Summer Internship Project Report

Summer Internship Project Report
On
FINTECH - STATUS, IMPACT, CHALLENGES, AND
FUTURE IN INDIA
Submitted to
Institute Code: 705
C.K. SHAH VIJAPURWALA INSTITUTE OF
MANAGEMENT
Under the Guidance of

Mr. Gaurang Badheka
(Assistant Professor)
In partial fulfilment of the Requirement of the award of the

degree of
Master of Business Administration (MBA)
Offered By
Gujarat Technological University
Ahmedabad
Prepared by:
Vrutika Shah
207050592001
MBA (Semester – III)
October 2021
STUDENT’S DECLARATION
I hereby declare that the Summer Internship Project Report titled “FINTECH -
Status, Impact, Challenges, and Future in India ” is a result of my own

work and my indebtedness to other work publications, references, if any, have been
duly acknowledged. If I am found guilty of copying from any other report or
published information and showing as my original work or extending plagiarism limit,
I understand that I shall be liable and punishable by the university, which may include
‘Fail’ in the examination or any other punishment that university may decide.
Enrolment No: Name Signature

207050592001 Vrutika Shah
Place: Vadodara Date:

CERTIFICATE OF EXAMINER
This is to certify that project work embodied in this report entitled “FINTECH -
Status, Impact, Challenges, and Future in India” was carried out by
Vrutika Shah (207050592001) of C.K. Shah Vijapurwala Institute of
Management (705).
The report is approved / not approved.
Comments of External Examiner:
This report is for the partial fulfilment of the requirement of the award of the degree
of Master of Business Administration offered by Gujarat Technological University.
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This is to certify that this Summer Internship Project Report Titled “FINTECH -
Status, Impact, Challenges, and Future in India” is the bonafide work of Vrutika
Shah (207050592001), who has carried out her project under my supervision. I also
certify further, that to the best of my knowledge the work reported herein does not
form part of any other project report or dissertation on the basis of which a degree or
award was conferred on an earlier occasion on this or any other candidate. I have also
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PREFACE
As a management student, training plays an important role during his/her study.
Training provides a corporate or real-world platform to learn practically. An MBA
degree without any training or corporate world experience is just like life without
oxygen.
This training provides us an opportunity to know the current market. To know the
current market situations, prevailing competitions, behavioural environment of
different people, etc. It provides us a platform whereby we can apply our theoretical
knowledge and we can solve many practical problems. And hence it can help us to be
a successful manager in the future.
The Finance world, whilst having mounted itself as a steady enterprise is likewise the
only one that regularly turns into the sufferer of some of the obvious troubles like loss
of transparency, a nevertheless much less real-time ecosystem, and a case of sluggish
digitized adoption.
All the time-honoured bickering, thinking voices while meeting with troubles just like
the 2017’s assault of a Trojan horse virus Ramnit which affected the economic zone
widely, accounting for around 53% of attacks, will become a voice in search of an
entire transformation.
Attacks like this and numerous others, together with the want to bridge the space
among the overall populace and the real-time get right of entry to in their money, has
delivered up a dire want of including technological improvements into the
conventional monetary procedures to enhance its popularity quo and supply higher
offerings to the give up users.
Technological innovation is referred to as FinTech. FinTech or Financial technology

is revamping the Financial in addition to different enterprise verticals via means of
big numbers. The tempo at which FinTech is shifting has ensured that the popularized
phase will make contributions to 25% of the sales that the financial region could
draw.
ACKNOWLEDGEMENT
The research study on “FINTECH - Status, Impact, Challenges, and Future in India”
has been a golden opportunity for me to acquire knowledge on the topic. Many people
have an important part in this research study and the effective completion of the
project report. Therefore, I would like to take this opportunity to thank all those
people who have guided me towards the accomplishment of my research topic.
I am very much thankful to the administration and staff of C.K. Shah Vijapurwala
Institute of Management for providing us the opportunity to undertake this project as
a part of the academic requirement.
I wish to offer my sincerest gratitude and deep appreciation to my guide Mr. Gaurang
Badheka, Assistant Professor, C.K. Shah Vijapurwala Institute of Management,
Vadodara who enabled me in designing the tool for the project and then undertaking
our further study. It was because of his timely advice and expert guidance and
suggestion, that I was able to complete my project.
I am very much thankful to all my friends and family members who have directly and
indirectly supported me in the project.
Regards
Vrutika Shah
EXECUTIVE SUMMARY
Market Overview
 The FinTech market in India has esteemed at INR 1,920.16 Bn in 2019 and is
relied upon to arrive at INR 6,207.41 Bn by 2025, growing at a compound yearly
development rate (CAGR) of 22.70 % during the 2020-2025 conjecture time
frame
 As of March 2020, India and China had the most noteworthy FinTech reception
pace of 87% each, out of the relative multitude of developing business sectors on
the planet, while the worldwide normal reception rate remained at 64%
 The Indian FinTech market has been seeing a remarkable development,

attributable to the public authority's computerized push through demonetization,
Jan Dhan Yojana, Aadhaar and Unified Payment Interface (UPI)
 Further, the social removing command (to diminish the spread of COVID-19) by
the Indian government has prompted the ascent in contactless methods of
exchange; anyway the worth of online exchanges has declined extensively
Drivers
 Growing digital infrastructure
 Change in consumer demographics and increased penetration of the internet
 Upsurge in the target market
Challenges
 Consumers’ distrust on online modes of payment
 Cyber and data security
Market Trends
 The Indian FinTech market has been seeing the expanded use of imaginative
advances like computerized reasoning AI, ML, and Big Data for personalizing
offerings
 Further, there has been an ascent in the quantity of Neo-Banks in the country
 The public authority's emphasis on digitizing little and medium undertakings

(SMEs) is relied upon to establish a favourable development climate for the
Indian FinTech
Table of Contents
CHAPTER 1: INTRODUCTION...............................................................................1
1.1 What is FinTech?.................................................................................................2
1.2 History of FinTech...............................................................................................3
1.3 Global FinTech Market........................................................................................6
1.4 Key Drivers of the FinTech Market.....................................................................8
1.5 How the concept of FinTech Evolved in India?.................................................11
1.6 Evolution of the FinTech Ecosystem in India....................................................12
1.7 FinTech in Past...................................................................................................14
1.8 Indian Financial System.....................................................................................16
1.8.1 Features.......................................................................................................17
1.8.2 Components.................................................................................................18
1.9 The Unbanked Population of India and the World............................................21
1.10 The key catalysts behind the rise of the Indian FinTech Revolution...............22
1.11 How is FinTech different from Traditional Banking?.....................................23
1.12 Difference between FinTech and Digital Banking...........................................24
1.12.1 What is FinTech?......................................................................................24
1.12.2 What is Digital Banking?..........................................................................24
1.12.3 FinTech vs. Digital Banking: Comparison Chart......................................24
1.13 How FinTech was doing in 2020.....................................................................25
CHAPTER 2: STATUS.............................................................................................28
2.1 Indian FinTech Market – Present Scenario........................................................29
2.2 Mumbai FinTech hub.........................................................................................31
2.3 Reasons for FinTech Boom in India..................................................................35
2.4 8 Ways FinTech Is Disrupting Financial Services for the Better.......................36
2.5 FinTech in India: leading the curve....................................................................37

2.6 Growth of FinTech in India: key drivers............................................................38
2.7 Segment-wise Opportunity Analysis of the Indian FinTech Market.................39
2.8 Emerging Segments of FinTech.........................................................................47
2.9 Government Support & RBI Initiatives.............................................................50
2.10 Types of FinTech Companies in India.............................................................53
2.11 What makes FinTech important?.....................................................................55
2.12 Financial inclusion via FinTech.......................................................................58
2.13 Motivators for Adopting FinTech Are.............................................................61
2.14 Barriers for Adopting FinTech Are..................................................................62
2.15 Categorization: What Falls Under FinTech?....................................................62
2.16 FinTech Industry - Factors Behind Growth in India........................................63
2.17 Advantages.......................................................................................................65
2.18 Chinese FinTech Investment in India..............................................................66
2.19 Market Trends..................................................................................................67
2.20 Market Influencers...........................................................................................67
CHAPTER 3: IMPACT.............................................................................................72
3.1 FinTech: Impact on Indian Financial Services Industry....................................73
3.2 FinTech: Impact on Financial Service Providers...............................................74
3.3 COVID Impact on Indian FinTech Market........................................................75
3.4 High Customer Experiences - a Win – Win Scenario........................................76
3.5 Impact of FinTech in Banking...........................................................................77
3.6 Impact of FinTech Companies on overall Indian Economy..............................79
CHAPTER 4: CHALLENGES.................................................................................81
4.1 Challenges of FinTech in India..........................................................................82
4.2 Challenges Impacting the FinTech Sector.........................................................83
4.3 Challenges for Future Development in FinTech................................................84
4.4 Key challenges Indian FinTech Companies and Start-ups Are Facing..............87
4.5 Challenges Banks are facing..............................................................................89
CHAPTER 5: FUTURE.............................................................................................91
5.1 Future of FinTech in India.................................................................................92
5.2 FinTech - A SWOT Analysis.............................................................................92
5.3 FinTech Trends..................................................................................................95
5.4 What about the ethics of FinTech?.....................................................................98
5.5 Regulations versus ethics...................................................................................99
5.6 Some considerations for FinTechs...................................................................101
5.7 Is FinTech more ethical than traditional banking?...........................................102
5.8 Examples of FinTech in India..........................................................................103
5.9 Opportunities in India......................................................................................109
CHAPTER 6: REVIEW OF LITERATURE........................................................113
CHAPTER 7: RESEARCH METHODOLOGY...................................................120
7.1 Research Objectives.........................................................................................121
7.2 Type of Research Design.................................................................................121
7.3 Source of Data..................................................................................................121
7.4 Data Collection.................................................................................................121
CHAPTER 8: FINDINGS AND CONCLUSION..................................................122
8.1 Findings............................................................................................................123
8.2 Conclusion........................................................................................................124
8.3 Scope of future research...................................................................................126
8.4 Observation......................................................................................................128
8.5 Solutions and Recommendations.....................................................................128
BIBLIOGRAPHY................................................................................................130
LIST OF FIGURES
CHAPTER 1: INTRODUCTION
Figure 1: FinTech...........................................................................................................2
Figure 2: Evolution of FinTech......................................................................................3
Figure 3: Evolution of the digitization of the financial services industry......................6
Figure 4: Market size and growth forecast (2018-2025e).............................................7
Figure 5: Global FinTech Market – Overview...............................................................8
Figure 6: Consumer FinTech Adoption.........................................................................9
Figure 7: Consumer FinTech Adoption by age category...............................................9
Figure 8: Reasons for not using FinTech solutions by age category...........................10
Figure 9: India adoption across age brackets and category..........................................11
Figure 10: Regulatory Timeline of Indian FinTech.....................................................13
Figure 11: Proposed FinTech and Innovations based framework for improvising
Digital Financial Inclusion...........................................................................................14
Figure 12: Components of Indian Financial System....................................................18
Figure 13: The Unbanked Population of India and the World.....................................21
CHAPTER 2: STATUS
Figure 14: Market size and growth forecast (2018-2025e)..........................................29
Figure 15: The No. of FinTech start-ups and the FinTech hubs in India.....................31
Figure 16: Major FinTech clusters in India..................................................................31
Figure 17: India versus other FinTech hubs around the world....................................32
Figure 18: Top FinTech Start-ups of India with Total Investments.............................33
Figure 19: Focused Market Adjustment Stage.............................................................33
Figure 20: India Leads EY’s Global FinTech Adoption Index for 2019.....................37
Figure 21: Investment in Indian FinTech (2014-2019)................................................38
Figure 22: Digital transactions.....................................................................................38
Figure 23: Segments of FinTech..................................................................................40
Figure 24: Venture capital funding by FinTech segments...........................................40
Figure 25: Investment across Indian FinTech segments (US$ million).......................41
Figure 26: Top-5 ranking of countries with the highest adoption of FinTech key
segments.......................................................................................................................42
Figure 27: Examples of payments players...................................................................43
Figure 28: Examples of lending players.......................................................................44
Figure 29: Examples of Insurtech players....................................................................45
Figure 30: Examples of WealthTech players...............................................................46
Figure 31: Examples of BankTech players..................................................................47
Figure 32: Examples of AgriTech players...................................................................48
Figure 33: Examples of HealthTech players................................................................49
Figure 34: Examples of PropTech players...................................................................49
Figure 35: Bridging the data gap..................................................................................50
Figure 36: Regulatory Bodies in India.........................................................................50
Figure 37: Regulations.................................................................................................52
Figure 38: Government Initiatives...............................................................................53
Figure 39:Lucrative Sectors.........................................................................................54
Figure 40: Financial inclusion via FinTech.................................................................59
Figure 41: Market Trends.............................................................................................67
Figure 42: Growing Digital Infrastructure...................................................................68
Figure 43: Number of Internet Subscribers..................................................................69
Figure 44: Internet Density..........................................................................................69
Figure 45: Growth in the number of bank accounts under the Pradhan Mantri Jan
Dhan Yojana.................................................................................................................71
CHAPTER 5: FUTURE
Figure 46: FinTech Market Size (INR Bn)..................................................................92
Figure 47: Short Term and Long Term effects of Covid-19 on FinTech.....................94
Figure 48: Paytm logo................................................................................................103
Figure 49: Paytm Valuation (INR Bn).......................................................................104
Figure 50: Policybazaar logo.....................................................................................105
Figure 51: PolicyBazaar Valuation (INR Bn)............................................................106
Figure 52: Bankbazaar logo.......................................................................................106
Figure 53: BankBazaar Valuation (INR Bn)..............................................................107
Figure 54: LendingKart logo......................................................................................108
Figure 55: LendingKart Valuation (INR Bn).............................................................109
Figure 56: Advantages in India..................................................................................110
Figure 57: India in Number........................................................................................112
CHAPTER 1: INTRODUCTION
1
1.1 What is FinTech?
Figure 1: FinTech
(Source: https://www.vapulus.com/)
The scene of banking and the monetary area has gone through a sensational change
since the 2008 Global Financial Crisis (GFC), attributable to monetary innovation
firms, prominently known as 'FinTechs'. Both as innovative disruptors and facilitators,
FinTechs have added to the cutting edge banking and monetary area through different
channels including cost enhancement, better client support, and monetary
incorporation. FinTechs play had a significant impact in unbundling banking into
centre elements of settling installments, performing development change, sharing
danger, and distributing capital. The data and broadcast communications insurgency is
viewed as the fifth 'Innovative Revolution' driving growth, and FinTech is in charge
of this inventive interruption. The extent of tasks of FinTechs has additionally
expanded, moving from crypto resources for installments, protection, stocks, bonds,
share loan, robo-guides, reg-tech, and sup-tech.
In India, FinTechs and Digital players could work as the fourth portion of the Indian
monetary framework, close by huge banks, moderate-sized banks including specialty
banks, little money banks, provincial banks, and helpful banks. This fragment can
possibly generally change the monetary scene where customers will actually want to
look over the more extensive arrangement of choices at serious costs, and monetary
organizations could further develop effectiveness through lower costs. India has
arisen as the quickest developing FinTech market and the third biggest FinTech
environment on the planet. FinTech appears to be possibilities thanks to supporting
2
the evolving Indian economy enjoy the benefits of digital technology and aim to cut
back inequalities between industrialized and developing nations.
According to India’s Telecom regulatory agency (TRAI), in April 2109 there had
been 1.16 billion mobile users. TRAI additionally expresses that the measure of cell
phone clients in India has developed last year huge amounts at a time in India,
finishing inside the world's least expensive portable information. The new entry of
telecom operator, Reliance Jio, has changed the telecom market dynamics completely.
This operator provides telecom services in India which are that the cheapest in the
world (The Economic Times, 2018, September 6)
FinTech can possibly generally change the monetary scene, furnish customers with a
more prominent assortment of monetary items at cutthroat costs, and assist monetary
foundations with becoming effective. The quick and ground breaking changes
welcomed by FinTech should be checked and assessed so controllers and society can
stay aware of the hidden innovative and pioneering transition.
1.2 History of FinTech
Figure 2: Evolution of FinTech

(Source: https://vinodsblog.com/)
FinTech 1.0
FinTech history traces all the way back to the 19th century and even before that. In
1860, a gadget called PENTELEGRAPH was created to confirm marks by banks.
3
Antiquarians acknowledge 1866 as the first substantial FinTech impression. This was
the year the transoceanic links were set up prompting a time of making network
frameworks and linkages all throughout the planet. The setting up of Electronic asset
move through Telegraph and Morse code in 1918 by Fedwire prompted the main
small step in the digitalization of cash. The two WW additionally saw another
arrangement of coders and codebreakers predominantly for military purposes
(however this set up coding and future advanced turn of events). The distribution of
the book "The Economic results of Peace" in 1919 is treated as the main suspect on
the FinTech-driven future.
For the most part, FinTech students of history miss one significant and life-changing
occasion of FinTech 1.0 and that is Diner's Card in 1950. This was the primary
genuine attempt to make your installments credit only and keeping in mind that the
start was unassuming and restricted to eateries installments, it prepared for the future
to create. This was trailed by the presentation of Credit Card by Amex in 1958. With
the presentation of Screen-based stock information by Quotron in 1960, the financial
market took a gigantic step, one significant fruitful execution of early FinTech
thoughts.
FinTech 2.0
FinTech 2.0 is considered regardless of the presentation of ATM machines by
Barclay's in 1967. Simply the prior year in 1966, Telex had substituted Telegraph for
moving data across the world; hence proclaiming a time of associated monetary
exchanges and correspondence.
The major FinTech development came in 1971 with the arrangement of NASDAQ as
the main Electronic financial exchange. It changed the manner in which offering is
done and modernized the IPO interaction essentially. This is viewed as quite possibly
the main FinTech advancement ever. This was trailed by the presentation of SWIFT
in 1973, another progressive assistance standard. The '80s saw the advancement of
electronic exchanges and internet banking frameworks. Trade plus (E-exchange)
presented the E-exchange without precedent for 1982 for its clients. This was trailed
by NBS/WF offering internet banking to their clients by 1983/1985. Today, we can't
envision a world without these two innovation administrations in our day-to-day
existence. 1983 was the year when Mobile telephones were dispatched interestingly as
well. The improvement of intricate figuring frameworks helped in the starting of
fresher and more powerful cycles and items. One significant advancement was the
4
development of E-trade during the mid-'90s which made the dependence on
computerized finance considerably huger. 1998 saw the dispatch of PAYPAL, the
pioneer of credit-only installments in years to come.
The 2000’s bubble burst and the resulting years saw the quick advancement of
innovation in monetary areas, fundamentally being conveyed by the conventional
banks as a helping capacity to their essential channels. The 2008 monetary emergency
drove an essential change in the viewpoint towards the FinTech area and the
requirement for development prompted the genuine blast that was revealed in the
coming years.
FinTech 3.0
The 2008 emergency prompted the accompanying necessities
 Post emergency changes required stricter administrative impulses for
conventional banks and it opened up another market for more modest players.
This was additionally helped by doubt of public in enormous monetary
foundations
 Generally speaking, the focal point of the business was on reducing down
functional expense utilizing innovation
 The approach of new innovations like P2P, Wallets, Bitcoins prompted
convenience for the overall purchaser
These necessities and advancements prompted another period of financial
administrations and FINTECH as far as we might be concerned today. Two
significant occasions were the improvement of Bitcoin in 2009 as the primary digital
money and P2P installment frameworks in 2011. The western world has been
agitating new turns of events and many new unicorns from that point forward. BaaS,
RegTech, Digital Lending, InsurTech, Wallets, and a lot more fragments are seeing
development and advancements consistently.
FinTech 3.5
The year 2014 onwards saw a non-direct ascent of the two most crowded nations in
FinTech; in particular China and India. Without enormous chains of mind-boggling
actual financial frameworks, these two nations saw an extremely speedy development
in the FinTech area. This alongside FinTech advancements in Africa is considered as
the development motor for 2014-2018. This is driven by SaaS advancements like
financial programming by Indian IT organizations, m-Pesa in Africa, Payment banks
in India, Alipay in China to give some examples.
5
FinTech 4.0
FinTech is forming the fate of monetary administrations, and conventional banks and
monetary associations need to adjust rapidly to the changed climate to endure.
Different new companies have disturbed the market and have raised the stakes as far
as mechanical progression, yet in addition plans of action and all the more critically,
client experience. It is assessed that 59% of clients in North America, 61% in Western
Europe and 59% in the Asia-Pacific are utilizing FinTech items. While a few banks
have gained ground in reception of new FinTech administrations, numerous investors
have not yet understood the extent of progress the monetary administrations industry
is going through and think little of the effect FinTech 4.0 is having on clients, who are
definitive disruptors. Monetary associations should foster a FinTech 4.0 system to
guarantee their proceeded with endurance in the midst of firm contest. 80% clients
feel FinTech organizations offer quicker types of assistance than banks.
Figure 3: Evolution of the digitization of the financial services industry

(Source: FinTech-Evolution - Alt and Puschmann 2016, pp. 36)
1.3 Global FinTech Market

 The worldwide FinTech market was esteemed at INR 11,334.92 Bn in 2019
and is relied upon to arrive at INR 32,107.83 Bn by 2025, growing at a CAGR
of 18.12% during the 2020-2025 estimate time frame
 The market's development can be credited to the flourishing worldwide
advanced installments area, computerized business market what's more, the
quickly developing versatile innovation industry
6
 The development of framework based innovation, through application
programming interfaces (APIs) would further drive the worldwide FinTech
industry during the figure time frame
 Blockchain is relied upon to disturb the monetary exchange industry across the
world, inferable from its worldwide reach and low handling charge
 Moreover, functional progressions gave by chatbots, mechanical cycle
mechanization (RPA), and circulated record innovation (DLT) are relied upon
to bring more precision and productivity to FinTech applications
 Asia-Pacific is the quickest developing FinTech market, universally, with
critical venture openings, and developing business sectors like China and India
Financial companies offer mobile-based financial apps to enhance the financial
services offered; it also helps to succeed in more customers and increase awareness
about online services. Solution providers are offering financially secure e-commerce
platforms with increasing demand for e-commerce apps among users.
Figure 4: Market size and growth forecast (2018-2025e)

(Source: FinTech Market in India 2020)
Banks and financial institutes are adopting financial technology like banking apps,
online banking, and web-based and app-based insurance services to extend the
productivity and efficiency of business operations.
7
Solution providers are offering financial services with innovative and new
technologies in social trading, e-commerce, wealth management, payments, and other
financial transactions.
Solution providers are integrating advanced technologies like AI, robotic process
automation, blockchain, and cryptography in financial services to boost the
performance of business operations.
Figure 5: Global FinTech Market – Overview

1.4 Key Drivers of the FinTech Market

 Increasing demand for mobile banking applications and e-commerce platforms
among users for a more user-friendly platform to perform financial
transactions is anticipated to drive the FinTech market.
 Increasing adoption of advanced technologies in business operations by banks
and insurance companies rather than using legacy operating systems is
anticipated to spice up the demand for FinTech among companies.
 Investors are collaborating with wealth management solution companies to
consolidate their position within the market and supply advanced solutions in
financial technologies, this is often expected to supply significant
opportunities to solution providers of FinTech.
8
Figure 6: Consumer FinTech Adoption
(Source: an-introduction-to-FinTech-key-sectors-and-trends.pdf (spglobal.com))
In attempting to decide the contrast between FinTech clients and non-clients, EY

found practically no curveballs. The age classes that were probably going to be drawn
to FinTech arrangements are related to those probably going to utilize computerized
gadgets. These buyers are more youthful (matured 25-44).
Figure 7: Consumer FinTech Adoption by age category

(Source: EY July 2017 - The Financial Brand)
This is likewise the segment classification of heavier monetary item clients, property
holders, and more taught buyers. Lucky for FinTech suppliers, these buyers are
likewise probably going to attempt another supplier. Buyers in more seasoned age
9
bunches are more gotten comfortable with their monetary propensities and more
faithful to their momentum supplier. (More adverse to switch).
Figure 8: Reasons for not using FinTech solutions by age category

(Source: EY July 2017 - The Financial Brand)
The most sensational difference between FinTech clients and non-clients is the
manner in which shoppers like to deal with their lives. As indicated by EY, "64% of
FinTech clients lean toward dealing with their lives through computerized channels,
contrasted with 38% of non-FinTech clients. FinTech clients are likewise bound to be
clients of non-FinTech advanced stages, for example, on-request benefits
(computerized taxis, online food, and so forth) and the sharing economy (bicycle and
lodging rentals)."
10
Figure 9: India adoption across age brackets and category
(Source: https://economictimes.indiatimes.com/)
1.5 How the concept of FinTech Evolved in India?
1991-2000
The Indian Government started to change the Indian Banking Industry with the
presentation of innovatively insightful banks. Different installment innovation was
pushed like MICR, electronic
2000-2005
Reserves move to support the financial area however the greater part of them was
government-driven and needed monetary development. FinTech's started to rule the
US and UK scene, they began infiltrating the Indian financial industry by offering
different buyer-driven administrations. FinoPay Tech and EKO India were the two
significant new businesses that fabricated their model around the financial journalist
model (BC Model) which was utilized to expand infiltration in provincial regions at
cheaper utilizing essential strategies with the assistance of specialists.
11
2005-2010
This period saw the development of major FinTech new companies, for example,
Oxigen, Paytm, Free charge, Mobikwik in the field of portable wallets-charge
installment and versatile re-energize administrations
2010-2014
From 2010, there have been various FinTech new companies that have mushroomed
in various sections like loaning (100+), individual budget the board (40+), and
speculation the executives (90+) new businesses.
2014-2019
Demonetisation presented in November 2016 is considered as the greatest lift to
FinTech in India and the Introduction of India stack (Aadhaar/e-KYC/UPI/e-Sign and
so forth) improved just as disturbed Payment, Lending, Insurance and Wealth
business. While wallets imploded because of UPI, Lending FinTech's/InsurTech
succeeded. Abundance business went through difficulties because of direct plans of
Mutual Funds.
2019-till date
India stack proceeds to emphatically affect FinTech's with fresher administrations.
NeoBanks have arisen as a section of decisions for financial backers. Neo-Entrants
are presenting "FinTech as an assistance line" in their present plans of action by either
creating it naturally or purchasing out FinTech's. Loaning new companies is going
through the development stage. Complex regions like Trade Finance and B2B new
companies are getting support in the new wave.
1.6 Evolution of the FinTech Ecosystem in India

The foundation of Indian FinTech lies in the basis is done over the earlier decade in
creating key empowering influences. The Indian FinTech industry the way things are
today being the consequence of a remarkable mixture of innovative empowering
influences, administrative intercessions furthermore, business openings just as certain
other qualities remarkable to India.
12
As the controller of payment system, the Reserve Bank has attempted various
measures to guarantee expanded effectiveness and continuous accessibility of secure,
open, and reasonable installment frameworks also, to serve sections of the populace
that are until now immaculate by the installment frameworks. To accomplish this,
Reserve Bank's Vision 2021 imagines four goal lines (4 Cs), i.e., Competition, Cost,
Convenience also, Confidence.
Figure 10: Regulatory Timeline of Indian FinTech

(Source: RBI Bulletin November 2020)
NPCI – National Payments Corporation of India
UIDAI – Unique Identification Authority of India
IMPS – Immediate Payment Services
DBT – Direct Benefit Transfer
JAM - Jan Dhan-Aadhaar-Mobile
UPI – United Payment Interface
BBPOUs - Bharat Bill Payment Operating Unit
India is one of only a handful of exceptional purviews with an explicit Payments and
Settlements law to "give for guideline and oversight of installments and settlement
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frameworks in India and to assign the Save Bank as the expert for the reason and the
matters associated therewith or coincidental up until recently". The Reserve Bank
manages some FinTechs straightforwardly by allowing them NBFC licenses (like
NBFC-P2P), or on the other hand in a roundabout way by directing the banks and
NBFCs related to them. National Payments Corporation of India (NPCI) is the
umbrella association for working retail installments and settlement frameworks in
India, as a driver of the Reserve Bank and the Indian Banks' Association (IBA) under
the arrangements of the Payment and Settlement Systems Act, 2007. The mediations
in Payment and Settlement System proposed by the Reserve Bank in its different
Monetary Strategy Statements over the year.
Figure 11: Proposed FinTech and Innovations based framework for improvising
Digital Financial Inclusion.
(Source: Role of FinTech and Innovations for Improvising Digital Financial Inclusion-
IJISRT21MAY1089)
1.7 FinTech in Past

During the last decade of the 18th century, current banking arose in India. The
FinTech area has gone through significant progress throughout the most recent twenty
years, battling from the provincial and post-autonomy periods and from
nationalization and advancement. The Indian economy was battling back in the mid-
14
90s till the new globalization and advancement strategy became effective in 1993,
wherein plenty of worldwide organizations began venturing into the Indian Market.
Indian Banking was all the while chipping away at the advanced age paper-based
record frameworks. This is when innovation a.k.a. monetary innovation initially
began to roll out troublesome improvements with the dispatch of Finacle by Tech
Giant Infosys.
Finacle turned into an enormous achievement and was considered as the foundation of
center financial frameworks of most of the banks in India and abroad. The banks had
the option to diminish the time taken to do different tasks by finished 90%. Each
branch has the openness of the client accounts which assist the clients with getting
administrations from anyplace. In any case, this wasn't the finish to the quandaries
that the purchaser needed to face to make installments for different exercises through
Check's the place where the beneficiary needed to visit the bank to store the genuinely
take a look at he gathered from the payer. Likewise, the client needs to do each
exchange by visiting his own branch.
ICICI Bank, nonetheless, dispatched Net Banking in India in 1998 interestingly and
abbreviated payment periods from 3-5 days to a couple of hours, bringing about
reserve funds of thousands of worker hours and mitigating a portion of the concerns
of organizations working in India. From that point forward, FinTech has started to
grow gradually with digitization starting after 2010, adding to the presentation of
portable banking applications furthermore; offering buyer banking solace whenever it
might suit them and further developed UI through their Personal Computers, laptops,
and smart phones.
Government supportive of digitization arrangements, strategy changes, designs like

the presentation of Digital India, Start-up India Scheme, e-KYC principles, UPI,
Financial Inclusion, Unique Identification (Aadhar) what's more, Bharat QR and so
on, but the Indian monetary area at the worldwide focal point and built a sound forum
for FinTech firms and services.
Another enormous drive came when the Indian government pronounced on November
eighth, 2016, the demonetization of 500-and 1,000-rupee notes, and individuals had
15
no alternative to follow wallet or card or bank channel installments that gave a
gigantic lift to the advanced installment industry. Paytm has been one of the huge
champs of this administration change. This went from 125 million wallet clients to
185 million three months later before demonetization, and it has kept on extending,
arriving at 280 million clients by November 2017. It had acquired 5,000,000 traders
with acknowledgment of the QR code in one year, and the organization had prepared
$1.6 billion of exchanges three and a half time each year. Back in 2014, the Central
Bank Reserve Bank of India delivered draft rules for another sort of association called
an installment bank. Such banks could take little stores (close to 100,000 Indian
rupees for every client, equivalent to generally $1,530) and didn't offer advances or
Visas however could run current and investment accounts, offer ATMs and charge
cards, and work net banking. 41 associations have mentioned, among them was
Paytm, and in August 2015 Paytm was one of 11 organizations to be given in rule
licenses. A great many Indians began to utilize versatile installments and become
cognizant (99.5 percent) of them without precedent for their lives inside a couple of
days. (Gagan Kukreja D. B., 2021)
India's advancement wave may regardless not be of the scale when seen against its
overall accomplices, yet it is stacked well, generally. From wallets to protection, the
organizations of FinTech have rethought how associations and clients do routine
trades. The extending gathering of these examples is arranging India as a charming
business area all throughout the world.
1.8 Indian Financial System

The financial set-up consists of the products and services given by financial
institutions that comprise banks, pension funds, organized exchanges, insurance
companies, and lots of other companies that job to facilitate economic transactions.
Practically, all economic transactions are tormented by one or more of those financial
institutions. They build financial instruments, like stocks and bonds, pay interest on
deposits, lend money to creditworthy borrowers, and form and manage the payment
systems of contemporary economies.
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1.8.1 Features
 It performs an important function within the economic process of the country
because it helps both savings and investment.
 It assists in mobilizing and allocating one’s savings.
 It promotes the event of economic institutions and markets.
 Performs a vital role in capital formation.
 It helps links the investor and also the one saving.
 It's also committed to the supply of funds.
 The financial setup meets the necessities of funds for business sectors.
 It makes the economic process by allocating the cash to people who can
properly utilize it.
 It commences to capital formation.
 Allows investment by business sectors.
 It assists saving and hence takes back money into circulation.
Financial structure refers to the form, components, and order within the financial
setup. The Indian national economy is broadly classified into the formal (organized)
economic system and therefore the informal (unorganized) economic system. The
casual monetary framework comprises individual cash banks, gatherings of people
working as assets or affiliations, association firms comprising of nearby merchants,
pawnbrokers.
17
Figure 12: Components of Indian Financial System
(Source: World FinTech Report 2020)
1.8.2 Components
Financial Institutions
Financial institutions are the participants during a financial market. They are business
organizations dealing in financial resources. They collect resources by accepting
deposits from individuals and institutions and lend them to trade, industry et al. They
buy and sell financial instruments.
Financial Markets
Financial Market bargains in financial protections (or monetary instruments) and
monetary administrations. Financial markets are the centers or arrangements that
provide facilities for getting and selling economic claims and services. These are the
markets within which money, also as monetary claims, is traded. Financial markets
exist wherever financial transactions occur. Financial transactions include the problem
of equity stock by an organization, purchase of bonds within the secondary market, a
deposit of cash in a very checking account, transfer of funds from an account to a
bank account, etc.
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Financial Instruments
 Financial instruments are the financial assets, securities, and claims
 They will be viewed as financial assets and financial liabilities.
1. Financial assets:
Represent claims for the payment of a sum of cash sometime within
the future (repayment of principal) and/or periodic payment within the
kind of interest or dividend.
2. Financial Liabilities:
Are the counterparts of monetary assets? They represent a promise to
pay some portion of prospective income and wealth to others.
Financial services in India

The monetary administration's area in India, which represents 6% of the country's
GDP, is developing quickly. Albeit the area comprises of business banks,
advancement finance organizations, non-banking monetary organizations, insurance
agencies, cooperatives, common assets, and the new "installment banks," it is
overwhelmed by banks, which hold more than 60% offer.
The Reserve Bank of India (RBI) is the pinnacle bank of the nation, controlling all
exercises in the monetary area. Business banks incorporate public area and private
area banks and are under the administrative management of the RBI. Improvement
finance establishments incorporate modern and farming banks.
Non-banking finance organizations (NBFC) give advances, buy stocks and

debentures, and deal renting, employ buy, and protection administrations. Insurance
agencies work in both public and private areas and are constrained by the Insurance
Regulatory and Development Authority (IRDA). India likewise has an energetic
capital market with stocks trades constrained by the Securities and Exchange Board of
India (SEBI). As indicated by "India in Business," a site of the Union Government,
India's financial area resources were valued at $1.8 trillion in the 2014-15 monetary
years.
19
As indicated by a report by KPMG-CII, India's financial area is a route to turning into
the fifth biggest on the planet by 2020. The country's extra security area is the greatest
on the planet, and the market size is relied upon to contact about $400 billion by
2020.The resources of the common asset industry are valued at $190 billion. The
benefits corpus store is projected to record $1 trillion by 2025.
Changes to put the monetary administration's industry and the economy on the road to
success incorporate measures to make finance accessible to medium, little, and
miniature businesses. India once had a vigorously government-overwhelmed
monetary administrations industry, and most administrations were given by
nationalized banks. Monetary area changes were started in 1991 fully intent on
speeding up financial development. Before very long, industry and administration
areas were opened for unfamiliar direct speculation. The changes finished the
predominance of the general public area and diminished direct government control on
mechanical ventures.
Monetary area changes in India have further developed asset activations and
distribution. The advancement of financing costs and therefore the facilitating of cash
hold standards have helped make reserves accessible to different areas. In any case,
prudential standards are fixed and easy, and guidelines expanded to remain far away
from a fundamental breakdown that different nations have endured.
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1.9 The Unbanked Population of India and the World
Figure 13: The Unbanked Population of India and the World

At present, around 31% of the world's population may be classified into the unbanked
category. The estimated figure stands at 1.10 billion people. The unbanked category
will be classified because of the class of individuals who don't use any banking
service or take banking schemes in any capacity. These people either make the
transaction in cash or are obsessed with the other agent for banking and financial
activities. These people reportedly don't have a subscription to any insurance or
pension schemes. It’s further estimated that the revenue potential which will be
generated by servicing the unbanked sector is 338 billion dollars.
FinTech is playing a necessary role in meeting customer expectations within the

financial industry. It is decentralized the supply of economic services from physical,
financial centers to the smart devices operated at the fingertips of the consumers. The
revolution is extremely helpful for developing countries where traditional banking and
financial infrastructure aren't robust and accessible to a bigger share of the population.
The explanation cited for the acute shortage of those services in developing counties
and underdeveloped countries was the price of the establishment of such centers of
finance. This shortcoming has been bridged by the event of FinTech.
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1.10 The key catalysts behind the rise of the Indian FinTech
Revolution
FinTech has now become an indispensable part of our life. And these are some of the
impelling factors that contributed to the growth of the FinTech in India:
 The demands for digital finance
As indicated by a 2016 McKinsey report, two billion people and 200 million
miniatures, little, and medium-size organizations in arising economies today need
admittance to order funds and credit. Availability issues like these constrained the
banks to fuse innovation to raise their administration.
 The mushrooming of smart phones
India has now overshadowed the US, turning into the second-biggest cell phone
market on the earth. The evident change of Indian portable organizations to bonafide
programming administrations has enabled FinTech new businesses.
 Need for easy payments
The general public's desire to create quick and tireless payments has acted as an
impetus to embrace financial technologies. Now, monetary transactions are simple
than ever. FinTech services are enabled in eliminating agonizingly lengthy queues and
save time.
 Support from the regulatory bodies
With initiatives like Start-up India and therefore the introduction of Unified Payment
Interface (UPI), government and regulatory bodies like RBI and SEBI are
aggressively promoting the target of a cashless society.
 The arrival of API-based services
UID, UPI, e-KYC, Mobile-based Digital Signature, Digital Locker (gets rid of the
need to present a paper report after the first run through) and Digital Consent (grants
individuals to quickly, straightforwardly, and safely make their profile and exchange
information accessible to outsiders for administrations) are the six essential
advancements that India has advanced. These advanced administrations helper’s
FinTech firms to smooth out and digitize everything.
 The interest of Venture Capitalist
The benefits of FinTech in banking became more evident to venture capitalists.
Investors are thus providing capital for various segments including wealth
management, money lending, and credit reporting.
22
 The rigid structure of traditional banks
With intense regulations to high operating costs, much of the standard business
practices appear unappealing to the customer base. Traditional banks also fail to
specialize in individual profit-making services and products.
1.11 How is FinTech different from Traditional Banking?
PARAMETER TRADITIONAL BANKS FINTECH PRODUCTS

PURPOSE As regulated bodies the core goal FinTech products are ideally
is management of risks involved created to fill the gaps between
with Lending & Deposit or any traditional banks & customers
transactions experience
PERSONALISATION Main focus is always on deposits, Focuses on mobile functionality,
credit/lending based on trust, accessibility, agility, cloud
credit scores & security. computing and convenience.
COMMUNICATION Chatbots provides robotic Enhanced Customer Experience
PATTERN experience pushing customers promulgates faster transactions,
away. 24x7 permanent access,
immediate consultation and
security.
POTENTIAL Physical distribution of Market distribution of FinTech is
COVERAGE traditional banks is less which higher due to higher penetration
gives FinTech an uncanny of mobile phone connectivity.
advantage over it. E.g. - In India mobile penetration
is at 80% in comparison to
Banks 35% distribution
TAT LOAN Average time to process loan Average Time taken to process
PROCESSING earlier- 28 days Average time loans- 5-10 minutes.
taken online- 1 day.
(Source: https://www.slideshare.net/sabafatima12/FinTech-research-global-future-of
FinTech)
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1.12 Difference between FinTech and Digital Banking
1.12.1 What is FinTech?

FinTech, a portmanteau of ‘financial technology,’ refers to a brand new wave of
companies that are revolutionizing financial services through the utilization of
innovative new technologies. It is an economic industry comprised of companies that
aim to compete with the normal financial methods to shape the longer term of
banking. It encompasses a large range of technologies, products, and business models
that are changing the way people pay, send money, lend, borrow, and invest.
The industries are adopting FinTech as a way that produces the prevailing delivery
process more efficiently in every aspect.
1.12.2 What is Digital Banking?

Digital banking is that the perfect example of how financial innovative technologies
are shaping the longer term of banking through digitization.
Digital banking is that the digitization of all traditional banking activities, where
banking services may be availed online without having to be physically present at the
bank.
Digital banking could be a move from physical to online, providing high levels of
automation and web-based services via an internet interface or mobile application. It’s
the power to access your financial data through mobile and ATM services.
1.12.3 FinTech vs. Digital Banking: Comparison Chart
FINTECH DIGITAL BANKING

FinTech is an economic industry Digital banking is one of the key
comprises of companies that are functioning areas of FinTech and how it’s
providing financial services through new- shaping the future of banking.
age technologies.
It uses a wide range of technologies, It is a digitalization of banking products
products, and business models to compete and services via web-based interface or
with traditional financial methods. mobile application.
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The purpose of FinTech is to offer trust, The purpose of digital banking is to speed
transparency, and technology through an up and enhance the process of customer
improved and efficient business models. interaction with the banks through digital
channels.
FinTech products and services include Digital banking includes online banking,
payment, fund transfer, wealth personal finance planning, digital wallets,
management, blockchain, crowdfunding, digital coupons, bill payments, mobile
etc. transfer, etc.
(Source: http://www.differencebetween.net/technology/difference-between-FinTech-and-
digital-banking/)
1.13 How FinTech was doing in 2020
 North America
Nonetheless, the development of North American FinTech is an extremely reassuring
astonishment in the event that we consider the year 2020 difficulties. The US market
development made 21% as indicated by the World Bank. Both Canada and the USA
are remembered for the rundown of Top 10 FinTech Markets.
The market of Canada takes the ninth situation, with a populace of 37.5 million
individuals, and the market center around Cryptocurrency and Blockchain, Digital
Lending, and Insurance administrations.
The FinTech market of the USA is a rating chief with a populace of 329 million
alongside a $9.4 billion FinTech speculation. The market center envelops Payments,
Security, and B2B FinTech. Protections controllers in the US might make some
forceful implementation; in any case, it can't lessen the allure of interest in the US
FinTech area.
 Europe
There are a few appraisals of European nations driving in FinTech advancement, yet
the vast majority of them incorporate the United Kingdom, Switzerland, the
Netherlands, Sweden, Lithuania, and Estonia.
25
London, as one of the best European FinTech centers, is popular for an incredible
number of gas pedals for FinTech new companies (more than 20), raising billion-
worth FinTech organizations. The UK's FinTech qualities incorporate Alternative
loaning, Blockchain and Cryptocurrencies, Payments, Personal Finance, and Wealth
Management.
Switzerland here and there styled as a crypto-valley has a chronicled notoriety as a

significant monetary center point and is another European FinTech focus with a
populace of 8.6 million and attention on Wealth Management and Crowdfunding
notwithstanding Blockchain.
The FinTech of Netherlands is known for Digital Payments, Investment, and

Alternative Lending. A populace of 17.1 million individuals has an exceptionally
undeniable degree of tech reception.
Swedish FinTech new businesses for the most part are SME banking, Payments, and
Neobanks. The populace is 10 million, while the quantity of advanced monetary
administrations clients is possibly high due to socio-segment boundaries.
Lithuania is a moderately new individual from such evaluations with a somewhat

little populace of 2.8 million individuals. Be that as it may, its major FinTech center
point in Vilnius and more than 170 FinTech organizations situated in the nation assist
Lithuania with fortifying its positions. The FinTech market center is Lending,
Payments, and Banking.
FinTech of Estonian is known for Payments, Alternative Lending, and Personal

Finance. A country that is much more modest than Lithuania in the populace (1.3
million) is profoundly intense to turn into a huge FinTech center point with heaps of
gas pedals and a great speculation environment.
 Asia Pacific
In the Asia Pacific locale, India is named one of the world's quickest developing
FinTech showcases by RBSA Advisors. In the second quarter of 2020, India acquired
$647 million in venture shutting 30+ FinTech bargains. For a similar period, China's
26
FinTech speculation reached $285 million. With a populace of practically 1.4 billion,
no big surprise the country's FinTech industry is developing for the beyond 10 years
with an emphasis on Payments, Lending, and Wealth Management.
With respect to Singapore's FinTech market: its key qualities are Insurtech,
Payments, and Lending. Like the UK in Europe, Singapore is known in the Asia
Pacific for 20+ FinTech gas pedals. The populace is 5.8 million. Critical government
speculation, for example, $735 million out of 2019, and ideal duty strategy make the
country one of the local FinTech pioneers.
 Africa and the Middle East

The most grounded FinTech market development is seen in the Middle East and
North Africa – it nearly came to 40% there, while 21% development is archived for
sub-Saharan Africa. With respect to the agricultural nations and arising FinTech
markets – such development is unsurprising due to at first low levels. It demonstrates
that more arrangements are probably going to occur in non-industrial nations with a
high level of the unbanked or underbanked populace, which gives an immense chance
to quick development.
27
CHAPTER 2: STATUS
28
2.1 Indian FinTech Market – Present Scenario
Figure 14: Market size and growth forecast (2018-2025e)
 The FinTech market has esteemed at INR 1,920.16 Bn in 2019 and is

anticipated to accomplish INR 6,207.41 Bn by 2025, extending at a CAGR of
twenty-two. 70% in India during the 2020-2025 period
 India is quickly constructing an environment offering FinTech new
companies a stage to develop into large unicorns
 However, the spread of COVID-19 is anticipated to affect the industry
revenue rate post-March 2020
 the government has restricted the operations of the tour, travel, and airline
sectors, which accounts for a significant share of online transactions within
the country
 Nevertheless, consumers have gradually begun using online modes for
purchasing essentials to avoid hand-to-hand currency transfer, which is
anticipated to increase the FinTech adoption rate
 In 2019, the average global FinTech adoption rate was 64%, where the Indian
FinTech market outperformed with an 87% adoption growth rate, making it
one of the most thriving markets in terms of business growth and employment
generation
29
 The main reasons for the growth can be attributed to the rapid adoption of the
internet, the surge in e-commerce, and increased use of smart phones in both
rural and urban areas of the country
 Further, expanded subsidizing support under the Start-up India drive,
developing monetary incorporation and enablement, expense and overcharge
help, and web convention assistance support have propelled the growth of the
industry
 The Union Budget 2020 proposed the suspension of Tax deducted at source
(TDS) or expense installment on shares allotted by start-ups to their
Employee Stock Option Plans (ESOPs)
 Therefore, employees working in start-ups, exercising their ESOPs, pays tax
at a later date
 India is bit by bit turning into a center point for FinTech new companies, and
worldwide financial backers are effectively putting resources into prospective
Indian FinTech start-ups
 In terms of investment, Paytm, Cred, Acko, InCred Finance, and BharatPe
emerged because the top five FinTech players within the Indian FinTech
market
 the arena is very competitive with tremendous growth potential, but stringent
regulatory norms tend to act as significant entry barriers for brand spanking
new players entering the Indian FinTech market
 Nevertheless, the presence of a strong technological ecosystem as its
backbone and an enormous market-base with low penetration of financial
services, the Indian FinTech market holds immense potential for growth
30
Figure 15: The No. of FinTech start-ups and the FinTech hubs in India
(Source: https://www.investindia.gov.in/)
Figure 16: Major FinTech clusters in India
2.2 Mumbai FinTech hub
 The Mumbai FinTech hub was founded by the Maharashtra government in

February 2018 to implement the Maharashtra State FinTech Policy, so as to
create the state a world FinTech hub
 The Mumbai FinTech center point helps within the production of FinTech
corpus reserve and advances the advancement of hatching space for
accelerators and new companies within the business
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Figure 17: India versus other FinTech hubs around the world
India is transitioning into a competitive environment providing a forum for FinTech

start-ups to eventually transform unicorns worth billions of dollars. FinTech business
visionaries in India are following different objectives, from entering new areas to
focusing on global business sectors. The adoption of Indian FinTech has grown
rapidly in recent years. For FinTech India has now turned into Asia's market chief. In
setting up its predominance over Asia's FinTech markets, India has crushed quick
contender China. India has recently earned USD 286 million in risk capital funding.
FinTech companies in China, on the opposite hand, obtained an investment of USD
192.1 million over the identical period.
As per NASSCOM, the Indian FinTech application industry is projected to hit USD
2.4 billion from an expected USD 1.2 billion by 2020.
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Figure 18: Top FinTech Start-ups of India with Total Investments
(Source: World FinTech Report: 2019-20)
The principal driver of the Indian FinTech Market's uncommon development has been
its vigorous FinTech environment, where various players are progressively strong
both as far as giving assets and building innovative and pioneering abilities. One in
everything about premier helpful patterns inside the country might be a profound
advancement pool with moderate and simple to-recruit tech laborers.
Figure 19: Focused Market Adjustment Stage
(Source: Internal KPMG Analysis, 2016)
33
The companies that come up during this room are mainly divided into 4 industries, i.e.
Payments, insurance, lending, and management of wealth. The payment market is
often subdivided into Mobile wallets, Mobile POS; Payment Gateways are only some
groups where much of the activity takes place. Citrus Pay, PayUBiz India,
CCAvenue, Direcpay, Instamojo, Zaakpay, Bill Desk, PayUMoney, Atom Paynetz,
ePaisa, Airplay, JusPay, Emvantage, and Transecute are major players during this
region. Loans may be categorized into Digital loans, P2P loans, and SME financing,
etc. Wealth management is one in every of the most sectors that several businesses
that are arising with creative ideas because the per household, income has
dramatically risen over the years. Therefore, people need help to create informed
investment decisions.
India has always been a country of economies of scale, wherein a lot of new
companies/start-ups are running the race to accumulate maximum data possible. For
example, a new company called Cred has been giving huge cashback and discounts to
people who are paying credit card bills through that financial technology start-up
based out of Bangalore in India. A lot of people in the industry have been wondering
why? The answer is simple that after the company has a good amount of data they
shall be able to sell relevant products to their database without any difficulties, they
would know which bank has a maximum credit card, high net individual customers,
etc. in turn they will be pitch & position their products, loans, offers from the partners
effectively.
Therefore, FinTech is now a choice to conventional banks and procedures; they

provide digital solutions to traditional cash management. Banks are getting down
coming up with things like API banking, automated cash management, e-collections,
etc. Many of those items address millennial who believe FinTech is best than
conventional banking. As an example, with virtual account management, a
corporation is going to be able to have multiple account numbers which might be
shared with different clients. However, the funds are going to be parked in one main
account, hence the customer is going to be ready to reconcile the funds easily by
bifurcating the virtual account numbers, whilst keeping one main account for easier
book-keeping.
34
Also, the government has begun to take some measures to boost FinTech’s
penetration by ordering banks to create more and more POS terminals. As India
currently has the bottom number of POS terminals, i.e. 1 POS per 500 citizens, among
the BRICS countries, this demonstrates that companies within the financial
technology sector like Mobile POS (Paytm, MobiKwik, etc.) do have an outsized
reach here. The govt. has founded a body named India’s National Payment Council
that introduced a digital portal for domestic payment named Rupay. The first goal of
launching this was to form money and in-house control of the transactions being
routed through international players like Visa or MasterCard. Governments have
taken many steps to push it in India and beyond. The Indian government signed a
separate Memorandum of Understanding with Singapore, Bhutan, Maldives, United
Arab Emirates, and The Kingdom of Bahrain.
2.3 Reasons for FinTech Boom in India

In India, the expansion of FinTech has been phenomenal, to the extent where the
foremost widely used messaging app, WhatsApp has introduced a brand new payment
feature by using Unified Payments Interface (UPI). UPI, managed by the National
Payments Corporation of India (NPCI), is a second and real-time payment system
between participating banks to transfer money through mobile-to-mobile. India
accounts for over 200 million WhatsApp users providing a large the consumer base
for merchant payments and contributes to large volumes in terms of peer-to-peer
(P2P) payments.
Many other global IT giants are zeroing in on adding payment features. For instance,
in 2017, Google Tez, a payment app, was launched by Google, while Amazon has
launched Amazon Pay and Samsung has introduced Samsung Pay. UPI feature has
been enabled by Samsung Pay and Google Pay and within the near future; Apple
plans to launch Apple Pay within the country.
Meanwhile, UPI-empowered computerized installment firms like PhonePe,

MobiKwik, Paytm, and FreeCharge is augmenting their arms stockpiles. In 2017,
India’s largest online payment firm and mobile wallet company, Paytm, invested R.s.
5,000 crores (786 million) in mobile payments. Flipkart, one of India’s leading e-
retailers, has also invested $500 million in PhonePe, to increase its technology
35
platform and consumer base and proportion its merchant network through online
payments.
According to the Digital Payments 2020 report by Google-Boston Consulting Group

(BCG), by 2020, India will surpass $500 billion in advanced installments, up from
$50 billion every 2016.
2.4 8 Ways FinTech Is Disrupting Financial Services for the Better

The FinTech business' advancement and innovation arranged conviction framework
are introducing another time of straightforwardness, proficiency, and inclusivity in the
space of monetary administrations. It is additionally reshaping client assumptions and
setting new, better expectations for client experience and fulfilment.
1) Online cashless transaction systems facilitate seamless online shopping through
e-Commerce sites like Amazon, eBay, Alibaba, etc.
2) Corporate online payment systems enable firms to collect payments on
service rendered and make payments on services utilised
3) Exchanging platforms collect and analyse user and market data to uncover
trends, provide aggregated market views, make forecasts and increase the profit
potential of traders and firms
4) Online and mobile banking/money transfer solutions speed up transactions,
reduce the need for paper-based currency (cash, cheques), and improve
financial traceability
5) Automated, calculation driven wealth management and personal finance
systems give precise conditional and context-oriented information to empower
clients to take suitable monetary choices with almost no human supervision
6) FinTech is challenging traditional insurance companies’ positions in the value
chain by enabling the creation of products tailored to customers’ specific needs
7) Peer-To-Peer (P2P) lending platforms enable individuals to borrow and lend
money without the involvement of intermediary financial institutions
8) New cutting-edge technologies are strengthening cyber security and national
financial security
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2.5 FinTech in India: leading the curve
Figure 20: India Leads EY’s Global FinTech Adoption Index for 2019
(Source: EY 2019)
India leads global FinTech adoption rates. 99.5% of consumers in India are aware of
online payment services.
37
Figure 21: Investment in Indian FinTech (2014-2019)
(Source: Deloitte, Tracn)
Since 2015, Indian FinTech firms have received more than US$8 billion in
investment, across 1031 deals.
Figure 22: Digital transactions

(Source: PWC, ASSOCHAM, Statista)
Total transaction values in Indian FinTech are expected to rise from $66.1 billion in
2019 to $137.8 billion in 2023, growing at a CAGR of 20.18%.
2.6 Growth of FinTech in India: key drivers

 Demonetization:
In 2016, India’s overnight ban of R.s. 500 and 1000 notes (representing 85%
of the physical currency in circulation) created a huge need - and opportunity -
for digital financial services in India.
 Government Support:
The Indian government's dynamic advancement of a credit only economy, of
computerized drives, and its help for comparing administrative turns of
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events, has likewise worked with the development of Indian FinTech,
including:
o The Unified Payments Interface ("UPI"): created and dispatched by
the Indian government, the UPI is a solitary window stage that works
with moment between bank installments and which, by guaranteeing
the interoperability of existing administrations, has changed
installment frameworks in India; and
o The Digital India Program: India has fostered a program to make a
strong computerized framework, advance computerized proficiency
and increment volumes of credit only installments.
 Regulatory Support:
Including creating tax incentives for FinTech start-ups, planning regulatory
sandboxes for FinTech firms, and recognizing P2P lending platforms.
 Greater financial inclusion:
Increasing financial inclusion has led to greater opportunities in Indian
FinTech: for example, Jan Dhan Yojana, which increased access to financial
services, and the Goods and Services Tax regime which formalized
unorganized payment sectors; from 2014 to 2017, 55% of bank accounts
opened globally were from India
 Greater consumer demand:
Indian consumer demographics, coupled with increasing financial awareness,
have led to a rise in demand for FinTech services.
 Technological advancements:
The increasing availability of the internet across India has facilitated the
growth of the FinTech sector.
2.7 Segment-wise Opportunity Analysis of the Indian FinTech

Market
 In 2018 and 2019, the payments segment received the very best amount of
capital investments
o This segment includes M-wallets, PPIs, merchant payments, POS
services, international remittance, and trading in cryptocurrencies
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o Most businesses during this segment are India-rooted and work well
for foreign investors, making it a lucrative investment opportunity
Figure 23: Segments of FinTech

Figure 24: Venture capital funding by FinTech segments

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 The lending segment represents peer-to-peer lending, crowdfunding, loans,
online lenders, on-book lending by NBFCs, and credit scoring platforms
o Slow credit disbursement and liquidity constraints in NBFCs are the
foremost significant reasons for the decline in working capital funding
 InsurTech might be an overall specialty portion for the Indian FinTech
environment containing protection aggregator, IoT, wearable, and kinematics
 WealthTech incorporates Robo-counsels, rebate dealers, and online monetary
consultants
 The chief capacity of the BankTech section is to use information guides like
monetary exchanges and spending designs toward make hazard profiles of
purchasers
o The BankTech segment in India experiences a substantial shortage of
structured data to derive values for assessing risk (especially for the
unbanked population) resulting in reduced growth figures
Figure 25: Investment across Indian FinTech segments (US$ million)

(Source: Deloitte, Tracxn)
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Figure 26: Top-5 ranking of countries with the highest adoption of FinTech key
segments
(Source: statista.com)
Payments Segment
 Payments is the largest segment of the Indian FinTech ecosystem and has
evolved significantly, post demonization
 India’s cash to GDP ratio has slipped to a single digit from the pre
demonetization the figure of 10.6%, depicting the enormous rise in digital
transactions across the country
 Prepaid Payment Instruments and m-wallets are the fastest-growing
instruments in the Indian FinTech
Drivers Challenges
 Even today a majority of the
 Government schemes like Digital India
population especially in the rural
have been the fundamental source of
areas prefer dealing in cash instead
encouragement for the digital payment
of using noncash methods of
segment
payment
 The country is witnessing increased use
 Lack of digital literacy and
of UPI-based apps like Google Pay,
required infrastructure, coupled
Google Tez, BHIM, and others
with the risk of security breaches
 The number of smartphone users in the
and fraud
country is predicted to double from the
current 442 Mn users to 829 Mn by
2022, pushing India towards
digitization
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Figure 27: Examples of payments players
(Source: FINTECH MARKET IN INDIA 2020)
Lending Segment
 FinTech lending (also called the choice lending model) target the credit needs
of retail consumers, small and micro-businesses that are underserved by
NBFCs and banks
 The alternate lending business model incurs lower operational expenses over
the traditional banks or NBFCs, thereby providing higher profit margins
 Most FinTech players are that specialize in keeping the Non-Performing
Assets (NPA) percentages, focusing more on quality than quantity of loans
disbursed to take care of healthy cash flow
Drivers Challenges
 The consumers without Aadhar
 Launch of API platforms like UPI,
Linkages act as a big inhibitor
Aadhaar and GSTN has given a
to the expansion of the segment
boost to the data-dependent lending
 Further, elimination of the e-
space
KYC based e-Mandate is
 Shifting preference of consumers
expected to create obstacles as
towards the online channel and the
digital lenders can no longer
growth of innovative models like
follow the automated loan
point-of-sale financing, buy-now-
collection model
pay-later, invoice discounting
exchanges, and others are propelling
the growth of the segment
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Figure 28: Examples of lending players
InsurTech Segment
Drivers Challenges
 Complex terms & conditions and
 IoT enables InsurTech players to
tedious claim settlement processes
capture real-time consumer data,
act as significant constraints for the
helping them improve the price
growth of the industry
of customized insurance products
 Further, limited awareness about
 The shift from agent-based model
insurance products, lack of customer
to digital channels are aiding
relationship management and
industry players to enhance
insufficient distribution network
customer experiences and target
present serious challenges to start-
tech-savvy customers
ups operating in this segment
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Figure 29: Examples of Insurtech players
WealthTech Segment
Drivers Challenges
 Increase in personal wealth makes  Lack of investor awareness

India an ideal market for the regarding financial products is a
WealthTech segment, as the considerable threat hindering
country ranks fifth in terms of the growth of this segment
affluence, HNW (high-net-worth)
 Further, due to increasing cyber
and UHNW (ultra-high-net-
frauds, investors become
worth) individuals
skeptical in sharing confidential
 Ease in regulations regarding
information related to finance
online mutual fund transactions
and accounts
and investments through e-wallet
 HNIs often prefer consulting
is anticipated to fuel the segment’s
with the wealth managers in
growth during the forecast period
person for personalized advice
rather than through online
channels
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Figure 30: Examples of WealthTech players
BankTech Segment
Drivers Challenges
 However, the lack of

Liquidity  Increase in automation and
required manpower inhibits
Management the rise of mobile-led
the segment’s growth
solutions have propelled the
 Moreover, players are
growth of the segment
experiencing the need to
 Further, improved awareness
collaborate with incumbent
about API-led architectures
banks to increase their user
has positively affected its
base
penetration
 Complex regulations by
Trade finance  The improved architecture
both local and global
(both banks and corporate) is
regulators act as the major
helping in better liquidity
hurdle for the growth of the
management
segment
 Players are working towards
 Also, limited knowledge
creating digital data
about local and global trade
(machine-readable) and not
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just digitizing workflows finance is hampering easy
adoption by users
 This fragment includes
Forex &  The forex and depository
enormous CAPEX, owing
treasury fragment has leased or nil
to the profound
contest in India
reconciliation with outsider
 Therefore, these fragment
data suppliers
structures a critical piece of
 By customizing the UX for
corporate bank income
the corporate further adds to
the additional cost for the
players
 However, the inefficiency

Capital  The lack of transparency in
of distributed ledger
markets bond market and the
technology to handle high
loopholes in existing
volume data is impeding
processes are major growth
the growth of the capital
drivers to this segment
market segment
Figure 31: Examples of BankTech players

2.8 Emerging Segments of FinTech
Beyond the core segments of the Financial Services industry, Agriculture, Healthcare,
and assets are witnessing new business models supported by digital platforms,
developments in data collection, storage & processing for real-time insights, and
simplification of knowledge & monetary transactions. AgriTech, HealthTech, and
PropTech new companies are upsetting customary methods of working together in
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three businesses that work with the country's hugest necessities—food, medical
services, and shelter for residents. These start-ups not only can improve efficiencies in
production and availability but also ease the method of trade and movement of cash
for market players. As a result, financial services players can benefit in these
organized markets that may provide alternative data to enhance the payments,
lending, and (or) insurance underwriting practices to become customer-centric
services.
AgriTech
AgriTech is an enabler to agriculture data creation, deep analysis using advanced
algorithms, yet as end usage by players across the agriculture value chain. With new
technologies that concentrate on data collection and analysis, these innovators have
become valuable assets for data deprived financial services industry.
Figure 32: Examples of AgriTech players

(Source: India FinTech Report 2020)
HealthTech
HealthTech is solving problems around unstructured, fragmented, and inaccessible
data, additionally as creating real-time health data that may be vital to several
industries
Players like insurers and healthcare providers.
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Figure 33: Examples of HealthTech players
PropTech
PropTech is powered by new-age technologies and data sources that may eliminate
prevailing challenges of knowledge asymmetry through real-time inputs, advanced
analytics, and simpler user interfaces for transactions, financing, and documentation.
Figure 34: Examples of PropTech players

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Figure 35: Bridging the data gap
2.9 Government Support & RBI Initiatives
Figure 36: Regulatory Bodies in India

(Source: FinTech in India: beyond the horizon 2021)
The Indian Government has recognized the importance of FinTech in driving the
expansion of MSMEs within the country and intrinsically has constituted a special
committee. one in each of the objectives of the committee, which falls under the
Ministry of Finance is going to be acting on creating a regulatory sandbox to push
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innovations other than cultivating participation with FinTech centers from Singapore,
UK, China, and so forth Furthermore, the below initiatives are launched by the
Government:
JAM (JAN DHAN YOJANA, AADHAAR, MOBILE) SCHEME
Financial inclusion has grown significantly throughout the country due to Pradhan
Mantri Jan Dhan Yojana. The previously unbanked now benefit from the direct
transfer of Government benefit schemes, insurance, and overdraft facilities. Aadhar is
the biometric-based Indian equivalent of the Belgian National Identity Card.
INDIA STACK
India Stack is a set of API’s (Application Programming Interface) that brings

Governments. Businesses, start-ups, developers, and consumers into the digital
infrastructure. Essentially it is a presence-less (Aadhar) paper-less (Aadhar e-KYC, E-
sign, and Digital Locker) and cashless layer (UPI and Aadhar enabled payment
system)
UNITED PAYMENTS INTERFACE (UPI)
UPI is a mobile application interface developed by the National Payments

Corporation of India. The objective is to allow the exchange of payments across banks
and wallets in a real-time environment. 29 banks in the country have integrated UPI
with their own mobile app. Once one creates a UPI id, transferring or requesting
money is easy.
PAYMENT & SMALL FINANCE BANKS
11 Payment banks and 10 Small Finance banks had received a license from RBI to
start banking operations in India. Small Finance banks provide basic services like
deposits and withdrawal. Payments banks can accept a restricted deposit of up to 1
lakh per customer. They are not allowed to issue a loan or a credit card. However,
only 3 serious players have managed to circumvent the RBI’s restrictions. Payments
and Small Finance banks were recently allowed to offer a government pension
scheme called Atal Pension Yojana.
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Figure 37: Regulations
RBI
The essential administrative body for FinTech in India is the Central bank - The
Reserve bank of India. Non-bank installment specialist organizations ought to consent
to the KYC standards like those recommended to Banks.
Ombudsman Scheme for Digital Transaction by RBI - RBI has given an Ombudsman
plot for computerized exchanges on 31st January 2019. This plan has RBI authorities
as ombudsmen who will empower clients to report grumblings against these non-bank
substances taking an interest in the installment framework. FinTech elements ought to
delegate nodal officials who will address them before the ombudsman.
UIDAI
The Unique Identification Authority of India (UIDAI) is a legal body answerable for
regulating the Aadhaar Program. The UIDAI has assumed a vital part in the utilization
of Aadhar by FinTech players as a method for client distinguishing proof.
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Against Money Laundering
To keep away from the danger of illegal tax avoidance, FinTech needs to satisfy its
Anti-tax evasion (AML) commitments in the areas they serve.
Figure 38: Government Initiatives

2.10 Types of FinTech Companies in India
B2B (Business to Business) Model
FinTech helps consumers to avail themselves of economic services on different fronts.

The business entities which were subjected to a posh loan or application process can
now take easy financial aids using FinTech. The approaching old concept of FinTech
helps business houses to induce loans using mobile technology or web-based
platforms in easy steps. The event is very beneficial, especially for tiny and medium-
scale industries.
B2C (Business to Customer) Model
FinTech is benefiting an oversized number of consumers with different credit needs.

FinTech is assisting individuals with raising credit and burning through lots of
monetary administrations with comfort. Hyper personalization and superior quality of
services providers make sure the prominence of FinTech over their traditional
counterparts. The prominent consumer services are money transfer facilities,
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budgeting apps, easy credit facilities, operate lending, and financial activities in their
peer group.
Figure 39: Lucrative Sectors

Digital /Mobile Payments
These payment options provide access to create digital payments and trade with
banks, commercial companies, central banks, hedge funds, forex brokers, investment
management funds, and investors. Consistent with reports, the world payments market
is estimated to be 1 trillion US dollars.
Insurance
FinTech has disrupted the bulk of services within the financial industry, and insurance
isn't any exception. The purported "Insurtech" industry is drawing in strong
speculation from investors from one side of the planet to the other.
Crowdfunding
Crowdfunding platforms allow entities to boost money from internet or app-based

users for his or her business operations. FinTech administration permits the
entrepreneur or sets up elements to pool assets from various assets from one stage.
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Digital lending /P2P Lending
The digital lending sector is taken into account as the foremost progressive arm of the
FinTech revolution. Purchasers would now be able to get credits and advances
utilizing their cell phones. The lengthy procedure has been reduced to a matter of
some clicks. Consumers can get easy loans for whatever amount they desire, starting
from ticket loans of meaner amounts to capital loans of upper amounts. The universe
commercial center for P2P loaning is anticipated to develop at a CAGR of 60% to
USD 1 trillion by 2025 from USD 9 billion out of 2014.
Stock trading apps
Stock trading apps are platforms that enable the user to shop for or sell stocks at the
faucet of their fingertips. Along these lines, diminishing the intricacy and time taking
technique of looking for or selling stocks into a course of not many taps of their
finger.
Robo Advisors
The Robo Advisor segment of FinTech could be a confluence of AI and Financial

concepts. It is a wealth management program that uses AI to function. It encourages
purchasers to deal with their abundance in the most productive way. This fragment is
assessed to oversee resources worth 5 Trillion US dollars by 2025.
Budgeting Apps
Budgeting apps help the patron to stay a record of their financials. The approaching
old apps are strengthening by the technological ability not only to stay track of
resources but also get valuable alerts and advice on their spending patterns.
2.11 What makes FinTech important?
Economic growth
The installments section inside FinTech is a significant empowering agent of

monetary development. Electronic installments added $296 Bn to GDP in the 70
nations concentrated somewhere in the range of 2011 and 2015, which is comparable
to the making of 2.6 Mn occupations on normal each year over the five-year time
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frame, or ~0.4% of the all-out business. Overall, a yearly increment of $104 Bn in the
utilization of labor and products.
Financial inclusion
FinTech works with underlying changes on the lookout, opening up promising

circumstances for already 'undetectable' gatherings of populace/monetarily prohibited
organizations with elective ways to deal with reliability evaluation. FinTech lifts
individuals from neediness with innovation and democratizes the monetary
administration's industry by boosting institutional proficiency.
The speed and quality of innovation
Through contest and prevalent arrangements, FinTech drives enhancements in

customary monetary administrations and advances the supplanting of inheritance
frameworks with creative new arrangements, which may offer advantages to shoppers
and different areas of the economy.
Business sustainability and scalability
FinTech includes the motivation of MSMB/SMB manageability with arrangements

that further develop pay, production network the executives, and co-ordinations.
Electronic invoicing, open APIs, HR arrangements, and so forth, empower
organizations to just grow abilities, work at higher productivity and a sensible scale.
Market curation and structural transformation
FinTech-lining ventures like AI, RegTech, EdTech, HealthTech, and so forth, change
the market structure by supplanting heritage components and customary plans of
action with cutting edge arrangements and more productive models of business
activity.
New value streams
The straightforward and real-time activity of FinTech developments, for example,

blockchain and computerized monetary standards, are producing new worth streams –
in monetary administrations as well as across the economy. Following the chances,
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monetary establishments dispatch their own monetary standards/labs/undertakings to
investigate new income streams.
Transparency and audibility
More digitized exchanges support more noteworthy reviewability, straightforwardness

in installments frameworks, and security by decreasing dangers, which prompts a
diminished requirement for guidelines. What's more, digitized arrangements give
information to administrative specialists to drive significant experiences on the
consequences of administrative approaches and make useful changes in accordance
with administrative procedures.
Collaborative culture
FinTech sheds worldwide and cross-industry boundaries to work with community

culture. FinTech likewise catalyses the development of the strong biological system –
devoted hatcheries, gas pedals, adventure reserves, administrative sandboxes, and so
forth The business fills in as a paste for market members to perceive the need for
commonly valuable cooperation for a bigger decent. FinTech made and works with
the idea of open advancement.
Borderless innovation
Since mechanical development is rapidly versatile, FinTech eradicated/decreased

public boundaries for sections, encouraging contests in worldwide business sectors. A
huge number of worldwide FinTech center points joined with start-up supporting
projects and administrative sandboxes have extended the market size for a given start-
up in a specific country.
The scale of the industry
Interests in FinTech have filled dramatically in the previous decade – ascending from
$1.8 Bn in 2010 to $19 Bn in 2015.FinTech new companies have drawn in $18.9 Bn
worldwide in the initial nine months of 2016. Additionally, a few assessments propose
that $4.7 Tn out of $13.7 Tn of the customary monetary administrations' income is in
danger of being dislodged by new innovation empowered contestants. FinTech has
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developed from a specialty to an industry that straightforwardly affects arrangements
and institutional advancement methodologies.
2.12 Financial inclusion via FinTech
The journey so far

Take payments as an example – with 80% of grown-up Indians approaching financial
balances according to the 2018 RBI report, it took the appearance of check cards
twenty years ago for them to urge 24/7 access to their own money in order that they
could make instant payments at stores and online. The initial FinTech (long before the
term became fashionable!) like Visa helped banks deploy this technology. However,
only a smaller number of cardholders ended up using their cards to buy, while the
bulk used them to induce cash at ATMs, partly because they didn’t have enough
places to use them at. Hence the subsequent big wave happened as FinTech started
enabling more merchants to just accept cards in their stores helped create digital
acceptance for utility service providers and merchants.
Another game-changer movement was the government’s commencement of the

National Mission for Financial Inclusion (NMFI) in late 2014 to produce universal
banking services to each household through mobile and identification. While it's
brought over 35 crore people into the formal banking system, with deposits exceeding
over R.s. 96,000 crore, in keeping with the Department of monetary Services, it's also
enabled collaboration between banks, FinTech and payment networks. This led to the
expansion of prepaid payment instruments in October 2017 and enabled customers to
use their debit cards or bank accounts to load money into their wallets and use the
now ubiquitous itinerant to create payments easily.
Now as we move towards interoperable, open-loop payment platforms, where card

credentials are securely linked with a payment platform, we'll see a convergence
between the legacy financial systems and FinTech enabling instant and secure
payments in-store or online. While the cardboard acceptance infrastructure doubled in
two years post demonetization, there's tremendous potential to rescale further on the
rear of technology. This can enable us to extend digital acceptance beyond this
estimated 10-15 million merchants, as long as there are an estimated 1 billion+ digital
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payment credentials between card credentials (or card numbers) and UPI handles. The
expansion of digital access could be a major boost for financial inclusion as more
Indians can now value more highly to pay and be paid, wherever and whenever,
digitally. This growth within the FinTech space wouldn't are possible without
collaborating with banks and payment networks and therefore the rising internet and
smartphone penetration, expected to succeed in 60% of the country’s population by
2022.
The roadblocks
As per the 2018 UN agency report, 190 million Indians remain without a checking
account. There are 48 percent of inactive accounts that do exist. In conjunction
thereupon, several financial institutions have to this point focused on catering to the
wants of metros and mini-metros, leaving out most of the population of India. Hence
with the matter not limited to individuals but also businesses, the reliance on banks or
digital payments to conduct transactions is marginal.
Figure 40: Financial inclusion via FinTech

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While demographic roadblocks like language barriers have restricted the proliferation
of digital payments among specific groups, the varied linguistic landscape has also
not allowed players to deploy products all told or several of those languages.
Moreover, the high cost of deploying infrastructure to herald more people on board
has also led to low issuance and penetration of payment instruments.
The issue of high framework cost is pervasive among vendors with just 7-10 percent
of the around seven crore merchants right now having embraced computerized
method of installments. While it leaves an enormous opportunity for expansion, it also
provides a collaboration opportunity to different entities during this sector. This
collaboration between big players and new-age FinTech firms will help in building
synergies and make sure that both are complementary to each other. FinTechs, that
sometimes aim to introduce convenient, simple, and affordable solutions to consumers
and businesses alike will benefit.
Riding the next wave

FinTech players have already experienced a start in driving the subsequent wave of
monetary inclusion in India by offering digital technologies. Besides, the regulatory
support from the banking company of India (RBI) through guidelines on tokenization,
account aggregation, and therefore the regulatory sandbox environment has further
helped the cause. Against this backdrop, FinTech players are looking to leverage low-
cost, asset-light infrastructure to roll out innovative services that focus on walk
penetration – like Bharat QR or contactless ‘tap-to-phone’ on mobile to confirm
simple, secure, and convenient ways to pay. They need to be understood that there are
often no one-solution-fits-all approach.
For instance, firms engaged in providing wallets, offering payment gateways, and
neo-banking, among others have all unrolled tailored financial products that would
cater to unbanked and underserved customers. Within the field of lending too,
FinTech has come up with several varieties of initiatives, like micro-lending and
marketplaces to sell loans to end-users. These wallet players have likewise enhanced
their organizations and transformed into installment stages that presently empower
P2P (individual to individual) and P2M (individual to the vendor) exchanges utilizing
wallets, UPI, and cards. Solutions like Visa Safe Click reduce friction and enhance the
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e-commerce experience of consumers for smaller transactions in a very secure
manner.
The road ahead

FinTech players have set the ball rolling for the country to achieve its complete
financial inclusion goal. A collaborative approach is that the natural next step to
accelerate the pace of this process. Cooperation between governments, executive
bodies, regulators, and personal businesses may be a prerequisite, but the
collaboration within the industry — between established financial institutions and
emerging FinTech – is additionally a key aspect. Both are naturally interdependent
and synergistic in nature. This ensures that the financial burden of putting in place
physical infrastructure or building networks doesn't solely lie on FinTech. Instead,
they may channel funds to develop their core business and use the strengths of
existing players to produce better solutions to the market.
Take the emerging concept of enabling mobile phones to form and receive payments
– FinTech is actively developing technology that banks may embed in their mobile
apps, to enable their merchants to receive payments on their own phones. Meanwhile,
large big techs like Google are enabling customers to provision tokenized card
credentials into NFC enabled mobiles, helping customers tap their phones to form a
payment, using cards issued by the banks.
2.13 Motivators for Adopting FinTech Are
 Ease of setting up of an account

 Ability to access a wide variety of products and services
 Effective service quality
 Good online experience and functionality
 Attractive rates and fees
 24/7 access to services
 Availability of more innovative products when compared to traditional
financial institutions
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2.14 Barriers for Adopting FinTech Are
 Lack of awareness
 Lack of proper knowledge of their usage and functions
 Feel traditional financial services providers as more reliable
 Lack of trust in the financial technologies
2.15 Categorization: What Falls Under FinTech?
The main players within the arena of monetary services are (listed by magnitude and
importance:
Government elements
Which may go generally from controllers, national banks, sovereign abundance

reserves, and each one the specialists that award licenses and may effectively impact
the monetary area?
Traditional financial services firms
Which have gotten included both as financial backers, possible vital acquirers, and
advertisers of development? For instance, Citibank, the US swell section bank, is
unbelievably and progressively included inside the area. It's an assortment of drives
like a gas pedal, outside acquisitions, and a dangerous capital venture group that
contributes the bank's own assets (on its own record no less).
Tech companies
That offer monetary types of assistance close by their center items. As an example,
both Uber and Amazon have dedicated internal teams of engineers and experts
making a robust push toward increasing their presence within the sector.
Companies that provide technology for financial transactions
Like Bloomberg, Thomson Reuters, American Express, Visa, and so on are all
innovation organizations that are a piece of the FinTech environment and wish to
keep awake with all progressions inside the space and with new contenders that will
challenge them.
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Professional investors
Which may be sorted upheld size (little or enormous asset), stage (seed, late
endeavour, private value, and so forth), and finally for the wellspring of assets, similar
to benefits reserves, strategic investors, family offices, etc.
New disruptive companies
Operating in several different sectors, which we'll cover in one in every one of the
subsequent sections. Frequently, these organizations started out by "unbundling" one
in every one of the administrations given by an officeholder player.
Banking and finance have always been very linked to governments, and are thus an
awfully hard sector to enter. FinTech start-up master Kathryn Petralia summarized the
inseparable connection between state and bank thusly: "While innovation and
monetary cycle are integral to the proceeding with interruption, nonetheless, they'll
not be the sole or maybe the most drivers of outcomes. Banking is ultimately about
money, and money is about public authority – this can be why, for hundreds of years,
banks are licensed once they weren’t direct creations of the state.”
2.16 FinTech Industry - Factors Behind Growth in India

A number of encouraging reasons are propelling the excellent growth of FinTech in
India. A number of them are:
Easy Payments
Installments have seen a stimulating transformation in recent years, particularly
thanks to the disturbance of internet business, versatile trade, and online installments.
Budgetary consideration is substantially over just installments and exchanges and
installments are seen because of the door for monetary incorporation. Shoppers and
vendors will carry on grasping digitized installments while UPI will still have its firm
ground for both P2P and P2M exchanges.
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Partnership between FinTech's and Corporate
The FinTech Times says 2020 is going to be the time of brilliant coordinated efforts
between FinTech trend-setters and corporate, where corporate organizations would
ideally put resources into FinTech rather than acquiring arrangements. Likewise,
banks are going to be collaborating with FinTech to map out inconsistencies and offer
benefits via administration, smooth client experience, and a progression in cutting-
edge highlights to ease tasks.
Simple Management of non-public Wealth

There's a rising change being experienced by Investment Advisory organizations with
the development of electronic riches counsels, also called "Robo-guides." And by
"Robo," we mean computerized board-stages as real robots. These Robo-guides can
guide executives through calculations and help clients make money-related decisions.
The right outcome is that the ability to yield specially designed, noteworthy counsel to
financial specialists without the contribution of human feelings, which too at a lower
cost.
Facility of Cloud Banking

The utilization of disseminated processing will reduce costs by a mind-blowing
degree in light of the fact that no additional hypotheses are needed for regulating
resources and gear. Cloud adjusts to the changing requests and offers versatility to
serve the reworking needs of clients. Cloud resources furthermore scale upon need
and grant less complex consolidations with developments.
Secure Digital Payments

Security is of most extreme significance since cash-related trades are presented with
risks and attacks. An EY report says innovations like Blockchain are going to be
extremely popular, crediting to its advantages like straightforwardness,
changelessness, discernibility, and audibility. Blockchain will provide a state of
security with regards to the trading of money and touchy data, enabling clients to
draw off its straightforwardness and convey down operational expenses.
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NLP Based Chatbots
There is presently a surge of hazardous development in associations. It's encouraging
to work out clients continuously attempting to find better approaches to consistently
communicate with organizations. FinTech is a sensation by utilizing NLP-based
chatbots and enhancing Conversational User interfaces (CUI) to alter portable
banking. These chatbots will have the choice to react to client issues and provides
practical arrangements accordingly.
Convenient Personalization
FinTech is further developing customer experience by giving redid plans that fit the
customer's necessities. The unavoidable fate of FinTech will see changed frameworks
that will envision basic occasions during a customer's life. Actualizing AI (AI) and
massive Data for personalization will originate improved availability and capability;
the results can then be employed in the progression of present-day administration
models.
2.17 Advantages
 FinTech increases accessibility. An outsized number of individuals can
access FinTech Market digitally.
 FinTech speed up the speed of approval of finance or insurance. FinTech

assists within the approval process which will be completed within 24
hours.
 FinTech gives more noteworthy comfort to its clients by getting to their

administrations through their cell phones, tablets, or PC from any
place.
 FinTech firms enjoy low operating costs and might also easily react to their
customer's needs because they need greater access to information about their
customers.
 FinTech companies are investing in major security to stay their customer’s

data safe. For this, a number of them are using biometric data and
encryption.
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 Lower cost services.
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2.18 Chinese FinTech Investment in India
The diagram of Chinese interest in India is on an upward slide as time passes. The
insights show the rise of the Indian Start-up Ecosystem is the best option for Chinese
financial backers. Chinese Venture Capitalist Investment in India has risen to about
ten times over the most recent 3 years. The Chinese VC interest in India was 668
million US dollars in 2016, which rose to 3 billion US dollars in 2017 and accordingly
arrived at the figure of 5.6 billion US dollars in the year 2018. The development in
VC financing is referred to as the achievement of steps was taken by the Indian
Government to further develop the foundation and strategy system. The unmistakable
Chinese financial backers in India are Alibaba, Xiaomi, Shunwei Capital, and Fosun
Tencent. India, which has been the unmistakable the decision for the venture by
Japan, the USA, European nations are seeing China joining the furious to top financial
backers list. The initial Start-up India Investment Seminar was held in Beijing last
year. 12 Indian new businesses partook in the occasion, out of which four tied down
financing as much as $15 million from Chinese investors.
The most featured arrangements came from Tencent and Alibaba. The Shenzhen-
based organization Tencent partakes in the standing for being the most dynamic
corporate financial backer in China. It put 35 million US dollars in subsidizing
Bangalore-based advanced financial organization NiYO. NiYO also fills in as the
money trade administration for outbound travellers. Also, the organization made a 1.4
billion US dollar Interest in Indian E-business Giant Flipkart collaborating with
Microsoft and eBay. Further, the organization likewise made a venture of 1 billion US
dollars in the ride-hailing specialist co-op OLA. The arrangement was executed in an
organization with Softbank. It likewise contributed a measure of 1 billion US dollars
in Indian food conveyance start-up Swiggy alongside Naspers, a South Africa-based
firm. Alibaba, the biggest internet business holding on the planet, isn't falling behind
in the pattern for putting resources into India. Alibaba has put 177 million US dollars
in Indian Payments Bank substance Paytm. (World FinTech Report – 2019)
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2.19 Market Trends
Figure 41: Market Trends

2.20 Market Influencers

Growing digital infrastructure
 Over the years, India has seen the monstrous advanced change
 The dispatch of UPI by the NPCI, the public authority upheld Digital India
program, and RBI's endorsed FinTech sandbox are the essential purposes for
the advancement
 A sandbox is a product testing climate that aides in the segregated execution
of projects or programming for autonomous assessment, observing, and testing
 UPI prepared for the carrying out of interoperable installment benefits across
FinTech organizations and occupant foundations in the country
 The dispatch of UPI in the nation has prompted the inescapable reception of
advanced installments among dealers and clients, making it the biggest
installment stage on the planet
 Digital India drive altogether affected working on the populace's computerized
development
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 The plan advanced computerized framework in the nation further developed
admittance to the advanced installment framework and aided in creating
monetary education among individuals
 Further, in August 2019 the Reserve Bank of India allowed FinTech
organizations, monetary foundations, and banks to build up a regulatory
sandbox(RS) for testing of inventive arrangements in regions like retail
installments, abundance the board, and computerized KYC
 The setting up of such a sandbox is relied upon to give a strong administrative
standard to the conceptualization of new items on a more limited size
Figure 42: Growing Digital Infrastructure

Change in consumer demographics and increased penetration of the internet
 During the most recent five years, the quantity of web clients in India has flooded
o The absolute number of web supporters expanded from 251.59 Mn in 2014
to 525.30 Mn in 2019
o Internet thickness or the number of web supporters per 100 occupants
expanded from 20.29 in 2014 to 38.02 in 2018
o The month to month information utilization per extraordinary association
was 86 MB in 2014, which expanded to 8320 MB in 2018
 Internet entrance rate in India is relied upon to increment extensively throughout the
following not many years
o Approximately 60% of the populace in India is assessed to utilize the web by
2022
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o The increment in normal web speed from 9.5 Mbps in 2017 to 31.2 Mbps by
2022 is expected to set up the web framework in the country
 The ascent in the number of web clients has empowered India to be the biggest and
the quickest developing computerized shoppers market on the planet
 Furthermore, the Indian populace is overwhelmed by the more youthful age with a
middle of 28.1 years (male: 27.5 years female: 28.9 years)
 Therefore, to coordinate with this fast digitization, monetary administrations will
undoubtedly re-examine their plans of action and work together with innovation-
driven new businesses or offer types of assistance through their computerized stages
Figure 43: Number of Internet Subscribers

Figure 44: Internet Density

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Upsurge in the target market
 Over the years, a critical piece of the Indian populace couldn't be a piece of the
formal monetary framework in the country
 The essential purpose for this is the absence of monetary mindfulness and the failure
of the conventional monetary specialist organizations to serve the section in a savvy
way
 However, the public authority dispatched different plans like Direct Benefit Transfer
(dispatched on first January 2013) and Jan Dhan Yojana (dispatched on 28th August
2014), which have helped in expanding mindfulness about monetary administrations
in the country
 This has made ready for FinTech organizations to serve the necessities of the
unbanked and under-banked populace with their minimal expense items
 Therefore, this has helped FinTech extend their objective buyer base and started new
business roads
Pradhan Mantri Jan Dhan Yojana
 This lead plan of the Indian government means to drive monetary

incorporation in the country
 The program brought about the increment in financial balance holders in the
nation, just as bringing a conduct change among the unbanked buyers
 This has prompted the ascent in the interest for tech-empowered monetary
items, in this manner setting out suitable open doors for the development of
FinTech organizations in the country
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Figure 45: Growth in the number of bank accounts under the Pradhan Mantri
Jan Dhan Yojana
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CHAPTER 3: IMPACT
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3.1 FinTech: Impact on Indian Financial Services Industry
With modified arrangements, central help, and striking advancements in widely
inclusive areas counting training, protection, and credit the executives, FinTech has
circumspectly yet gainfully reshaped the whole monetary administrations and
installments space. As per the Vision 2020 examination by Deloitte and CII, India is
progressively turning into a computerized economy with more than one billion cells,
330 million web clients (around 94% on cell gadgets), and 240 million cell phones.
India is advancing into a dynamic biological system that gives a discussion to

FinTech new companies to venture into unicorns of billions of dollars. FinTech
organizations in India follow different objectives, from entering new areas to focusing
on worldwide business sectors. Over the most recent couple of years, the development
of Indian FinTech has developed dramatically. As indicated by NASSCOM, the
Indian FinTech programming market is relied upon to arrive at USD 2.4 billion from
a current USD 1.2 billion by 2020.
Indian FinTech firms could address a part of the fundamental issues affecting Indian
cash related organizations — growing exertion, further developing a customer
experience, diminishing functional grinding, and engaging progressed channel
gathering and use. Legacy slanted constructions and higher fixed expense models of
regular banks and monetary organizations should offer a favoured situation for new
FinTech firms as banks play discover these inexorably versatile and imaginative new
organizations. FinTech \'s chance is to broaden the market, shape customer leads, and
effect long stretch changes in the money-related business. Some of FinTech \'s
beneficial portions for augmentation are given:
Indian FinTech firms can reshape the monetary administration industry in the going
with three distinct ways:
 FinTech should make outstanding and creative danger assessment
frameworks. Using tremendous data, significant learning, and elective data to
ensure credit and build FICO appraisals for clients with helpless credit
establishment would increase monetary administrations entrance in India.
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 FinTech associations are depended upon to diminish expenses and lift the
capability of monetary administrations. The upsides of less greasy working
models can be given to customers not being messed with legacy errands, IT
structures, and exorbitant actual frameworks
 FinTech can make an undeniably incredible, safe, and capable organic
arrangement of monetary administrations. FinTech firms are less
homogeneous than existing banks and deal exceptional learning configurations
to further develop capacities similarly to culture.
3.2 FinTech: Impact on Financial Service Providers

Insurance
The cutting-edge backup plans have perceived the requirements of the millennials and
have taken on vital changes to suit their necessities. Most backup plans presently offer
an internet-based technique for presenting the application, documenting cases, and
client assistance. They have made the entire interaction consistent. A few backup
plans permit recipients to start claims with a call and WhatsApp message. The
documentation is exceptionally negligible and can be submitted on the web,
successfully eliminating the requirement for a client to visit the guarantor's office.
Payments
Gone are the days when individuals remained in the long bank and ATM lines to pull
out cash. Most lodgings and shops currently acknowledge advanced installments.
Different portable wallets offer installments administrations. Most banks currently
have their own installments versatile application. Installments applications offer types
of assistance like an individual-to-individual money move, prepaid versatile re-
energize, service charge installments, etc. The digitization of cash has empowered a
credit-only economy.
Lending
The coming of FinTech has digitized loaning. Making numerous outings to the loan
specialist's office is a thing of bygone eras. FinTech has empowered an internet-based
strategy for credit applications. FinTech has taken the loaning business online as well
as simplified the cycle and a lot quicker. A few moneylenders offer moment credits
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with the least documentation. All you need to have is PAN and character
confirmation.
Investment
The trading companies have altogether profited from the happening to FinTech
organizations. Beforehand, financial backers needed to outfit different reports before
they contributed. FinTech organizations have totally changed the KYC documentation
measure. The KYC documentation has been simplified and bother-free with the
foundation of the Central KYC Registry (CKYC). FinTech organizations have
extirpated various venture conventions. You can easily put online in FDs, shared
assets, and financial exchanges.
3.3 COVID Impact on Indian FinTech Market

 Like the 2016 demonetization, the Covid-19 pandemic is one more milestone
improvement for FinTech firms. It has kicked off the advanced or contactless
installments again after the detailed lull because of the infection sway.
 The loaning organizations have been seriously affected on account of COVID-
19. While pandemic has sped up Indian clients' reception of advanced
monetary items, the new record openings for neobanks were at that point
above pre-Covid levels.
 Huge ventures are being made by setting up banks and insurance agencies,
which prompted the procurement and more speculations from financial
backers in 2020. In 2021, there will be expanded force in organizations among
FinTech and banks as Finance Minister asked banks to utilize a Co-beginning
model. The declaration mirrored the acknowledgment of FinTech firms by the
huge organization conventional monetary foundations.
 Difficulties for FinTech new businesses during mid-COVID19:
o The pandemic has upset the plans of action of numerous FinTechs
o FinTechs are probably going to confront a drawn-out time of
mellowed interest as utilization diminishes across India
o Because of movement limitations, new companies are battling with
the new businesses beginning
 Systems took by the majority of the FinTech firms:
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o Dispatched new items
o Improved/streamlined existing items
o Distinguished and designated new client fragments
o More client driven methodology
 It is normal that by the final quarter of 2021, organizations will begin seeing
GNPA levels contacting 3 to multiple times of pre-pandemic level and there
could be some overflow even into the following monetary year.
 With the normal liquidity crush in the underlying piece of the year,
collaboration in the space of co-loaning might be a significant topic for the
coming years. Numerous players can search for huge accomplices in the
financial space to accomplish pre-COVID-19 volume levels in Q4 and
afterward resulting development, yet their assortment efficiencies and
execution during these test times will be the deciding component.
 In the Union Budget 2021, the public authority of India declared the setting up
of a FinTech centre in Gujarat International Finance Tec (GIFT City). The
FinTech Hub will help make around 150,000 positions and speed up the
utilization of man-made consciousness, AI, and so forth it will drive tech-
empowered expense working which will enlighten the expanded significance
of digitization.
 The spending plan for 2021 likewise assigned INR 15 billion to help and lift
advanced installments. Making an 'awful bank' is additionally an intriguing
move, pointed toward moving terrible resources of banks to a resource
recreation organization (ARC) and an associated design to purchase out and
pivot focused on resources, especially of public area banks (PSBs).
3.4 High Customer Experiences - a Win – Win Scenario
Customers though are the first beneficiaries of any business; a win-win scenario is
also created for all including incumbent firms. If the customer journeys are being
effectively redesigned, it encourages customers to consider financial institutions to be
not only as service providers but also as experts who may be relied upon for advice
and also for a wider range of services. Some factors can impact customer experience
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positively. If firms specialize in some critical elements, they'll help in maximizing
their efforts in improving their customer journeys. These factors are discussed below.
Higher personalization:
Availability of giant customer data is often effectively employed in providing
personalized offerings and services consistent with the tastes and preferences of the
purchasers.
Increased speed of service:
Today’s Customers are habituated to induce things done quickly and digitally. Excess
delays are leading to customer turn-off.
Improved convenience:
24/7 services are available to supply access to any time service at anywhere through
any channel or device
Intuitive interaction:
Customers are guided comfortably through their journeys through design-based User -
interface principles.
Better functionality:
Firms stick with it improving them while solving the customer pain points. It helps in
providing innovative solutions.
Proactive insights:
Firms take the support of predictive analytics to spot and understand customers’ needs
beforehand and supply services accordingly. Firms help customers with the
prevention of fraud or money-saving opportunities. These startling administrations
may in some cases add appreciation and pleasure to the client experience.
3.5 Impact of FinTech in Banking

Loans:
It has changed the manner in which the banks work and has opened a gigantic new
market for market-based loaning. With the passage of FinTech organizations, credits
and related administrations can be effortlessly benefited by shoppers. Elective models
are being made to give shoppers capital, regardless of whether it is a business or a
person. These organizations are committed to further developing client experience,
monetary items, and expedient endorsement of credits.
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Payment Services:
FinTech organizations have influenced how the portions are made. Presently,
installments are made web-based utilizing the web or through cell phones, mitigating
the requirement for trader accounts. Cash can be moved straightforwardly to the
financial balance, which diminishes the odds of extortion and exchange charges.
Wealth Management:
With the ascent of FinTech, the manner in which individuals set aside cash, oversee
resources, and contribute their capital is evolving. Utilizing the new monetary
innovation, these organizations plan to give tweaked answers for dealing with their
own abundance and ventures. FinTech programming additionally helps in contrasting
choices all together with making the best growth strategies for individual budgets.
Remittal Transfers:
For years, banks and individuals have battled with conventional settlement benefits
that can be costly and convoluted. All through the long haul, FinTech associations
have strived to make these inbound and outbound trades direct and moderate.
Insurance Services:
Acquiring protection has now turned into a less intricate strategy. With modified
plans, all should be possible on the web. From the application cycle to the installment
of charges occasionally, this paper-broad help has developed with FinTech
advancements hugely.
The coming of the FinTech business has simplified banking and straightforward.
FinTech products were worked starting from the earliest stage, at the top of the
priority list of the new crowd, who were more educated and who were more tech-
savvy and looked for ease in the transaction. Generally, FinTech has gotten some key
changes in the Indian banking ecosystem:
 Upgraded openings for monetary consideration

 A culture of advancement and business
 Ascent of NBFCs as tech-empowered players
 Tech-empowered credit evaluation
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 Further developed client experience in credit endorsement and disbursal
 Changed KYC documentation measure
 Smoothen out items and administrations for SMEs
 Changing how individuals make day by day installments
 Quicker and safer cash moves
 Further developed abundance the board choices
 Diminished intricacy and uncertainty in the protection
 Information investigation and blockchain for straightforwardness
 New financial models like neobanks, cloud banking, and more
3.6 Impact of FinTech Companies on overall Indian Economy

 Loans:
There is an immense change in the strategies for working Banks. These days, there is
another market for the Lending-based market. Credits and comparable advances can
be effortlessly benefited by a purchaser.
 Payments:
Payments are handily made online through the web by means of cell phones. Online
installments are the critical advantages of web-based shopping nowadays. Likewise,
cash can be moved effectively starting with one Bank Account then onto the next with
a lesser measure of exchange charges, and furthermore, chances of misrepresentation
are limited.
 Fund Management:
With the development of this innovation, there are heaps of changes in the
propensities and manners by which purchasers are setting aside cash, contributing, or
dealing with their resources. An organization plans to give total answers for
speculation and reserve funds. FinTech Software additionally helps in picking the best
speculation by giving an alternative to analyse.
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 Remittance:
Initially there was a battle with customary settlements that were costly, convoluted,
and tedious. With the assistance of FinTech Companies, these inbound and outbound
exchanges are basic, simple, and moderate.
 Insurance Services:
One can obtain Insurance online with every one of the tweaked plans and subtleties
accessible. Each cycle is presently paperless and credit only beginning from applying
the installment of premium.
 Equity-Funding:
Through these advancements, new Project Ventures and Businesses can bring the
asset up in the type of Equity from an enormous number of individuals.
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CHAPTER 4: CHALLENGES
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4.1 Challenges of FinTech in India
FinTech despite having huge opportunities has still a tricky path to steer on. Below is
that the probable roadblocks list within the path of FinTech enterprises
 It's not very easy to enter into the Indian market and perform because of the
restrictive regulatory framework designed to forestall fraud. It acts as a large
barrier for brand spanking new entrants. they have to satisfy plenty of
formalities before the beginning of its operations itself
 Unbanked population, Poor infrastructure in terms of Internet Connectivity,
and low literacy level are the opposite hindrances. Still, a large Indian
population (48 percent) doesn't have bank accounts which are a requirement
for conducting online transactions. While people have bank accounts they still
face the problems of poor internet connectivity which takes more intervals to
end the transaction. So people tend to prefer a cash transaction instead of a
web transaction. Keeping aside, the purpose of getting a checking account and
internet connectivity the bulk of the Indian population still doesn't have
enough financial literacy level suitable to travel for it.
 It's very tough to vary the conservative approach of merchants and users who
deal the daily transactions with cash. The bulk of the aged people are doing
these transactions in cash for an extended time and it’s hard to suddenly
change their old habits and introduce them to new avenues at this age.
 Different frauds resulting in loss of cash in online transactions are an awfully
hard bite to swallow for the shoppers. People’s money is looted by the
fraudsters by using technology and this has been a good challenge ahead of
the FinTech firms. Therefore, the firms indeed should work effortlessly for
bringing improvements in infrastructure and being more consumer-friendly.
 FinTech in India is bereft of a scarcity of presidency support and Incentives
for shielding their interests. At a really basic level, this demoralizes the
entrepreneurs. They weren't provided the correct guidance and support to start
out though it's something for the betterment of the country’s economy still.
 Like in any industry gaining investors' trust is incredibly difficult nowadays
for the FinTech industry too. Getting the desired seed capital and another
investment on time is becoming very difficult and this can be visiting reflect
negatively on the operations and functioning.
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4.2 Challenges Impacting the FinTech Sector
1. Uncertainty in Regulation:
India is one of only a handful of exceptional purviews with a particular Payments and
Settlements law to accommodate guideline and management of installments and
settlement frameworks in India and to assign the Reserve Bank as the expert for the
reason. After the administrative fillip, India actually has the best approach as far as
giving security to business stages. A couple of guidelines including guidelines for safe
speculation leaves, its remain on cryptographic money, installment guidelines by
NPCI, and so on are as yet developing and ongoing changes in the administrative
situation will be consolidated thinking about the dynamism of the FinTech business.
Further, cross-line installments are as of now not being channelized through trendy
new companies and get led through age-old financial channels. A uniform norm of
training (across locals), a usually deciphered language, and normalized KYC
standards combined with proportionate guidelines can open up an immense window
of unfamiliar exchanges through FinTechs.
2. Discovery of Platforms:
As a result of an abrupt ascent in FinTechs openings, numerous players have begun
taking an interest and opening up their individual FinTechs incomparable or covering
spaces. There are various FinTech new businesses making it swarmed to make a
brand review among all. To catch development, a portion of the overall industry and
clients in this generally divided market will be trying for players except if
combination turns into the thing to take care of.
3. Data Security Risk:

Information spills, stage vacation, and data burglary have become very wild in the
FinTech space. Information, computerized reasoning, and AI are the foundation of
FinTechs. Fostering a solid system to ensure information is of central significance and
players will need to put profoundly in components to control this danger and agree
with administrative prerequisites towards information security. Further, control of
information and the decision of offering the individual information to different
applications and sites ought to be practiced as a solid privilege by Indian masses;
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mindfulness and advanced schooling to that degree are as yet inadequate with regards
to prompting information spills and improper utilization of classified information.
4. Lack of trust and awareness:

Because of an absence of mechanical progressions, mindfulness, and variation to
these FinTechs, the infiltration of these administrations has so far stayed confined to
metros and top-level urban communities. This imbalance of access and its absence of
provincial entrance and mass variation in lower-level urban areas will stay the
significant prevention and the significant development driver also for the area. Till
then, at that point, the dependence on neighbourhood moneylenders and inclination
for cash exchanges will proceed.
5. Systemic Risk:
With the colossal development of the FinTechs and the wild development in hidden
misconducts because of the idea of the credit stream, have prudential guidelines
controlling the framework wide danger multiplication. Customary banks give signs of
progress sourced from Deposits, though these FinTech organizations loan from Debt
Funds/Equity Funds. In this manner, the danger can saturate to different classes of
individuals including financial backers, shoppers, and empowering influences.
4.3 Challenges for Future Development in FinTech

FinTechs will stand up to a few chances and difficulties later on. Extensively, they
need to address six worries to turn out to be more productive, solid, even handed, and
versatile.
1) Regardless of enormous extension for development, cross-line installments are

as yet an unchartered area for FinTechs. Benefiting settlement administrations
troubles transient laborers because of steep expenses related to such
settlements. A high portion of getting line installments courses through
reporter banks, whose decreasing numbers could result in much greater
expenses and retrogression to casual, unregulated installment networks in
India, cross-line exchanges is slow contrasted with home grown installments
and hardly any choices are accessible, in spite of substantial internal individual
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settlements. To make installment frameworks in various locales interoperable,
installment guidelines should be meant as a typical language. For this, norms
and practices across wards should be composed, and shared trust in every
home grown organization's Know Your Customer (KYC) and Anti-Money
Laundering (AML) systems should be set up. As of late, UPI was associated
with Singapore's Network for Electronic Transfers (NETS) on a pilot premise
at the Singapore FinTech Festival 2019, proposing that huge advances could
be made inside the current arrangement. The UPI framework gets comfortable
fiat cash inside the controlled monetary framework edge and hence, presents
less danger than frameworks, for example, stable coins which are normally
overseen by BigTechs.
2) The expanding ubiquity of FinTechs could compound information use,

insurance, and protection concerns if the legal rights and commitments of
specialist organizations are not obviously outlined. AI calculations could
duplicate and sustain existing examples of segregation and reject weak
segments. As the Indian populace becomes information-rich with expanding
Internet and portable inclusion, the following test is engaging buyers with the
information produced by them through satisfactory lawful and administrative
mediations. Residents ought to have the option to practice control of their
information like some other individual resource. There is an arising interest for
information limitation from different wards. In this unique situation, an answer
could be a model where information is put away locally and just double (Yes
or No) questions are permitted on it from abroad, from a predetermined and
internationally endless supply of allowed inquiries.
3) There is a need to discover the effect of FinTech on monetary soundness,

because of the greater potential for framework-wide danger with its extension.
Loaning principles could debilitate because of more extensive credit access
and higher rivalry. Since FinTech moneylenders give propels from obligation
and value instead of from stores, such credit could be more procyclical and
unstable because of the absence of standard credit rules. Further, credit
movement outside the prudential guideline space could deliver credit-related
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countercyclical approaches less viable. Reputational, digital, and outsider
dangers might emerge for banks interfacing with FinTechs.
4) There is an imbalance of admittance to FinTech administrations. Regardless of

having the world's second-biggest Internet client base, admittance to the
Internet is still profoundly one-sided towards the metropolitan, male, and
princely populace sections. Confidence in the online commercial centre is low
and a regular client requires 3-4 months to make their first online exchange.
Most clients utilize online stages for item explore however lean toward
ensuing disconnected buys. However, 'miniature shippers in India represent a
staggering extent of deals; they have been avoided with regards to the credit-
only upheaval particularly in more modest urban areas. Notwithstanding the
high infiltration of portable information and cell phones, use for monetary
exchanges is low because of conduct reasons like absence of trust, confusions
about tax collection, absence of applied information in utilizing computerized
installment modes, and saw security dangers.
5) The issue of shopper security and advanced training. Controllers need to

pressure pre-emptive extortion recognition, while additionally coordinating
computerized proficiency into monetary education to dissipate confusion.
Security arrangements and complaint redressed components should be
rearranged and pitched to support investment by low-pay gatherings.
Nonetheless, monetary proficiency and computerized cleanliness alone might
be lacking. Cross-country proof proposes that paying with cash is a
propensity, by and large, delayed to change. In China, road merchants,
buskers, and even acknowledge electronic installments. Be that as it may, in
Tokyo, six of ten eateries require cash installment. Money use increments as
worries about protection rise, while it decays as trust in banks rises. In this
manner, approaches to elevate electronic installments need to address major
worries about protection and trust in monetary organizations.
6) Controllers need to behave impartially. The Report of the Working Group on

FinTech and Digital Banking alerts that controllers ought to neither
overprotect officeholders nor unduly favour newbie’s by applying differential
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administrative treatment. With the expanding strength of huge firms in
advanced installments, there will be a rise in trade-off between information-
filled oligopoly for modest administrations and the requirement for re-
adjusting motivations to encourage more modest, more imaginative firms for a
cutthroat environment. Notwithstanding, to follow the guideline of non-
partisanship, "specialists might need to battle with stricter treatment for
specific sorts of movement, like where a case on the stage's accounting report
is produced or where retail financial backers and customers are included".
4.4 Key challenges Indian FinTech Companies and Start-ups Are

Facing
Long raising support cycles, passed up major opportunity targets and expanding
misfortunes are some extremely normal issues looked at by FinTech loaning
organizations. These issues emerge principally because of the fumble of the loaning
lifecycle. There are different difficulties that FinTech's new businesses in the nation
face each day. We examine a couple of them beneath:
1. Regulatory and Compliance Laws

Numerous laws definitely add to the lull of the FinTech new companies in Indian
monetary business sectors. Not exclusively are these guidelines testing to adapt to, yet
they additionally make it hard for FinTech players to enter the Indian business sectors.
Consistence laws are laid set up as a prohibitive administrative system to forestall
misrepresentation. Notwithstanding, they also go about as enormous obstructions for
the new FinTech participants. There is a major rundown of customs that FinTech new
companies need to satisfy before they even beginning activities.
2. Unbanked and Underbanked Population

In any case, FinTechs had staggered development due to helpless foundations like low
web infiltration and proficiency levels in India. Albeit the Indian government is
handling these issues with liberal strategies, the advantages may be apparent over the
long haul. Actually even today an enormous fragment of the Indian populace is
unbanked, and in this manner inclines toward cash exchanges as opposed to online
buys.
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One more obstacle for FinTech development in India is low monetary proficiency in
the Indian people group. For instance, India dispatched the Pradhan Mantri Jan Dhan
Yojana to work on monetary incorporation in the country. In any case, subsequent to
opening a sum of 180 billion ledgers, over 48% of them stayed torpid without a
solitary exchange in a year, a World Bank report recommends. In spite of the relative
multitude of drives set up, India is a long way from the way to monetary
consideration.
3. Trust in Cash
Most Indians follow a moderate methodology with regards to day-by-day exchanges
and wind up utilizing cash. They have confided in cash as a vehicle of deals for a long
time and think that it is hard to change their propensities and adjust to new roads.
Offering financial sorts of help with an unbanked market is problematic since these
organizations are routinely related to modernized stunts. A few Indians neglect to see
the utility that FinTech offers through their imaginative items and administration
because of monetary ignorance.
4. Cyberthreats
FinTech organizations manage touchy client information. Various network protection
dangers bring about huge financial misfortunes during on the web exchanges. These
are altogether ridiculous for clients. The innovation that offers accommodation
additionally opens up individuals' online records to fraudsters hoping to take their
resources. This is a consistent stream to the prominence of FinTechs. FinTechs need
to strengthen against any test presented by programmers. An enormous measure of
monetary information of people and organizations is made accessible carefully. This
expands the danger of online protection breaks.
5. Lack of Support from the Government

FinTechs face a desperate absence of legislative help and motivations to secure their
premium in the Indian monetary business sectors. This can be exceptionally
demotivating for new FinTech players. FinTechs assumes an essential part in driving
monetary development and should be offered every one of the ability to flourish.
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6. Industry-Related Complexities
FinTechs are intended to work with a complex working model. This makes it hard for
them to keep a smooth relationship with other monetary organizations like banks.
Banks, then again, dread to work with FinTechs gambling notoriety misfortune.
4.5 Challenges Banks are facing

1. Continuous Innovation
Innovation comes from bits of knowledge, and experiences are found through client
connections and constant hierarchical examination. Bits of knowledge without
activity, nonetheless, are barren — it's crucial that monetary foundations be ready to
turn when important to address market requests while developing the client
experience.
2. Outdated Mobile Experiences

Nowadays, every bank or credit association has its own marked versatile application
— notwithstanding; on the grounds that an association has a portable financial
technique doesn't imply that it's being utilized as adequately as could be expected. A
bank's portable encounter should be quick, simple to utilize, completely included
(think live visit, voice-empowered computerized help, and so forth), secure, and
consistently refreshed to keep clients fulfilled. A few banks have even begun to
rethink what a banking application could be by presenting versatile installment
usefulness that empowers clients to treat their cell phones like secure advanced
wallets and right away exchange cash to loved ones.
3. Customer Retention
Monetary administrations clients anticipate customized and significant encounters
through straightforward and natural interfaces on any gadget, anyplace, and
whenever. In spite of the fact that client experience can be difficult to evaluate, client
turnover is unmistakable and client dependability is rapidly turning into a jeopardized
idea. Client steadfastness is a result of rich customer connections that start with
knowing the client and their assumptions, just as carrying out a continuous customer-
driven methodology.
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4. Rising Expectations
The present consumer is more intelligent, savvier, and more educated than any other
time in recent memory and expects a serious level of personalization and comfort out
of their financial experience. Changing client socioeconomics assumes a significant
part in these elevated assumptions: With each new age of banking, clients come a
more inborn comprehension of innovation and, thus, an expanded assumption for
digitized encounters.
Millennials have driven the charge to digitization, with five out of six detailing that
they like to associate with brands through online media; when reviewed, recent
college grads were additionally found to make up the biggest level of portable
financial clients, at 47%. In view of this pattern, banks can anticipate people in the
future, beginning with Gen Z, to be significantly more put resources into Omni
channel banking and receptive to innovation.
5. Increasing Competition
The danger presented by FinTechs, which regularly focus on the absolute most
beneficial regions in monetary administrations, is huge. These new industry
contestants are constraining numerous monetary establishments to look for
organizations and additionally securing openings as a makeshift measure; truth be
told, Goldman Sachs, themselves, as of late stood out as truly newsworthy for
intensely putting resources into FinTech. To keep an upper hand, customary banks
and credit associations should gain from FinTechs, which owe their prosperity to
giving a streamlined and instinctive client experience.
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CHAPTER 5: FUTURE
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5.1 Future of FinTech in India
Figure 46: FinTech Market Size (INR Bn)
(Source: Business World News dated September 11, 2020)
In a report, by Research and Markets, as of March 2020, the FinTech market in India
is expected to expand at a compound annual growth rate (CAGR) of ~22.7% during
the 2020-2025 Period.
The future of the FinTech industry looks promising and growing rapidly on the back
of
 Rise of start-ups in the FinTech industry

 Penetration of Smartphone users
 Continuous build-up of the digital infrastructure
 Overall streamlining of financial process in many industries
5.2 FinTech - A SWOT Analysis
Strengths
The benefits of FinTech are complex. By making the communication among
customers and monetary administrations just as between monetary specialist
organizations simpler and easier, FinTech offers huge potential to upgrade
efficiencies, diminish costs, modernize the monetary foundation, empower more
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viable danger the executives and extend admittance to monetary administrations
across a scope of various regions including loaning, installments, individual budget,
cash move, and protection.
Weaknesses
The security of individual data given by purchasers online is under the spotlight
nowadays. The new information break at Face book is a valid example. This issue is
especially pertinent for the FinTech area similar to the danger of misrepresentation or
monetary dangers related to purchasers not completely understanding the new
monetary items.
Opportunities
The 'de gambling’ marvel has turned into an existential danger to many little states in
the Commonwealth, particularly in the Caribbean and the Pacific. FinTech might
actually offer answers for a portion of the vital drivers of de-gambling, for example,
the 'Know Your Customer strategy' or dispose of the requirement for comparing
banking connections out and out.
The declining cost of internet providers and developing versatile and cell phone
infiltration in little and agricultural nations additionally give an incredible chance to
use FinTech to advance monetary consideration among the assessed two billion
individuals who stay without admittance to formal monetary administrations.
While numerous Central Banks are effectively advancing FinTech through 'sandbox'
approaches, the current administrative boundaries are assisting manages an account
with keeping up with the norm. The FinTech and the conventional financial area,
nonetheless, need not generally contend yet can likewise supplement and gain from
one another, manufacturing new organizations for the effective conveyance of
monetary administrations.
Threats
Cybercrime might possibly sabotage the trustworthiness of the whole monetary
framework. This is maybe the fundamental motivation behind why some Central
Banks are hesitant to accept FinTech all the more extensively. In the Commonwealth,
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numerous little and agricultural nations do not have the limit and foundation to protect
network safety. There are likewise worries that numerous FinTech new businesses are
too focussed on dispatching their item rapidly, without giving due consideration to
safety efforts.
Then, at that point, there is likely maltreatment of FinTech. Without legitimate

guidelines, simple admittance to back can energize hazardous practices like exorbitant
acquiring and high close-to-home obligation gathering. There is additionally some
genuine worry about the market rivalry. A couple of early contestants in the market
can get too huge too early and can use impressive monopolistic force. Then again, an
excessive number of participants offering comparative types of assistance can
likewise swarm the market and make oversight more troublesome. This is particularly
valid for some little and non-industrial nations where the ascent of the area can extend
currently restricted administrative and administrative limits.
Figure 47: Short Term and Long Term effects of Covid-19 on FinTech
(Source: cbinsights.com)
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5.3 FinTech Trends
Digital-only banking:
The monetary area moves immediately when banks essentially give worldwide
installments, Peer-to-Peer moves, contactless MasterCard alongside no exchange
charges, and freedoms to trade and buy Bitcoin, Ethereum, and different other digital
forms of money. Banking measures that offer these administrations to clients through
online channels are progressively altered by computerized just banking. These are
amazingly gainful since, with the assistance of computerized measures, no client
needs to invest energy visiting the banks actually, sit tight in a long queue for banking
administrations, and do a ton of desk work. Because of the ascent of computerized
just banks, visits to banks have dropped by 36% somewhere in the range of 2017 and
2022. The Non-necessity of actual visits has been a shelter during the hour of the
pandemic, and that has thus brought about the work of being acknowledged at an
expanding number of banks. Different advantages of computerized just banking
incorporate quick bill installments, practical expense the executives, continuous
examination; reset pins from home, and speedy equilibrium survey.
Biometric security systems:

Different computerized monetary administrations like versatile banking have become
so famous because of expanded web use and cell phones. However, this is a decent
practice; the expansions in computerized administrations raise a great deal of safety-
related inquiries. Cybercrime is additionally another issue that continues to increment
in number each day. This is the reason each FinTech organization ought to consider
taking important safety efforts, and one approach to do that is to add a biometric
framework to the rundown!
Biometric security frameworks give clients certainty that all their own and monetary
data is defended, and since the presentation of different biometrics advancements like
facial acknowledgment and unique mark ID are additionally a piece of cell phones
today, biometric security frameworks can be executed to turn into a piece of
individuals' regular daily existences. Be that as it may, in the years to come,
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contactless biometric arrangements are accepted to assume control over touch-based
arrangements.
RPA:
RPA (Robotic Process Automation) is an innovation that utilizes computerized robots
or projects (bots) to robotize explicit and repetitive undertakings that people
ordinarily do. Numerous associations have effectively executed comparative
frameworks to let loose assets and increment exactness. Many have likewise taken on
the innovation to computerize back-end office measures like client on boarding,
security checks, and compromise of installments, account upkeep, and then some.
The main benefit of RPA is that robots can do every one of these jobs faster and all
the more proficiently, permitting human workers to zero in on considerably more
complicated and innovative approaches.
Blockchain:
However, initially intended to zero in on cryptographic forms of money, blockchain
innovation has completely changed the working of the FinTech business today. With
this innovation, every exchange is guaranteed to be done in a safe and safe way;
blockchain decentralizes the confirmation cycle of exchange, and the resulting
expansion in the security of exchange has implied that many banks and monetary
organizations have effectively embraced it and are at present utilizing its advantages!
Blockchain ensures that all the data stores are gotten start to finish while there is the
least danger. It can likewise be executed to guarantee safe cross-line installments.
These are a couple of reasons why blockchain is moving today.
Artificial Intelligence (AI)

Banks overall are intending to utilize Artificial Intelligence for a large number of their
interior activities. As per Autonomous Research, AI is accepted to lessen 22% of the
functional costs in a bank by 2030, implying that banks will actually want to save
around $1 trillion basically by carrying out AI for their activities.
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Monetary establishments can utilize AI to deal with the expanding digital assaults by
recognizing monetary dangers and cheats. Simulated intelligence can likewise be
made to work in a client-driven way by carrying out calculations that can record all
collaborations with the most extreme accuracy and precision. Through customer
administration arrangements like Chatbots, Artificial Intelligence has effectively
shown its handiness in monetary knowledge – it is inevitable that monetary
foundations and banks embrace AI for different purposes.
Voice-enabled payments
The prominence of Siri and Alexa has shown how significant voice innovation is in
our regular routines. In any case, these advancements cannot exclusively be utilized
for assisting individuals with turning off their lights and perusing their news yet can
likewise assist them with making simple installments. Reports have shown that there
are over 3.25 billion voice partners being utilized all throughout the planet. Along
these lines, when an ever-increasing number of clients begin contingent upon their
Smartphones for installments, voice innovation may take over conventional
installment strategies and become the new installment arrangement.
Open banking
Open banking unites banks and FinTech, empowering information organizing across a
few monetary organizations. It additionally guarantees that the information delivered
by monetary specialist co-ops is normalized and secure, making data sharing simpler
among various approved associations on the web. It can likewise permit clients to deal
with their monetary records in a safe and available way by offering them a merged
perspective on their financial records. By making ledger the board straightforward and
simple, open banking can possibly work on the monetary judgment of clients and can
possibly help long-haul abundance creation.
Virtual cards instead of plastic

Utilizing virtual cards rather than plastic isn't new however is most certainly getting
famous this year. One of the significant reasons why it is acquiring ubiquity is high
security; data can't be taken or replicated effectively except if an actual medium is
available. Clients will likewise not need to stress over discarding the cards once they
terminate.
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Monetary foundations can arm their staff with virtual cards to assist them with
bettering oversee costs, and numerous associations have as of now executed
comparative frameworks set up.
Autonomous finance
Independent money utilizes ML, AI, and mechanization to offer clients an issue-free
encounter on versatile entries. In this innovation, the client isn't needed to give inputs
straightforwardly. All things being equal, the client can utilize the virtual investor
made explicitly for him on the entry. These one-of-a-kind virtual brokers will actually
want to oversee and dissect the client's dangers, portfolio, and speculations. The AI
calculation will then, at that point create the best reserve funds and venture
alternatives for the clients, diminishing the odds of any off-base careful decisions or
human blunders.
Cyber Security
With the expanding FinTech arrangements being carried out, monetary establishments
should not leave out effective network safety techniques. Digital dangers increment
consistently with expanded online exchanges, and advanced cycles and cyber-attacks
can make shared dangers across frameworks. This is the reason monetary foundations
should make themselves digital secure and execute compelling network safety
methodologies to ensure themselves and their customers.
5.4 What about the ethics of FinTech?

With this expanded admittance to monetary administrations, clients' very own data
has opened up and is effectively available. Open financial APIs make it simple for
FinTechs to work with conventional financial information. Further, the unstructured
information accessible on the web could be mined to acquire new client experiences.
While there are many advantages to mining client information, the dim sides of
computerized advancements are underrepresented in current conversations on the
digitalization of monetary items and administrations.
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The current discussion in this setting is by all accounts slanted toward turf battles
among old and new advances, occupant banks and testing FinTechs, and other serious
components, zeroing in less on the more significant parts of information
proprietorship and purchaser rights.
For instance, in a new article, the economist examines proprietorship issues identified
with the expanding advanced substance in ordinary innovation like vehicles, clothes
washers, and even sex toys! The story contends that if makers of these inexorably
digitized machines and gadgets implant the rights to shoppers' very own information
in their items and administrations, buyers' information proprietorship rights and their
capacities to get these will diminish to representative force, making it inconceivable
for customers to guarantee responsibility for they are compelled to share when
utilizing as well as burning-through items/administrations they have legitimately paid
for. This point turns out to be fundamentally significant in the monetary
administration's area given the related affectability and security contemplations.
5.5 Regulations versus ethics

While guidelines are set up to control the double-dealing of individual data, it is
intriguing to see the degree to which FinTechs authorize these preventive cycles and
methods against the unapproved or shifty utilization of touchy client information.
Initial, one line of investigation is to decide if current guidelines are adequate in

securing customer information or new approaches ought to be set up to guarantee
better control. For sure, some new voices have stood in opposition to dormant lawful
and institutional systems that have up to this point been not able to viably manage the
extent of movement and interruption abusing purchaser and licensed innovation rights
brought about by troublesome advanced advances. Will Payment Services Directive
2(PSD) achieve huge changes on this front? The way things are, customary banking is
turning out to be progressively managed, which gives some level of safety to shoppers
of monetary administrations. Be that as it may, FinTech is still ineffectively managed,
so there is more danger implied for purchasers of FinTech arrangements in the public
eye on the loose. For instance, "know your client" guidelines, just as hostile to illegal
tax avoidance and against psychological militant financing guidelines, make
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conventional banks less leaned to offer monetary types of assistance to specific pieces
of the market. FinTechs are yet to be completely managed by these laws.
Moreover, as FinTech firms foster their innovations, clients are empowered to change
their profiles on the web. In any case, in a new report, the Financial Industry
Regulatory Authority (FINRA) states, "If financial backers oftentimes change their
profile, a powerful practice is for representative vendors to contact the financial
backer to comprehend why the financial backer is rolling out these improvements."
Thus, the innovative strengthening of clients through a feeling of responsibility for
individual information is plainly proliferated decision that FinTechs ought to
investigate further. The potential gain of FINRAs report is that it prompts FinTechs,
yet without an authorizing system, to consent to customary financial guidelines. The
odd side is that FINRA considers client profile changes destructive and expects that
FinTechs will decide clients' genuine expectations forestall extortion or another
unsafe action. A particularly slanted perspective on client information hazards making
one more thorough device that inconveniences clients opposite FinTechs.
Another rising concern is guaranteeing guidelines are reliably carried out across
FinTechs given their different contributions. While clients approach more customized
items and administrations, they additionally face higher dangers of extortion if their
data isn't taken care of safely or is compromised. Without a doubt, the FinTech
monetary environment may be undermined assuming even a solitary untoward case is
accounted for—not at all like with customary monetary establishments, where just the
particular element is influenced. Moreover, there might be less straightforwardness
for clients in regards to where their own and freely accessible data is being utilized,
and they may turn out to be touchier towards online social commitment, accordingly
making yet more data imbalances that reduce clients' on the right track to their own
information. There is additionally an expanded danger of crooks and psychological
oppressors taking advantage of innovation to help their exercises. A new article in
Financial Times additionally brings up the issue of whether guidelines ought to be set
up for savvy home apparatuses as information compromises there would mean
straightforwardly barging into somebody's private space.
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5.6 Some considerations for FinTechs
To begin with, numerous online exchange locales offer their clients a store containing
chronicled buy information. FinTechs could propel this training by offering their
clients a log containing data on how their own information has been utilized. Clients
ought to have the option to cripple the utilization of individual information along an
affectability scale, permitting FinTechs to utilize specific kinds of information and
denying them to utilize different sorts of information.
Second, most online records contain awry benefits, opposite clients. Clients
infrequently read account agreements, which regularly contain conditions that give
stage proprietors the option to utilize client information for business or different
purposes. FinTech firms—truth be told, all organizations—ought to acquaint logs
educating clients with whom their information has been sold (or shared), and they
should make these logs promptly accessible to clients. This degree of
straightforwardness ought to be the base edge for all online client accounts.
Third, FinTech firms could accomplish more than this: they could permit clients to
uninhibitedly pick assuming they need their information to be shared at all and,
assuming this is the case, with whom information can be shared, what sort of
information can be shared, and for what purposes. This training would allow clients
the opportunity to choose how their information will be utilized and to control the
spread of data about their deeds while at the same time permitting FinTech firms to
foster administrations that are all the more firmly lined up with developing patterns
among clients.
We know that these focuses may appear to repress business; however, working at the
cutting edge of an information-driven age accompanies the obligation of illustrating
FinTech firms' center business. We accept it as a given that most stage proprietors
consider data financier a piece of their center business, yet on the off chance that this
comes at the expense of client honesty, it is sketchy whether such darkness is moral
over the long haul. The expanding progression of AI arrangements that length
numerous gadgets and innovative stages should fill in as an underlying notice.
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"Client first" is a vital mantra for some organizations nowadays, and client experience
is at the core of most firms' systems. Around here setting, overlooking essential
morals may quickly pull a firm down on moral grounds. Consequently, it is similarly
significant for FinTechs to consider running a morals motor notwithstanding their
RegTech, cloud, or AI motors. Without a doubt, as per a 2015 World Economic
Forum (WEF) report, the association is now discussing monetary administrations
firms' moral utilization of client data, attempting to guarantee consistency across the
business, and setting industry principles. FinTechs should invite this sort of drive all
things considered to their greatest advantage to take part in a standard-setting that
follows sound and moral strategic approaches.
5.7 Is FinTech more ethical than traditional banking?

FinTech isn't 'innately' more moral than customary banking; everything's to do with
individuals and the designs that make it up. Obviously, individuals are as yet
blameable of being, indeed, individuals. Be that as it may, its whole presence as
another industry depends on the trust procured from its clients. FinTechs need to show
improvement over those that preceded. FinTechs need to be there for individuals who
have been abandoned by banking's weaknesses.
FinTech likewise has one major blacksmith's iron looming over its head: its clients
can go somewhere else. It's an industry that requires its clients to jump aboard, and in
the event that they choose to leave on account of terrible practices and exploitative
conduct, they can't actually get around that. Clients will leave and take their cash
somewhere else. Financial backers will take their assets to less troublesome freedoms.
That joined with the impending age of morally disapproved twenty to thirty-year-olds,
there simply isn't as a very remarkable heritage for FinTech organizations to depend
on. In the event that they don't act in a normal manner, they may basically bite the
dust.
The extraordinary thing about FinTech is that it's a fresh start. Inheritance banks are
overloaded with a set of experiences and a design that multiplied and boosted awful
conduct — to a degree they actually do. FinTech has an ideal chance for better morals
directly all along
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5.8 Examples of FinTech in India
Unicorns in FinTech
A unicorn organization, or unicorn start-up, is a privately owned business with a
valuation of more than $1 Bn. As per Hurun Global Unicorn List 2020, India is home
to 21 unicorns, altogether esteemed at $73.2 Bn and FinTech organization Paytm is
India's most elevated esteemed unicorn, at $16 Bn. India has added three new
unicorns to the rundown in 2020. Alongside being the most elevated esteemed Indian
unicorn, FinTech organization Paytm is additionally the most elevated gainer in the
Indian unicorn classification. Out of absolute unicorns in India, 1/3rd are FinTech
organizations.
Name: PayTM
Founded: 2010
Segment: Payments
Figure 48: Paytm logo
Paytm and is India's biggest payment organization that offers purchasers multi-source
and multi-objective payment arrangements. They permit purchasers to make payment
from any financial balance to some other ledger liberated from cost, i.e., 0% fee
charges. More than 8 million dealers have benefited from its far-reaching payment
arrangements.
Paytm was established by Vijay Shekhar Sharma and is claimed by One97

Communications and is authorized by RBI. The Paytm application permits clients to
search for both physical and advanced merchandise, and furthermore pay for DTH
plans, bill payments, and mobile recharges.
The organization cooperated with Alibaba's distributed computing arm – 'AliCloud' to

grow its payment network at a worldwide scale. They have financial backers like
Berkshire Hathaway, SoftBank Group, and MediaTek and surprisingly raised an
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undisclosed sum from Ratan Tata in March 2015. It is ostensibly the greatest FinTech
organization in India.
Paytm gives an application-based wallet to buyer installments. It likewise gives an

online wallet to versatile re-energize, charges installments, travel appointments, inn
and ticket booking, booking chamber, gold buy, gifts, and so on It offers banking
administrations, Mastercards, advances, and speculation stages for protection,
common assets, and then some. It additionally offers Paytm Mall for internet
shopping of versatile, garments, food, frill, hardware, toys, and then some.
The most effective method to utilize Paytm:

1) Make a Paytm account utilizing your portable number and email ID.
2) You can add cash to your 'Paytm Wallet' by means of 3 substitutes - net
banking, charge card, or Visa
3) You can move cash to another person by choosing the 'pay or send' choice.
4) You can make installments to others or ledgers on Paytm by checking a QR
code.
5) You can likewise send cash to other Paytm clients through their telephone
numbers.
Figure 49: Paytm Valuation (INR Bn)

(Source: FinTech Industry in India - Future of Financial services)
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Name: PolicyBazaar
Founded: 2008
Segment: InsurTech
Figure 50: Policybazaar logo
PolicyBazaar was established by Yashish Dahiya, Alok Bansal, and Avaneesh Nirjar
in June 2008 in Gurugram. They are one of numerous FinTech new businesses to
emerge in Gurgaon. They have raised more than $650 million starting in 2020.
PolicyBazaar gives an online protection examination stage for people. It offers
protection cites forever, wellbeing, auto, and that's only the tip of the iceberg. It
likewise gives claims handling administrations.
PolicyBazaar is an online protection aggregator for a similar investigation of items

that are presented by different guarantors utilizing boundaries like value, quality, and
key advantages. It assists clients with looking at protection strategies and helps them
in choosing the best or the most applicable approach that can be bought on the web or
disconnected.
The online stage started as a value examination site and a data entryway for finding
out with regards to protection and related projects; it then, at that point extended to
turn into a commercial center for protection strategies.
PolicyBazaar has restricted with protection specialists which assists it with acquiring
data like value, advantage, protection cover, and so on straightforwardly from the
guarantors for the client to look at. They don't charge a single thing from the client for
its administration. The income for the organization is produced from the expenses
charged for the showcasing and ad stretches done by insurance agencies on its
foundation.
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Figure 51: PolicyBazaar Valuation (INR Bn)
Name: BankBazaar
Founded: 2008
Segment: WealthTech
Figure 52: Bankbazaar logo
BankBazaar is an online monetary item circulation and correlation stage. It empowers

clients to analyze advances like individual advances, home credits, car advances, and
instruction advance items; charge and Visas; ventures, for example, bank account,
fixed stores, and that are just the beginning.
BankBazaar is a Chennai-based online monetary stage established in 2008 by Adhil

Shetty, Arjun Shetty, and Rati Shetty for item dissemination and correlation
investigation. It empowers clients to purchase individual credits, home advances, car
advances, and training advances.
BankBazaar likewise offers charge and Visas, disaster protection, health care
coverage, accident protection, travel protection items, shared assets, fixed stores, and
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investment accounts. With different proposals from various banks, you can look at
offers and actually take a look at your qualification in minutes. Clients just need to
give fundamental subtleties to apply to an item on the web and can follow its status.
BankBazaar's income comes from application-based commissions from banks. Clients
don't have to pay any charge.
BankBazaar contenders are a few organizations like Policy Bazaar, Easypolicy, My

Insurance Club to give some examples. However, BankBazaar is one of the first
FinTech new companies that worked on the perplexing undertaking of picking saving
and venture apparatuses for Indian clients, these contenders are developing to obtain a
decent amount on the lookout.
Figure 53: BankBazaar Valuation (INR Bn)

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Name: LendingKart
Founded: 2014
Segment: Lending
Figure 54: LendingKart logo
Lendingkart is a loaning organization that empowers SMEs and business visionaries

to apply for working capital advances. It assesses the financial soundness of a client's
business by utilizing large information and examination.
Lendingkart is an internet financing organization established by Harshvardhan Lunia

and Mukul Sachan in 2014. Lendingkart gives advances to working capital
requirements for SMEs (little and medium-sized undertakings); these credits are
speedy and guarantee free with insignificant desk work. They are basically a loaning
FinTech organization in India.
Lendingkart approaches a gigantic measure of information from information

accomplices scattered the nation over. It is one of a handful of the main FinTech
organizations in India. These information accomplices furnish Lendingkart with
different data about the seller: instructive capability, family foundation, notoriety,
seriousness on the lookout, and so on
The organization works across 1300 urban areas and has dispensed advances over
INR 3,500+ crores to date (2020). Aditya Birla Capital, Saama Capital, Mayfield
Fund, Bertelsmann India Investments (BII), and Darrin Capital Management are a
portion of its conspicuous subsidizing accomplices. In March 2016, Lendingkart went
into an essential association with Mahindra's SmartShift – a carefully empowered
aggregator for freight proprietors and carriers.
How does Lendingkart work?

1) Lendingkart does showcase through references, print deliveries, and news
discharges.
2) SMEs or sellers visit Lendingkart's site to apply for the credit.
3) They need to give total data and transfer important archives.
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4) When the archives are checked, the investigation group at Lendingkart
creates two codes through AI frameworks.
5) In view of those codes, a choice to give the advance or not is created and the
sum is chosen if the credit is supported.
The best part about the entire interaction is that it simply requires 4 hours. A bank for
the most part needs many months for a similar cycle.
Figure 55: LendingKart Valuation (INR Bn)

5.9 Opportunities in India
India is the biggest consumer market on the planet. It is among the quickest
developing FinTech industry market on the planet. Purpose in benefits for FinTech
working in India is a fast web infiltration, the biggest populace of unbanked class, and
the most elevated FinTech reception rate on the planet.
Besides, it is assessed that the Indian FinTech market will be developing at a CAGR
of 22% in the following five years according to NASSCOM. Subsequently, India has
neglected income potential for FinTech players. The chances are restricted to retail
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shoppers as well as exist to incorporate the 57.7 million independent ventures enlisted
in the country.
Figure 56: Advantages in India

Infrastructural Advantage
India is the world's third-biggest and quickest developing start-up center, with over
26000+ new companies projected to be inactivity by the end of 2025. The
development capability of Indian new businesses is enhanced by the development of
start-up foundations in India. The Government of India is running different plans for
the development and advancement of new companies in India. Plans, for example,
Start-up India Scheme, make in India conspire, stand up India Scheme, Atal
Innovation Mission (AIM) are the noticeable ones among the different plans
presented by the Indian Government at different degrees of administration.
The Start-up India Scheme has an award worth 1.5 billion US dollars to be distributed
for creating new companies to reinforce the start-up biological systems of the country.
Likewise, the Government gives a discount on business and brand name enrolments
alongside tax breaks to new companies. The Government of India likewise dispatched
a committed stage for start-up enlistment to make the new businesses mindful of the
different plans and advantages accessible to them. The stage is valued to give
simplicity of enrolment to new companies by the business clique and unfamiliar
financial backers.
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The Best of Industry Talent
The Best Industry Professionals on the planet are available in India. The IT labor
force of India Accounts for multiple million experts. India stands second as far as the
number of IT experts revitalizing behind the USA. Notwithstanding, among the 6.5
million IT experts of the USA, 1.5 million have a place with Professionals of Indian
beginning working in the USA. The fare of Indian IT administrations remains at 180
billion US dollars in yearly income. The all-out world power in India remains at 510
million individuals and is positioned second on the planet.
Smart Country Initiative
The Government of India dispatched the drive to assemble a savvy framework for the
country by the drive of the advancement of Shrewd Cities and the dispatch of the
Digital India development. The move plans to draw in unfamiliar interests in the
economy. Aside from these, free Wi-Fi at a public spot, Railway stations, and hyper-
nearby (metro) stations are practical all through the country. The way that web
portable information in India is the least expensive in the entire world aids in the
simple infiltration of web-based help suppliers. The biggest rail route organization of
the world, Indian railroads likewise permitted installment for ticket booking and
different administrations through Digital installments choice, for example, installment
wallets banks and FinTech organizations.
Tax and Rebate Benefits
The Government of India gives different Tax and Rebate motivations and discounts.
Assessment discount is presented to vendors making more than half of their exchange
carefully. Aside from this, refunds up to 80% of expenses are given to new companies
at the hour of brand name enlistment. The DPTT perceived new businesses likewise
get the expense occasion time of the initial a long time from the date of
acknowledgment by the Government. An exception is given on capital increases
expense to interest in unlisted organizations for a speculation period yearning for
more than 24 months. The Government is in converses with different Government and
administrative bodies to stop the charging of overcharges or exchange charges made
for taxpayer-driven organizations and enrolments.
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Investment in India
The unfamiliar venture possibilities for India are blasting at a quick speed. India
partakes in the trust and speculations of financial backers from all throughout the
planet. The ventures by Foreign Direct Investors remained at 64.37 billion dollars
during the financial year 2018-2019. The FDI gotten in the principal quarter of 2019-
2020 Fiscal year remained at 16.3 billion US dollars. The private equity and venture
capital (PE/VC) ventures arrived at US$ 25.20 billion from January to October 2018.
The nation is getting FDI and FPI at a remarkable rate. During the time of April –
June 2019, the FDI remained at 18.4 billion US dollars. The nation is making a course
for turning into a five trillion economies by 2022.
Figure 57: India in Number

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CHAPTER 6: REVIEW OF LITERATURE
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(Rabab Ebrahim, 2021) “FinTech in Banks: Opportunities and Challenges” The
authors suggest that the new chances of FinTech incorporate better advanced financial
experience, customized client administrations, significant level information security,
practical, and effective administrations. Then again, FinTech brings about dangers, for
example, security risk, specialized danger, guideline hazard, monetary danger, and
notoriety hazard. At long last, they propose that the potential difficulties of FinTech
are mechanical transformation, risk reduction, guidelines, and human resources work.
(Gagan Kukreja D. B., 2021) “The Impact of FinTech on Financial Services in

India: Past, Present, and Future Trends” This part covers the turn of events, openings,
and difficulties of monetary areas due to new advancements in India. This section
illuminate’s opening that arose due to segment profit, high infiltration, and admittance
to the most recent and reasonable innovation, moderate expense of cell phones, and
government strategies like Digital India, Start-up India, Make in India, etc. In
conclusion, this part depicts the undiscovered possibilities of FinTech in India.
(Arner, Barberis, & Buckley, 2015) “The Evolution of FinTech: A New Post-Crisis
Paradigm?” FinTech 1.0, from 1866 to 1987, was the primary time of monetary
globalization upheld by an innovative framework, for example, overseas transmission
links. This was trailed by FinTech 2.0, from 1987-2008, during which monetary
administrations firms progressively digitized their cycles. Since 2008 another period
of FinTech has arisen in both the created and creating the world. This period is
characterized not by the monetary items or administrations conveyed but rather by
who conveys them. This most recent development of FinTech, drove by new
businesses, presents difficulties for controllers and market members the same,
especially in adjusting the likely advantages of advancement with the potential
dangers of new methodologies.
(Khotinskay, 2019) “FinTech: Fundamental Theory and Empirical Features” In this

study, the author considers the issue of monetary changes in the financial frameworks
of the business level - by the case of the monetary market. The driver of these changes
is FinTech (monetary innovation). Patterns that have been created in this portion of
the economy after the worldwide emergency of 2007-2009, proof the rise of another
framework quality in plans of action, inside the monetary market as well as past it.
This new foundational quality is a result of two target megatrends: the financialization
11
of the economy, from one perspective, and its digitalization, then again. The rise of
the new quality in the monetary frameworks of the business level makes it important,
to sum up, the observational experience and to decipher it according to the perspective
of the principal hypothesis.
(P. Krishna Priya, September 2019) “FinTech Issues and Challenges in India” India
is a developing business sector for FinTech with a populace of almost 1.3 billion. An
immense level of the unbanked and under-banked populace is making India a thrilling
worldwide space for monetary innovations. FinTech is viewed as a distinct advantage
and problematic development which is fit for stirring up the customary monetary
business sectors. FinTech has been filling quickly in India over the most recent five
years and is relied upon to fill further in the closest future. At this start, the article
centers on the fundamental kinds of monetary advancements and their capacities and
furthermore examines the chances and difficulties it has in the Indian business
climate.
(Kanchan Rauniyar, May 2021) “Role of FinTech and Innovations for Improvising
Digital Financial Inclusion” The objective of the study is to delineate the job of
FinTech advancement as the leader to advance digitalization and digitization, which
adds to expanding Digital financial inclusion (DFI). Basic holes and how the
reciprocal relationship of FinTech advancement and DFI can uphold the cutting edge
monetary the business has been introduced in the discoveries of this review to
distinguish the interrelationship between FinTech, monetary advancement, and DFI.
The hypothetical focal point based on different writing audits has been utilized to
investigate the diverse level of co-relationship that features the positive, negative, and
double measurements that exist between FinTech, monetary advancement and, DFI. A
reasonable system has been proposed to portray the whole progress period of the
customary monetary environment moving into the cutting edge monetary scene with
the assistance of DFI.
(Pant, September 2020) “FinTech: Emerging Trends” The objective of this paper is
to recognize around the world arising FinTech patterns. The Qualitative examination
approach was utilized depending on a survey of writing, conversation with the experts
and scientists. The arising patterns incorporate IMF center around utilizing FinTech
for cross-line installments utilizing disseminated record innovation, Augmented
11
reality for consumer loyalty, Digital protection, Digital invoicing, Crowd-financing,
Crowd contributing, Robotics venture warning, Future connections among Banks and
FinTech firms, Central bank administrative job. It additionally came out that despite
the fact that there are many exploration papers on FinTech universally,
notwithstanding, there isn't a lot of examination work did on FinTech in India and
there is a chance for additional exploration on the advancement and development of
FinTech in India.
(K. & S., April 2021) “Financial Technology in Indian Finance Market” The purpose
of this paper is to talk about issues, for example, FinTech drivers, deficiencies of
conventional monetary administrations, and the job of innovative progression. The
paper additionally resolves issues concerning FinTech speculation and disturbance. It
alludes to monetary innovation difficulties like speculation of the executives, client
the board, and guidelines. The paper looks at the advancement of FinTech in the
worldwide market over the long haul.
(Mention, 2020) “The Age of FinTech: Implications for Research, Policy and
Practice” This paper recognizes the structure blocks for the eventual fate of FinTech
and gives prescriptive spaces of concentration to direct research, strategy, and
practice. In total, the reason for the paper is to fill in as an impetus and require an
integrative methodology in fostering a typical agreement and understanding of
FinTech as a socially built wonder at the crossing point of examination and
innovation of the executives.
(Albastaki, Y. A., 2021) “When Technology Meets Finance: A Review Approach to

FinTech” The research intends to fill the hole in the current scholastic writing in
regards to the presence of advancement-centered monetary innovation (FinTech)
organizations. The examination gives an applied outline of the key worth drivers
behind FinTech, including the use of asset-based hypotheses, plans of action, human-
focused plans, and open advancement. The article presents how FinTech can fill in as
an empowering agent of development in the officeholder monetary area and can
effectively affect the triple-main concern by tackling the issues of individuals who
inhabit the lower part of the pyramid.
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(Peter Gomber, 2017) “Digital Finance and FinTech: current research and future
research directions” This article surveys the present status of examination in Digital
Finance that arrangements with these novel and inventive business capacities.
Additionally, it gives an attitude toward potential future exploration headings. As a
theoretical reason for exploring this field, the Digital Finance Cube, which accepts
three vital components of Digital Finance and FinTech, i.e., the individual business
works, the advancements, and innovative ideas applied just as the foundations
concerned, is presented.
(Kudinska, 2016) “Banking and FinTech: A Challenge or Opportunity?” The aim of

the paper is to examine the new patterns in banking, distinguishing openings and
dangers of FinTech for banks. The ideal reconciliation of FinTech into business
permits banks to get a benefit in the developing contest. This paper gives a broad
investigation of ongoing patterns in FinTech and banking, analyzing the experience of
driving European and US banks, just as overviews directed among individuals from
the monetary administration's industry in various nations. The creators have
concentrated on the advancement of the monetary advancement and innovation
market, evaluated the current practices applied in the field of FinTech, recognized the
primary dangers identified with the improvement of FinTech and monetary
developments the banks are presented to on the micro and macro level.
(Pollari, 2016) “The rise of FinTech opportunities and challenges” This paper
analyzes the critical drivers of the development of FinTech, its job in reclassifying the
monetary administration's industry, and the logical effect on industry plans of action.
The paper additionally examinations the patterns in FinTech interest in worldwide and
provincial business sectors and Australia's elective money market and features a
progression of key difficulties and openings for officeholder monetary foundations.
(Guild, 2017) “FinTech and the Future of Finance” This paper will take a look at the
effect of technological innovation on the economic sector, an industry commonly
known as FinTech. The consciousness of the paper is on how FinTech has expanded
access to finance for millions of people in growing economies, with a particular
hobby within side the function of regulatory frameworks in facilitating that process.
11
(Vijai, 2019) “FINTECH IN INDIA – OPPORTUNITIES AND CHALLENGES”
The main purpose behind this paper gets to the chance and difficulties in the FinTech
business. It clarifies the advancement of the FinTech business and presents monetary
innovation (FinTech) in the Indian finance area. The FinTech gives digitalization
exchange and safer for the client. The advantages of FinTech administrations
diminishing activity expenses and cordial clients. The FinTech administrations India
quickest developing on the planet. The FinTech administrations will change the
propensities and conduct of the Indian money area.
(Dr. Girish Kumar Painoli, 2021) “Impact of FinTech on the Profitability of Public
and Private Banks in India” The main purpose behind this paper is the impact of
FinTech on the Profitability of Public and Private Sector Banks in India. It clarifies
the development of the FinTech business and presents monetary innovation (FinTech)
in the Indian financial area. The paper gives the verifiable advancement of FinTech
and Market size and development. The FinTech administrations India quickest
developing on the planet. the FinTech administrations will change the propensities
and conduct of the Indian money area.
(Dr. Srinivasa Rao Dokku, 2021) “THE FUTURE OF INDIAN FINTECH: ISSUES
& CHALLENGES” This paper additionally examines the development of the FinTech
business and the top nations that are embracing the FinTech business on the planet.
The paper covers the current market of the FinTech businesses and investigates the
development of the business later on. It additionally addresses the difficulties and
difficulties of the execution of monetary innovation in India.
(Madan, July - 2021) “FinTech: Really a buzzword, at Embryonic Stage or a

burgeoning Industry? with special reference to India” The current paper is an
endeavour to peep into such purposes behind the development of this FinTech area in
different fragments alongside its future roads. The figures referenced depend on
looked through articles in magazines, papers, and distributed reports on sites, and so
forth It has been inferred that India has a high potential just as happenstance in the
FinTech area particularly in the installment portion as purchasers are becoming more
intelligent step by step which thusly constraining and spurring the enterprises for the
advancement in their administrations to stay in the race.
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(Jadwani, 2015) “Impact of FinTech Start-ups on the Banking Sector in India” The
purpose of this paper is to investigate the arising patterns and effects of the FinTech
insurgency on the financial area in India. It additionally proposes approaches that
banks in India can take to manage the present circumstance, how might they learn and
work together with these FinTech new businesses to foster another face of banking in
the coming years.
(Srivastava, 2020) “Unfolding FinTech: A paradigm shifts in Indian banking” This

paper's aim is to proffer the job of Financial Technologies or FinTech in the monetary
business in the financial area specifically. The paper widely features late patterns in
FinTech for Indian banking. FinTech is presently a vital piece of the Indian financial
framework, it has changed a test into an entryway for greater flexibility, better
workableness in certain spaces of the bank. This review proposes a pathway for the
advancement of FinTech in changing the business and clients. It will test further into
the organized development of FinTech-based advancements and furthermore the
connection among FinTech and monetary consideration. The investigation suggests
that there can be an outskirt in the production of significant worth in additional
investigation of the new experiences on impending monetary innovation and its
results on the financial business.
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CHAPTER 7: RESEARCH METHODOLOGY
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7.1 Research Objectives
 Understand the definition of FinTech;
 Understand opportunities in FinTech;
 Study challenges of FinTech
 Study emerging trends in FinTech
 To study the areas where the FinTech in Indian market.
 To provide a conceptual overview of the FinTechs and adoption of FinTech
among digitally active consumers.
 To identify both the Motivators for adopting financial technologies, Barriers
and Challengers for adopting financial technologies
7.2 Type of Research Design
This is an exploratory kind of study. It isn't expected to give conclusive evidence,

however, assists with having a superior comprehension of the issue. Exploratory
research configuration doesn't mean to give the last and indisputable responses to the
research questions, however merely explore the research topic with varying levels of
depth.
7.3 Source of Data

In this research study " Secondary Data Collection Method" is used.
7.4 Data Collection
An exploratory research design approach has been followed by using the secondary
data. The data collection method used here is external data collection. The data has
also been taken from published books and various government standards. The
selection criteria were based on top-cited research papers on Google scholar website.
Some key data and trends for future innovations in FinTech were taken from websites
of leading market research organizations.
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CHAPTER 8: FINDINGS AND CONCLUSION
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8.1 Findings
The study examines the definition of FinTech, emerging trends in FinTech, the impact
of FinTech on financial institutions, risks from FinTech innovations, and future
opportunities. FinTech is transforming the world of finance faster than ever before
using newer technologies. Some of the key findings from the review of literature are:
FinTech has 64% global consumer adoption; 96% of global consumers are aware of
digital payment services, 68% of consumers prefer non-banking institutions for
financial services and 46% of consumers are willing to share their banking data with
the non-banking firm are key findings of 2019 FinTech consumer survey. On the
SME segment, 25% is the global adoption rate, 56% use banking payment & FinTech
service, and 46% use FinTech financing service (Global FinTech adoption, 2019).
Digital payment has maximum awareness and adoption rate, with India and China is a
global leader. It has become the backbone for non-finance industries like insurance
(comparison, purchase), transportation (e.g. radio taxi), telecom & utility (recharges,
bill payments), travel (bookings, payments, offers), hospitality (booking, payments),
entertainment (content purchases), FMCG (point of sale), e-commerce, etc. Even, the
government in many countries like India is carrying out direct fund transfers for
purchases and subsidies to eliminate corruption and reduce the cost of a transaction.
Digital payment shall continue as core FinTech services with further innovation.
Banks are driving initiatives to encourage FinTech innovation, they need to address
challenges from people, processes, and organizational culture. Neobanks are posing
challenges for traditional banks by offering innovative products at a lower cost.
Regulatory bodies and central banks are supporting FinTech innovations by setting up
sandbox environments and policy changes for licensing and governance. The
regulator needs to leverage FinTech innovations for its governance and supervision
function and be more proactive using newer technologies.
Blockchain has immense potential to transform businesses, reduce costs, and improve
trust and transparency. The potential of tracking any transaction from source to target
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with trusted intermediaries is a powerful capability of blockchain and has strong use
cases, like diamond stone tracking from mining to retail store, organic farming from
farmer to market, land records in maintaining a transparent history of ownership and
sharing secure medical records of a patient.
Newer technologies like cloud computing, blockchain, artificial intelligence,

cognitive learning, machine learning, robotics, augmented reality, big data, IoT, and
drones are leveraged by FinTech firms.
IMF as a global financial institution believes FinTech can improve cross border
payment service, cost of the transaction, and transparency using blockchain
distributed ledger technology.
Digital insurance, digital invoicing, electronic factoring, electronic leasing, crowd

investing and interlinkages of cryptocurrencies other than bitcoin are newer topics
where further research can be carried out.
Investment advisory using robots has the potential to disrupt the investment advisory
business. These robo-advisors can meet the customer expectation of trust and
transparency, at a lower cost, and with better knowledgeable information; however,
customers still expect a human interface for investment advisory, which can be
addressed by a hybrid model of a human face along with a robo-advisor.
8.2 Conclusion
The scene of the banking and the monetary area has gone through an extraordinary
change since the 2008 Global Financial Crisis, demonetization, and COVID 19,
attributable to monetary innovation firms, prevalently known as 'FinTechs'.
According to MEDICI India FinTech Report 2020 second Edition, India had the
second-largest number of new FinTech new companies over the most recent three
years, directly behind the US. Likewise, inside FinTech fragments, Digital
installments have been at the front line of driving India's FinTech area. Loaning is the
second biggest portion in India's FinTech Sector followed by InsurTech, WealthTech,
Neo Banks, RegTech, and so on.
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In the course of recent years, India has tried a few rules and changes, for example,
conceding numerous licenses for separated banking to little back banks, installment
banks and acquainted the bound together installment interface with incorporate the
unbanked populace of India in the formal monetary administration's envelope,
reinforcing the major FinTech sections like installments and loaning biological
system.
Drives drove by the public authority and controllers for advanced India like
demonetization, Jan Dhan Yojana, Aadhaar, and so forth supported by the developing
web and cell phone entrance, have prompted the reception of FinTech.
As an ever-increasing number of clients get on the advanced board, FinTech should

zero in on building trust and shopper commitment. Particularly since time is running
short when network protection is amazingly helpless. To be basic and to remain in
front of the opposition over other FinTech brands, it is important to zero in on security
alongside simplifying the methodology for buyers.
FinTech has been known for its transitioning innovation claiming towards offering the
most helpful and adaptable choices for purchasers. It isn't shocking that going ahead,
monetary administrations will offer an altered and nearby contribution to their clients
utilizing information investigation. With the ever-increasing number of advances in
innovation monetary administrations adjust to overhaul their techniques, more
development in this area is anticipated. This is only the start of a gigantic FinTech
market in the impending decade.
Out of a sum of 21 unicorns in India, 1/3rd are FinTech organizations, Paytm being
the most elevated esteemed unicorn, at $16 billion. The FinTech market in India has
been regarded at INR 1,920 Bn in 2019 and is depended upon to show up at INR
6,207 Bn by 2025, stretching out at a gathered yearly development rate (CAGR) of
22.7% during the 2020-2025 period.
While the FinTech business is as yet in its initial reception stage, we trust it is all
around situated to observe long haul development in the coming years. The
progressions will be more centered on advanced loaning (elective finance) and open
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banking. FinTech development will at last set out outsized open doors for firms and
assist with enabling them in the advanced age.
FinTech has disrupted financial markets with technology and innovation by

transforming the finance business and is growing faster than ever before. Digital
finance is now emerging as the backbone of businesses. This makes it crucial for
FinTech firms to address concerns relating to online business risks more proactively.
The financial market crisis of 2008 was the beginning of FinTech and it has evolved
with time. The challenges for FinTech firms in the current year have increased
substantially due to the Coronavirus pandemic; however, the current situation also
presents them with the opportunities to monetize from increasing digital transactions
and growing demand for tele-medicines and insurance products. Currently, the new
investments in FinTech have almost stopped as many firms are forced to cut costs and
reduce redundancies. The online or digital business is here to stay, and FinTech firms
can further learn from the current crisis and come out strongly with innovative
solutions (Beyond COVID-19: New Opportunities for FinTech companies, 2020).
8.3 Scope of future research

According to an academic point of view, FinTech is as yet an untilled field.
Subsequently, ample new examination strands are recognizable. Quite possibly the
most squeezing one is certainly the connection between FinTech firms and
officeholder players. Do they see each other as supplements or contenders? Would
consolidations and acquisitions bode well or would key collusions yield more worth?
Another exploration question on the business level could be what separates FinTech
firms from occupant players.
They as a rule serve indistinguishable customers, yet FinTech firms and occupant
organizations are overall generally unique. How would they vary as far as vision and
procedure, authoritative construction, cycles, and culture? Dropping down the worth
chain, extra exploration questions emerge from promoting and deals. How do FinTech
firms approach customers? Which customer fragments would they say they are
ordinarily focusing on? What is their valuing model? Important experiences could
likewise come about because of exploring the help elements of FinTech firms: How is
finance guaranteed?
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In such a digitally active environment, the FinTech sector can look forward to many
new ways and norms to rule the roost in 2021 and beyond. Here are a few of the top-
slated ones expected to define the FinTech sector in the coming years.
Contactless payment is the new payment model
Following the Covid-19 circumstance where social removing was one approach to
stay away from the infection, the banking and the installment areas have prepared for
Contactless Payments. The emphasis is on credit-only installment. The business is
good to go to incorporate cutting-edge installments applications and frameworks to
empower moment online installments opposite cash. Many organizations are
effectively employing committed web engineers to coordinate the advanced
installment framework into their organizations.
Embedded Finance will find many takers
Take the case of a big deal like Amazon and Uber. These are trailblazers in their
center spaces of activity and the manner in which they have utilized inserted finance
ways to deal with bringing to the table their client's brilliant encounters merit
watching. From installments to credits, protection to contracts, organizations today
are offering inserted administrations, as though they can guess the thoughts of their
clients and proposition them precisely what they need.
Financial inclusion as a necessary part of the industry
The pandemic influenced most pieces of society, however, the most influenced were
individuals from poor monetary foundations. In 2020, some incredible advancement
drove the way for monetary consideration to help the persecuted and poor people. For
instance, in Brazil, there was an application in the Marica area that guaranteed that
essential pay was circulated to the occupants there utilizing Mumbuca advanced
money. These individuals had lost their positions during the pandemic. Additionally,
Singapore and Malaysia saw the issue of advanced financial licenses.
Newer partnerships
2021 and the future will see an ascent in communitarian endeavours to guarantee a
solid cutthroat scene while underlining development. The FinTech area will grow as
new players enter the scene through strong associations. Banks, insurance agencies,
and resource executive's organizations are altogether taking a gander at banding
together with FinTech organizations so digitization becomes simpler and quicker for
them.
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Cryptocurrency acceptance
One more significant pattern expected to get up to speed this year is the worldwide
acknowledgment of digital money. For instance, the European Bank has made a stride
nearer towards the planning of an advanced Euro. General assessment with respect to
the equivalent is being arranged, and very soon, we are all together going to perceive
how to open Europe is to tolerating crypto coins.
After FinTech, watch out for Regtech and Wealthtech
Going a stage forward, FinTech that represents monetary innovation will see the
development of Regtech or Regulatory innovation and Wealthtech or abundance the
board innovation. It fundamentally implies that lawmakers or controllers, monetary
and innovation organizations will meet up to work with advancements. Anticipate that
these three industry players should function as three columns to achieve a reformist
change in the area cooperatively.
8.4 Observation
The digital and technological transformation changed business activities across all
enterprises, and the financial and banking area is no exemption. What is encouraging
is that the Indian government and regulatory institutions have basically advanced and
innovative as opposed to the obstructive environment for FinTech in India. In any
case, policies and governance should coordinate with the speed of advancement in
this area, especially to guarantee secure and straightforward development.
8.5 Solutions and Recommendations
1) Unreasonably severe authorizing guidelines in India are one of the principal

disadvantages forestalling FinTech improvement. Overall experience
proposes that supporting campaigning and cooperation with State
establishments has helped FinTech fire up endeavours to enter the market,
acquire shoppers and controllers' trust and draw in financial backers. This
experience could demonstrate helpful in Indian conditions.
2) Affiliations and Federations of Chamber of Commerce ought to advise the
populace about FinTech administrations that are now accessible for use.
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3) Hazard capital finances need to help new organizations in this field since they
have an enormous potential to create and develop in India as well as in Asia
and worldwide business sectors;
4) FinTech firms need to make effective promoting efforts to upgrade the
public's mindfulness.
At long last, the Indian government ought to invigorate the execution of monetary
administrations basically in three ways:
1. By making a stage (sandbox) permitting creative monetary advancements to
enter the market and approving their security;
2. By making a reasonable and straightforward arrangement of management over
the exercises of FinTech firms, particularly the P2P and B2Blending stages;
3. By making a program of assessment impetuses animating interests in the
monetary area.
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Post-Crisis Paradigm? The HKU Scholars Hub, 1-46.
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ISSUES & CHALLENGES. Embracing Change & Transformation-
Breakthrough Innovation and Creativity, 610-618.
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REPORTS
FinTech in India 2020
FinTech 2021 (FinTech in India: beyond the horizon)
FinTech Market in India 2020
FinTech Industry in India, Future of Financial Services February
2021 FinTech Report 2019
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Summer Internship Project Report

Under the Guidance of

In partial fulfilment of the Requirement of the award of the

Status, Impact, Challenges, and Future in India ” is a result of my own

Enrolment No: Name Signature

Place: Vadodara Date:

Rating of Project Report [A/B/C/D/E]:

(A=Excellent; B=Good; C=Average; D=Poor; E=Worst) (By Faculty Guide)

Signature of the Faculty Guide/s

(Name and Designation of Guide/s)

Signature of Principal/Director with Stamp of Institute

(Name of Principal / Director)

Technological innovation is referred to as FinTech. FinTech or Financial technology

 The Indian FinTech market has been seeing a remarkable development,

 Growing digital infrastructure

 Change in consumer demographics and increased penetration of the internet

 Upsurge in the target market

 Consumers’ distrust on online modes of payment

 Cyber and data security

 The public authority's emphasis on digitizing little and medium undertakings

1.1 What is FinTech?.................................................................................................2

1.2 History of FinTech...............................................................................................3

1.3 Global FinTech Market........................................................................................6

1.4 Key Drivers of the FinTech Market.....................................................................8

1.5 How the concept of FinTech Evolved in India?.................................................11

1.6 Evolution of the FinTech Ecosystem in India....................................................12

1.7 FinTech in Past...................................................................................................14

1.8 Indian Financial System.....................................................................................16

1.9 The Unbanked Population of India and the World............................................21

1.11 How is FinTech different from Traditional Banking?.....................................23

1.12 Difference between FinTech and Digital Banking...........................................24

1.12.1 What is FinTech?......................................................................................24

1.12.2 What is Digital Banking?..........................................................................24

1.12.3 FinTech vs. Digital Banking: Comparison Chart......................................24

1.13 How FinTech was doing in 2020.....................................................................25

2.1 Indian FinTech Market – Present Scenario........................................................29

2.2 Mumbai FinTech hub.........................................................................................31

2.3 Reasons for FinTech Boom in India..................................................................35

2.4 8 Ways FinTech Is Disrupting Financial Services for the Better.......................36

2.5 FinTech in India: leading the curve....................................................................37

2.7 Segment-wise Opportunity Analysis of the Indian FinTech Market.................39

2.8 Emerging Segments of FinTech.........................................................................47

2.9 Government Support & RBI Initiatives.............................................................50

2.10 Types of FinTech Companies in India.............................................................53

2.11 What makes FinTech important?.....................................................................55

2.12 Financial inclusion via FinTech.......................................................................58

2.13 Motivators for Adopting FinTech Are.............................................................61

2.14 Barriers for Adopting FinTech Are..................................................................62

2.15 Categorization: What Falls Under FinTech?....................................................62

2.16 FinTech Industry - Factors Behind Growth in India........................................63

2.18 Chinese FinTech Investment in India..............................................................66

2.19 Market Trends..................................................................................................67

2.20 Market Influencers...........................................................................................67

3.1 FinTech: Impact on Indian Financial Services Industry....................................73

3.2 FinTech: Impact on Financial Service Providers...............................................74

3.3 COVID Impact on Indian FinTech Market........................................................75

3.4 High Customer Experiences - a Win – Win Scenario........................................76

3.5 Impact of FinTech in Banking...........................................................................77

3.6 Impact of FinTech Companies on overall Indian Economy..............................79

4.1 Challenges of FinTech in India..........................................................................82