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Experts look back at the FinTech industry as 2023 draws to a close

By Puja Sharma

December 26, 2023

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Fintech news, Fintech outlook 2024,

As we stand on the cusp of 2023, the RBI’s decision stands as a beacon of prudence and foresight. Elevating risk weights for personal loans underscores our commitment to responsible lending and financial stability. It’s a timely intervention, echoing caution against the allure of easy credit in the unsecured consumer loans sphere.

“While the monetary impact of potential bad loans might seem limited, the sheer volume of individuals attracted to non-productive borrowing, particularly for items like gadgets, warrants our attention. This measure serves as a safeguard against lenient loan practices, drawing from historical lessons that highlight the risks stemming from lax appraisals in credit card and personal loan domains.” said  Jaya Vaidhyanathan, CEO, BCT Digital, around banking sector and unsecured loans.

Moreover, it’s not just about reining in lending institutions; it’s a concerted effort to protect the public. The RBI’s broader focus, spanning from crackdowns on unregulated lending apps to cautioning against speculative market behaviour, reflects a holistic strategy. As we celebrate the resilient state of our banking system post the past decade’s trials, it’s imperative to acknowledge and address the mounting concerns in the peripheries—FinTechs, NBFCs, and the stock market. Our financial health depends not just on the stability of our banks but on a vigilant approach to the evolving challenges in adjacent financial sectors.

In 2024, Indian banks will stand at a pivotal juncture. With only 10% employing integrated risk management as per the FIBAC’ 23 survey, a strategic shift is imperative. Also, the climate change brings a duality of opportunity and risk—$2.5 trillion in green finance potential and risk of allotting significant credit to industries, vulnerable to climate change. Adopting dedicated risk management frameworks, embracing innovative models and effective technology will be key in navigating these challenges, ensuring resilience, and capitalizing on emerging opportunities.

“We have seen a robust demand for credit in the Indian market, suggesting our evolving FinTech landscape. This surge not only signifies the economic prowess of our nation but also speaks volumes about the aspirations of our people. NBFCs have played a pivotal role in extending financial services to previously underserved areas.” Madhusudan Ekambaram, Co-founder and CEO, KreditBee on the FinTech-sector at large and his outlook for 2024.

The confluence of factors such as increased internet penetration, a burgeoning middle class, a tech-savvy customer base, and government initiatives has fueled this demand. FinTech lending companies, including KreditBee, have actively contributed to this shift, offering tailored products that resonate with the diverse needs of our expanding customer base.

In FinTech lending, rising cyber threats necessitate ongoing investment in cybersecurity. The spotlight in 2024 is on RegTech, integrating AI, blockchain, and cloud computing for compliance in the face of growing regulatory complexity.  These emerging trends in FinTech lending not only herald a transformative journey but also underscore the delicate balance between innovation and responsibility. They lay the groundwork for a future where finance is not only more efficient and customer-centric but also upholds ethical standards and champions inclusivity.”

“The push towards a cashless economy has been outstanding, led by the success of UPI, which has shown an impressive 80% year-on-year growth and contributes more than 75% to the nation’s retail digital payments. UPI transactions are expected to reach 1 billion transactions per day by FY27.”  said Nayantara Bhargava – Chief Business Officer, Mswipe technologies.

At Mswipe, it’s heartening to see that retail consumer goods stores have bounced back. Covid had impacted this segment and many of the small shop owners had lost a lot of business. This segment has grown by 168% from last year. Apart from retail shops, we see apparel, restaurants and the fuel segment growing YOY.

We will continue to strengthen our products and services and are committed to contributing to the India market. Our retail base will reap benefits of this as well as we are focusing on further building cutting edge products for the banks and enterprises to provide best in class holistic payment solutions. We have partnered with over 20 banks today and are looking at scaling these. We are also contributing to increasing the digital footprint across the smallest towns and villages of India About 30% of our base is from Tier 3 to Tier 6 markets of India and it will continue to grow in terms of contribution.”

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