Technology has the potential to fundamentally transform the fintech landscape, provide consumers with a greater variety of financial products at competitive prices, and help financial institutions become more efficient. Fintech has changed the way the world transacts.
What is Fintech?
A fintech is a short form of Financial Technologies. It is the application of modern technologies to the products and services in the financial industry such as forex or remittances. The fintech landscape increases with innovations. It disrupts the banking sector. In India, when this sector started emerging, there were very lax norms and regulations, however, with the advent of fintech, the regulators evolved.
Today, there are many rules and norms applicable to this sector, which has given birth to altogether a new business model which helps the banking and financial sector companies to deal with changing laws. This space is now known as regtech.
What is the ABCD of Fintech?
Though fintech is associated with any new technology which resolves the pain points in financial transactions, ABCD particularly stands for Artificial Intelligence (A), Blockchain (B), Cloud Technologies (C), and Data Analytics (D).
Under these technologies, there could be more associated technologies such as Artificial Intelligence includes Machine Learning and Natural Language Processing techniques.
Fintech Landscape – Business Models
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- Investment Tech – These are the platforms for retail and institutional investors to research and invest in multiple financial assets. Companies like Zerodha and Upstox are examples of this business model.
- Payments – This is the wider spectrum of business for disruptive business models. Companies that participate in traditional web-based and offline payment cycles; provide an alternative mode of payment, and support the payment companies in terms of security, analytics, platform, etc. G-Pay, Paytm and Phonepay are classic examples of these services.
- Accounting Tech – These companies try to automate the functions of the finance and accounting departments of organizations. They might also help to streamline the accounting. Khatabook is a successful example of an accounting tech company.
- Alternate Lending – Online lending platforms (including balance sheet lenders, marketplaces, P2P lenders as well as lead generators) and enablers. Lendingcart is an interesting company that operates on this business model.
- Bankingtech – Tech solutions for the banking industry including software, hardware, and Tech-enabled services. Jocata is an example of a Bank Tech company that provides compliance solutions.
- Cryptocurrencies – Companies that create business models around Bitcoin and other digital currency products and services operate in this space. CoinDCX is the cryptocurrency exchange that facilitates the exchange of Fiat Currencies for Crypto.
- Insurtech– Software products and data solutions primarily for the insurance industry. Policybazar is the first listed company in India on the insurtech model.
- Regtech – Tech products are primarily for financial institutions and regulators for efficient implementation and monitoring of laws and regulations. Regtechtimes is a new-age media company.
- Crowdfunding – Online platforms where people and organizations raise money from the masses. Ketto, Impactguru, Milaap are some of the examples of crowdfunding.
- Forextech – Tech solutions, including internet-first platforms and software for the forex market.
India has become the top five destinations for Fintech developments. Academic institutions are encouraging the learning models to train the students on this subject. The cornerstone of the India Stack is the Aadhaar enabler, used to access a unique, verifiable identity at low marginal cost by FinTechs.
