The financial technology (FinTech) ecosystem in India has been arguably the hottest one. An explosion of smartphone users and state-of-the-art digital infrastructure are fueling the rapid growth of FinTech in India. The Indian FinTech sector has embarked upon its digital journey and is catching up fast with its global peers in terms of adoption.

According to NASSCOM, the Indian FinTech market is expected to grow at a CAGR of 22% in the next five years. The transaction value for the Indian FinTech sector is expected to reach $73 billion by 2020, as per the KPMG reports quoted by YourStory.

India is also slated to be the first country globally to get the payments facility from WhatsApp. WhatsApp has started rolling out a Unified Payments Interface (UPI)-based payments feature. With more than 200 million active users in India (the largest anywhere in the world), WhatsApp is expected to drive large volumes on peer-to-peer (P2P) payments and also become a popular platform for merchant payments.

Other global giants, too, are zeroing in on this space. For instance, Google has already launched its payments app Google Tez (“Tez” in Hindi means fast), while Samsung has launched Samsung Pay and Amazon has introduced Amazon Pay.

Meanwhile, our Desi digital payment firms like Paytm, PhonePe, MobiKwik and FreeCharge (all are UPI-enabled) are strengthening their arsenal.

So, as you can see, the Indian FinTech space is full of action. In this post, we have who Parinita Gupta, who will throw some more light on the FinTech sector in India.

Fintech Ecosystem in India: Trends, Top Startups, Jobs, Challenges and Opportunities

by Parinita Gupta

FinTech in short “Financial Technology” is a concept of digitalizing the financial services. FinTech’s main aim is to digitalize all the financial services to maintain the transparency, increase the focus on customer & reduce the unwanted costs in the banking and finance sector.

Fintech redefines the framework of the financial services such as Digital Market Outlook & Agreements and procedures of banking like lending, investment strategies, and payments.

Digitalizing the financial services have a mutual benefit within a customer and a banker. Simplified access of the services using automated mobile apps, fast and instant transactions, more transparent and convenient services are considered to be the characteristics of the Fintech.

In was observed that it’s been only half a decade since the Fintech concept entered in India. Due to some external factors like demonetization, cryptocurrency, digital mode of payments led to a rapid adaptation by the huge audience in India.

Digital Payments, incl. Mobile POS Payments & E-Commerce are considered to be the main reason for adapting the digital mode of transactions. Online Crowdfunding, Wealth management services & Marketplace lending on a digital platform are another reasons for the rapid development in the industry.

According to NASSCOM, by 2018, there are more than 500 Fintech start-ups in India whose main motto is to move towards the cashless economy.

Technically it was observed that FinTech venture’s value reached up to US$ 12.2 billion in 2014, US$ 19.1 billion in 2015, and US$51,756m in 2018. It was expected to increase by 29% that makes about US$2.4B by 2020 in India. China tops the list of highest transactional value in financial technology with US$1,562,408m in 2018.

Top 10 FinTech Start-ups in India

PayTM-; One97 Communications

PayTM had started its financial services for mobile recharge and utility bill payments. It was founded in the year 2010 and became the top FinTech start-up in India. From a mobile wallet PayTM evolved into PayTM Bank which provides complete online financial services to the customers.

MobiKwik

MobiKwik is an Indian digital wallet company founded in 2009. Bipin Preet is the founder of the MobiKwik wallet. MobiKwik wallet is used to transfer money directly from a bank. Its worth is about $100 million.

BankBazaar

Bank Bazaar is an online platform which gives information regarding Bank Loans, credit cards, and insurance policies. Customers will have a chance to compare the services of all the banks and directly apply for the loan through bank bazaar app or website. Bank Bazaar also provides Bank Bazaar insurance policies to the customers completely on an online platform.

PhonePe

PhonePe is a Bangalore based Fintech Company which works based on the services of Unified Payments Interface (UPI). It was launched in the year 2014 and partnered with UPI based mobile payment apps, Yes bank and also with Flipkart.

Capital Float

Capital Float is a digital finance company in Bangalore. Capital flow provides capital loans for inventory purchase, managing cash flows etc. It lends money to the borrowers within 2-3 days.

Policy Bazaar

Policy Bazaar is an online platform where the user can apply for various insurance policies. Policy Bazaar is one of the largest online insurance brokers in India. It was founded in the year 2008 by YashishDahiya.

CCAvenue

CCAvenue is an online payment gateway which provides many options to transfer money online. CCAvenue is a portal through which e-Merchants and user can accept & make the payments. In CCAvenue provides a real-time multi-currency payment option completely through online.

Mswipe Technologies

Mswipe is India’s largest independent mobile POS merchant acquirer and provider in India. Mswipe link with Small Medium Enterprises in India to connect with all financial services and also for digital payments.

LendingKart

LendingKart is an online platform which collaterals with Small Medium Enterprises and provides working capital. The company provides the funds from 50,000 to 1 crore to the Small Medium Enterprises in India. LendingKart is very famous in the state Gujarat.

InCred

InCred is an online platform that provides personal, home, educational, consumer and business loans to everyone. It also provides loans for both SME’s for capital infrastructure. The company uses data science to make the process of lending quick, simple and hassle-free.

Job Opportunities in the Fintech Space in India

FinTech is an integration of both IT and banking sector. Job opportunities will be open for both the banking and IT sector.

In IT sector, jobs for UI/UX graphic designer, Cloud Management Professionals, software and mobile app development, Machine Learning, and Artificial Intelligence will boost to an extreme level as FinTech is all about online services.

In Banking Sector, there are many career opportunities to work with the startup companies like MobiKwik, MSwipe, and many other digital platforms. Jobs in e-wallet and e-commerce are also available to manage the financial aspects of the company. Traditional jobs in banks will be replaced by the candidates who are experts in both IT and Finance to deal with the e-transactions in banks.

Apart from this, the mandatory jobs like Product manager, Product Engineer, Sales and Marketing executives, Data Analyst, Social Media managers are quite common and are in Demand in FinTech Industry.

Challenges and Future Perspectives

In India, acceptance of various cashless modes payments was seen after demonetization notes. The government itself encouraged everyone towards the cashless technologies like digital wallets, Internet banking, and the mobile-driven point of sale (POS).

Linking with the Aadhaar card, eKYC, UPI and BHIM had restructured the financial sector in India. After the ban of 500 and 1000 notes, it was reported that digital transactions raised up to 22% in India FinTech start-ups like PayTM saw 435% of more traffic to the websites and Apps. This led to the growth of many FinTech start-ups in India as there are many opportunities to grow.

Digital Finance firms have benefited from many government’s start-up policies. Reserve Bank of India also allowed an easy way to start a FinTech start-up. Government is also providing the financial assistance for start-up’s up to 1 crore. Customers started accepting the digital currency for both personal and commercial use.

Due to various changes in the Indian economy, the financial structure of Indian banks and financial institutions were changed and digital wallet became a mandatory channel for the transfer of payments.

Integration of IT with finance led to the increase in the value of digital money like Bitcoins. Cryptocurrency, Blockchain system led to faster transactions of digital payments.

Banks like HDFC, Federal Bank etc. linked there official digital transactions with the small startup in India like Startup Village which led to the growth even in small FinTech start-ups.

Modernization of the tradition sector of banking and finance had increased more customers, reduced the time and were able to provide fast and quick services to the customers.

FinTech industry also has few challenges, like Fintech startups, find a little difficult to reach the growing phase in the business cycle.

Collaboration and adoption rate is quite less but the ratio is moving upwards with a 59% increase in the digital payments.

Integration of many other techniques like blockchain management, cryptocurrency is not still in a niche stage in India.

Transparency of the regulatory issues and hiring of tech personnel are among the key challenges of the Indian FinTech space.

Innovation has been a bit limited for the low-income groups. Additionally, mass awareness and internet bandwidth is still a huge roadblock in India.

As a coin has two faces even FinTech industry in India also have few challenges, Yet these challenges can be converted into opportunities if a further support is provided by the government.

Author Bio: Parinita Gupta is a banking professional, blogger, and digital marketer. She has co-authored many blog posts for Stoodnt, Inc. Here are her previous articles:

FinTech Ecosystem and Banking Jobs in Singapore for Expats & International Students

Financial Services & Banking Jobs in Canada and Challenges of the FinTech Ecosystem in Canada

How to Get Banking Jobs in Dubai

Scopes of Machine Learning & Artificial Intelligence in Banking & FinTech

Scopes of the Internet of Things (IoT) in FinTech

Cloud Computing in FinTech

Blockchain Technology Beyond Cryptocurrencies and Financial Services

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Sources: 1, 2, 3, 4, 5, 6, 7.