The growth of the ecommerce sector in India has led to newer propositions – one that has caught widespread attention is the current Indian financial tech (aka fintech) and online retail sector. At the inaugural BW Businessworld Golden Cart Summit and Awards, experts delved on what ticks for this sector, and what its opportunities and obstacles are.
While much development in infrastructure and revising of regulatory policies is yet to catch up with the fintech sector, new companies, specifically fintech startups, will have to continue to be highly innovative in finding solutions in how to bring the Indian masses to the online mobile wallet platforms across, tier III, IV cities and villages. The biggest challenges the sector will have to deal with are limited internet connectivity, security and using data analytics to understand wallet users’ behaviour, pointed out Rahul Chandra, Co-founder and Managing Director of Helion VC.
If you ask anyone from the VC community, they will tell you that fintech is the hottest sector to invest in. “But too many startups are focusing on the same thing; we need to push more towards innovation,” Chandra stated. He explains that this maybe another reason why despite the 1.2 billion dollars invested in the sector since 2012, it has not yielded any notable breakthroughs.
According to Naveen Kukreja, CMO for Policybazaar.com, fintech will play three primary roles. “The first will be to increase access to consumers,” he said, citing the Aadhar example in opening bank accounts for India’s masses.
The second role will be to increase convenience. With online payments platforms, consumers can send and receive money much easier than going to through the traditional banking system. The third, and equally important role, is that fintech can reduce cost. “I mostly use my smartphone for banking, I haven’t visited a bank branch for a year now. By that logic, banks too can reduce operation costs in the new order,” Kukreja pointed out.
Akash Gupta, the General Manager of Mobikwik drew attention to how mobile wallets will scale and survive despite inadequate internet connectivity.
He said, “Competition is still hazy. There are lesser fintech startups today, than five years ago, due to consolidation. Our core areas will continue to be payments. Growing user base is the next goal and in that, it is critical to reach tier II and III cities. We are currently doing a small project in Pune with a NGO to help people with alternatives for people no bank accounts. These solutions can help them transfer money, and more people can use wallets even if they have no bank accounts. We are also working towards increasing acceptability among merchants in the unorganised sector, all of which will eventually contribute to growth.”
Even as the panel discussed various aspects of the Indian fintech sector, asserting that the sectors will continue to see investor interest, Chandra summed up by raising the question on what will lead to differentiation and eventually growth in the sector.
BW Reporters
Regina is a reporter for BW Businessworld. In her previous assignments, she has worked with Independent television Network as a news anchor and reporter in Sri Lanka
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