Why India Needs More Fintech Start-ups in the Hardware Space

An app that pays your bills or tells you where to invest in the stock market or even lets you buy insurance just with a tap on your mobile screen — most of the fintech developments these days are in the software digital space.

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But with the increased usage of the Near Field Communication (NFC) technology or wearables that enable payments or even the government encouraging the usage of Aadhar Pay, are we looking at the next big disruption within fintech? Entrepreneur India finds out.

Hardware Will Take Up Space in the Backend

So far, robots and other hardware developments have been mainly seen in the manufacturing industries. "The ATM is the only hardware we are dealing with today in the fintech space on a day-to-day basis. Even in the lending segment, the credit score is created digitally and there's no work as such with hardware. But, it will see a lot more importance in the backend, where it will work in obscurity, away from consumers' notice. There are already other things like NFC payments and wearables that are slowly cropping up in the country," said Uday Dhoot, Founder, Oyepaisa.com.

Dhoot believes that hardware will do a good job in enhancing security coverage or in blockchain technology. "Even for something like GST, a concern that still remains is whether the server will be able to take the load every fortnight, when people across the country upload their documents. This is where a hardware start-up can make a difference," he said.

Robots As the Face of Banks?

Through their utility in servicing, robots can be seen finding foothold in fintech. "Hardware will come into use for a service like KYC. The reason being, be it banking or mutual fund investments, there's a lot of paperwork that needs a lot of visits to different banks or offices," said Dhoot.

Others, too, believe that branch banking is where robots can thrive. "Kiosk machines and ATMs are getting smarter by the day. You never know, hardware and IoT can come in handy in doing away with a few jobs. When one thinks of robots one thinks of conversational banking, but language can still be a barrier.

"In fact, they will be useful in carrying out all the mechanical activities," said Vijay Khubchandani, a serial entrepreneur in the hardware space. In fact, Khubchandani is currently working on an interesting payment wearable that can be linked to an e-wallet. "Wearables will be able to give consumers a unique user experience," he said.

Right Talent is Missing

The hardware space is still a difficult one to crack and that's not just in the fintech space. "It's not an easy sector to be in. You don't just sit in front of a computer and code here. The talent is missing in the country. It's still one of the least chosen fields by an entrepreneur. However, things are slowly changing, even the government is taking steps. The Department of Science and Technology has declared a grant of INR 10lakh for an engineer, who is building a hardware product in India," said Khubchandani.