Today with the advent of innovative payment systems and necessity to have paper money no longer exists. Two different industries, namely finance and technology have been brought together to constitute the new terminology of “Fintech.” These disruptive discoveries have given an alternative to a new financial environment where digital transactions like contactless payment tools, cryptocurrency, and digital wallets are the need of the day. Following are some of the main trends that the industry predicts for 2019.
The global economic changes of 2008-9 saw numerous comprehensive financial organizations hesitate, making the general population more accessory to receiving technology as a trend in financial activities. Technology assists in decreasing costs and turnaround time. This is the way towards a progressive society as it is comprehensive and depends more on leveraging technology than finance.
Platforms as a service or PaaS are one of the most notable trends to watch out for in the Fintech space. This will provide solutions to go exceeding the cloud computing arena. The organizations can extend solutions out of the box and add smart customization to address diverse industry needs. Miscellaneous functions like Sending and collecting payments, high-level payment services, infrastructure building and augmentation, unconventional and innovative user experiences are the prospect of new collaborations in the Fintech Industry.
As per the data recorded in late 2018 from the World Bank, India houses the second largest unbanked community in the world. This is a definite indication that the Government requires to look at non-traditional ways that can inspire change and influence the economy positively. Indian Fintech organizations have helped create lean cloud-based solutions to reach out to the masses.
The budgetary concessions that permit a more significant disposable income in the hands of the middle class will furnish an extra fillip to the Fintech services which are mostly accessed by this sector through a strong, smart telephone practice. It will speed up the economy and also improve the returns on savings and investments.
The budget has directed at supporting the growth of digitization, and there are many concessions in the interim budget that will acknowledge the diverse consumer sections across socio-economic and geographic boundaries to obtain financial and banking services. This is why the center has been located on easing KYC (Know Your Customer) and consumer onboarding criteria.
The aadhaar pile has been viewed as a centralized financial database that can be utilized as a more accepted norm to make it compulsory for Fintech platforms. There are many theories regarding this, but it does seem the most attainable option once data security has been appointed and guaranteed.
Peer to Peer or P2P lending programs has been given preference as the economy prepares up to cross double digit numbers. These programs will facilitate private players to take digital financial assistance to underserved demographics. The thought of P2P lending has been identified as an alternative lending class collectively. The investment cap of Rs 10 lakh will draw consumers with higher disposable earnings (owing to the taxable inception being raised to Rs 5 lakh). This will further break the boundaries of traditional banking standards and design a new class of creditworthy corporations and individuals (read MSME’s and students) more strengthened towards fullness and development.
Angel investors have been disappointed with the 30 percent duty of tax on profits, and that has directed towards a deficiency of funding for many Fin-tech start-ups. Answers have been considered, but it continues a hot topic of communication in the power hallways of the Finance Ministry. The Government which is to take charge now will have to make an apprised and wise judgment to encourage growth in this space.
These methods and modifications have the capability to fuel economic extension, promote financial inclusiveness and drive India to greater lengths. With the interim budget designing down useful recommendations, it remains for the next Government to improve enduring systems and encourage innovative solutions to create new promenades of disruption. Fin-techs are the way forth to guarantee the enhancement of the economy in the next few years.