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Fintech India: Top Trends to dominate through 2021

Blog: NASSCOM Official Blog

The year 2020 was not the greatest for many industries in India due to COVID-19. But interestingly, the fintech industry reported rapid growth during the pandemic in the year 2020.

In the absence of physical contacts, consumers relied on virtual financial services to access and disburse funds and fintech solutions of varied types saw an unprecedented surge in demand. India’s Fintech funding grew 2X Y-o-Y to 1.7 $ billion in the first half of 2020.

The year 2021 looks promising as well looking at the rising consumer and business interest in contactless and digital financial services. Key fintech trends that are projected to influence the Indian financial services market in the year 2021 include but are not limited to the following:

Fintech India Trends 2021:

During COVID-19, several banks have adopted open banking via Open APIs and have started offering a major chunk of their banking services outside their firewalls. This trend is expected to magnify in India through 2021 as more and more customers demand digital financial services.

However, security will still be a concern with open banking and fintech players need to bring in tighter security in open banking platforms for the ecosystem to gain real momentum in 2021.

Neo-banking in India is expected to see a huge spur in 2021, attracting huge investments from global players as well. Further, though the RBI has not changed its stance on neo banking in India as yet, it has started allowing fintechs to test their innovations in a sandbox, which portends well for the broader fintech industry and neo bank in India. This

Further, digital-first aggregator platforms around the entire insurance value chain that not just give an option to compare insurance policies and chose the best one, but also allow digital KYC, after-sales services, and claims, will take the front seat in 2021. Incumbent insurance players will look to collaborate with modern Insurtech players and many bigtechs will look to jump into the bandwagon to get a share of the rising pie.

Fintechs offering autonomous finance will start picking the limelight that takes the burden off consumers’ minds and automates their financial decision-making process with AI and Machine Learning. As more people try to create more time for themselves in the work from home, contactless world, they will be delegating such repeated tasks to fintech solutions in India.

Further, as more solutions in the offline model spur up, the Indian fintech market will see digital payments proliferating to newer segments that were cash-obsessed till now due to reasons like lack of availability of a digital payment facility, poor internet connectivity, lack of awareness, etc.

Amidst the entire gamut of increasing user growth and traction, the fintech sector in India is indeed poised for more innovation in 2021. India sees some innovative fintech players as the most promising for the year 2021. Some of the most potent ones (but not all) include:

Looking forward:

In a nutshell, while 2020 was a pandemic hit year with many new surprises coming up for the fintech players and incumbent financial players of India, 2021 will be the year for most fintech players to build upon the learnings from the past year and monetize the digital transformation opportunities that the pandemic has thrown upon across the industry.

While the year 2021 will continue to see a rise in fintech investments in India, the industry will see a lot of transformation in the form of mergers and acquisitions among the incumbent financial players and the fintech players, several strategic partnerships to bring about digital transformation, the emergence of new fintech use cases, and the rise of innovative fintech offerings across the financial services value chain in general.


The post Fintech India: Top Trends to dominate through 2021 appeared first on NASSCOM Community |The Official Community of Indian IT Industry.

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