Leveraging latest technologies and policy-level support from the Government of India. The Indian FinTech sector is poised for an impressive growth
When finance pairs with technology, we get a disruptive innovation called FinTech. Thanks to the rapid developments in the FinTech sector. There’s a revolution in the way customers shop, bank, and manage money. FinTech leverages technology to make online customer journey convenient. And, it makes multiple options available to make online payments and transfer funds.
A Myriad of Regulations
Although online transactions have become seamless, they are opening up newer avenues for cyber attacks as well. This is largely due to the easy availability of customer data including personally identifiable information. If this information exposed to data breaches can be used for numerous types of financial crimes. Taking note of these possibilities, regulators introduced regulations and directives. EU GDPR and PSD2—that make it mandatory for businesses to ensure the security of data they possess. Apart from data security regulations, there are numerous other regulations. Such as Dodd-Frank, Comprehensive Capital Analysis (CCAR), Basel, National Payments Platform (NPP), and Markets in Financial Instruments Directive (MiFID) that financial institutions are required to comply with.
Leaning on Technology
To keep pace with the rising expectations. Both from customers and regulators—while sustaining and growing businesses, financial institutions are increasingly looking toward technology. Especially, artificial intelligence, machine learning, deep learning, and blockchain.
A PwC report has stated that the startups using AI in financial services are particularly gaining significant investments. And over the last two years it have seen average funding of US$1 bn. Similarly, blockchain, yet another cutting-edge technology has now moved out of the research labs. And is now being deployed in business use cases including online payments, fund transfer, and identity management. It is expected that by 2020, 77% of responding companies, in a PwC survey, will adopt blockchain. And it will happen as a part of a production system or process.
FinTech in India
The India FinTech growth story, leveraging latest technologies, is also impressive. And with the Government of India pushing for digitization through numerous initiatives including demonetization, unified payments interface (UPI) and providing policy-level support, the FinTech sector is poised to register impressive growth in India. Further, the introduction of the India Stack will provide entrepreneurs and innovators with the much-needed technological framework to aid the growth of the Indian FinTech sector. In fact, PwC has gone on to state that “India offers the highest expected return on investment on FinTech projects at 29% versus a global average of 20%.”
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