Financial Technology (Fintech) startups mainly focuses on using emerging technology in design and delivery of financial products and services with the focus on making them more accessible, affordable, and easy to use.
Year 2021 ended with record number of unicorns for Indian startups. Out of 81 unicorns that India has produced so far, 2021 alone witnessed rise of 44 unicorns and 10 of them were Fintech startups. Covid 19 spread and resulting lockdown further fueled Fintech growth.
Fintech startups across the globe mainly collaborate and co-create products/features with the existing financial institutions and leverage partner bank’s license for transforming financial services. Fintech startups engage in one or more of the following core-activities:
- Aggregator services where they allow customers to discover and compare various products & services
- Provide support services like digital onboarding, e-KYC, credit appraisal, automation etc.
- Design or innovate new product or feature (for instance BNPL, Credit on UPI)
- Digital Distribution or unbundling product features from one or more providers to repackage and distribute it.
Fintech Sub-Domains:
Fintech can be broadly divided into five sub-domains where technology is used in payment, lending, insurance, and wealth management domains. Regulatory Technologies (RegTech) focus on compliance and security across Fintech domains.
Out of the overall $26.2Bn funding in Fintech, PayTech leads with $13.6Bn followed by CreditTech with $6.5Bn, WealthTech with $2.4Bn and InsurTech with $2.1bn funding.Finance is getting impatient in the digital age. Indians now pay and receive Rs 7.7 lakh core a month via apps running over a shared public utility.
