We’re five months into 2017 and Indian Prime Minister Narendra Modi’s ambitious Demonetization move in the second last month of 2016 has had a tremendous impact on Financial Technology in India.
So much so that the development of FinTech has seen unprecedented growth in the last couple of months, and Fintech start-ups are busy making hay while the sun is shining.
According to a report published by Professional Services major KPMG, investment in the sector declined to $216 million in 2016 from a whopping $1.6 billion in 2015. The Global Fintech sector may have shown signs of slowing in 2016, fast forward to 2017 and things are only looking up for this sector.
Let’s have a look at what’s happening in the FinTech space in India today:
- Peer-to-Peer Lending:
Peer-to-peer lending, also known as P2P lending, is a trend to watch out for in 2017. Simply put, P2P lending is a win-win situation for both lenders and borrowers – lenders usually earn high returns compared to those offered by traditional financial institutions and borrowers stand a chance to borrow money at interest rates that are typically lower than those offered by banks.
A hugely unregulated sector, with as many as 30 peer-to-peer-lending agencies operating out of the country including Lendbox and Lendenclub. P2P lending is on the rise – quite a huge number of borrowers who didn’t qualify for a loan from the banks avail this platform.
- Cryptocurrency:
Cryptocurrency is just like your traditional currency with the difference that it uses cryptography for securing your transactions, and it also controls the creation of new money. In simple layman terms, it may be referred to as digital currency.
Bitcoin, the first cryptocurrency to have been ever created enjoys unparalleled popularity even as many cryptocurrencies like Zebpay, Coinsecure, and Unocoin have emerged over the years. Today, One Bitcoin equals 113458.92 Indian Rupee and continues to grow in value.
However, it is worth noting that it is a currency that is highly volatile – Mark Thomas Williams, popularly known as Professor Bitcoin, who is a member of Boston University’s faculty, suggests Bitcoin is seven times more unstable than gold and eighteen times shakier than the US dollar!
- Social Media:
India is a huge market for Social Media giants owing to its huge population base. Tech-savvy Indians, be it buying groceries or making bank payments, prefer doing things online. This has prompted most service providers to have their Social Media channels to broaden their customer base and keep the existing clients engaged.
FinTech companies are no different – they are using Social media like never before, so much so that a new term named “Fintech Marketing” has emerged.
Fintech companies see Social media as a way of communicating with prospective clients, thereby facilitating them to understand customer behavior and preferences which would help them in selling the right product.
Profit book, a simplified and robust cloud accounting software that has proven to be increasingly popular among small organizations to create invoices, for tax calculation and tracking inventory, for instance, has its own Facebook and Twitter handle to connect with people at another level altogether.
2017 looks to be a promising year for the Global Fintech sector – more so for India and Demonetization is only going to accelerate Fintech’s growth. Cash crunch forced your friendly neighborhood tea and vegetable vendor to look beyond printed money and accept e-payments. We’re soon gearing up for a truly digital India, aren’t we?
LSI Keywords: FinTech, Cryptocurrency, P2P lending, Bitcoin, digital currency
