Financial technology, or fintech, has been experiencing a major boom in recent years, driven by the desire to improve accessibility, innovation, and opportunities in financial services. It has been advancing worldwide, and India is no exception. The Boston Consulting Group predicts that India’s digital payments market will increase from $3 trillion (₹246 trillion) to $10 trillion (₹820 trillion) by the year 2026. This is being “driven in a big way by the millennial and GenZ generations, who are technologically savvier and have different expectations from financial services than earlier generations.”
Nowadays, platforms and apps have been gaining more customers and clients eager to explore this burgeoning field. Consider the emergence of online trading platforms and how they’ve evolved through brokerages. Multi-asset broker Exness has low spreads, no commission fees, and instant withdrawals to improve the trading experience. It recently reached $3.31 trillion (₹254 trillion) in trading volume in June 2023, showcasing just how massive the sector has become. Such performance mirrors India’s overall online trading experience.
The rise of online trading in India is only one aspect of this emerging industry, but it encapsulates the country’s significant demand for fintech services and solutions. Their convenience, easy accessibility, and efficient features present a vast number of opportunities for consumers and businesses. With a rapidly-growing fintech sector, India may soon become one of the most powerful fintech hubs in the world. Here’s how a fintech revolution in India may soon be at hand:
A Growing Fintech Powerhouse
India has long been an agricultural country, with these practices being embedded in the economy, culture, and traditional values since ancient times. With so many relying on this industry for livelihood and as a crucial pillar of the nation, it is difficult to envision a sector rivaling how widespread agriculture has become. However, it’s clear that with the advancement of technology and the growing demand for financial services, the fintech industry is also quickly becoming an essential aspect of India’s economy.
Many experts believe that India has the power to become the leading fintech capital of the globe should these positive trends continue. India’s fintech adoption rate is 87%, far above the 64% global average. In less than ten years, India’s fintech market is predicted to generate $200 billion in revenue. The country is the third-largest fintech ecosystem in the world, and this growth trajectory is likely to continue. Fintech opens up a lot of opportunities to bolster the Indian economy, as many are seeing the potential for innovation and investment that can further drive the industry’s development and India’s growth. With more funding being granted to fintech startups and businesses, these companies can focus on delivering more efficient services and systems.
Increasing Innovative Fintech Solutions & Services
The pandemic especially highlighted its value, as many took the digital and online world to manage finances when mobility and contact were limited. Now, such technology is still evolving, even without the need for the contactless measures that have discouraged using paper cash. This is most clearly exhibited in India’s adoption of digital payments, which has skyrocketed in recent years. In 2022, the country topped the global rankings with 89.5 million digital payments made that year.
Even with the monumental use of fintech solutions, these services are still evolving and innovating. Take the Unified Payments Interface (UPI) platform, which has become incredibly widespread in the country since it allows free and fast account-to-account transfers using fintech apps such as PhonePe or Google Pay. Because this platform can be downloaded onto a smartphone, it can replace the need for credit or debit cards and does not require users to enter sensitive bank details, making it a safer way to conduct transactions. UPI is also now taking steps to be more global, allowing for cross-border transactions in other countries. Fintech startups have similarly prioritized digital lending, insurance, and investment services, making it easier to manage money digitally.
Boosting Financial Inclusion
Even with more financial solutions available, a large number of people in India remain unbanked or underbanked. Traditional banking systems are much harder to access in India’s rural areas; many prefer to keep their savings at home rather than putting them into accounts. Financial literacy is not as common in these places, and the lack of banks and financial services that can aid these populations doesn’t solve the issue. However, while many Indian people may not have bank accounts, they will likely have a smartphone with Internet connectivity. It’s predicted that there will be one billion smartphone users by 2026, and having access to such a device can connect underbanked and unbanked people to financial services through fintech solutions such as neobanks.
Neobanks leverage technology that gives the customer greater access at zero cost, disrupting traditional banking systems. If banking institutions or kiosks are unavailable, these fintech solutions allow users access to regular banking services like opening accounts, withdrawals, transfers, loans, and checking bank balances. Those in rural areas or those without access to a traditional bank account can find convenience in being able to manage their finances from their devices without the need to travel far to do so. It’s also much easier to view clear instructions for guidance, and many digital platforms also offer support services to guide users. By providing a wider range of groups with more access to financial services, more people can contribute to India’s economy while addressing their financial needs.
India’s fintech revolution thrives off the cycle of empowering people and being empowered the more people use and participate in fintech. India is uniquely positioned to continue building on the existing fintech sector to drive the nation’s economic growth, boost business opportunities, increase people’s access to financial services, and foster greater financial literacy among more groups of people. If the fintech revolution continues to move on an upward trajectory, India may see more positive developments in multiple aspects of business and society.
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