The COVID-19 crisis has had multiple cascading effects on the economy. The recently released report by PwC India in partnership with FICCI titled “Redefining the FinTech experience: Impact of COVID-19” takes a closer look at the sector’s position prior to the pandemic, reflects upon the impact of the crisis on the sector and recommends a framework for the way forward.
This report looks at the opportunities for the FinTech sector in the wake of the COVID-19 crisis due to the increase in the digital transactions. The growth drivers on the supply side have been government and regulatory support aided by technological adoption and advancement. On the other hand, on the demand side, growth has been propelled by rising customer needs, unmet market potential, and rising collaborations between FinTechs and incumbents.
The report further suggests that payments will continue to emerge as one of the key pillars of FinTech due to its potential to act as an infrastructure provider and offer a full suite of cash management services. Retail & MSME lending will emerge as two main components of alternative lending driven by their tech-driven approach.
InsurTech, WealthTech & Enabling Tech will work towards seamless distribution of financial products and services to targeted prospects, supporting agents and banking correspondents by engaging and servicing customers based on parameters such as unique preferences, risks and prospect conversion probability. FinTechs might endure more hardships as funding becomes sparse and the struggle for cash amplifies.
As per, Vivek Belgavi, Partner and Leader FinTech, PwC India – FinTech sector in India, across startups and incumbents, needs to go beyond liquidity challenges. They need to tap opportunities arising from broader sectoral digitisation and changing consumption preferences to stay competitive and well positioned to capitalise as the economy revives”