With the rise of technology-driven startups, Fintech has rapidly grown and transformed India. Many market-specific challenges related to payments, security, and customer experience are now solved through cutting-edge technology.
Banks and other financial institutions are busy innovating to eliminate inefficiencies and improve customer experience with new ideas and innovations.
And why wouldn't they?
According to Indbiz, India is home to a fifth of the world's youth demographic, this population advantage could play a critical role in achieving the nation's ambitious target to become a US$ 5 trillion economy.
Today, innovations are based on what our youth want, not what they need. The younger generation wants better working conditions and flexible financial services that should align with their long-term and immediate goals.
Young India and technology
Compared to past generations, young people are very friendly with technology. Their early exposure to and experiencing a world through technology affects how they interact with each other and how they prefer to interact with financial services provided by neobanks, banks or other service providers.
According to research by YouGov, 49% of Indians are early tech adopters and are eager to buy new products and adopt new technologies, too.
The early adopters in India are comfortable with taking risks, want to use a product before it goes on sale and wants to pay for their luxurious needs.
During the pandemic, the use of digital devices increased among young people. They relied on technology to fulfil their basic needs during the emergency, whereas non-tech-savvy users struggled.
Research conducted by Lenovo states that 92% of Indian respondents of all ages say they feel more comfortable with their tech capabilities after Covid-19 and are more appreciative of what it offers.
Also, affordable internet and easy access to mobile phones serve as a prerequisite for ensuring young India's digital financial inclusion. Technology's presence in people's lives will only push financial service providers to think and make young products.
Drivers of the fintech revolution in India
India is home to over 2100 fintech companies and 21 fintech unicorns. We have the highest fintech adoption rate in the world. According to NITI Aayog, the Indian fintech industry has total funding of over $27.6 billion and is expected to be valued at over $150 billion by 2025.
Fintech companies are partnering with banks to provide customised solutions for evolving needs of the tech-driven young India.
Digital payments have become a way of life. The widespread acceptance of apps like Google Pay and PhonePe by traditional brick-and-mortar establishments and vendors is proof of rising digital momentum in India.
There are plenty of favourable circumstances to nurture this growth. The young tech-savvy demographic in India is willing to let go of cash and embrace digital innovation by Fintech companies.
Digital natives–millennials and Gen-Z, as they say, prefer an experiential and aspiring lifestyle. They want it all. They want it now.
The NOW culture is responsible for creating the 'Shop Now And Pay Later' movement leading to a surge in demand for immediate credit.
By providing credit access to people without having credit cards, fintech companies are promoting financial inclusion. Unlike banks, fintech companies are vouching for the young population by further providing quick access to money.
The younger generation demands faster, better, safer and more feasible financial services, and Indian fintech companies are providing the solutions to meet their needs. Real-time payments, quick disbursal of loans, online insurance and lending have gotten easier because the new ecosystem is digitally driven.
The road ahead
Ultimately, the goal remains the same – empower the youth to drive their financial journeys. To make India a completely cashless economy, spreading awareness and educating people about the importance of technology are necessary.
And to truly succeed, a holy triad between the bank, fintech companies, and the government should be formed to ensure digital freedom.