The fintech industry in India has grown exponentially in the last few years. With new start-ups propping up in the space every day, and funds flowing in, it is not a surprise that technology, erstwhile unheard of, is emerging from within. From the government’s initiative to digitize the country to global corporations placing and expanding their bets on tech companies in India, the outlook looks bright for the fintech industry.
Here’s what some fintech start-up founders and company leaders have to say about the trends that they noticed in 2019 and what they expect from the upcoming year.
UPI and Credit Demand
The Indian government’s flagship payments platform – the Unified Payments Interface (UPI) – has seen wide adoption since being introduced to the public three years ago.
“UPI has completely transformed payments in the country – ease of use, interoperability and instant settlements,” said Mayank Kachhwaha, co-founder at IndiaLends.
Founded in 2015, IndiaLends is a credit underwriting and risk analytics platform that focuses on the underserved strata like the urban lower-middle class, self-employed individuals and those from non-tier I cities.
However, despite digitization and the massive success of a platform like the UPI, one thing still holds true for the credit landscape in India, according to Kachhwaha. “India needs a lot more credit, now more than ever.”
India’s fintech space has also recently seen the advent of neobanks – financial service providers who are completely digital and have no branches.
“The year witnessed the maturing of business models of neo-banks across a wide range of business operating areas,” said Vinay Bagri, co-founder at NiYO.
Bengaluru-based start-up NiYO works with banks and employers to offer salaried employees benefits such as healthcare or food allowances through its platform.
Bagri is confident that 2020 will bring cheer for the fintech industry and neobanks. “Traditional banks will continue to embrace technology and digital disruption like never before, and their partnership with neo-banks will grow stronger and deeper,” he said.
Adoption By Institutions
One would continue to see the gap growing between financial institutions that adopt or develop artificial intelligence and machine learning related capabilities and those who don’t, according to Jonathan Bill, co-founder of CreditMate.
“Just as we will see (a gap emerging between) those that have truly embraced technology at the heart of their business or are only claiming to have done so,” said Bill.
CreditMate is a Mumbai-based debt collection start-up backed by fintech unicorn Paytm.
“With technology streamlining processes such as application management, underwriting, and eKYC, digital lenders can disburse the loans in as little as 24 hours post the initial application,” said Alok Mittal, chief executive officer at digital lending platform Indifi Technologies.
Mittal said he sees post-approval documentation and use of the Goods and Service Tax Network for extending better credit facilities to Indian businesses as two big opportunities for next year.
Digitization of SMEs
The government recently approved the introduction of e-invoicing for business to business transactions.
“It (the mandate) will mark the next phase of growth for software products that will pave the way for the digitization of Indian SMEs,” said Vinod Subramanian, chief executive officer at Logo Infosoft, which provides GST solutions to Indian organizations.
Subramanian added that 2020 will be exciting for software as service providers “as more and more Indian SMEs adopt and start using technology for their business processes.”
2019 has seen the growing accessibility to newer technologies such as smart speakers, which has helped people access information with simple voice commands, said Kumar Abhishek, co-founder at ToneTag.
ToneTag uses sound waves to enable offline, proximity-based contactless payments on any device.
“Voice-based commerce will be a dominating trend in 2020,” Abhishek said.
The likes of Amazon and Google have been pushing agg