If you’re not a fan of hunting and gathering, you’re probably glad we invented trade, all those millennia ago. Our ancestors got buns for apples, sold cattle in exchange for homes, and learnt tradecraft for the cost of a shirt. In those initial transactions, we began the first steps of walking down a pathway that would ultimately create economies, markets, and financial institutions that would be challenged, redefined and developed for thousands of years.
When we finally thought that we knew what was going on, everything is unrecognizable again (thank you, technology!).
Financial Technology (FinTech) has been evolving from its early stages to becoming the catalyst that is forcing us to re-evaluate the traditional financial and banking institutions. They may have been around for hundreds of years, dealing in conventional currencies; now we’re reassessing both.
FinTech has been evolving since 1967 when Barclays introduced the world’s first ATM. From then on, it was a world for internet banking, PayPal and even Cryptocurrencies.
Rupee it after me:
In India, the majority of the innovation spearheaded by startups making a radical transformation in financial services via technology. The sheer size of the population in India, at 1.3 billion people, is what makes the country a ripe market for FinTech. There is an excellent opportunity for financial inclusion, growing digital penetration, and 76% digital literacy- the highest in the world.
India has a 59% FinTech adoption rate and its ranked second, globally. The primary reason for this surprising figure is that more than 79% of new FinTech startups see traditional incumbents as partners who can collaborate for mutually beneficial ventures, rather than as competition. This favourable collaborative ecosystem that does away with competition is a significant boost to all involved parties and paves the way for unprecedented innovation and evolution of financial technology.
And the big deal is:
40% of India’s population is unbanked or underbanked, and as a young nation witnessing high growth in digital penetration, it makes India an exciting global space for Fintech. Thanks to government policies such as “Pradhan Mantri Jan-Dhan Yojana” (PMJDY), between 2014 and 2017, financial inclusion has grown from 54% to 78%. In addition to PMJDY, the Indian government has enacted initiatives to expand the quality and delivery of Digital Financial Services (DFS) through Aadhaar biometric identification. Aadhaar cards are linked with mobile phones, SIM cards and financial service accounts to improve delivery of government schemes and benefits.
According to FII, 75% of adults have digital access to a financial account, and 54% of adults are active users (in the past 90 days) of their formal financial accounts.