What Makes Fintech in India Ideal for Investments? While AI remains a hot-favourite among the investors, start-ups that are not lagging behind come under the umbrella of Fintech

Fintech startups are catching the eyes of the investors. While AI remains a hot-favourite among the investors, start-ups that are not lagging behind come under the umbrella of Fintech. India is becoming a breeding ground for many fintech start-ups. Leading the pack is Paytm which caught the attention of Japanese-investor, SoftBank. Masayoshi Son's business conglomerate has been dedicatedly investing in Indian start-ups, from food tech to fintech, there is no category where SoftBank has not extended its funding arm.

There are also smaller players in the market that have been trying to secure a stronghold in the fintech market. RazorPay, Open, AffordPlan, Paymate, Innoviti etc are some of the examples. One of the interesting trends emerging in the fintech industry is that of both consumer-oriented and merchant-oriented companies are emerging in the market. The Indian fintech market is not weighing on one side but such trends definitely indicate the possibility of a balance.

According to NASSCOM, the Indian Fintech market is forecast to touch USD 2.4 billion by 2020 from a current USD 1.2 billion. With several campaigns initiated by the government urging Indians to shift to digital alternatives, it is true to point out that India is becoming a digitized economy, whilst keeping the expectation of a cashless economy seems unreasonable and unfair. BIZ Experiences India chalks out several reasons why investors are showing considerable interest in the Indian fintech market.

More Power to the Unbanked

India has been struggling on the front of finance ever since one can remember. Financial inclusion has always the one challenge India has been struggling to combat. Cheolwon Charlie Lee, CEO of True Balance says, "PM Modi emphasized on India being the next destination for fintech companies. Major global firms like Google and Facebook have launched payment services only in India which proves that the mobile payment market in India has great potential." He further adds that India is in tandem with the Digital India initiative promoted by the government.

Lee also says, "Fintech companies aim to bring financial freedom to primarily unbanked users giving them a safe, fast and convenient transacting experience and bringing them under the umbrella of financial inclusion right on their doorstep." This is a boost to India becoming a digital economy.

Financial inclusion is the primary reason behind the roaring success of such fintech platforms in India. Abhishek Gandhi, Co-founder, CFO and CTO of RupeeCircle.com, says "Technology-driven startups in this space are reaching out to underbanked masses and solving a major problem of financial inclusion. And this definitely makes fintech a lucrative sector to be invested in."

Technology to the Aid of Finance

A hard to ignore fact is how the face of finance has changed ever since technology started aiding it. Coupling the elements of technology with finance has proven to be a successful combination that has caught the attention of the investors and the masses.

Uday Somayajula, Co-founder of ePayLater, says, "There is a huge unmet demand for financial services in India. What is surprising is that the industry until quite recently remained untouched by digital innovation." He further adds, "Together with the potential of game-changing technologies like artificial intelligence, machine learning and data analytics, the disruptive solutions and products offered by fintechs have emerged as avenues for investment."

He adds that the biggest reason why fintech is gaining a lot of popularity is that many such companies are able to deliver solutions that directly impact consumption in the economy.

Dissolving the Friction Points

There are many points of friction when it comes to financial transactions. Providing solutions for them means scoring big among the masses. Anand Kumar Bajaj, Founder and CEO, PayNearby, stresses on this aspect, "Digital payments help accomplish speed in concluding commercial transactions and brings peace and assurance to a transaction. Interestingly, with the heightened application of technology, a lot of friction points in finance are being solved beyond payments." Therefore, space is heating up with tech powering insurance, lending, investments, payments, collections, banking.

Industry experts and people, in general, are extremely bullish about fintech. In fact, they have every reason to do.