Fintechs getting indispensable

While newspapers today have regular columns on startups, what is really making waves is the fintech startups that strive to change the way we handle our financial transactions. They are evolving and trending and they are here to stay:

Imagine a scenario where you can pay for a cup of coffee with your iPhone or solve a complex financial issue using an app. That’s the power of the fintech today. It has brought in major changes in every aspect of life, especially in handling one’s finances.

While technology has been a factor causing disruptions in the financial services sector for nearly 15 years, especially with the development of core banking system, it has penetrated in an unprecedented manner in the last two years. Practically everything in banking is technology-based - fund transfers, payments, loan processing, disbursals and recovery, account opening and what not. What facilitated this strong prevalence of technology are the fintech startups and they are poised to create more disruptions.

According to research studies, the number of fintech startups funded in the first half of 2016 equals the total number of startups funded in the sector in 2015. It is believed that as much as $1.2 billion is invested in fintech startups in the country in the last two years. Nasscom has estimated that at the global level fintech software and services sector will become a $45 billion opportunity by 2020, growing at a compounded annual growth rate of 7.1%.

In simple terms, fintech is business based on using software to provide financial services and most fintech companies are startups founded with the purpose of disrupting incumbent financial systems and corporations that rely less on software. These startups often work in partnership with research institutes, government agencies, technology enterprises and create an integrated ecosystem which assimilates the combined expertise, experience and technology provided by the entities involved.

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