The Fintech Revolution
Financial technology or Fintech has emerged as a transformative force that has reshaped the global financial landscape, redefining how we manage, invest and interact with money. As we trace the evolution of Fintech, it’s essential to look back at the parallel transformation of the banking sector which has evolved from brick-and-mortar institutions into digital platforms offering seamless, real-time financial services. The evolution of the credit card stands as a pivotal moment in this journey, taking us from paper based transactions to the sophisticated and secure digital payments we rely on today. In the current technology scenario, advancements in AI, blockchain and data analytics are driving unprecedented innovation, creating a fertile ground for Fintech startups to thrive. These startups are not only disrupting traditional financial models but are also unlocking new opportunities, democratizing finance and driving financial inclusion on a global scale. The synergy between cutting-edge technology and financial services is shaping the future and it’s only the beginning. In this article, we shall examine the development of Fintech over the years and how it has altered the environment for various businesses, industries and consumers. It will also examine how Fintech develops, evolves and grows and what it means for different organizations and people.
Table of Content
- Evolution of fintech
- Evolution of banking
- Evolution of credit card
- Current technology scenerio
- Fintech startups
Evolution of Fintech
When we talk about the evolution of fintech, it is similar to the
evolution of man. This picture was created using innovation that describes how human beings have evolved, yet, no specific date can be described as the beginning of fintech. It started with small initiatives, kept improving from time to time based on the needs of users and has reached the stage where we see it today.
Even when we look at the current stage of fintech, it often looks
like we have reached the peak of technology usage in financial
services. However, we should not be surprised to see new products,
technologies and innovative methods of doing financial transactions in the next 5-10 years. It is tough to create or explain the exact step-wise evolution as many innovations go undocumented or unnoticed due to some users needs. Recent years have seen a tremendous evolution in the fintech industry, which is expected to continue forever. A solid and evolving Fintech presence is crucial for financial services organizations and all kinds of institutions since financial technologies have emerged as one of the most significant areas of our lives, creating an impact in the lives of people, whether they are in services or business.
Let’s begin by looking at how Fintech got its start. Financial Technology also known as Fintech refers to the numerous technologies, software, tools, systems and so on that various financial institutions utilize to provide services to their clients. These financial institutes may be in Banking, insurance, lending, wealth management or any other segment. The tools being utilized by these organizations include a variety of approaches, algorithms, simple or complex calculations, rules and methodologies as one might expect, but a layman may think of its working. If we try to trace the origin of Fintech, we shall find that Fintech has existed in some capacity or other since the first wave of financial globalization in the middle of the 19th century. The first experience of a new innovative product was with the introduction of Credit cards, which were introduced in the 1950s. Having a small card with
some codes written on the backend and getting account information transmitted through technology or online transactions was perhaps the beginning of doing a financial transaction using technology.
While people were getting adjusted to Credit Cards, it was
expanding just ten years later, ATMs revolutionized how bank
customers withdraw cash from the bank. There was no token system
or queue for withdrawing or depositing the money in the bank. The entire bank statement and transaction update were available
by use of technology. The technology that banks employ to operate their ATMs has changed over time and we have seen this firsthand. The machines for cash withdrawal now also provides cash deposit. ATMs are used to take bank statements and give a few other essential services. The recent technology upgrade uses ATMs without the card, cardless cash withdrawal facility and new chip based cards. In the 1970s and 1980s, Fintech companies started creating innovative tools and techniques for handling and storing customer data. This
became a catalyst for numerous subsequent significant innovations now commonplace in the credit card and ATM space. New features and facilities were created, thus improving the customer experience. The reach of credit cards and ATMs was minimal due to limited access to technology globally, especially in India. The fintech industry experienced a tremendous revolution due to the
rapid growth of the internet in the 1990s.
Key Examples of Innovation:
- Electronic payment systems — The payments are made using
Telex and the SWIFT system. - Web-based business models — New businesses were created
that operated using only the technology platform without
any physical offices. - Web-based shopping — Ordering products and services using an internet facility
- Portable or Moveable banking — The banks started providing
their services at locations where they did not have a physical
presence. - Bank digitalization — Banks started moving from paper
documents to digital methods of transactions.
The next significant phase started during 1995 – 2005 also known
as the internet bubble when technology stocks zoomed. The
development of online trading and banking systems during the
1990s changed how individuals engaged with their money. Stock
trading which was running through brokers through their physical offices and telephone calls moved online where people could trade stocks through computers. It was also the time when mobile phone usage started in a big way, though it was costly. In the initial mobile phone stages, the incoming calls were also chargeable. With the emergence of mobile banking, payments using internet services and
other significant technologies in the 2000s, Fintech saw continued
expansion. Fintech has advanced significantly in a short span of time and does not appear to be slowing down. Whatever was developed 10 years earlier started changing in 5 years and later, the same technology started changing in 2 years.
Evolution of Banking
It is well known that the first printed cheque was issued in 1762 perhaps that was the beginning of using technology in financial
transactions. It took almost a hundred years for national level
banking acts to be passed and make banking a regular economic activity in the US. The use of cheques increased during 1890 - 1915 as the design of cheques also kept improving, gradually getting more security features. The technology to use Magnetic Ink Character Recognition got developed, making the reading of cheques by machines easier. Somewhere in 1969, in India, the banks were nationalized changing the ownership from private companies to taking them under government control. In the United States, some banks started with cash machines to withdraw cash by 1994-95, the use of cash machines now called Automatic Teller Machine (ATM)
increased significantly. At this time, the first internet banking also started in the US as did internet usage. The year 2007 brought the next level of change in banking when Apple started mobile phones, iPhone and offered banking through them instead of computers. By
2010-2013 the penetration of mobile banking increased globally and the number of people using mobile banking increased exponentially.
Evolution of Credit Card
It isn’t easy to picture a time before the convenience of the contemporary credit card. However, throughout a large portion of human history,
systems of credit in which one party loans money or resources to another party without expecting quick repayment which were managed orally or recorded in some ledger.
Current Technology Scenerio
The quick rise of Fintech has altered the banking industry’s business environment and prompted the need for more creative solutions.
Due to these recent trends, banks must expand FinTech investment,
reevaluate service distribution channels, particularly business-to-
consumer models and further standardize back-office operations. The growth of Fintech is perceived as a threat to traditional banking
by some members of the financial services sector. Others think that
because FinTech offers more flexibility, better functionality in some areas and the consolidation of services, it has evolved into a challenge that may be transformed into an opportunity.
Modern financial technologies are undergoing drastic changes impacting the whole sector’s infrastructure. Increased automation, openness and customer focus are among these improvements. Within these online platforms, there is an increased number of transactions based on exchanging goods or using cryptocurrencies. A brand new way of exchanging money without human interference
between machines has become universally accepted. On the one hand, these processes increase the potential for addressing requirements, but on the other, they also introduce new dangers and threats.
The financial services sector’s quick adoption of Fintech in 2018
helped it become a powerful theme that has continued into 2019. The areas of digital payments and money transfers, financial software and automation and alternative lending and funding platforms have seen the most development. The key technologies that gave impetus to the rapid development of FinTech are technologies of artificial intelligence, processing large
volumes of data and new analytical tools such as Blockchain and API.
FinTech is more pervasive than ever nowadays. It has become
an essential aspect of our lives with the introduction of electronic payments, mobile wallets and others. As was already noted,
businesses are making significant investments in Fintech as they
become more aware of its significance. Fintech is now vital to many companies and is no longer used just for banks and other financial organizations.
In the Banking and Finance segment cost barriers have been lowered through technological advancement addition of new products and services, facilitating the entry of more new players. Investment in physical access points like branches, ATMs, or agents is unnecessary for new entrants as they use more technology and tools. Even though phygital hybrids of physical and digital infrastructure are still
necessary to serve customers bitcoin ATMs were made available to holders of crypto-assets, providers without physical networks can now partner with others to provide those services wherever necessary, thanks to improved interoperability and the simplicity of outsourcing arrangements. A few agents, branches and ATM networks can serve the market without a supplier building, but physical networks need scale.
The current wave of innovation in Fintech is characterized by the
entry of start-ups fintech enterprises on the one hand and the giant incumbent technology organizations like Apple, Google, Meta and so on. On the other, Given the strong venture capital interest, the former is frequently well-resourced. Still, they lack the advantage of an existing customer base and often use aggressive techniques to take market share away from incumbents on particular items. The latter
group benefits from already having a client base and income sources, which they may use to scale quickly and incorporate financial services into their current goods and services. Varied entry types might entail significantly different implications for market structure and financial
regulation, competition and consumer protection laws. In the Indian context, if we take the example of Paytm, many other payment gateway companies or platforms started operations however, they could not reach the level where Paytm was. Some of them got acquired by more
prominent players in the same segment.
Niche vendors can attract an interested clientele and offer customized goods and services. A low-cost provider can enter the market with relative ease from an economic perspective eliminating numerous fixed costs and decreasing variables and switching costs, even though they still need to build a solid reputation. Prices are more resistant to change than risks and economic factors, nevertheless. Credit, liquidity,
markets and operations risks can be diminished or shifted but not
entirely removed. Since interconnectedness and the decomposition of services add additional linkages to each product chain and user interface, the attack surface for cyber criminals has grown.
There is always a debate on which fintech platforms to be used by
various users. While some advocated that a single platform should offer all the products related to Financial Services, on the other hand, a section of people feels that each fintech platform should be exclusive to one kind of product or service. Your company philosophy will determine whether you should compete on a broad platform or in a specific niche. In the Fintech Market Participants Survey, respondents
were asked whether they expected retail and SME clients to utilize
several providers without a core relationship or to have a single
core financial relationship. 16% of respondents predicted that
customers would have a core relationship with a marketplace or platform provider while 36% predicted that customers would utilize numerous providers without having a primary one. These diversified views may depend on the economic literacy and need of particular demography.
Technology advancements have impacted every industry, but the
financial services sector has been particularly hard hit. Behind the
scenes, many facets of finance had already been digitized for instance, most global payment flows were already computer to computer through the internet. The results of this technological wave are the unbundling of financial goods, restructuring the value chains that generate and deliver financial products and services, and introducing new providers. The initial effects were the disaggregation and
atomization at the product level and the possibility of a significantly more fragmented financial services sector at the provider level. However, as explained below, traditional economic forces that shape
industry structure, such as economies of scale and scope, search costs and transaction frictions, remain relevant, albeit in different forms. They are causing a re-bundling of services and a potential acceleration of sector concentration which counteracts the tendency toward fragmentation.
Another good illustration of diversification being created in the financial services segment by an Indian fintech is Zerodha. It started as a discount brokerage firm by providing extremely good technology for executing trades and has grown to a unicorn and diversified in various other segments within financial services.
As per the experts, as stated above, the recent 65 years proved to be
the golden era for the development of the fintech industry.
- 1920s — The introduction of transactional cards.
- 1960s — The introduction of credit cards.
- 1967 — Barclays introduced the world’s first ATM in 1967.
- 1990s — The advent of the internet.
- 1999 — PayPal became the first electronic payment system or
digital wallet. - 2009 — Cryptocurrency-Bitcoin the digital currency was launched.
The introduction of the Blockchain and bitcoins was just the beginning. To cater the needs of the dynamic and competitive marketplace of the 21st century, the focus shifted to delivering personalized solutions and user-friendly platforms driven by agile, DevOps, automation,
AI/ML, blockchain, cloud and other emerging technologies.
Therefore, global leaders emphasize awareness of the Fintech trends to stay ahead of the competition.
Fintech and Technologies
Fintech has integrated many forms of technology with Finance
to develop fast-processing analytical software. The technologies adopted include artificial intelligence, machine learning, robotic process automation, data analytics and blockchain, which have played a vital role in the evolution of finance. We have discussed the
key definitions of the Fintech segment in the previous section, few of them are being briefed again as they are more relevant in today’s world.
Artificial Intelligence and Machine Learning
Artificial intelligence is the replication of human intelligence
functions by machines, particularly computer systems. Expert systems, natural language processing, speech recognition and machine vision are some examples of specific AI applications. An application of AI called machine learning allows systems to gain knowledge from their past performance without having to be specifically programmed. Machine learning aims to create computer programs that can access data and use it to acquire knowledge. These two technologies have profoundly changed the financial sector. They have enabled fintech firms to create pathways for data-driven marketing and predictive behavioral analytics. These tools
are extremely useful in wealth management to encourage people to save more money in the lending space to understand the borrower’s behavior after availing the credit facility; to predict the investment
pattern in the stock market and so on. Additionally, this might aid
regulatory compliance, credit rating and fraud detection.
Robotic Process Automation
Robotic process automation sometimes known as automated
customer service technology, is used by the fintech industry in
almost all segments. With the help of this technology, financial
institutions’ robots can process repetitive and complex, manual
operations. Robots do the management of statistics, data collection and transaction management. They are also in charge of marketing and communication with all stakeholders. This technology aid Fintech companies in managing staffing and all other expenses as
well. The robotic process saves time, cost and reduces the chances of human error.
Data Analytics
Fintech companies mine huge datasets for information about
customer spending patterns, financial behavior and repayment
track in the case of loans and investing behavior data is extremely useful when analyzed for a particular segment. With mathematical algorithms and these insights, marketing plans and fraud detection systems are developed which are essential nowadays.
Blockchain
Blockchain is a decentralized system comprising of public ledgers dispersed among many locations and records all transactions. To put it simply, this is a method for the group to be openly informed of all the data, information, and behavior so that they can make the financial
choice based on the client’s data and information. The transactions are secured by an impenetrable code that makes them safe and
guards against hackers and fraudulent transactions. Blockchain’s privacy and security features make it a crucial component of fintech.
Future developments in the interaction between AI and Fintech will strengthen it and make operational costs more favorable. As an illustration, entrepreneurs are developing solutions that can aid investors in gathering crucial data, analyzing it, and producing insightful market reports for wiser investment choices. For the most
effective underwriting choices and credit assessment procedures
several institutions are using systems with AI.
In addition to these technologies, the list also includes blockchain
technology, smart contacts, RPA, agile, and so on. These innovations prioritize the client, shorten the time to market, use the Minimal
Viable Product power, eliminate the past and get markets
and workforces ready for the future. While these tech solutions are revolutionizing the financial ecosystem, it is crucial to acknowledge their impact on global organizations. With hundreds of start-ups being founded each year globally, India
is at the forefront of the fintech sector’s explosive growth. India will be a hub for fintech due to its rapidly developing fintech companies and user-friendly culture with low cost and supportive government initiatives. India will become a top economy in the Fintech sector as things are just getting started and there is a tone of fresh innovations and improvements on the horizon.
Fintech Startups
As we are going to learn more about the Fintech ecosystem
subsequently with a focus on lending, it is essential to know about
some well-known Fintech start-ups, their technology and their long-term vision. This will also help any new entrepreneurs prepare themselves better. Here is a brief about some Fintech startups operating in various sectors, be it insurance, lending, payment gateway, wealth management and so on.
Financial Sector Case Studies
We will now discuss in detail a few financial fintech startups.
Paytm
Paytm is a platform for mobile payments and money management and is a renowned Fintech company. It provides an application based platform to pay installments, schedule travel, book hotels and tickets, reserve rooms, buy gold, buy gifts and so on.
Paytm has evolved into an Indian juggernaut that manages various
banking services, credit cards, advances, a protection-focused
speculation platform, shared assets and so on. Paytm Mall is an
extended service provided by Paytm for online shopping for various items, including clothing, accessories, hardware, toys and culinary items. Numerous services, including Paytm wallet, cater to almost 100 million registered users.
One97 Communications, the parent company of Paytm, was founded in 2000 by Vijay Shekhar Sharma with a loan of Rs 8 lakh. In 2010, he launched the Noida-based Paytm as a platform for prepaid cell phones and DTH direct-to-home recharges.
But he transformed Paytm from those early roots into India’s most
valuable financial start-up in less than ten years. The Paytm Wallet
was one of India’s most popular digital wallets after its inception in 2014. The following few years saw Paytm grow its user base and enter the e-commerce space by enabling online shopping and ticketing.
After the government’s shocking ban on high-value currency notes
intensified digital payments in 2016, their use surged.
The business became the first payment app in the nation to achieve 100 million downloads in 2017. As of March 1, 2021, Paytm had 1.2 billion monthly transactions and more than 150 million active users. After Paytm led the way in digital payments in the nation, the industry quickly took off as Amazon, Google, WhatsApp and Walmart’s Phone Pe all introduced their payment services in an effort to partake in the lucrative market, which EY predicts will reach over $95.29 trillion by the end of March 2025. Let us look at the technology being used by Paytm for its website and
mobile application. W3Techs provides information about the usage of various types of technologies on the web by conducting various surveys. As per(https://w3techs.com), some technology tools are discussed here for a basic understanding.
- Current technology scenario.
- Content Management Systems uses WordPress for inner pages, an open-source blog publishing, and a PHP and MySQL-based content management system.
- Gatsby, another open-source static website generator based
on React and GraphQL, is used on sub-domains. - Java Script is a server-side programming language
lightweight, object-oriented, cross-platform scripting
language and PHP, a well-known common scripting
language for creating websites is used for inner pages. Some
static pages are created using static files by using offline tools. The internal pages in a client side programming language are also prepared using JavaScript and JavaScript Library - jQury 3.5.1. It may be noted that many new companies may use newer versions as well. - The web servers have used Node.js and Nginx.
- A server-side JavaScript environment called Node.js creates network applications like web servers. An open-source, lightweight web server is called Nginx pronounced engine X.
- The web hosting providers are:
- Amazon, the most commonly known and used US-based
e-commerce and cloud computing service provider. - WP Engine, which provides managed WordPress hosting is used in inner pages.
- Netlify, is used on subdomains that offer hosting for web applications and static websites.
- SSL Certificate is used from DigiCert and IdenTrust.
- Traffic Analysis tools are used through Google Analytics,
along with that other Google tools are used for advertising
networks and tag managers. The company also used all the
other tools offered by social media companies like Twitter,
Facebook, Pinterest and so on.
The Paytm payment gateway can be integrated using ReactJS with a
few easy steps as offered by Paytm.
- The user, who wants to integrate with Paytm, can create a Paytm developer account.
- The user can then collect the API keys offered by Paytm for
integration. - Then, the user needs to create a ReactJS application.
- Add the scripts to the Index.
- Logic and UI, Paytm payment integration process flow to be
done. - The last step is to import the Paytm button in the APP being
created by the user. - Paytm payment gateway integration completed.
BharatPe
BharatPe was founded in 2018 to assist Indian merchants in growing their companies and adopting digital payments. BharatPe was the first to create an interoperable QR code that could take payments from more than 150 UPI applications with no transaction costs.
BharatPe makes money by giving merchants unsecured loans.
Merchants can apply for loans up to Rs. 7 lakh with no processing
costs or collateral. BharatPe announced BharatSwipe, a card payment acceptance machine in H2 2020. It is the third-largest participant in the private POS market with plans to expand its distribution.
In August 2021, BharatPe teamed with LenDenClub to develop a 12
percent Club app, marking the company’s first step into consumer lending. Twelve percent Club is a peer-to-peer lending platform that allows users to invest and earn up to 12% yearly interest or borrow
at a low rate. It is interesting to note that the technology used by BharatPe is not very different from what is used by Paytm concerning the Content management system, server-side programming languages, client-side programming languages, CSS framework, web servers, web
server providers, data centers, DNS, e-mail servers, content delivery networks, traffic analysis, character encoding, and so on. The basic structure on the back end seems quite similar, while the user experience may differ.
Cred
Cred was founded in 2018 to provide a platform for high-credit-worth individuals to manage their credit bills and earn rewards for paying them on time. Cred is noted for its innovative client acquisition strategies, such as Indiranagar Ka Gunda during the last IPL season.
Cred claims that by giving a complete analysis of their credit card bill spending and delivering timely bill payment reminder notifications, they can enhance their consumers’ credit scores.
- Cred RentPay — Members may use the CRED app to pay
monthly recurring rent and receive CRED coins in exchange. - Cred Stash offers quick credit loans with customizable
periods and low-interest rates. - Cred E-commerce is a store within the Cred app to find
specially chosen items. - Cred Pay is a service that allows you to pay with your credit
card. This service, launched in collaboration with Razorpay
and Visa, will enable consumers to make payments on partner
sites using CRED coins.
The content management system used on the subdomain is supported by WordPress using PHP and MySQL. The server-side programming language is created using PHP, while the client-side programming language is based on JavaScript. It has also used JavaScript within the web pages. Interestingly, for traffic analysis, it uses Google Analytics and Mixpanel and WordPress Jetpack. The site elements are important
to note as a change from other payment gateway companies.
- External CSS In a different Cascading Style Sheets
file, external cascading style sheets specify stylistic guidelines. - CSS is embedded in web pages that specify a set of styling
guidelines for a particular element. - Inline CSS Using the style attribute, inline Cascading
Style Sheets provide style rules directly within an (X)HTML
element. - File compression algorithm GNU zip (Gzip) is used to
compress files. - Along with other standard SSL certifications, it has employed
Brotli Compression, Strong ETag and HTTP Strict Transport Security.
RazorPay
Razorpay, a Bangalore-based company, specializes in meeting the payment demands of startups and businesses. Razorpay makes it simple for merchants to take payments from and send them to their dealers. Shashank Kumar and Harshil Mathur launched it in 2014.
As it enables an online business to collect, process and distribute
digital payments through various mechanisms such as debit cards,
credit cards, net banking, UPI, and prepaid digital wallets, its service
is used by thousands of customers. It is among Bangalore’s largest
fintech firms.
Banks typically provide their APIs to payment platforms. They then
create a second layer and integrate with banks. So, they all appear to
be alike. With Razorpay, however, we had the opportunity to design
the product first while leaving bank connectivity as a mystery. We
talked about what our customers want and what the retailers want.
We responded to these and developed our product.
- Harshil Mathur, CEO, and Co-founder, Razorpay
In 2017, the RazorPay platform introduced Razorpay Route, Razorpay Smart Collect, Razorpay Subscriptions and Razorpay Invoices as its four new offerings. These products make an effort to manage operations, including cash flows, money disbursement, automating NEFT and bank wires, as well as the collecting of recurring payments. Razorpay Capital, a further subsidiary of the platform, is a lending platform that supports businesses with on-the-spot loans to help them address their cash flow difficulties.
RazorpayX, an API banking platform powered by AI, is yet another standout innovation of the platform. This tool provides organizations with a fully functional current account that they may use to automate
payroll, bank transfers, sharing invoices, and other financial tasks.
RazorpayX payouts are a platform product that allows businesses to
disburse payments from vendor and customer payouts to employee salaries efficiently and promptly.
As reported by Your Story, the platform charges about 0.25 - 0.5
percent fees for each subscription collection transaction that takes
place via their gateway. Through the set-up of version 2.0, the
platform has prompted multiple revenue streams heading ahead.
The company charges as much as two percent on every transaction
carried out via its payment gateway.
The platform set up its corporate credit card in 2019 and aims to expand to include newer businesses and corporates.
MobiKwik
Bipin Preet Singh and Upasana Taku started the Indian fintech
business MobiKwik in 2009. Its main office is in Gurugram. Mobile and online payments, phone and DTH recharges, mobile transfers, online shopping and much more are all available through MobiKwik, a supplier of digital wallet services.
Users can keep up to INR 50,000 in a MobiKwik wallet, which they
can use to make purchases online, pay bills, and recharge their mobile phones. Their customers may buy bus tickets using the cash pick-up option and pay in part for the tickets using the partial payment feature.
Sequoia Capital, NET1, and GMO Venture Partners are a few investors in MobiKwik. Following demonetization, MobiKwik now offers free
wallet-to-bank account transfers.
Before demonetization, they used to charge 4% for those who weren’t KYC compliant and 1% for those who were. In India, they have more than 100 million members, and more are constantly added. Users who are not KYC compliant can transfer between 1000 and 20,000 rupees to their bank account. However, you can keep up to INR 100,000 in your MobiKwik wallet once your KYC is complete.
Insurance Sector
The insurance sector is disrupted by the growth of fintech, shifting
customer behavior and cutting-edge technologies. Additionally with innovations like risk-free underwriting, on-the-spot purchasing, activation and claims processing, Insurtechs and tech companies continue to alter the client experience.
Digit
In September 2017, the Insurance Regulatory and Development
Authority granted regulatory clearance to Digit Insurance,
formed in 2016 by Kamesh Goyal.
Digit’s digital-first strategy promises to make the insurance purchase and claim procedure easier. Motor, life, jewelry, and travel delay insurance are some of the most popular Digit insurance products.
According to the company’s transparency report, it has 17 million subscribers as of March 2021, with motor insurance the most profitable, followed by health and accident insurance. The claim completion rate was 96 percent during the epidemic, which lasted from April 20 to March 21.
After becoming the first Unicorn of 2021, Digit Insurance raised $200 million at a valuation of $3.5 billion in July 2021.
The business model of DIGIT is simplified to sell insurance products online where the customers can buy any of its products, be it health insurance, life insurance, motor insurance, or travel insurance in an effortless and transparent manner directly from the company without the involvement of any broker, thus saving cost. It used AI and ML to weed out fraudulent claims, thus keeping the claim time significantly less and the claim ratio very high. Its fraud management system uses data analytics to identify suspicious claims. The server-side and client-side management are based on Java and JavaScript and it has also used JQery. Its web server is Apache HTTP open-source Apache server. It uses Google Analytics, Microsoft UET and Adobe Analytics for traffic analysis. For site elements, it has used
External CSS, Embedded CSS, Inline CSS, Gzip and Strong ETag.
More details on the technology used by Digit can also be found at (https://w3techs.com/sites/info/godigit.com).
TurtleMint
Dhirendra Mahyavanshi and Anand Prabhudesai created Turtlemint in 2015.
Turtlemint is an online marketplace where people can compare and buy insurance at the lowest possible price. It provides digital solutions to insurance advisers to make personalized insurance product recommendations. Advisors may use the application to market various insurance products through a single site. Courses on
a variety of items are also available using the platform.
According to the business site, Turtlemint has sold over 30 lakh
policies and provided services to around 1.5 lakh active insurance
advisers.
With a penetration rate of 16,000+ pin codes out of the 19,000 pin codes in India, more than 1.5 million clients, and onboarding of
almost 80% of insurers, Turtlemint has produced more than 1,20,000 micro entrepreneurs.
Turtlemint is India’s largest PoSP insurtech platform, with a year-on-year growth rate of 110 percent. It offers a feature to compare various insurance products being offered by other insurance companies as
well.
As per an article in https://www.expresscomputer.in, the areas of value addition by turtle mint include:
- Assisting advisers in providing their clients with customized
suggestions by considering their specific needs. - Creating a thorough online training curriculum for insurance advisors. The program provides more than 70 courses for sales skills, personality development, certification for insurance advisors, and podcasts.
- Assisting the adviser in expanding their business by giving them access to the full range of tools and data they need to excel as insurance advisors. Additionally, the Turtlemint-Pro App offers pertinent data and details on lead management and distributes marketing materials like flyers, posters, one’s own profile and so on.
All their technological endeavors have been powered by cloud
computing. They can easily combine all their technical
activities and solutions thanks to their efficiency and agility. AWS has successfully met its expanding needs in its entirety. Additionally, the team is very effective, and the AWS interface is very user friendly. Therefore, AWS best satisfies its infrastructure, services and interface requirements.
Lending Space
Lending and borrowing procedures are becoming simpler and faster. Loans are now available to practically everyone in the country due to the growing acceptance of digital financing. The country’s lending market has expanded significantly because of this high accessibility.
Prest Loans
Prest Loans is a new-age FinTech NBFC, providing all kinds of loans to support and encourage businesses these loans may be in the form of working capital finance to small businesses, Micro, Small and Medium Enterprises units, e-commerce vendors, invoice financing, inventory funding and so on. Recently, Prest Loans has stepped into the electric vehicle loan segment.
The company’s vision is to assist its stakeholders in growth through
customized financing solutions and support the financial inclusion initiative for the MSME sector in India. Prest loans offer small business loans, including unsecured and short and long-term secured business loans.
Prest Loans caters to the first ‘M’ in the MSME segment, that is, the
Microbusiness segment and offers loans to the MSME Sector, that is,
shopkeepers, retailers and wholesalers who have no banking habits and do not maintain proper financial documents due to the nature of their business.
ZestMoney
The largest and most rapidly expanding AI-driven EMI finance
platform in India is ZestMoney. Due to a lack of credit history, more than 300 million households now do not have access to credit cards or other formal financing choices. The fintech startup has created a platform that can significantly improve their lives. This is the top platform for the disbursal of automated small-ticket loans since it was built with cutting-edge technology, including a fully digital,
automatic back end with an AI-based machine learning decision engine.
ZestMoney uses 50 technology products and services, including
HTML5, Google Analytics and jQuery, according to G2 Stack.
ZestMoney is actively using 101 technologies for its website,
according to BuiltWith. These include Viewport Meta, iPhone /
Mobile Compatible and SPF.
In the last few years, ZestMoney has designed many insights based on Artificial Intelligence. The largest and most rapidly expanding AI-driven EMI finance platform in India is ZestMoney. Due to a lack of credit history, more than 300 million households now do not have access to credit cards or other formal financing choices. The fintech startup has created a platform that can significantly improve their lives. This is the top platform for the disbursal of automated small-ticket loans since it was built with cutting-edge technology, including a fully digital automated back-end with an AI-based machine learning decision engine.
Faircent
Faircent is a Peer to Peer (P2P) lending platform where borrowers and lenders can interact with each other to negotiate the terms of the loan agreement, including the rate and tenure of the loan disbursement. The revenue model is to earn fees from the lenders and the borrowers on a successful transaction.
Faircent is India’s first P2P lending platform to be granted a Certificate of Registration by RBI as an NBFC-P2P. Technology is used to streamline the procedure and lower costs. As a result, they give borrowers a chance to fund their needs at reasonable rates and aid lenders in obtaining the highest return on their investment. Once a person is interested in registering, they go through a thorough verification process in accordance with the KYC standards established by various agencies. As a result, all the financial and personal information relating to lenders and borrowers visible on
Faircent has been confirmed.
Visitors to Faircent can sign up as lenders or borrowers depending
on their needs. All the registered borrowers and lenders with Faircent undergo a thorough verification procedure based on the personal, financial and professional information given.
According to each borrower’s profile, an automatic system
recommends the loan term, loan amount and interest rate based on
how well the borrower will be able to repay the loan. To support the
borrower’s needs, lenders can submit offers, which are accepted. As a result, borrowers and lenders can contribute to a percentage of a borrower’s overall loan requirement. The borrower and the lender sign a formal contract once they have come to an understanding. The loan amount is subsequently deposited to the borrower’s account, and throughout the agreed upon period, the borrower pays periodic EMI installments.
Repayment can be tracked using their own account on the internet through an online, automated approach. The entire process can be made fair, transparent and speedy thanks to Faircent’s technology driven platform.
i2i Funding
P2P lending, commonly referred to as peer-to-peer lending, is a
financial innovation that brings together verified borrowers asking for unsecured personal loans and investors aiming to increase the
return on their investments. Investors can view all the information about the borrowers before lending them money because verified borrowers are published on the P2P lending platform. Lending modest sums to numerous borrowers allow investors to diversify their holdings.
Globally, peer-to-peer lending has already shown to be a wildly
effective alternative finance model. P2P lending is rapidly gaining ground in India and is steadily developing into one of the investors most alluring investment options. RBI has previously acknowledged this innovation and developed laws for the industry.
i2iFunding is India’s best and most trusted peer-to-peer lending
platform, which started operation in Oct 2015. Peer to Peer lending
P2P lending connects investors who lend money online with
verified borrowers seeking to get affordable Peer to Peer (P2P) Loans. i2iFunding is a Reserve Bank of India registered Non-Banking
Financial Company P2P Lending Platform NBFC-P2P.
i2iFunding has a well-defined Credit Assessment Process that
ensures a 360-degree assessment of the borrower’s credit profile.
They have created an automated internal credit evaluation model
that uses real-time, integrated data analysis from sources like social
media, mobile, CIBIL reports, bank account statements and so on. Their credit model analyses borrowers’ profiles based on thousands of data points and more than 100 criteria.
The in-house credit evaluation team assesses the credit risk of each borrower and classifies the loan proposal in the suitable i2i Risk Category from A-F.
- is the category with the strongest credit profile.
- F being the weakest.
Along with the risk category, i2iFunding also recommends an interest rate for each loan:
The Technology platform is developed using JavaScript, JQuery and
Bootstrap on client-side programming languages. The web server used is Apache HTTP open-source server. Interestingly it has used the Ubuntu operating system.
Neo Banks
Despite their relatively recent debut into the more expansive FinTech market, Neo Banks have significantly changed and grown globally and in India. The concept of Neo banks has evolved as they set themselves apart from online banking services and shifted their
focus from being just focused on digital banking to delivering an
exceptional customer experience.
Jupiter
Jupiter is a Neo bank, or a digital banking business that provides its customers with various digital retail banking services, allowing them to open and manage their bank accounts from the convenience of their homes. Jupiter also combines special tools for its consumers to keep track of their wealth, provides real-time spending breakdowns and insights and aids them with practical savings accounts so they may put money aside for purchases. Additionally, each of these can
be managed in real-time. The company does not deduct shady fees as many banks do. Additionally, there is no requirement for minimum
balance maintenance on Jupiter bank accounts. The money on your Jupiter account can also be readily withdrawn from nearby ATMs.
Jupiter is regarded as one of the UPI-based payment apps with the
fastest processing times.
It is a digital banking firm that provides a wide range of fascinating amenities to support and satiate the expanding needs of Indians of all ages. This company’s business concept is loosely modeled on the digital, mobile-only bank in the UK. Jupiter presently offers four products to help customers save money, properly manage their
savings, and earn rewards. Federal Bank, NPCI and VISA are the
company’s top three banking partners in terms of volume.
Other Financial Services Startups
Startups challenge established players in the finance sector by
increasing financial inclusion and utilizing technology to reduce
overhead.
FamPay
The first Neo Bank in India designed just for teenagers, and their families are called FamPay. Teens can use cards, P2P and UPI without
a bank account to make payments with FamPay. Payments are convenient and enjoyable for GenZ since parents may send money safely to their children at any time or place.
Recko helps FamPay overcome three significant problems by
providing these solutions:
- First, because FamPay uses a T+2-day settlement cycle, it’s
critical to understand if their PG partner’s payments are delayed. They will follow up with the payment partner if
there is a delay in the settlement to find out why. - Second, examining FamPay’s charges is crucial because
customers need to know how much has been charged to them in accordance with their contract. - The volume would come in third. This is done to gauge how proficient they are with money. For instance, if any money is
settled in their wallet, FamPay must receive it. Finding out
how many transactions FamPay conducts each day is another
important consideration to determine whether their volumes have risen or fallen.
The reconciliation for the entire day is fully visible to FamPay. Their operational effectiveness has been enhanced by 80%–85% compared to the prior procedure. In addition, if settlements have not been made or overcharged, FamPay also detects delays or disparities with their PG. Prior to performing reconciliation, it would have taken more time, which would have left them with less time to analyze any other
gaps, making it difficult to find this.
Conclusion
By the time you complete reading this in the section, there will be
a few more Fintech companies in the world that will have come
up with new products, services and innovative ideas. We have
intentionally not covered Cryptocurrencies, Crypto exchanges that are quite popular and expanding operations globally. However, due to various regulatory concerns and high volatility in that segment, I thought it appropriate to keep it pending for some other time. We shall continue focusing on the lending segment within the Fintech space.
Explore More:
- https://www.thebalance.com/history-of-credit-
cards-4766953. - Fintech Industry in India | History | Growth |
Future (startuptalky.com) - https://www.inventiva.co.in/business/corporate/
top-20-fintech/. - https://www.analyticssteps.com/blogs/success-story-razorpay.
- https://inc42.com/features/digit-insurance-drhp-ipo-decoded/
