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Read About the Types & State of Fintech Companies in India

Akash Dubey

| Updated: Nov 03, 2019 | Category: CFO Service, Finance & Accounting

Fintech-companies-in-India

Fintech companies in India are making rounds of news from the last few years. The curiosity surrounded by the word is increasing at a rapid pace, and so is its influence in the finance industry. The concept of Fintech practices delivering financial services using technology with the aim to improve and automate the process. Fintech includes every activity that delivers financial services through technology platforms. Fintech aims to compete with traditional processes of banking and financial operations with a focus on improving efficiency on multiple fronts and a reduction in operational costs. It helps to improve the utilization and delivery of financial services.

The arrival of Fintech has been celebrated in the financial world. It is helping financial institutions, business owners, companies, and consumers to manage their financial activities more efficiently. Fintech technology blends financial processes with specialized software and algorithms. These platforms can be accessed on a computer, smartphone, and other smart devices. Fintech has helped emerging business entities to disrupt the financial industry because of their adaptability to prevailing situations and agility to be flexible while serving the last mile needs of the consumer. There are certain sectors that are having exponential growth than the rest. Let us read about the types of fintech companies in India.

Types of Fintech Companies in India

Types of Fintech Companies in India.

Digital /Mobile Payments

These payment options provide access to make digital payments and trade with banks, commercial companies, central banks, hedge funds, forex brokers, investment management funds, and investors[1]. According to reports, the global payments market is estimated to be 1 trillion US dollars.

Insurance

Fintech has disrupted the majority of services in the financial industry, and insurance is no exception. The so-called “Insurtech” industry is attracting a hefty investment from venture capitalists all around the world.

Crowdfunding

Crowdfunding platforms allow entities to raise money from internet or app-based users for their business operations.  Fintech service allows the individual business owner or established entities to pool funds from different resources from one platform.

Digital lending /P2P Lending

The digital lending sector is considered as the most progressive arm of the Fintech revolution. The consumers can now get loans and advances using their smartphones. The lengthy procedure has been reduced to a matter of a few clicks. The consumers can get easy loans for whatever amount they desire, ranging from ticket loans of meaner amounts to capital loans of higher amounts. The global market for P2P lending is expected to grow at a CAGR of 60 percent to USD 1 trillion by 2025 from USD 9 billion in 2014.

Stock trading apps

Stock trading apps are platforms that enable the user to buy or sell stocks at the tap of their fingertips. Thus, reducing the complexity and time taking procedure of buying or selling stocks into a process of few taps of their finger.

Robo Advisors

The Robo Advisor segment of Fintech is a confluence of AI and Financial concepts. It is a wealth management program that uses AI to function. It advises consumers to manage their wealth in the most profitable manner. This segment is estimated to manage assets worth 5 Trillion US dollars by 2025.

Budgeting Apps

Budgeting apps help the consumer to keep a record of their financials. The coming of age apps is strengthening by the technological ability not only to keep track of resources but also get valuable alerts and advises on their spending patterns.

The Beginning of Fintech Industry in India

Fintech initially, was attributed to the computer technology used to perform back end processes of established banks and financial institutions. However, gradual changes in technology and the rapid rate of innovation in Fintech changed the landscape for this concept. Interestingly the technology has now grown into multiple arrays of financial services and triumphing in both commercial and personal finance domains. Fintech is now predominantly taken into usage in different sectors, such as retail banking, fundraising, investment management, insurance, etc.  A plethora of application snow available for the users offering a range of utilities by harnessing the power of Fintech. Commonly used applications perform a function such as funds management, stock trading, selling and buying of financial instruments, etc.

The State of Fintech Companies in India

Fintech not only helps to deliver financial service with geographical restrictions but also helps in the formulation of customer-centric policy based on data-driven insights collected from Fintech platforms. This data helps Fintech entities to optimize their service operations, policy development, and offer greater utility to consumers. The success of Fintech can be proved by the fact that at present, there are over 39 unicorns with valuation over 147 billion US dollars worldwide. The rapidly growingly Fintech fraternity now stands at 120000+ strong startups network.

India has emerged as the fastest-growing major economy in the world and an attractive investment hub. The achievement has emerged as a result of constructive economic reforms and a growing customer base. The highly prospering financial sectors bloom a positive scenario for upcoming Fintech players in India. The growth projection is based on progressive infrastructural reforms and proactive government policies.

Investment in Fintech Companies in India

Domestic and foreign investment is on growth in Indian financial markets along with other sectors. The economy received an equity inflow of 436.35 billion US dollars through Foreign Direct Investments for the period of April 2000 to June 2019. Apart from that, the Foreign Portfolio Investment has stood 184 billion US dollars for the period of April 2002 to March 2019. Talking of Fintech, the digital payment segment is currently clocking a turnover of 64 billion US dollars. The segment is projected to reach a turnover of 135.2 billion US dollars by 2023.

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Akash Dubey

Akash Dubey is a Law Graduate and works as an Advisor at Enterslice. He is proficient in Legal and Financial Advisory. His expertise in the skills of Legal and Financial Research is an aid to his strengths as an Advisor.

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