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Wide Scope Of Innovation For Fintech Sector

“No other country offers the depth, width and length of issues faced in the banking and financial services sectors

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The USA has the largest number of start-ups in the world, followed by China and India. With the entire ecosystem of government, academia, industry and venture capitalists supporting the startup culture in India, it won’t be long before India replaces China as the country with the second-largest number of startups, and eventually, the USA. The first step is likely to happen by 2025, and hopefully, the leadership position will follow within a few years after that.

The fintech sector in India probably
offers the maximum scope for innovation and disruption. No other country offers the depth, width and length of issues faced in the banking and financial services sectors like the ones faced in India.

Endless Possibilities
The spectrum of the problems is immense: from one sector of the population having access to sophisticated financial instruments to millions of people being unbanked, from a creaking old financial services delivery model in the physical model to an efficient app-based instantaneous fulfilment model and an older generation subjected to a languorous lending model to the new millenniums desiring an instantaneous loan approval model, India has it all!

Just look at some of the mindboggling statistics: UPI was launched in 2016 and within a space of a few years, it has reached a staggering number of 2.3 billion transactions in January 2021. Nearly 295 million Jan Dhan Yojana accounts have been opened, with 176 million in rural and semi-urban areas. The opportunity these platforms offer to fintech startups to create value addition to customers is unparalleled. Combine all this with the rapid rise in the number of mobile phones and the use of digital payments, the market potential is immense.

Opportunities for fintech start-ups The existing processes in banking and financial services are antiquated and are in urgent need for reform. From opening an account to routine transactions, there are still many friction points. As an example, the first printed cheque was issued 300 years ago, and the cheques are still being used for payments. The question is when will the last printed cheque be issued in India? 2025? Or earlier?

Neobanks will ensure that the physical space and investment required for banks will become redundant. Starting with penetration in urban areas, Neobanks will start proliferating into semi-urban and rural areas.

The use of AI and Machine Learning across all products and offerings of fintech start-ups will proliferate and will be particularly useful in Regtech connected to financial services – tracking money laundering, transaction monitoring and prevention of cybercrime and frauds will gain increasing traction.

Affordable financial services and products which target inclusion of the masses with low margins will give massive scale, particularly if the products are targeted towards the huge number of non-English speaking population of India.

The list is endless and start-up founders who have the unique ability to spot an opportunity will succeed and scale rapidly. They need to find that “Eureka” moment and foray into an opportunity in the sector which will offer huge opportunities.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

Ninad Karpe

The author is Partner at and can be reached at

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