Experts: Fintech

Rahul Raj

Founder & CEO, FloBiz

“FinTech is the fastest growing amongst all Tech sectors. Supercharged by GST demonetization and UPI the FinTech companies have been able to push the limits towards bigger innovation & better collaboration. For a sizeable section of society some financial services are already being delivered digitally and securely. Weve seen an acceleration in the design & adoption of different offerings ranging from payments credit investing insurance to trading which has been further fueled by the pandemic. India sits at an enormous opportunity of revolutionizing & democratizing access to a cluster of financial products & services for its 1.3B population on which weve just gotten started. Theres encouragement from the regulators and policies from the government that is helping drive growth in FinTech. There are still a lot of things to fix or revamp so the future looks even more promising & exciting for the FinTech industry than today. The Covid-19 pandemic has surely tested the resilience of every industry including FinTech. On one hand businesses dealing with tangible goods and in-person services were hit really hard and on the other FinTech companies were able to adjust to remote working environments invest more into tools & products to streamline day-to-day operations and contribute to the reach & adoption of our banking & payments infrastructure in the time of social distancing. FinTech companies have grown in size scale & number and startups have been able to raise billions of dollars. Forced by the threat of outbreak consumers expectations have risen such as doorstep delivery or acceptance of digital payments and every small business has had to seriously reconsider the way they have been doing business. The pandemic already is - and will be for some time - a major cause for technological advancement in the financial services industry.”

Amit Jhanvar

Director, Unitus Capital

“Fintech alternate lending industry is in flux with regulatory and COVID headwind. With the RBI guidelines due shortly in the wake of the loan apps fiasco and industry starting to pull itself out of COVID effects investors are in general maintaining a cautious view on the industry. Within the various segments Embedded Finance has emerged as a new niche. While the industry has been impacted by COVID-19 the winners have been the ones which have focussed on credit quality and differentiated distribution play. We like the companies which have cleaned up their portfolio proactively and are now focusing on growth. As a de-risking strategy we also see more neo-banking plays emerge offering all asset classes as well as a raft of tech infra companies to support the fintech industry.”

Avisha Gupta

Partner, L&L Partners

“India has emerged as a key market for the fintech industry in terms of the number of fintech players quantum of investments received and even the volume of fintech transactions undertaken. Digital payments and wallets have so far been the flag-bearer of Indian fintech market fuelled heavily on the demand side by favourable demographic factors and on the supply side by the enabling policy and regulatory framework such as Aadhar Jan Dhan Yojana India stack. As to the future in my view the digital lending space is at the cusp of revolution. This has been apparent by the steady growth of this space through the past decade. The unique Indian demography innovative financial products along with policy initiatives such as the account aggregator framework will serve as key drivers. Additionally with versatility being increasingly considered as marker of strength another expected trend in the coming years is the organic and inorganic expansion of established single segment fintech players into other related fintech segments and the consequent bouquet-service offerings by them.Lastly the focus of fintech firms will now extensively need to be towards the continued strengthening of customer trust such as by investing in cyber-security infrastructure as that is now being increasingly recognized as the necessary foundation for growth of the fintech industry. Despite the devastating impact of Covid-19 on several industries the fintech industry managed to stay afloat during the initial few months of 2020 and emerge stronger in the later months. Within the fintech industry the impact has been sector specific ofcourse with exceptions. While payments particularly UPI payments and insure-tech continued to have a strong foothold given contact-less payment mode preferred by many during Covid -19 retail digital lending had a muted growth albeit for a short duration. Despite such variations overall the move to a deeper digital economy has only been accelerated during Covid-19 which significantly cushioned the adverse impacts of the pandemic on the fintech industry.”

Monish Anand

Director, Founder & CEO, MyShubhLife

“Lending companies have been stress tested on their books due to COVID-19. Infact some of the fintechs have found it difficult to survive during this period with high NPAs and difficulty in raising capital. Many investors have shied away from this sector because of the long recovery cycle and business models no longer seen as viable and sustainable. Fintechs will have to prove the efficacy of their business models all over again especially their ability to underwrite and collect effectively before funding resumes in the sector.However 2021 will be the year when winners will emerge among the ones who have a strong business model on collection efficiencies and product innovation. Indian fintechs are gearing up to confront the post-Covid challenges by adopting intelligent platforms and pursuing robust strategies. With attention on new-age financial services models that leverage Artificial IntelligenceMachine Learning and provide a technology-first approach to lending the Fintech sector is likely to gain more traction with VCs in 2021. A key driver of the rising investor confidence in the fintech sector are products like digital payments loan discovery and insurance discovery which are among the tech products having the highest user penetration in India. The growing internet penetration clubbed with the governments push for fintech adoption is set to expand the addressable fintech market further with end to end financial services over mobile devices. For example a growing trend is where payment platforms have added insurance wealth management & investments portfolios to position as Neobanks. Financial industry has always come back stronger after a downturn and shown its resilience through a number of stormy situations. This resilience is seen in FinTechs too during the trying times of Covid 19 pandemic. The resilient fintechs were those who managed marginal leads by reducing costs and increased revenue through speedy and decisive decision making and gained the ability to extend this lead for the next decade. The onset of Covid-19 was a time for fintechs to strengthen risk parameters drive faster adoption of financial technology and spur further innovation.At MyShubhLife we started strengthening our core risk parameters also taking a tough but necessary decision of lending to only certain segments of customers within our chosen market. We built an end to end digital journey on our app to avoid physical contact and leveraged technology to heighten the effectiveness of our collections strategy during the moratorium and restructuring phase via digital communication channels and payment gateways. We rebranded ourselves from Shubh Loans to MyShubhLife. This was not a matter of a simple brand name change. We were already transitioning from a loans-only company to a full stack financial services company and Covid-19 acted as a catalyst to extend our product offering to provide our customers with easy access to affordable and customised products such as Insurance E Gold SIPs and E filing taxes.With the changes witnessed in the previous year on digital payments and contactless transactions on financial platforms 2021 is expected to be promising for fintech in India. A growing trend is Fintech-as-a-Services Platform. The year could see a rise of fintech players that enable the integration of fintech solutions with core banking systems. With fintech-as-a-services-platform solutions financial institutions will find it easier to partner with fintech companies whether it is in India or in similar markets abroad.”