Indian Fintech scene poised for further growth momentum in 2018

As the sector grows and technology develops in 2018, Indian startups are likely to flourish

A trader wears a Bitcoin shirt while working in the S&P 500 options pit at Cboe Global Markets Inc. in Chicago, Illinois, U.S., on Friday, Dec. 29, 2017. U.S. stocks slipped in thin trading on the final market day of 2017, while the dollars slump continued as the euro headed for its best annual performance in 14 years. The S&P 500 Index turned lower in trading 45 percent below the 30-day average, leaving its gain this year just under 20 percent, the most since 2013. Photographer: Daniel Acker/Bloomberg
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India's financial technology sector that has grown at a brisk pace this year in the country is expected to continue gathering momentum going into the new year.

"2018 is going to see a growing interest in fintech start-ups, spurred both by ample opportunities to disrupt and increased investor interest in this space," said Rohit Lohia, the co-founder and chief operating officer of Cointribe, a lending platform.

Fintech segments such as digital payments and alternative lending solutions have been the focus for a number of start-up launches in India in recent quarters, eager to capitalise on the digitisation drive in one of Asia's leading economies. 

"Last year has been an incredible year for the fintech sector, as the aftermath of demonetisation and the implementation of GST created a positive policy environment for more individuals and small and medium-sized companies to go digital," said Manav Jeet, the managing director and chief executive of Rubique, a financial services marketplace in India.

Bitcoin and other cryptocurrencies, like everywhere else, have also generated a lot of interest in India amid surging value and volatile trading.


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However, the Reserve Bank of India has issued a series of warnings about the lack of regulation on these currencies, highlighting potential security and financial risks. The debate on legitimacy and whether digital currencies are a solid asset class is not going to die down anytime soon and will likely rage on 2018 as well.

While the future of cryptocurrencies is far from certain in India, the focus of the government here, is firmly fixed on encouraging digital transaction segment, as it pushes for transparency in its cash-heavy economy.

"Fintech players today are disrupting a space which has traditionally been ruled by large financial institutions," said Sanjay Sharma, the managing director and chief executive of Aye Finance.

Digital wallets, for example, have seen a surge this year, particularly following demonetisation, when cash dried up. Rapidly rising penetration of smartphones and growing use of internet in India bodes well for the fintech sector.

Like elsewhere in both developed and the developing worlds, India is likely to see an increased collaboration between the financial institutions and fintech players "to improve the odds for everyone and dramatically improve user experience", according to Mr Sharma. As the sector grows and technology develops in 2018, Indian start-ups are likely to try and venture into more sophisticated and cutting-edge fintech solutions .

"While payments and lending will continue to get the most attention in fintech space, 2018 might also see some players break-out in the AI, blockchain or robo-advisory space," Mr Lohia said.

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