation and implementation of GST, has created a substantial growth opportunity for FinTech startups in the country. The announcement of demonetisation proved to be a key driver for a shift away from a paper-based and cash-based economy toward a digital, electronic, technology-driven platform. Digitisation in the finance sector has become a way of life as India has an abundance of over 2,000 FinTech startups, becoming a catalyst for change in every way fueling the spirit of innovation and self-reliance.
FinTech Innovation Categories
India has emerged as one of the robust FinTech economies in the world with landmark innovations like paperless lending, mobile banking, secure payment gateways, mobile wallets and other concepts that are already shaping a new and digitised India. Here are the main game-changer innovation categories in FinTech that have seen substantial growth over the past few years.
Financial Inclusion
Financial inclusion startups help in building revolutionary, innovative products around FinTech that are affordable, accessible and convenient for underserved customers. The Indian FinTech startups’ efforts in this direction have manifested in many ways, like innovative solutions around low-cost technology, strategic partnerships between incumbents and FinTechs, the launch of digital-only banks and much more.
Financial Literacy
From financial education to smarter sales, startups in the financial literacy sector aim to educate users to learn finance by doing. Understanding accounting terminologies, preparing financial statements, cash flow statement preparation and analysis, and ratio comparison are some of the topics where the FinTech startups are proving to be revolutionary.
Insurance
The rise of FinTech startups in the insurance category is working towards changing consumer behaviour and introducing advanced technologies to disrupt the insurance industry. InsureTech startups have become a major attraction for investors and have received an unprecedented amount of funding leading the wave.
Startup India’s flagship event, National Startup Awards, has recognised some of the key enablers of growth in the FinTech sector and rewarded them with various benefits to become role models for upcoming FinTech startups. The winners of the National Startup Awards 2021 in the FinTech sector are as follows:
Naffa Innovations Private Limited
Naffa Innovations Private Limited has curated a product called ToneTag, which is currently the largest soundwave communication technology platform that enables payments and proximity customer engagement services on any device, irrespective of the infrastructure or instrument. ToneTag uses the power of sound to enable seamless human-to-device communication and device-to-device communication. With ToneTag, anyone can communicate with any device with minimal or no human interaction through any device. With 132 claims and 13 patents, Naffa Innovations Private Limited is empowering various businesses across the globe and helping them enhance their communication channels. ToneTag has also received the FinTech awards for Promotion of Digital Payments 2018-19 by MeitY and RBI for enabling payments of feature phones. The company has over 10 million unique interactions per month with over 52 million+ unique users on average.
Umbo Idtech Private Limited
Umbo Idtech Private Limited is an InsureTech company that has developed its product called Riskcovry, which enables omnichannel insurance distribution for its partners. The product helps them to build and scale their insurance distribution business across channels, use cases and products. The company offers comprehensive insurance in a box solution that suits a distribution partner’s customer base. The insurance in a box solution contains insurance around life insurance, general insurance and health insurance for different demographies across channels. Riskcovry helps with price discovery, product recommendations and enabling end-to-end omnichannel digital purchase history. Umbo Idtech Private Limited is already a partner with Mumbai FinTech Hub, which is an initiative by the Government of Maharashtra.
The Roadmap Ahead
With new-age FinTech companies and startups like yours, the Indian FinTech industry has garnered the spotlight from various international markets. The growing awareness of modern financial technology has provided the Indian FinTech sector with a much-needed boost. Startup India continues to boost the growth of the FinTech sector in India through various central and state policies. Our flagship initiative of the National Startups Awards bridges the traditional financial sector and the current FinTech sector with modern technologies. If you are a startup working in the FinTech industry, explore the various offerings that Startup India has in its repository for your startup.
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Reference Links:
https://www.investindia.gov.in/sector/bfsi-fintech-financial-services
