Beruflich Dokumente
Kultur Dokumente
Indian consumer
FinTech companies
transform the financial
services landscape in India
October 2017
Contents
Foreword 2
FinTech adoption in India 6
Key Themes 10
Unmet financial needs 10
Increasing investment in FinTech 11
Conducive environment 13
Responsive Incumbents 14
Payments 16
Overview 16
Emerging trends 17
The road ahead 19
Financial Planning 20
Overview 20
Emerging trends 21
The road ahead 23
$
Money transfer Financial Savings and
Borrowing Insurance
and payments planning investments
Source: EY FinTech Adoption Index 2017 Country Dashboard; Note: *Income in (US$ ‘000).
India’s FinTech adoption rate exceeds the including poor literacy, limited access to telecom / delivery
global averages platforms and the inability to pay for even the relatively
lower costs of FinTech services. However, this is expected
to change over the next few years on account of a number
52% 33%
of digital initiatives being undertaken by the Government to
drive financial inclusion and direct delivery of benefits.
Adoption by region
India Global
1. “Smaller proportion of India’s youth employed,” Mint, 25 May 2016“; The sad illusion of India’s demographic dividend,” Financial Times, 17 October 2016.
The relative ease of setting up an account with FinTech However, the EY FinTech Adoption Index 2017 indicates
providers as compared to traditional financial services, and that as adoption increases, and traditional players start
the ability to access a wide range of services conveniently to address the inefficiencies exposed by FinTech, Indian
are the primary motivators for adoption of FinTech in India. consumers are likely to start demanding ‘bank grade’
services like 24x7 access and more attractive rates and
The demand for simple, convenient services and a better fees.
customer experience, compounded with low levels of
India and Global motivators of adoption (%) India and Global barriers to adoption (%)
31
Easy to set up an account 5
30 Was not aware they existed 14
Access to different 19
products and services 17 Did not have a need to use 4
them 10
13
Better quality of service
8
Don't understand how they 4
Better online experience 11 work 8
and functionality 8
More innovative products
11 Prefer to use a traditional 3
than available from traditional
7 financial services provider 10
financial institutions
Access to services 24 hours 10
a day, 7 days a week 16 Don't see the advantage of Fin- 2
Techs over traditional services 6
More attractive rates and 4
fees 13
2
Greater level of trust than 2 Do not trust them 5
with traditional institutions 2
India Global
South
Indicator India Brazil Russia China# US France Germany
Africa
Commercial bank
branches per 100,000 13.6 20.7 32.9 8.5 10.5 32.9 37.5 14.1
adults
ATMs per 100,000
19.7 114 173 76.4 69.3 NA 107 121.1
adults
Outstanding loans from
commercial banks (% of 50.7 42.3 48.6 99.7 67.6 45.6 38.9 21.2
GDP)
Outstanding deposits
from commercial banks 65.8 33 46.2 157.3 43.4 59.5 36.6 28.4
(% of GDP)
#Mainland China Note: Data as of 2015
Source: IMF Financial Access Survey Data, 2016
2. “India to clock 7.1% growth this year, 7.5% in 2018: UN report,” Mint, 11 May 2017; “Fintech in India,” Swissnex Report, October 2016.
3. “Expanding Access to Finance for Small Businesses in India,” Microsave, May 2014.
Traditional service delivery models have not been able There has been a significant increase in FinTech
to address the financial needs of consumers. startups in India over the last two years, primarily in
the payments space (driven by regulatory changes and
FinTech, with its ease of usage and access, has allowed
market demand).
consumers to get access to these services, typically at
lower costs, driving its active adoption. In addition, there is increased willingness by domestic,
as well as international VCs/PEs and incubators to
heavily invest in this sector in India.
Regulators are interested in driving cashless / digital Globally, FinTech startup are disrupting the business
transactions for financial inclusion as well as control. models of incumbent financial services players.
The spread of broadband / telecom provides a platform In India as in other markets, incumbents are adopting a
for financial services delivery with low delivery costs and range of strategies to deal with the risk and opportunity
high outreach. afforded by FinTech paradigms. These include strategic
partnerships that provide the FinTech firm with access
to bank clients and infrastructure to acquisitions.
consumers (individuals as well as small and medium This has coincided with a shift in focus away from purely
enterprises) have already started turning to FinTech firms customer-acquisition innovation to newer business models
as alternative providers of access to payments, credit, (mobile payments, automated underwriting and processing
investments, insurance etc. Even in urban areas where of transactions etc.)
branches are ubiquitous , banks are often unable to live up
to the increasing expectations of demanding customers.
Younger customers do not have the patience to visit Number of Fintech companies launched
branches. They are looking for fully automated, simple to
use, digital products and services - an area where banks 390
are found lacking - especially when compared to the digital
offerings of ecommerce firms.
192
Increasing investment 125
186
108
in FinTech 60 65
4. Tracxn FinTech India Report – October 2016; “Fintech: no more the new kid on the block,” Mint, 28 December 2016.
In terms of number of startups, it is the third-largest tech Payments and Lending Tech sectors in India rank high in
startup hub globally with 4,200 tech startups. According to terms of funding received.8
News stories
Global VC Quona Capital9 and Japanese IB Global incubators launch in India
Nomura10 invest in Indian FinTech
Several global incubators (Startupbootcamp, Swiss Re
Global VC firm Quona Capital recently launched a and Zone) have launched in India
US$141m FinTech-focused fund for emerging markets.
“Startupbootcamp11, which has FinTech accelerators
The fund plans to invest 30% of its corpus in India,
in New York, London and Singapore, expects around
making India its largest target market.
300 applicants specializing in alternate payments and
Nomura has set up an US100m global fund to invest in lending in the country. It has partnered with ICICI and
FinTechs in the capital markets and investment banking RBL Bank and takes a 6% equity stake in startups.”
(CMIB) space. Nomura has launched a global accelerator
Zone Startups India has partnered12 with Barclays
and co-creation platform called Voyager Nomura
and Axis Bank to start accelerator programs. Global
FinTech, where startups can develop products / services
reinsurer Swiss Re has launched13 “InsurTech,” an
in the CMIB space.
accelerator to help startups develop solutions for
Insurance. Key themes for the accelerator are IoT, smart
analytics & systems of engagement.
5. “Fintech in India,” Swissnex Report, October 2016; “Here’s what’s going on in India’s startup ecosystem,” TechAsia, 16 February 2017.
6. https://www.statista.com/outlook/295/119/fintech/india#
7. “9 fintech startups that could soon be unicorns in India,” TechAsia, 23 August 2016.
8. Tracxn FinTech India Report – October 2016; Institutional Investor reports.
9. “Quona to invest 30% of its $141 million fintech-focused fund in India,” The Economic Times, 15 March 2017.
10. “Nomura Services launches fintech accelerator,” Business Line, 19 April 2017.
11. “Global accelerators & incubators look to cash in on India’s fintech goldrush,” ET Tech, 19 October 2016.
12. “Zone Startups to manage Barclays’ Rise accelerator programme in Mumbai,” ET Tech, 16 June 2016.
13. “Swiss Re launches ‘InsurTech’ startup accelerator,” The Economic Times, 02 May 2016.
For the Indian Government and financial sector regulators In November 2016, the Government of India undertook a
— Reserve Bank of India (RBI), Insurance Regulatory demonetization drive, scrapping high-denomination notes
Development of India (IRDAI) etc. — financial inclusion is a (accounting for 86% of the country’s currency notes).
critical objective. Given India’s geographical spread and the This provided a significant boost to FinTech startups
challenges inherent in creating physical (financial services) (mobile wallets and digital payments), pushing citizens to
infrastructure, the regulators have been pushing the use of use to digital modes for payments.
digital modes of transaction.
• “Paytm’s traffic increased by 435%, app downloads grew
The Government of India launched the Pradhan Mantri Jan 200%, and there was a 250% rise in overall transactions
Dhan Yojna14 in 2015 with the aim of opening basic bank and transaction value.”16 In February 2017, the firm
accounts for every Indian. The scheme envisages providing announced17 an investment of INR6b over the next 10
an overdraft facility after six months, as well as a debit card months to expand its QR-based payment network along
with inbuilt accident insurance. with plans to add 10m merchants enabled with these
RBI has also been steadily promoting a digital agenda to codes.
deepen and broaden financial services in the country. • In February 2017, MobiKwik18 announced an investment
Digital initiatives such as UPI, Unstructured Supplementary of INR3b for expanding its user base. This is expected to
Service Data (USSD), Bharat Interface for Money (BHIM), increase the annual gross merchandise value (GMV) to
Bharat QR, Aadhaar Enabled Payments System (AEPS), US$10b by 2017-end from the current US$2b.
Yearly M-wallet transaction value (INR b) Monthly M-wallet transaction value (INR b)
619.8
Demonetization
83.5
74.5
205.8
33.8 33.1
81.8
10.0 29.1
14. “Prime Minister to Launch Pradhan Mantri Jan Dhan Yojana Tomorrow: To Dedicate Mobile Banking Facility on Basic Mobile Phones to the Nation,” Public
Information Bureau 27 August 2014.
15. Report by Committee on Digital Payments, Ministry of Finance - Government of India, December 2016.
16. “Mobile wallets see a soaring growth post-demonetisation,” Hindustan Times, 01 January 2017.
17. “Paytm to invest Rs600 crore over 10 months to expand QR code payment system,” Mint, 20 February 2017.
Responsive incumbents Over the past two years, there has been a visible trend
in collaboration between incumbent players (banks and
The Indian financial sector is highly regulated with insurers) and FinTechs. FinTechs benefit from not being
significant capital and other constraints on firms interested constrained by capital / licensing aspects, which the bank
in delivering financial services. While this level of regulation or insurer manages. The incumbent player benefits by
is aimed at protecting the interests of consumers, it being able to lower its costs and target competition with
has had the unintended effect of creating large entry cutting-edge solutions in payments, mobile wallets, lending,
barriers for FinTechs. However, in areas that are relatively AI, analytics, chatbots and blockchain technology.
lightly regulated (mobile wallets, customer acquisition
and comparison), FinTechs have been able to disrupt, or
significantly impact, the business models of incumbent
players as a result of lower cost structures, and more
effective technology design and implementation.
18. Demonetisation boost helps fintech start-ups; The Indian Express, Mar 3, 2017
19. “With 220mn users, India is now world’s second-biggest smartphone market,” The Hindu, 03 February 2016; “Number of Internet users in India could
cross 450 million by June: report,” Mint, 02 March 2017.
20. “Rs0 to Rs 3.3 trillion, the big numbers from Mukesh Ambani’s RIL AGM speech,” Mint, 21 July 2017.
21. “Reliance Jio Phone impact: Rating agencies Icra, Crisil split over effect on industry,” Financial Express, 25 July 2017.
22. “Indian e-commerce market could reach $28 bn by FY2020: Report,” Business Standard, 9 September 2016.
23. “Amazon’s losses jump 5-fold on India investment,” Mint, 29 July 2017.
Payments Automation
• MoneyView: Expense tracker on mobile • Decimal: Mobile-based sales tool with segmentation,
targeting and positioning capabilities
• C
► hillr: Instant money transfers, recharges and
merchant payments
Online customer durable finance
Credit Score
AI
• C
► reditseva: Customer credit analytics and management
• Asimov Robotics: Humanoid robot at branches
tools
• N
► iki.ai: Chatbot on Facebook
24. “Banks and FinTech startups see more value in cooperation than in rivalry,” The Economic Times, 26 March 2017.
25. “Paytm to go global with Uber tie-up,” The Times of India, 04 May 2016.
26. “What is Ola money?,” Olacabs.com.
27. “Goodbye cash, hello airtel money,” Airtel media center.
Regulators & Institutional support These initiatives have created an interoperable structure
wherein customers having accounts with different banks or
is playing an enabling role payments solution providers can transact with each other
(using a virtual address) easily.
The National Payments Corporation of India (NPCI) was set
up jointly by the RBI and the Indian Banks Association (IBA) RBI on its part has liberalized the Know Your Customer
in 2007 as the umbrella organization for retail payments (KYC) requirements for low-value wallets and customer
and settlement systems. Over the past five years, NPCI authorization mechanism for low value retail payments,
has led substantial effort and investment in developing thus keeping intact the core proposition of ease and
the national payments infrastructure and technology simplicity. A new set of differentiated banking licenses
platforms, be it Instant Money Transfer System (IMPS), (payments banks) have been issued to a host of players
Unified Payments Interface (UPI), Bharat Interface for from diverse areas such as wallets / pre-paid instruments,
Money (BHIM), Bharat BillPay (BBP), and Aadhaar Enabled telecom players as well as India Post, to democratize
Payment System (AEPS). payments for mass adoption.
UPI An instant payment system which uses IMPS infrastructure to enable seamless Push (sending money using a virtual
address) and Pull (requesting money) transactions between multiple bank accounts through a single app
BHIM An app which allows users to transfer funds between accounts in different banks (leveraging UPI) using a single
identifier (mobile number or virtual address) and without the need to create additional accounts / wallets
BBP Interoperable payment platform which allows users to make bill payments across multiple
channels and payment modes, and provides instant receipts through SMS
BharatQR A common QR code specification developed jointly by NPCI and other card schemes; Allows mobile based Person to Merchant
(P2M) payments from any BharatQR enabled mobile banking app using Aadhaar, IFSC & account or a card linked account
AEPS Making payments using Aadhaar number authenticated using biometric scan; the
payment is directly processed from the Aadhaar linked bank account
0.25% - 1% MDR 1.6% - 2.5% MDR Monthly transaction Non-transacting Annual maintenance
For debit cards For credit cards charges of INR 150- charges per monthly charge of
200 per terminal of INR 200-300 INR 2500-5000
per terminal per terminal
(estimated for transactions (applicable for low (depending on type
worth INR 10,000) transacting or inactive of POS; may include
merchants) annualized rental value )
Paytm launched a P2P payment solution for merchants wherein merchants can send secure payments links to
customers over SMS. Customers can then make the payment on their phone, eliminating the need for merchants
to capture their credit/debit card details.
“Paytm launches QR code payment option for wallet app,” Mint, 15 October 2015.
“Paytm replaces its app PoS feature with P2P payment system for merchants,” The Economic Times, 01 December 2016.
Proximity payments is taking off ‘Tez’ a UPI based mobile payment service with AudioQR
capabilities30 and a proximity based “Cash Mode” solution
Tap and go payment mechanisms have been deployed which allows funds transfers without the need to share
in India across a number of use cases (toll payments, private details.
public transport etc.). However, other modes of proximity
payments are gaining popularity as a result of a number of
changes in the market.
28. “How a Human Touch Agent Can Make a Difference in Promoting Digital Financial Services,” A Report on Center for Financial Inclusion Blog, 10 July 2017.
29. “Looking to bring Apple Pay to India, open to operator billing: Tim Cook,” The Indian Express, 23 May 2016.
30. “Listen hard, Mark. Google’s turned up the audio in India”, Economic Times, 23 September 2017.
Near Field Communication (NFC) payments enable offline merchants to accept payments via
contactless cards and mobile payment modes such as Samsung Pay using NFC enabled PoS terminals.
Most new terminals are NFC enabled and this is expected to increase NFC transaction volumes
Toll & transit payments through smartcards, RFID tokens and mobile applications. A recent
government mandate for inclusion of FASTag in new vehicles is expected to provide a boost
Magnetic Secure Transmission: smartphones emit magnetic signals mimicking a card magnetic strip
allowing for cardless payments even at non-NFC POS terminals
Other key emerging modes for proximity payments are BharatQR codes, UPI, and Aadhaar enabled
payments
Contextual payments:
“Chat app Hike launches UPI payments, wallet,” Mint, 20 June 2017.
Social media and messaging platforms are being increasing
“WhatsApp will reportedly launch peer-to-peer payments in India within
used by companies to run product promotions and drive 6 months,” Tech Crunch, 03 April 2017.
commerce. In order to allow consumers to complete the
transactions seamlessly, these platforms are extending
their capabilities to allow consumers to make payments. Even as the POS and card based payments continue to
This will make it easier for individual service providers and grow at a steady pace over the next 4-5 years, alternate
small business owners to connect with their customers and form factor payments are likely to gain further traction
receive payments. with platforms like UPI enabling the entry of new players
or existing players developing new and unique payments
use cases. Adjacencies around payments such as credit for
merchants and customers will become a natural extension
The road ahead for large players. In the long run players which develop
scalable and sustainable business models and stay ahead in
The accelerated innovation in payments has resulted in the the product lifecycle and adapt to changes will remain most
launch of a large number of similar solutions by various relevant to customers and merchants.
players. As the industry matures, a consolidation in the
number of players is likely and Innovation will be a key
differentiator in this crowded payments market.
Emerging trends Financial planning software of the past, present and future
http://www.getwalnut.com/faq
MoneyFrog — Integrated platform for
financial planning
B2B services for integration of financial MoneyFrog is a financial advisory firm that uses
accounts a blend of technology (robo-advisory) and human
experts to help clients manage their investment
There is an emerging category of specialized players are
portfolios. It profiles customers using a number of
providing financial institutions with an integrated view of
parameters, including financial assets, goals and
all accounts of their prospects and customers. The services
risk appetite. Based on the profile, the firm helps
they provide include analysis of financial statements,
customers identify investment options using its
aggregation of client data, account level dashboards and
algorithms / robo-advisory capabilities and allows
advisor solutions.
customers to transact online, as well as reach out
to financial advisors for advice and resolution of
queries.
https://www.perfios.com/index.php/aggregation-api/
https://www.perfios.com/index.php/ifas/
Simpler and more secure customer Seamless integration between savings and
authentication investments
With the ubiquitous presence of smartphones across a Financial institutions are trying to inculcate the habit
large cross-section of customer segments, more and more of regular investments in financial asset classes among
customers want to access their savings and investment customers, by enabling them to save small amounts of
accounts online or through the mobile channel. surplus funds lying idle in savings accounts. This implies
the existence of an architecture to enable the frictionless
Traditionally, SMS-based OTP has been used as the primary ‘sweeping’ of low value balances from savings accounts into
mode of authentication, but with heightened cyber-security investment accounts. The payment bank ecosystem in the
concerns, financial organizations are starting to move to country is rapidly building out this sweep architecture as
alternate modes of authentication, e.g., facial and voice they cannot keep more than Rs 1 lakh of balances in their
recognition. In addition, advances in technology (as well as customer accounts at end of day.
the Government’s financial stack) now allow for real-time
biometric authentication, such as fingerprints (Aadhaar-
linked) to iris recognition.
Other incumbents, however, are trying to serve as platforms, by unbundling the production and distribution of banking
products and services. They remain the “owner” of the customer’s primary account, i.e., savings account, but provide access
to their banking platform through open APIs, allowing nimbler startups to access customers’ financial accounts information /
transactions (with explicit consent) and offer value-added products and services.
Mobile wallet
Lending
Marketplace
Retail
Branches
Investment
Trading
Bank Transactions
Social
Mobile payments
Stored value eMoney Customer
Savings
Ticketing
Payments
Crowd funding
APIs provide a modular extensible and standardized This concept is still at a nascent stage in India (unlike the
interface to the banks’ underlying infrastructure platform, western world, where providers such as ING Direct FIDOR
supporting a lot of functions around savings, investments offer a full suite of API services). However, FinTech players
and payment, as well as community features and third- in investments and payments are increasingly catching up
party services. with the trend.
Interest Rate
~16-24%
• Can get pricing of 10-18% • Varied product needs – short term and medium term • Pricing for >25-30% from
from banks niche/local lenders
• Lack of available suitable products from banks
• Existing business and credit • Typically need short term
• May not have sound financial history, past credit
history loans
records or usage of credit card
Emerging trends
Digitization and automation of loans processes
To deal with competition from newer players and the rising customer expectations, incumbent banks and NBFCs are
reinventing their existing processes32 through digitization and automation at each step of the lending value chain.
32. “Axis Bank & Suvidhaa roll out ‘Nano Credit’ - pre-approved, instant & unsecured loans,” BusinessLine, 11 Aug 2016.
• India Stack is a complete set of API for developers which includes the
India Stack Aadhaar for Authentication, e-KYC, e-Sign , Digilocker, UPI and privacy-
protected data sharing within the stack of API
Faster document
• No size limitations for document upload avoids the delay caused by
upload facility
customers trying to reduce the size of documents or dropping off the
without size
process
limitations
Integration with
• Integration with external partners such as CIBIL will enable to conduct real
external partners
time credit check and become a key driver for providing real time approval
for real time credit
in principle to the customer
check
• For positive scenarios with relevant documentation upload and positive real
Real time Approval In
time credit check can drive real time approval in principle thereby leading
Principle
to superior customer experience and greater leads to sales conversion ratio
Detailed MIS
• Detailed MIS Dashboard view real time to operations manager to identify
dashboard for
any bottleneck across each process step and take immediate remedial
tracking of TAT for
actions to avoid delays for sanctioning/disbursements
each file
Taking cognizance of the growth in P2P lending (India • Lenders to an aggregate exposure of INR 10 Lakhs
already has ~30 P2P lenders34), and the consequent across borrowers and NBFC-P2Ps
need for oversight, the banking regulator (RBI) has • Borrowers to a cap of INR 10 Lakhs across all P2Ps,
recently issued a master circular35 regulating P2P
lending platforms. • Exposure of a single lender to a single borrower (across
P2Ps) at INR 50 thousand
In order to ensure that consumers are protected from
issues arising out of cyber-security, fraud, money- • Tenure to a maximum period of 36 months
laundering and operational challenges, P2P lenders To protect borrowers and lenders, RBI has also mandated
have been directed to register as Non-Banking Financial that the funds from lenders and borrowers be held in
Company within 3 months of issuance of the circular. In separate escrow accounts at a bank and not comingled
addition to other constraints, the circular requires NBFC- with the NBFC-P2Ps own funds. The chosen bank will be
P2P applicants to demonstrate required to promote a trustee which will be responsible for
• Capital adequacy - minimum capital of INR 2 Crore operating the escrow accounts on the basis of instructions
delivered through the platform or otherwise. RBI has also
• Viable business plan prohibited cash transactions and directed Trustees to
• Robust and secure Information Technology system undertake funds transfers only between bank accounts.
Since P2P lenders which fail to get approval from RBI may While moving to a regulated regime is likely to increase
be asked to wind down their business, the industry is likely operational (& compliance) costs for P2P lenders, the
to see consolidation among smaller or weaker players sector as a whole is likely to benefit from protection
who will either be unable to satisfy RBI’s requirements for afforded to lenders and borrowers in addition to ensuring
registration, or do not have the capacity to adhere to the that only serious players with the capacity to build a
other operational requirements outlined in the circular. sustainable business operate in this space.
https://yourstory.com/2016/11/simpl/
“Simpl Is an Anti-Wallet That Brings the Buy-Now, Pay-Later Model Online”, gadgets.ndtv.com, 01 December 2016.
Rejection
Access customer
information
Automated approval
Customer applies for Traditional source, like Loan processing via rule-
• Upto approval limit
credit credit bureaus based decision engine
• Approved transaction types
ecosystems
have provided POS finance for consumer durables and
consumer electronics for long. However, FinTechs are
making available to consumers a variety of financing
An increasing number of FinTech firms are tying up with models across lifestyle purchases — many with the ease of
merchants and service providers to provide affordable being available online at the point of purchase.
financing options at the point of sale. Niche products are
being developed in conjunction with these merchants,
utilizing customers’ transactions histories and other
IRCTC
available data points to evaluate their credit worthiness.
Similar tie-ups for providing customers with flexible IRCTC has collaborated with ePaylater to provide
repayment options are being offered prominently across transaction credit to customers after evaluating
aggregator websites, retail chains, e-commerce players their CIBIL scores and transaction history.
and travel portals, catering especially to customers without Customers who wish to opt for this service need to
credit cards. provide their PAN or Aadhaar details. If found credit
worthy, they will be able to book tickets up to five
The evolution of SME lending platforms is an illustration
days in advance with a service charge of 3.5% and
of ecosystem lending. SMEs face challenges in getting
repay it in the next 14 days.
access to capital for a variety of reasons, including the
informal nature of business, poor infrastructure and limited
“Indian Railways to introduce “book now, pay later” option,” Economic
assets. FinTechs36 such as LendingKart, NeoGrowth and Times, 01 June 2017.
CapitalFloat have developed innovative business models
to cater to this underserved market. These models include
partnering with e-commerce platforms such as Amazon, Alternate data and credit ecosystems have allowed
Snapdeal and Flipkart37 and leveraging their data on sellers FinTechs to assess credit worthiness of segments that
(trading history, returns ratio, customer ratings etc.) to were hitherto untargeted and cater to digitally acquired
assess credit worthiness and offer loans. customers at lower unit costs. Students and young adults
are one such segment. FinTechs are offering students small
ticket loans with flexible tenures to fund lifestyles (flights,
movie tickets, cabs and phone recharges) and purchase
Amazon and its lending program for of consumer durables with ticket sizes starting as low as
INR500.38
SMEs in India
Amazon, in partnership with NBFC Capital First
Ltd., has initiated a Seller Lending Program to
provide working capital loans to small and medium Slicepay — Exclusively lending to
businesses on Amazon.in. The program offers students
secured and unsecured loans ranging from INR5
lakh to INR2 crore to selected sellers. SlicePay is a micro-lending platform that uses a
proprietary risk mechanism to offer students of
Sellers are given pre-approved indicative offers with select colleges credit lines of up to INR60,000
amounts and indicative rates and fees. The sellers without collateral. The firm has tied up with on-
can apply online with the amount and tenor of their campus merchants as well as a number of major
choosing and submit their documents. online e-commerce platforms, including Amazon,
The loan will be approved and disbursed within five Flipkart, Myntra, Snapdeal and Paytm, from where
days of application. Sellers will be offered loans users are allowed to purchase products. Users select
on the basis of various criteria including account a payment plan (down payment and installments)
tenure, selling history and customer feedback. and are billed on a monthly basis.
https://slicepay.in/how-it-works
“Amazon.in Launches Lending Program for SMEs in India”, Amazon.in,
10 February 2016. “Here’s how micro-lending startup SlicePay addresses students’ queries on
lending”, CIOL.com, 05 June, 2017.
36. “Top 16 Fintech Startups in India changing the unorganized lending space,” The Hacker Street, 17 May 2017.
37. “Indian e-commerce platforms help sellers get easy loans to aid growth,” Business Standard, 10 December 2015.
38. “Startups offer credit lines for cab rides, movie shows,” Economic Times Tech, 08 April 2017.
39. “Bots are welcome in the insurance sector,” Mint, 20 June 2017.
“GOQii enters into alliance with Max Bupa and Swiss Re for Health
Offerings”, GOQii Blog, 20 April, 2017.
Data
CRM
The road ahead used as industry-wide asset registers for fine arts and
specie. As use of blockchain increases in India across
government services (land records, motor vehicles etc.),
High competition in telecom, the Government’s focus on
we expected these to be leveraged for smart contracts and
digital services (Aadhaar, UPI etc.), relaxation of rules by
fraud prevention.
the regulator and a more demanding young population are
going to drive InsureTech usage and innovation in India. India is currently at an inflection point, with a critical mass
of customers, falling technology costs and an increasingly
In customer acquisition and servicing, we expect to see
connected and demanding customer base with growing
greater use of social media analytics and machine learning
incomes. We see InsureTech players partnering with
based customer interaction engines to target customers
insurers, industry players and the Government to radically
(based on life events). This is likely to be supplemented by
transform the customer experience, and drive insurance
automated advisory solutions to help potential customers
penetration and density.
understand their risks and propose insurance coverage (not
just for individuals but also for small enterprises).
The Government has also launched several initiatives This adoption will be driven by large increases in insurance,
to scale up the startup ecosystem, including a US$1.5b savings and investments and borrowing, even as payments
startup fund.40 Major global VCs and hedge funds are active remains the leading area of usage.
in India and angel funding networks have also started While adoption will continue to increase among young
coming up in both the established and emerging hubs of adults, usage is expected to increase drastically among
the country. older generations who are opening up to the idea of
conducting financial transactions digitally.
40. “PM Modi launches $1.5 bln fund to support start-ups,” Reuters, 16 January 2016.
$
Money transfer Financial Savings and
Borrowing Insurance
and payments planning investments
89 86
80
73 74 75
71 69
64
54
48 47
25
Contributors
Chennai Kochi
Tidel Park, 6th & 7th Floor 9th Floor, ABAD Nucleus
A Block (Module 601,701-702) NH-49, Maradu PO
No.4, Rajiv Gandhi Salai Kochi - 682 304
Taramani, Chennai - 600 113 Tel: + 91 484 304 4000
Tel: + 91 44 6654 8100 Fax: + 91 484 270 5393
Fax: + 91 44 2254 0120
Ernst & Young LLP
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