Bumper Year for FinTech in India in 2021-A Good Time to Continue
No doubt, 2021 Indian fintech.. Fast-growing computing power, Internet penetration, and increased Internet speed and coverage have all enabled fintech solutions and startups to penetrate the Indian market deeply, widely and rapidly. Sustainable pandemics that have benefited physical mobility have also helped fintech companies and services take hold.
The key to FinTech is that if it can overcome technical challenges, it is more comprehensive than regular financial services and, in fact, suitable for rural and underdeveloped regions of the country. In addition to enabling digital payments and helping people buy insurance online, new companies are creatively disrupting consumer and business finance with new and innovative services. Uday Kotak, MD and CEO of Kotak Mahindra Bank, recently warned the bank, “Wake up or you will see most of the traditional financial system withdraw.”
Not surprisingly, Indian fintech companies raised a whopping $ 9 billion in 2021. We expect neobanks and digital lending to gain momentum, so if the wind continues to blow in favor of them, it could benefit FinTech for years to come.
Issues that can bring them back are data security and privacy risks, as well as government regulatory and policy instability.
Fintech Unicorn Pretra
Digital campaigns in India are increasing the use of digital payments in physical stores such as roadside vendors and small stores. All of these factors are expected to drive the growth of the Indian fintech trading market.
The FinTech trading market in India can be divided into payment modes, services, applications, and regions. Based on the payment mode, the market can be divided into payment interfaces, payment gateways, point-of-sale terminals, prepaid payment methods, remittances and more.
Of these, the payment interface segment in 2021 gained the largest share at 69.99%. This is because users can use their smartphones as virtual debit cards to send and receive money instantly. In addition, the concept of QR codes has completely eliminated the use of digital wallets.
We said the FinTech brand could raise about $ 9 billion in India, and in proportion, FinTech’s funding surged by more than 200% in 2021 compared to 2020.
The amount was raised in 410 equity funding rounds in 2021. As a record, about $ 2.83 billion was raised in 303 rounds in 2020.
Within FinTech, payments continue to dominate the roost. The settlement company managed to raise $ 4.11 billion. That’s 46% of this year’s FinTech funds. Companies such as Pine Labs ($ 700 million), Razorpay ($ 535 million), and Cred ($ 547 million) have shown this path.
Of the 43 startups that turned to unicorns in 2021, 12 were from FinTech Space. And these twelve managed to raise $ 4.8 billion worth of funding.
Fintech companies that have turned to unicorns include Digit Insurance, CRED, Five Star Finance, Grow, Zeta, BharatPe, Mobikwik, Acko, Upstox and Slice.
Financing momentum to continue in 2022
Even early-stage fintech startups are a hot topic. Approximately 145 early-stage fintech startups raised a total of $ 735.3 million by December 10, 2021, compared to 74 startups that raised $ 254.9 million during the comparison period last year. ..
Large investors such as Tiger Global Management, Ribbit Capital, Sequoia Capital, BlackRock, Mastercard and SoftBank are actively investing in India’s fintech ecosystem.
Experts believe that this funding and praise is not an instant. They feel that these companies are strong in nature, so the fintech sector will meet future needs and therefore attract more money in the future. “Funding will continue until 2022 and we will see some consolidation towards the second half of this year,” said one industry analyst.
Card integration
Happy days in the future
Investor interest and growing consumer base show the potential of the fintech industry.
Currently, UPI’s payment environment is dominated by Google Pay and PhonePe. However, the National Payments Corporation of India’s (NPCI) 30% trading cap will push the two to “medium” new customer acquisition and reduce trading volumes within certain limits by the end of 2022.
Next year, we will see more action in this happening segment.
Payment FinTech PayU, already owned by Prosus, has acquired another major payment gateway, Bill Desk, for $ 4.7 billion. The acquisition will bring the combined entity’s total payments (TPV) to $ 147 billion.
This year we also saw Paytm come up with India’s largest IPO worth about $ 2.4 billion — but what happened after its listing is another story. This year, another fintech company, Policybazaar, also entered the exchange. Companies like PineLabs and Digit Insurance may have an IPO in 2022.
Fintech startup BharatPe has acquired Punjab and Maharashtra Cooperative (PMC) Bank in collaboration with Centrum Financial Services. The startup and NBFC have joined forces to acquire a bank that symbolizes the year FinTech companies went to India.
Investor interest and growing consumer base show the potential of the fintech industry.
By the end of next year, analysts say the industry will see some sort of integration and reorganization as things settle down. Further collaboration between fintech companies and banks is expected. As competition intensifies, acquisitions and mergers are inevitable.
Adopting new technologies by not only building your own IP but also leveraging partnerships with other FinTech ecosystem stakeholders will be essential for growth.
BNPL, cynosure
Easy and attractive
The BNPL app makes credit available when you need it, without spending a lot of time on KYC authentication.
Fintech companies are also expected to close the gap between small credit requirements and access to online banking services in the coming months. In this regard, the Buy Now, Pay After Buy (BNPL) service is important. Credit cards can solve the ticket size problem, but they are skeptical in India.
India’s BNPL payment ecosystem is valued at around $ 11.57 billion in India.
BNPL is popular with Indian consumers, apart from hosting the ancillary services it offers (discounts and cash back). This is because BNPL allows you to take out small loans as needed, unlike individual credit lines. Bank.
The BNPL app makes credit available when you need it, without spending a lot of time on KYC authentication. It’s also easy to check out your cart using BNPL.
BNPL companies are raising awareness of loans through that approach. No wonder there are nearly 40 BNPL-focused startups in India. Many established players are also shifting or starting to offer BNPL services on their platforms.
Companies such as LazyPay, which has more than 30 million users in India, Simpl, ZestMoney, ePayLater, and Capital Float, whose daily necessities transactions surged 40%, are segments.
Stock market services and complementary products
Rapid increase in trading strategy platforms
Another area of interest for FinTech start-ups is stock market services. This year, a trading strategy platform emerged to help individual investors grow.
Fintech may also focus on free products such as digital bookkeeping, inventory management, staff and expense management, and GST collection. Many large companies are actively paying for these services and are looking for more solutions. Startups such as Khatabook, Chqbook, OkCredit, and Vyapar App offer many interesting solutions in this niche segment.
Another area of interest for FinTech start-ups is stock market services. This year, a trading strategy platform emerged to help individual investors grow. In 2021, the number of active Demat accounts in India increased to 14.1 million, a 4.7-fold increase in 12 months.
WealthTech is transforming the investment climate and bringing a crowd of first-time equity investors to the market. The Trading Strategy Platform seeks to provide a “strategy” to keep you making money on the stock exchange. It’s a dangerous area. However, platforms such as Smallcase, Stratzy, WealthDesk, RAIN, Scripbox and Pickright are used.
FinTech Challenges
Where should FinTech go?
Over 70% of India’s population lives in villages, and so far the use of the finTech platform has been concentrated primarily in urban areas. The point is that FinTech innovation must be settled for India and born in remote areas.
A user-friendly digital interface, hassle-free digital process, and rapid feedback system are the keys to FinTech’s success. Many traditional financial services providers lack process and technology agility, but the FinTech brand is far more advanced in both. Unless banks and other financial institutions adapt to the new conditions, it seems very likely that a huge chunk of market share will be lost in the coming years.
Over 70% of India’s population lives in villages, and so far the use of the finTech platform has been concentrated primarily in urban areas. The point is that FinTech innovation must be settled for India and born in remote areas.
However, FinTech also needs to be careful about regulations. Digital lending and neobanks will soon be regulated, as recommended by the Reserve Bank of India (RBI) and Niti Aayog.
Want to know about the latest in technology? Follow TechRadar India twitter, Facebook When Instagram!!
https://ift.tt/3Hny9Dc Bumper Year for FinTech in India in 2021-A Good Time to Continue
The post Bumper Year for FinTech in India in 2021-A Good Time to Continue appeared first on Autobala.
Auto Updates
Comments
Post a Comment