FinTech has proved to be one of key tenants in helping India truly emerge as a global superpower.
The growth of FinTech in India appeared too ambitious at one point. However, in only a span of a few years, Indians today are actively accessing digital payment services, in addition to securing loans online, investing in digital assets and a lot more. And while there is a long trail of digitally-enabled solutions for Indians to choose from, other FinTech players are making them financially more aware and literate, helping them make the right call.
Of course, the shift was only made possible owing to a range of policy and infrastructural overhauls, along with the writ and determination of private players and FinTech start-ups. In fact, the FinTech players have continued to leverage the sweeping wave of digitization, internet access and easy smartphone affordability, in on-boarding Indians on digital platforms. Owing to these radical changes, FinTech today stands poised to be a game-changer in the disparate and diverse socio-economic mix that India is.
Champions of the Unbanked
FinTech players are presently able to cover a wide gamut of population demographics, which were previously underserved or totally un-served by the traditional players. These new entrants are utilizing the boom in data, following Aadhaar authentications, GST, social media, India Stack and more and making processes flexible, in order to reach out to the disparate and diverse sections. Furthermore, the access of these services is no longer limited to the fancy, high-end smartphone using generation. FinTech players are creating solutions that not only work on high-speed internet, but also basic phones with poor connections. The same ensures participation of a large number of people in India’s burgeoning BFSI sector.
The prime beneficiaries of the same happen to be the burgeoning MSME segment in India, along with a number of first-time users that lack any financial history. At this point, it is also important to consider the fact that there are over 55 million MSMEs, spread across the hinterlands of India. With the growth of FinTech, the MSMEs are now able to not only access business credit, but also access business mentorship and knowledge, paramount for the longevity of these businesses.
The same has the potential for creating ripples across the country, especially when we take into account that the MSMEs are amongst the largest employment generators in the society today, second only to the agriculture sector. By ensuring the sector’s access to liquidity and business mentoring, FinTech startups are contributing towards the overall growth and development of the rural India, whilst providing a sounder, more pragmatic alternative to the problem of rampant urbanization.
Making India Financially Literate & Aware
Availability of resources wouldn’t hold much merit, if people don’t know how to use the same. While in India, we have seen the rise of different Fintech products and solutions, financial literacy continues to remain a challenge. Standard & Poor’s survey confirms the same, claiming that 76% of Indian adults are not aware of even the basic concepts of finance.
Thus, in addition to lending or digital payments, Fin-Tech start-ups today are also filling a significant gap in financial literacy. While getting a loan with a bad credit score is subject to a lot of tribulations, a wing of FinTech start-ups help credit seekers improve their credit scores and access the most plausible solutions. This comes as a welcomed relief, since users today tend to suffer at hands of information overload. The help doesn’t just end there as Fintech players offer further support to borrowers in sticking to the re-payments or re-engaging with the banks after a bump in the ride. The process is done via chatbots, ensuring minimal intrusion and a empathetic customer experience.
By extension, these solutions allow banks to better profile and reach out to a focused group of credit seekers, keep a tab on delinquency and reduce the burgeoning problem of NPAs.
A customer experience that is easy, across horizons
Earlier, people had no other means but to reach, sometimes on foot, to the post office and send a money order. Today, the entire process takes place over just a click or a touch. In fact, by automating a number of customer touch-points, the FinTech players have not only expedited processes, but also minimized any chances of corruption or other evils to prevail in the transactions. People today have a plethora of options to choose from and decide what works for them the best. Furthermore, the players are also focusing on spreading digital literacy, in order to reach out to more of their target audience. The same is helping India not only access streamlined information regarding financial services, but also improve their financial literacy and thus, make informed choices.
In essence, FinTech has proved to be one of key tenants in helping India truly emerge as a global superpower. Hither to, a lack of access to financial services has been one of the key deterrents in realizing the same. While the formal banking and financial sector might be over 200 years old, it was still not diverse and accepting enough to cover certain marginalized sectors under the purview of financial services. The same lag is being filled, owing to the growth of FinTech start-ups in the country.
—by Anshuman Panwar, Co-Founder, Creditas