The close collaboration between BFSI incumbents and fintechs is set to grow with time, with fintechs complementing the BFSI incumbents in production and delivery of financial services. The biggest beneficiary of this collaboration among BFSI incumbents, fintechs and regulators shall be the Indian customers.
Key highlights of the publication
- The Indian financial services sector has been getting increasingly digitalised and this movement is leading to increased efficiency within the system, better reach of the financial services to citizens of the country, reduced cost of access, time saving, and improved customer service, which in turn is leading to greater financial inclusion. At the forefront of this digital revolution have been the fintechs, which have leveraged technology to digitise FS products and delivery channels. These developments have blurred industry boundaries within the FS space and new business models are being developed due to economies of scope available to the fintechs.
- As per the results from a recent study by NASSCOM, the Indian crypto currency market is expected to reach USD 241 million by 2030. Currently, it is estimated that there are 15 million to 20 million active investors in the crypto currency market in India, with the overall market value of cryptocurrencies increasing by around USD 1.5 trillion in 2021 to roughly USD 2.3 trillion as of December 2021 owing to 15,000 to 20,000 available tokens.
- Fintechs are working on creating Self-Regulatory Organisations (SROs) for their respective area of operation and are creating a model code of conduct (CoC). It will be critical that fintechs adopt an appropriate CoC and deliver on those consistently to ensure their market conduct is as per the expectation of the regulators.
- The sectoral regulators, off late, have been vocal about their expectations from the fintechs and have stated publicly that while they support innovations brought about by the fintechs, they are also concerned with the new risks that these innovations and business models are introducing in the financial services industry.