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.
by Amit Nigam, COO and Executive Director of BANKIT