Fintech: An
Introduction
Traditional Financial
System
What is Fintech?
Fintech is generally described as an industry that uses technology to make
financial systems and the delivery of financial services more efficient (RBI,
2020).
It is "technologically enabled financial innovation that could result in new
business models, applications, processes or products with an associated
material effect on financial markets and institutions and the provision of
financial services“ (FSB, 2019).
Fintechs are "start-ups and other companies that use technologies to conduct
the fundamental functions provided by financial services, impacting how
consumers store, save, borrow, invest, move, pay, and protect money"
(McKinsey, 2016).
Fintech- few important points to note
→ For users, digital technologies enabled by the near-ubiquity of cell and smart
phones offer an opportunity to access faster, more affordable, more tailored, more
secure, and more convenient financial services.
→ For both incumbents and new fintech financial service providers, the costs of
offering customers digital products can be considerably lower than those using
physical infrastructures and relying mostly on paper- and human-based business
models. Fintech enables remote, contactless, and cashless transactions.
Fintech- few important points to note
→ Big tech companies have expanded into financial services by leveraging their large
platforms and troves of alternative customer data that can be analyzed for insight
through big data analytics.
→ Over the past decade, fintechs have attracted more than $500 billion in funding.
→ Since 2019, they have received roughly 20% of global venture capital outlays—
attracting large amounts of capital from generalist, technology private investors and
hedge funds—beyond the financial services specialists who had historically funded
these businesses.
Revenue multiple of the sector
Source: BCG QED Global Fintech Report 2023
Funding to the sector stage-wise
Source: BCG QED Global Fintech Report 2023
Strong Fundamentals
Source: BCG QED Global Fintech Report 2023
Customer Satisfaction
Source: BCG QED Global Fintech Report 2023
Large potential market
Source: BCG QED Global Fintech Report 2023
Potential for increased Digitization -2021
Source: BCG QED Global Fintech Report 2023
Types / Classification of Fintech
Top 10 global
fintech deals
in H1 2023
Top 10 Asia Pacific
fintech deals in H1
2023
Understanding the Fintech space
Understanding the Fintech Sector
Group no. Financial Service Questions
1 Payments- Domestic 1 and 2
2 Payments- Cross-border 1 and 2
3 Banking 1 and 2
4 Investment & Wealth Management 1 and 2
5 Insurance 1 and 2
6 Payments- Domestic 3 and 4
7 Payments- Cross-border 3 and 4
8 Banking 3 and 4
9 Investment & Wealth Management 3 and 4
10 Insurance 3 and 4
Questions to be addressed
1. How has this financial service changed over the last decade?
2. How are the traditional financial institutions responding to this change?
3. Highlight any two prominent fintech players within the financial service and their
business model in brief
4. What is the Indian scenario wrt this financial service (status and a few players)
Company Sector Company Sector
Paytm Payments Zeta Technologies Banking Products
PolicyBazaar Insurance BharatPe Payments
Billdesk B2B Payments Acko Insurance
Pine Labs PoS Payment Sol. Upstox Brokerage
Razorpay Payment Gateway Slice CreditCards / BNPL
PhonePe Payments Oxyzo Marketplace SME Lending
Digit Insurance Insurance CredAvenue Debt Marketplace
CRED Payments Open Financial Technologies Neobank
Groww Brokerage & MFs BillDesk Payments
CoinDCX Crypto Assets Coinswitch Crypto Assets
Indian Fintech Unicorns
