India is a region where many things can happen in the financial sector. It appears that fintech will easily gain some inroads in this region. Several key factors act in its favor at this time.
The Smartphone Boom
In this modern day and age, smartphones are very common devices. Even more so in India, where over 450 million smartphone users are active today. It is also one of the few countries to have an average of more than one mobile device per consumer.
This growth is facilitated in different ways. India is home to very low mobile tariffs, making it a leader in the Eastern world. Other countries can learn a few things from India in this department. There is also a very reliable 4G network for mobile data.
It seems plausible to assume 5G connectivity will become accessible fairly soon. That will , in turn, pave the way for new fintech solutions tailored to mobile users.
AI is a Fintech Facilitator
Ongoing advancements in artificial intelligence should never be underestimated. While seen as a niche market, it can be of great value in the financial sector. Through AI, companies can analyze and understand consumer behavior and sentiment.
Moreover, it allows for some innovative financial services. With this information in hand, robo-advisors continue to gain popularity. Additionally, there are digital assistants for standard banking services. It is evident that fintech companies can take full advantage is these developments and make their presence felt.
Lack of Financial “importance”
Most people are unaware of how India’s financial system works behind the scenes. Unfortunately for residents, the increasing availability of banking services has not triggered a major shift yet. Instead, the payment, insurance, and investment industry in India remain open to disruption.
Combined with the public vs private bank sector inequality, a lot can happen. The vast majority of Indian bank accounts are opened through public sector banks. Their collective market cap is far lower compared to India’s biggest private bank.
Furthermore, with just 50 million credit cards – and half as many active users – traditional finance isn’t convincing too many people. India is a country where mobile and innovative payments are crucial. It is a key area for fintech companies to explore.
On the insurance front, there is plenty of room for competition in India. It is believed that only 4% of the population have health insurance in 2020. An abysmally low number, indicating the dire need for strong competition. Fintech and insurance seem to go hand-in-hand.