in India

Fintech in India - A global growth story
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Fintech themes - New frontiers changing
the face of financial services in India
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Emergence of fintech companies in India is a prelude to the
transformation in payments, lending and personal finance
space that has manifested in significant investor interest in
the recent times. Fintech is enabling the entire value chain
of the traditional financial institutions to establish better
connects with customers and to provide new offerings in
the market. There are numerous start-ups cutting across
multiple business segments and functions, predominantly in
payments and lending space.
KPMG has identified seven themes that have the potential
to redefine the financial services sector, and if harnessed in
a proper manner can open numerous prospects for banks.
Figure 9 depicts the fintech themes along with a snapshot
of key initiatives taken in each one of them from an Indian
context.
Payments and financial inclusion have gained major market
attention. At the same time, there is a strong case of
investing in the lending and security biometrics space of
Fintech. Slowly, a clutch of companies are beginning to
look at robo-advice and Bank in a Box as new investment
avenues. Blockchain is an emerging tech-mammoth and
has a potential for mass market implementation in future.
Seven fintech themes
Next-generation
payments
• 46 per cent of indian fintech are
focused on payments and trade
processing.
• Payment initiative such as UPI
are expected to define the future
of payments.
P2P lending
• 20 new P2P lenders in india in 2015.
• P2P on the verge of entering the
regulatory paradigm.
Blockchain
• Industry coming together and
exploring different hypothesis
through hackathons.
• Indian IT companies venturing into
Blockchain by opening innovation
labs.
Robo-advisory
• Although miniscule at present,
its applicability is gaining ground.
• Can be revolutionary in personal
finance management.
Bank in a box
• Evolution of payment banks and
RRBs creating a surge in demand.
• Non finance corporations leveraging
the technology stack of service
providers.
Security and biometrics
• Gaining ground with banks
exploring voice recognition
systems.
• Aadhar linked biometrics can be
crucial in the years to come.
Financial inclusion
• Vision 2020 aims to put financial
exclusion to single digit.
• Fintech storming in due to a lot of
government led initiative.
*Note: the above analysis is based on qualitative research conducted
during April–May 2016. The rating parameters have been plugged as per
the current adoption and maturity level of the themes in India. Particular
areas of consideration were existing fintech start-up ecosystems,
government regulations and support and steps taken by incumbent
market participants.
Key bases adoption and maturity*
High Medium Low
© 2016 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.