New technology is being introduced into the Indian consumer’s life, with many of the biggest names in the industry coming on board.
As of now, most of the major brands are investing in this space with a focus on making money and building relationships with their partners.
But, the financial world is changing.
With new technology and the growth of internet based businesses, the demand for financing is growing at an exponential rate.
As per a report by ICL, the average credit score of Indian consumers rose from 6% in 2016 to 7.4% in 2017, as compared to a year earlier.
With the help of these new opportunities, the number of startups offering financial services in India has risen from 12 in 2016 and has now grown to over 250.
The growth in the number and scope of financial companies has also been seen in the cities as well.
According to a report from ETNow, Bengaluru, Hyderabad and Mumbai saw the fastest growth of new companies, with new financial companies coming on the scene at an alarming rate.
“We have seen the adoption of smart technology in cities, and a lot of these startups are also based in the suburbs, which is the biggest hurdle to financial inclusion in these cities,” said V. S. Bharti, Partner at the Financial Times Global Technology Network.
With these developments, the country is also poised to become a hub for technology, with the likes of Flipkart, Flipkarte, Snap, Google, Vodafone, Airtel and Tata banking also joining the market.
But are these startups taking it seriously?
What is the financial ecosystem like in India?
According to a study by Icl, only 7% of India’s citizens have access to a bank account.
That figure has increased to 16% in the past three years, with around 50% of people having access to no bank account at all.
The report said that a significant number of the country’s 7.2 billion population are not able to access a bank or other financial institution.
While the financial sector has seen a rise in its popularity in recent years, it is not without its challenges.
For instance, with a large number of individuals being left out of the mainstream financial world, many of these companies are only focussing on the top earners.
“These companies have created a niche for themselves, and they don’t care about the rest of us,” said Shree Kaur, an executive at a startup in Bengaluru.
The country needs to diversify, Kaur added.
With many of India´s top players taking a different view on the financial landscape, the industry needs to become more open and inclusive, said Kaur.
“There is a need for banks and other financial institutions to become open, transparent and accountable.
We have a lot to learn from each other and that is the only way we will achieve this,” said Kavitha, an entrepreneur in Bangalore.