Acoustic Post - What is Fintech 1

By Aritro Datta

Financial Technology or FinTech in short describes the evolution and intersection of the financial services industry and technology. It may refer to startups, tech companies, or even legacy providers. The lines are getting blurred day by day, and it’s getting harder to know where technology ends and financial services begin.


The term Fin-Tech is often used in the media and in casual conversation. While many use the term, its specific meaning often gets lost somewhere along the way. Startups use technology to offer financial services at lower costs and to offer new tech-driven solutions that make things easier for the average human being. Incumbent financial firms look to acquire or work with startups to drive financial innovation. Technology companies provide payment tools. All of the above can be seen as Fin-Tech.

India recently became the third most preferred global destination for fin-tech investments last year, only falling behind the United States and the United Kingdom.

Investments in Fin-tech in India nearly doubled to $3.7 billion in 2019 from $1.9 billion the previous year, according to a report by Accenture and CB Insights which itself is a global venture-finance data and analytics firm. The number of deals was up slightly to 198 last year as compared to 193 the year before.

The overall transaction value in the Indian Fin-Tech market is estimated to jump from approximately $65 billion in 2019 to $140 billion in 2023, if not more. India has recently overtaken China as Asia’s highest Fin-Tech funding target market with investments of more than $286 million across 29 deals, as compared to China’s $192.1 million across 29 deals in 2019.

The Fin-Tech industry in India is expected to increase at a CAGR of 20.2% during 2017-21 to reach $92 billion. The country is amongst the fastest growing Fin-Tech markets in the world. It is ranked the highest globally in the Fin-Tech adoption rate along with China. Digital payments value of $65 billion in 2019 is expected to grow at a CAGR of 20% till 2023.

One of the reasons why the Indian fin-tech space, and especially the online payments market is becoming an avenue for interest for Indian investors day by day is that most of the solutions are India rooted.  

While they may derive their experiences from foreign markets, when the solution is India-focused, it tends to work well.


Here are some of the major categories in the financial technology market.


Apart from making banking more accessible and quick, innovations in technology have far-reaching applications that are diverse in nature. It enhances the relationship directly with customers through the launch of public crowdfunding platforms. It enables smaller businesses and young entrepreneurs to receive funding without having to raise money through conventional channels.

Social change is another promise that many Fin-tech firms aim to reach by taking into account demographic statistics and social needs. People in developing nations can now access microfinance and digital lending platforms. Large numbers of people, who were not covered by traditional banks, are now able to use online payment services.

Fin-tech also has caused a disruption in the insurance industry from online policy handling, data protection, and providing insurance. Robo-advising is another innovation that has disrupted the asset-management sector by providing algorithm-driven recommendations and computerized portfolio management which does demand human supervision.


Digital payments have been the torchbearer of the Indian Fin-Tech space in recent times. In 2010, India launched its first real-time payment mechanism and introduced the UPI in 2016. Currently, there exist 375 payment startups in the country. Mobile/digital wallets and gateways account for over 50% of the payment startups in India. In consumer credit, the urban population is likely to leverage Fin-Tech lending services to avoid heavy documentation, and the rural population can benefit from alternative credit mechanisms. Currently, there are 110+ Insure-Tech start-ups operating in India.

Banka, NBFCs, and many financial bodies closed the year on a difficult note, but not FinTechs. They raised funds without many hurdles. In fact, many operating Fin-Techs managed to raise a significant amount. In the time of the coronavirus, the advent of technology has been called for more than ever. With practically everything moving to an online base, it is time Fin-tech is looked at seriously and pushed forward to reach every household only to make a better and more efficient world.

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