Five Emerging Fin-Tech Trends in India

Financial services such as recharge packs, insurance, small loans, etc., must empower Indians who live beyond the metros and make their lives easy

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The Indian fin-tech sector, though still in its nascent stage, is clearly on a high growth trajectory thanks to the mushrooming of fin-tech start-ups since the year 2015 offering innovative technology-based products and services to the unbanked.

Traditional banks and other financial institutions, which earlier resisted tying up with these fin-tech firms, are now increasingly collaborating with them to reach out to the 1 billion unbanked users across India using technology.

The increasing use of smartphones, a surge in e-commerce, and a push to the less cash economy by the government's demonetization move have further catalyzed the growth of the fin-tech sector. In fact, we have seen how fin-tech services in rural India have revolutionized the way people and businesses today go about their daily transactions.

Below are five fin-tech trends that will make India a truly cashless economy:

Buy Now Pay Later - Fin-tech firms lending micro amounts to consumers with an option to pay back later has picked up well in rural India where people might not have the cash but are still aspirational. "Buy Now Pay Later' services allow a consumer to buy a product or service instantly with a part payment and then pay back the remaining amount either within a fortnight, or over several weeks, or even over a long period of time if they have made a high-value purchase, depending on the service provider. These services can be used to buy clothes and other products and recharge mobile phones, pay utility bills and purchase grocery with just a click and pay for it later.

Unified Payment Interface - Indian banking regulators such as the RBI are also promoting a digital agenda through the launch of innovative services like the Unified Payment interface (UPI). The UPI is an instant payment system for mobile-to-mobile money transfer, that enables users to transact through an app linked with their bank accounts. The benefit of the UPI is that a consumer does not need to enter personal bank details with every transaction he makes. This is great for SMEs who can avail quick loans from fin-tech companies based on the internal, alternative credit scoring system of the firm.

A Paperless Economy - A paperless economy is a way forward. Gone are the days when people had to carry a file will all their documents to the bank for a simple financial transaction, only to further wait for days till all the documents were checked and cleared. Everything is just a click away, even unsecured loans! A paperless transaction is faster, cheaper, convenient and secure. Even productivity has gone up with paperless financial services.

Beyond Metros - The biggest pie for fin-tech players lies in rural India, comprising Tier II/III regions. The largest unbanked users rest there. However, since accessibility is still an issue, the biggest challenge also comes from these smaller towns and villages of India. What we need to focus on are effective business models that will benefit that section of the economy who need money for living. Financial services such as recharge packs, insurance, small loans, etc., must empower Indians who live beyond the metros and make their lives easy.

Personalized Services - A robust, effective internal analysis system that studies customer patterns and behaviour, can easily help firms personalise the interface to suit each user's specific usage preference. This will help fin-tech players to provide unique, quality services to each customer and help ease the process of banking transactions for them.