This write-up is intended exclusively for readers who want to better comprehend the paradigm shifts in the global FinTech landscape. The major emphasis here would be on Payments, Remittance, Blockchain and Indian adoption. With the recent advancement and implementations in aforementioned areas and collaboration between banks and FinTech startups, there are some incredible technology development shaping new financial services experiences. A brief primer on each of these areas of focus is given below:

Payments - 2017 has been the year of instant digital payments, aligned with the emergence of alternative payments. With mobile payments (P2P and merchant payments) reaching higher adoption levels in the mainstream, traditional payment methods are slowly taking the back seat. In 2018, global payments revenue are expected to reach $2.3 trillion, representing 43% of banking revenues.

Blockchain – almost over 70% of banks have already initiated or in the process of initiating DLT projects in 2017. Blockchain in areas of Audit, Insurance, Capital Markets and cross-border money transfer may see more production ready use cases.

Remittance – The worldwide remittance flows were estimated at $575.2 billion, which was significantly below the previous forecasts. Developing countries are estimated to receive about $439 billion, which is nearly three times the amount of official development assistance.

As per a report by KPMG, India is transitioning into a dynamic ecosystem offering FinTech start-ups a platform to potentially grow into billion dollar unicorns. From tapping new segments to exploring foreign markets, FinTech start-ups in India are pursuing multiple aspirations.

The Indian FinTech market is projected to touch USD 2.4 billion by 2020 from a current USD 1.2 billion, as per NASSCOM.

The traditionally cash-driven Indian economy has responded well to the FinTech opportunity, primarily triggered by a surge in e-commerce, and smartphone penetration. The transaction value for the Indian FinTech sector is estimated to be approximately USD 33 billion in 2016 and is forecasted to reach USD 73 billion02 in 2020 growing at a five-year CAGR of 22 percent.

The investor attention has been concentrated towards hi-tech cities in 2015, with Bengaluru witnessing eleven VC-backed investment deals of USD 57 million, followed by Mumbai and Gurgaon with nine and six deals, respectively. Bengaluru, the start-up capital of India has benefitted from the same and is ranked 15 among the world’s major start-up cities.

The government is naturally the prima facie catalyst for the success or failure of FinTech in a heavily regulated financial industry. The Government of India along with regulators such as SEBI and RBI are aggressively supporting the ambition of the Indian economy to become a cashless digital economy and emerge as a strong FinTech ecosystem via both funding and promotional initiatives.

Funding support: The Start-Up India initiative launched by the Government of India in January 2016 includes USD 1.5 billion funds for start-ups.

The buzz around fintech has gained the substantial attention of traditional financial institutions in the recent times, start-ups, venture capitalists, and regulators. Banks and regulators are hard-pressed to revisit their operating model and policies respectively to create a conducive environment of collaboration and dynamism amidst the participants in the fintech ecosystem.

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