From digital payments and wealth management to lending and insurance, Indian fintech companies are leveraging technologies such as artificial intelligence, machine learning and cloud computing to disrupt traditional financial services.
According to a report by EY, the domestic fintech sector is set to reach $1 trillion in AUM and $200 billion in revenue by 2030. This puts India in a strong position to lead the next generation of fintech innovations and propel the industry forward.
With the eyes of the world on the sector, here are three trends that will drive Indian fintech innovation in 2023.
1.
Neobank partnership powered by ultra-personalized products
The EY report states that Indian neobanks saw a 5x jump in funding last year and the figure is expected to reach $215 billion by 2023. According to a report by Inc42, the current market size is estimated to be $48 billion, with Fi Money, Open, Niyo and Jupiter being some of the top names in the industry.
Money Management App Fi Money It recently closed its Series C funding round with new and existing partners investing $75 million, valuing the Bengaluru-based fintech at $550 million.
What makes this sector so attractive is the fact that a growing number of India’s young working population is finding value in the personalized financial solutions that neobanks offer. But not just the consumers, traditional banks have also noticed the benefits of partnering with Neobank in conducting business.
In the absence of a regulatory framework for digital banking licenses, such partnerships would operate a variety of hyper-personalized financial products and services.
2.
AI-powered efficiency in digital lending
From ‘buy now, pay later’ to instant loans, digital lending services have already captured a large portion of India’s growing appetite for credit. According to an EY report, over $9 billion has been invested in digital lending in the last 5 years, and the market is expected to grow to $515 billion in book size by 2030.
With credit disbursements outpacing deposit growth, the RBI has expressed its concern over the banking sector’s ability to meet the growing credit demand while maintaining adequate capital buffers. like technology
account aggregator framework
This, combined with AI-powered credit assessment techniques, will enable fintechs to efficiently supply credit where it is needed most.
3.
Wealthtech for all
For the most part, Indians have invested in physical assets like gold, real estate and FDs, preferring to stay away from capital markets. Apart from boosting digital payments, the pandemic played a major role in bringing more Indians to the capital market, which is evident from the 63% jump in active demat accounts to 89.7 million in FY22.
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Simplify Investing
mutual funds covering stocks,
peer-to-peer investing
And everything is perfectly positioned to democratize access to wealth management services through AI-enabled personalized advisory services. It will allow an entire generation to build wealth efficiently and achieve their financial goals.
Hyper-personalized financial products combined with digital penetration will boost access to banking services in India. AI-powered lending will broaden access to credit, while advances in wealth tech will allow millions of people to benefit from India’s booming markets.
Together, these three trends will ensure that India maintains its position as a global leader in fintech innovation in 2023.