TechSparks 2020 is there, and this time it’s bigger, better and virtual. The immersive global event, taking place October 26-30, is one of India’s most influential startup and innovation events.
This year TechSparks will see masterclasses, workshops and speakers from around the world – with a more ‘glocal’ perspective to highlight Made in India startups, innovations, ideas and industry themes as the ecosystem strives to accommodate Prime Minister Narendra Modi’s bugle call for a Aatmanirbhar Bharat.
At TechSpark’s fintech track this year, we’ll be hearing from the biggest names in the industry, including Kunal Shah, Founder and CEO of CRED; Nithin Kamath, Co-founder and CEO of Zerodha; Vinay Bagri, Co-founder and CEO of Niyo; Manish patel, Founder and CEO of Mswipe; and more, on some of the most pressing issues facing the FinTech industry in India.
Technology permeates more than just our social life and the needs of consumers, and it is now evident that traditional businesses must either swim with the changing tides or sink.
Some of the most significant technological innovations over the past decade have been in finance, as consumers have moved from transporting money using non-physical and mostly virtual money to conduct online transactions. Money itself has changed because of fintech, as have centuries-old concepts of lending and borrowing.
In India, local players like Paytm, PhonePe, CRED, Instamojo, PolicyBazaar and LendingKart, among others, led the fintech revolution. After fighting a good fight against international players, these startups have managed to gain valuable market share.
In fact, India has been so successful in deploying fintech services that not only our adoption rate the second highest in the world with 59%, but UPI – a product made in India – has also become a security plan in the world of financial services.
Here are some highlights of what we can expect to hear on the TechSparks 2020 fintech track.
Financial inclusion in India
Between 2014 and 2018, Indians with a bank account and access to financial services increased from 54% to 81%, according to Findex. This growth in numbers came from banking and economic reforms during these years.
The biggest boost to India’s fintech revolution may have come from the government Digital India Initiative, where regulators were trying to digitize the processes needed to facilitate financial inclusion – PAN cards, Aadhaar cards, GST and KYC online – to help people access services faster.
Today, with the world’s cheapest data plan, fintech startups and digital banking providers in India are turning to another boom in financial services on the horizon, especially since the country takes note of PM Modi’s aatmanirbhar and ‘Vocal for local’ calls.
Startups have already started reporting that their services are seeing increased traction in lower tier cities and rural India, with some even relying on these geographies to provide a boost.
In fact, over the past two years, fintech startups that focus specifically on traditionally unbanked populations such as rural dwellers, economically disadvantaged communities, small businesses and traders, as well as SME / MSME grew up faster than those that target only the urban population.
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Digitize wealth management in India
Paytm recently launched brokerage services for retail investors on its Paytm Money platform and said nearly 60% of the demand for its investment products is from Tier II and III cities. And this has been a trend on fintech platforms.
Associated to demand from lower-tier cities and millennials – a new financially savvy population actively seeking ways to generate passive wealth – more and more fintech players are entering the retail investment space to bring investment banking services previously inaccessible to the general public on more user-friendly and less expensive platforms. While Zerodha and Paytm Money are leaders in the field, others like PhonePe are not too far behind.
With so many options available for people to invest today, startups are trying to strengthen their presence and differentiate themselves from others by offering features like robo-Advisors, investment products organized according to user preferences and access to industry research tools, among others.
It’s an exciting space to watch especially as the industry is booming.
Growth of digital loans
With the introduction of digital tools such as e-KYC, online credit scores, and increased data security, digital retail loans have increased in number in India. From Rs 2.7 billion in 2019, Online loans set to more than double to Rs.15 trillion by 2024, according to a joint report by ICICI Bank and CRISIL.
The digital lending industry itself is expected to represent 16% of loans to individuals over the next five years, up from 6% in 2019.
Digital loans are in higher demand than traditional bank loans due to their shorter lead times, less paperwork, and more transparency. These loans, although backed and mostly provided by banking institutions, are all disbursed digitally, saving people time and helping them access capital faster.
The industry is at an interesting stage because with so many existing lending options already available and adapted to digital formats, online lenders are becoming Creative by introducing new debt products to their customers.
From peer-to-peer loans and chit-fund type loans to crowdfunding, startups in India are crossing the boundaries of the legacy format to design new products powered by technology.
AT TechSparks 2020, we will strive to understand the driving force behind this need for new lending products, how digital lenders are lowering their risk to be financially strong enough to support some of these instruments, and whether this creative thinking is affecting corporate finance as well.
Some other areas we hope to explore at TechSparks 2020 include:
- FinTech for Small Businesses and How It’s Changing the Landscape for SMEs and MSMEs
- Where is the payments industry going: beyond QR codes, mobile phone transfers and UPI
- Bank 2.0: How fintech is changing the face of institutional banking and also forcing a digital revolution in small banks
- Next in fintech: how wearable devices, gamification and voice banking upgrades the fintech industry
- the future of banking: What will banking services look like in the future? Insurance market platforms already allow you to compare various insurance policies before you buy – will this apply to banks as well? Will banks have to offer non-financial services to play a more important role in the daily life of users? Paytm already doing this by making their app more user-friendly by offering various other services on a single platform – is this the new format in the industry?
- Customer Experience in Banking – What’s the Next Wave of Customer Experience for FinTech? How are new-age technologies like AI / ML / chatbot making a difference?
- The impact of COVID-19 on the fintech industry
- FinTech strategy for next billion Indians – how does fintech plan to reach them, what are some of their unique needs and requirements and what prevents them from using existing technologies?