21.1 What is FinTechIntroductionNeed for FinTech in contextofBanking industryInsurance IndustryWealth ManagementIndustry2.1 Initiatives by Indian Government to boost fintech.
Recent Media buzzSource : Economic Times, Mint4The domain of fintech is expected to continue to pay a very crucial role in a post COVID-19 world. However, for that to happen, fintech will have to evolve and adapt to a new world order. Experts are working on ways in which Fintech companies can stay relevant efficiently and profitably
What is Fintech5•As the word suggests ‘Finance’ + ‘Technology’•Financial industry innovates & improves financial services by use of technology•Traditionally, large Banking and Financial institutions have been resistant to changedue to their legacy IT systems.•Scope for innovation is restricted as they are under constant scrutiny by regulatorybodies and their agility for customer acquisition and service was bound by tediousprocesses.•The FinTech industry came been under focus recently with Berkshire Hathaway’s investment into Paytm for Rs 2500 crore marking Warren Buffett’s first investment in India.•“The Indian fintech ecosystem is the third largest in the globe. $6 billion investments have already happened in fintech market in the country in the last 3-4 years. Fintech market in India is likely to expand to $31 billion in 2020," – Niti Aayog CEO Amitabh Kant in May 2019.•FinTech is amongst the most thriving sectors at present in terms of both business growth and employment generation. Globally, the FinTech software and services industry is estimated to touch $ 45 billion by 2020, growing at a CAGR of 7.1% - source : NASSCOM – February 2020
Traditional banks & FI6Traditional Banking Institution Strengths•Have a very strong existing customer base and relationships that have been in place for years. They still retain the lion’s share of consumer accounts across the spectrum of financial services.•Convenience of in-person touchpoints at branch offices to solidify relationships with clients — evenas they build out their digital strategies.•Big national banks & NBFCs have better capital to invest in their own digital transformationinitiatives like such as mobility, artificial intelligence, machine learning, and big data analytics.Traditional Banking Institution Weaknesses.•The traditional financial institutions still have significant work to do to repair consumer trustdamaged during the last recession.•concerns improving consumers’ digital experience. While financial resources are being allocated to create new digital offerings, many of these initiatives are not well integrated with their more established call center or operations.•The complexity of existing systems — built on generations of difficult-to-integrate legacy technologies — combined with an incumbent culture that may not be optimized for today’s digital marketplace.