FinTech in India is in high growth mode with investments startups topping $1.5bn in 2017. The coming year promises to exceed that as the industry is at an inflection point. Here’s a little bit of crystal ball gazing on what the FinTech future looks like.
Policy Push Will Continue to Drive Innovation
The Government of India and the RBI have already laid a solid foundation for a digital financial infrastructure in India. The JanDhan Yojana, Aadhar, RuPay network, Unified Payments Interface (UPI), Bharat Bill Payment System (BBPS), and BHIM (Bharat Interface for Money) are all steps in this direction. Demonetization and the recent directive to link Aadhar with every financial relationship a person has will act as catalysts in furthering the digital push and driving innovation.
The ‘India Stack’ set of APIs for presence-less, paperless, and cashless service delivery will become the backbone for ensuring the new digital economy works seamlessly.
Collaboration Will Be King
Banks will increasingly start looking at startups in the FinTech, RegTech, and InsurTech space as their extended innovation arms with a view to collaborate with them. In addition, independent forums such as Startup Bootcamp FinTech-Mumbai accelerator program will continue to provide a platform for FinTech, banks, and venture capitalists to come together.
Payments Transformation Will See Continued Acceleration
The BharatQR code, a unique interoperable payment acceptance solution developed by the NPCI (National Payments Corporation of India), Mastercard, and Visa will enable point of sale (POS) transactions to be made more seamlessly. Along with banks, payment wallets like Paytm and MobiKwik will continue to make huge investments to leverage this new standard. We are also likely to see emergence of new service layer apps that get built on top of the BharatQR code solution.
Bitcoin and Cryptocurrencies Could Either Explode or Implode
2018 will be a pivotal year for cryptocurrencies in India. While the RBI has continued to maintain that cryptocurrencies like Bitcoin and Litecoin are illegal, there has been a mad rush to invest in these especially towards the back half of 2017. There will be a new normal created, likely in the form of some regulation by the RBI, that will help provide some direction. India will also likely also see its first ICO (Initial Coin Offering) in the form of Laxmicoin.
NITI Aayog has started work on building IndiaChain as the backbone for blockchain transactions in the country, and it is likely to be linked to IndiaStack. This will result in digital contracts, seamless transactions, and reduced fraud. Banks such as ICICI and Axis Bank that have already taken baby steps in blockchain implementations and will have the opportunity to pivot using IndiaChain and lead the way in new innovative services.
Artificial Intelligence (AI) and Machine Learning (ML)
Startups in this space are likely to well as adoption by banks and other financial institutions rises in AI, ML, Natural Language Processing (NLP) and Natural Language Generation (NLG). These will be especially useful in areas like KYC, reconciliations, and operations transformation. Also, new-age intelligent chatbots that leverage these technologies for improved customer service are likely to be rolled out.
Voice as an Alternative Channel
Google Home and Amazon Alexa will see adoption rise in India. This will mean banks and FinTech players will need to build out their omni-channel capabilities to also include voice.
India’s FinTech journey is set to get into high gear in 2018 and beyond!
The article was originally published on Business World Disrupt and is reposted here by permission.