Top 10 Services of Fintech Companies in India

May 24, 2022 Admin
Fintechs in IndiaFinancial Technology Fintech companies in India Fintech startups FinTech Services in indiafintech ecosystem

Fintech: The Basics

Fintech (Financial Technology) are firms that help consumers and financial institutions enhance old services and create automated financial solutions. The services include wealth management, insurance, payment gateways and alternative credit scoring, among other financial services.

The expansion of Fintech companies in India has been revolutionary. India saw a spurt in the number of Fintech startups between 2010 and 2015, with 1216 new startups emerging in the market. In 2021, Indian Fintech ecosystem stood at $31 billion, becoming the third largest Fintech market in the world.  

With digitization leading us toward a cashless economy, Fintech startups have made it possible for customers to avail virtual financial services that are easily accessible, cheaper and quicker. New startups are emerging at a fast pace to enhance the quality of banking and other services, not just for the consumer, but also for organizations.

 

Top services offered by Fintechs in India

The services provided by these startups have helped customers and existing merchants create an ecosystem of shared resources and profits

Here’s a low-down on the top most services provided by these companies.

 

Digital Lending

Digital lending is a form of loaning funds through online applications. The flexibility and efficiency of applying for loans via phone has become popular in comparison to the thorough physical processes at the banks. This is a highly employed method of lending in India, with a 2020 report showing an 87% increase in the adoption rate.

 

AI, ML and Data Analytics tools are being employed to tap into user behavior and patterns. In areas where these services cannot reach due to the lack of development, there, DSAs are being employed. A Direct Sales Agent works as a mediator between the borrower and the lenders and helps them connect online. Measures by the government have also helped digital lending platforms to operate safely and protect the customers’ information.

The digital players have also categorized their loan sizes to suit the diversity of the population. Micro and short-term loans help people with lower income levels to purchase loans.

 

 

Digital lending accords better customer experience, faster and more efficient lending, consistent lending decisions, and easier loan distribution and management.

 

Wealth Tech

The advent of wealthtech has changed the way advisers and consumers engage with wealth management. At the core of wealth technology is the management of wealth and investment advice by various platforms. Usually, these AI bots generate plans for customers based on the data collected through their digital behavior, their interaction with the system, and their financial activities and habits.

Tax planning, estate planning, succession planning, wealth protection, family governance, and wealth structuring are all included in the services.

 

InsurTech

Fintechs are digitizing key banking services, including insurance services. The Indian InsurTech or Insurance Technology market holds the second position in Asia-Pacific according to a new report, with the firms believed to have raised a total of $1.33 billion in the year 2021.

Technological disruption has led to the advancement of efficiency in the insurance sector. This innovation allows insurance companies to do away with human intervention and target the customers digitally, increasing their reach and creating a better means of retaining customer attention.

Today, applications help customers research their insurance needs and easily get them through their phones. Although India’s insurance penetration has been low, it rose from 3.30% in 2015 to 3.75% in 2020. InsurTech is at the cusp of a huge expansion in a next few years.

 

Digital Payments

With a UPI scanner in every store, the need to carry cash has decreased substantially, especially with the pandemic enforcing the importance of physical distance.

Digital Payments refer to the transfer of funds from one party to another for the sale of goods or services. These include net banking or bank transfers, payment cards like prepaid cards, credit cards and debit cards, mobile applications like UPI, wallets, Point of Sales Terminals (more on this later in the article), among many others.

The government’s Digital India Campaign has ensured a rise in the sector with approx. 7,422 crore transactions in the financial year 2021-2022. With new reforms and policies, the Indian government is moving towards a ‘Faceless, Paperless, Cashless’ economy.

 

Payment Gateways

Payment Gateways provide a mechanism to make payments on merchants' websites. It is differs from digital payments in that you need to fill out detailed forms with every purchase of goods or services. The transactions are encrypted and (with the information provided by customers) it is easier to verify users. The payment is approved both by the bank and by the user before it is processed.

With the constant decline in cash payments and increase in online purchasing, the value is estimated to only rise with time.

 

SME Lending

Very often, small businesses and MSMEs struggle to procure loan facilities. This could be due to a lack of established credentials or certain traditional processes that do not work in their favor.

Fintech companies in India are providing quick access to loans for MSMEs through faster and safer digital onboarding processes. There is a significant variation in how traditional and new lenders evaluate the loan eligibility of SMEs. Fintechs also consider cash-flows of businesses and their potential, whereas banks and NBFCs primarily look at balance sheets and profit and loss statements of prospective borrowers.

 

Alternative Credit Scoring

When self-employed users with steady incomes are unable to apply for loans, these services come in handy. These scoring methods differ from traditional methods like CIBIL and rely on the data collected.

Fintechs employs a variety of technologies, including machine learning and artificial intelligence (AI), to assess a multiple factors, including the applicant's payment history, travel history, e-commerce transactions, and spending pattern.

 

PropTech

Proptechs have greatly improved and changed how consumers find, rent, purchase, sell, and manage properties. Developers, investors, and property management businesses all profit from the cross-industry technologies. It reduces paperwork and improves transaction speed, efficiency, and security.

Customers and businesses can use proptechs' technology to make virtual property decisions and transactions, as well as manage real estate portfolios. In India, the PropTech segment is expected to increase from $120 billion in 2017 to $1 trillion by 2030.

 

Point of Sale (PoS)

PoS terminals are points where cards can be swiped for quick transactions. Merchants use  POS (point of sale) system is to receive payments from clients, among other things. The point of sale serves as a hub for merchants to run their businesses in a variety of ways, including inventory management, transaction processing, and customer management.

 

Blockchain and Cryptocurrency

Blockchain is a digital database of records called blocks that are used to track assets and record transactions in a business network. The recording of data on blockchain is done in a highly secure manner, and it is nearly impossible to get into the system.

Crypto, also known as a digital or virtual currency, is a secure digital or virtual currency that is not controlled by governments. As a decentralised digital system, cryptocurrencies operate through the blockchain.

 

About ScoreMe Solutions Pvt.Ltd.

ScoreMe is an innovative fintech company in India. Our deep-rooted expertise in the domain and the passion for delivering hassle-free, delightful customer experience, help us to design innovative products, which are backed by Big Data and complex mathematical algorithms. Our products help lenders, banks, and other financial institutions to conduct an in-depth analysis and assess financial health of the borrowers, assisting them in their decision-making process, rather quickly, efficiently, and effectively. 

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