With such noteworthy progress, it is no surprise that
customer expectations are also on the rise. Increased internet penetration and
smartphone usage have enabled people to fulfil almost all their financial
requirements with the click of a button.
India’s fintech industry has shown a remarkable growth
trajectory in recent times, having undergone a radical transformation.
According to a recent report by Research and Markets, as of March 2020, India
accounted for the highest fintech adoption rate, a whopping 87 per cent, out of
all the emerging markets in the world, falling second only to China. In 2019,
the fintech market in India was valued at over Rs 1,920 billion and is
projected to cross Rs 6,207 billion by 2025, expanding at a CAGR of 22.7 per
cent.
With such noteworthy progress, it is no surprise that
customer expectations are also on the rise. Increased internet penetration and
smartphone usage have enabled people to fulfil almost all their financial
requirements with the click of a button. This is true for the vast majority of
the country’s urban population. Gone are the days when we needed to make
multiple trips to bank branches for various reasons – be it for simple
functions such as cash/cheque deposit, or more extensive ones such as availing
loans or credit cards. Today, all we need to do is simply open the relevant
mobile application on our smartphones and almost every financial service is
available under one roof. Tier-III, tier-IV cities, and India’s hinterlands,
however, tell a different story.
Despite technological advancements in the fintech sector
across the country, a significant percentage of the population, especially in
rural regions require assistance when it comes to gaining access to a hassle-free
experience to fulfil their financial requirements. To address this, leading
industry players are ramping up their efforts to ensure that citizens even in
remote pockets of India can have frictionless experiences by acting as one-stop
destinations offering a plethora of services.
The COVID-19 predicament
When we consider the growth of fintech in 2020, we simply
cannot overlook the pandemic. The devastating impact of the outbreak has
significantly lowered cash transactions in urban cities owing to safety
concerns. But in rural areas, a vast majority of people rely on cash for their
day-to-day transactions – be it purchasing groceries, or even paying for
transport. Aside from this, the older generation in the hinterlands might
require assistance when it comes to meeting their everyday financial
requirements such as withdrawing cash or availing a loan or even for insurance.
The pandemic not only brought the world to a complete
standstill but also created an adverse impact on millions of people in remote
areas by cutting off their access to the outside world due to a series of
lockdowns. Unavailability of public transport, social distancing norms, limited
working hours of the few banks present in the vicinity, and under-staffing at
the bank branches added to their woes.
For instance, a small-time farmer in a remote village in UP
or Odisha relies largely on cash to sell his produce at the local mandi, paying
octroi and to purchase other groceries at the markets. And bank branches might
not be easily accessible. Since the onset of the pandemic, due to strict social
distancing norms, public transportation has been halted temporarily, making it
nearly impossible for him to access the bank and deposit/ withdraw cash to/from
his account.
All in one solution
The above-mentioned array of challenges created a considerable
gap in banking facilities and posed numerous challenges for those in the
country’s hinterlands. It became nearly impossible to even carry out their
day-to-day transactions, and the process of visiting banks and withdrawing cash
was tedious. Aiming to bridge the gap and improve financial inclusion across
the country, companies in the fintech sector, particularly start-ups began to
visit the homes of people in remote pockets of the country to assist them with
their everyday financial needs.
Right from doorstep cash delivery to insurance coverage,
Recharges & Bill payments and even, emerging fintech players are offering
almost all financial services under a single umbrella, right at the customer’s
doorstep. These all-in-one solutions have addressed the financial problems
faced by India’s rural population to a large extent enabling them to withdraw
cash through AePS (Aadhar-enabled Payment Systems) and perform other
transactions from the comfort of their homes with sufficient assistance from
banking correspondents and agents.
To sum it up, technology is advancing at a breakneck pace
bringing us ground-breaking fin-tech innovations that guarantee convenience and
safety, not just in metro cities but in the hinterlands of the country as well.
That being said, the future of the fintech industry will certainly include
all-in-one payment solutions that simplify the overall process of banking.
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