India’s fintech market is the fastest-growing compared to the rest of the world. Despite the first two waves of the Covid-19 pandemic that wreaked havoc across most sectors, the innovations brought about in the fintech space have helped India maintain a cutting edge. Globally, the country has the highest fintech adoption rate at 87% against a global average of 64%.
The exponential growth across the segment has also resulted in significant capital inflow and rising investor interest. In fact, fintech continues to dominate the country’s investment landscape. During the period of Jan-May 2021, the sector accounted for 88 of the 502 funding deals and raised more than $2 Bn — a 4x increase from $495 Mn raised by the sector in the first five months of 2020.
Given the growth scenario, it is not surprising that global fintech companies such as Tide, Revolut and Wise are also setting up bases in India.
However, the sector has its own challenges and bottlenecks, and concerns over cybersecurity are topping that list. According to a report by Florida-headquartered ACI Worldwide (a payment systems company), India had clocked 25.5 Bn real-time payment transactions in 2020, the highest in the world. The report also noted that with this rise in transactions, cyber frauds related to real-time payments were increasing as well.
According to its estimates, out of the fraudulent incidents in India, 11.6% were identity theft cases and 6.2% were digital wallet hacking.
In a bid to decode the current fintech market, expected trends and opportunities, the ecosystem’s endeavour to counter the recent surge in cyberattacks and the likely impact of a third wave of the pandemic looming large on the horizon, Inc42 hosted this session of The Dialogue with Onfido, a London-based identity verification company.
How Startups Are Driving India’s Fintech Revolution
Moderated by Srikrishna Ramamoorthy, a partner at Unitus Ventures, the session hosted Akshay Mehrotra, cofounder and CEO of EarlySalary, Krishnan Vishwanathan, founder and CEO of Kissht, and Sharan Nair, chief business officer at CoinSwitch, to discuss how fintech startups in India evolved in sync with the new normal to deal with challenges and spearhead growth.
The session covered:
- The second wave of Covid-19 and its impact: A comparison between 2020 and 2021 fintech startup landscape
- Fintech trends to expect in 2021, such as neobanks powered by open banking APIs
- The rise of emerging tech-based solutions: How startups are leveraging digitisation, AI, and more to drive growth in the sector
- Advantage new technology: Use cases and benefits to be derived from blockchain adoption
- How major challenges like identity thefts and cyberattacks are hindering the sector, and how Big Data and AI can help solve them
- The solutions provided by companies such as Onfido and how fintech startups can leverage them