Indian start-ups, which focus mainly on payment processing and trading solutions, are now creating the fastest developing fintech products.
Powered by innovation in the payments processing field, the fintech software product segment is growing exponentially in India, according to the National Association of Software and Services Companies (Nasscom).
In a recent report, Nasscom estimated the total fintech software and services market in India to be worth a total of $8 billion which is set to grow 1.7 times by 2020. India has more than 400 companies and 200 start-ups in the space, with more than 20 per cent classified as ‘mature firms’ with demand across regions.
Nasscom head of research, Achyuta Ghosh, said that India would continue to be the fastest-growing market for fintech products. Ghosh identified India’s fintech software products landscape as ‘diverse and vibrant’ as well as able to adjust in line with evolution.
“While core banking, insurance, risk management, and point of sales solutions were first-generation products, the industry has undergone rapid evolution in terms of product offerings, with added focus on customer experience, driven by the advent of mobile and analytics technology,” he said.
Payment processing technologies, including transaction gateways and platforms, online and mobile wallets, ATM and POS services, remittance, and cash cards account for 34 per cent of the Indian fintech landscape. Banking services are close behind recording 32 per cent in accounting, treasury management, core banking software, risk management and mobile banking services.
GREX Alternative Investments co-founder, Abhijeet Bhandari said that in the scene of changing technology, there was a need to integrate systems talking to each other and create seamless information sharing.
“This will help fintech companies to take better and faster informed decisions, bringing efficiency as well as cost reduction. The fintech companies in India will make it easier to process loans, analyse credit, and ensure cheaper access to capital, not only for companies but also for individuals,” said Bhandari.
“The industry is yet to see such large fintech companies but with the Reserve Bank of India coming up with regulations for P2P lending and payment banking licences, India will witness a fintech revolution in the next five years.”