Challenges Fintech Companies Face While Expanding to Rural IndiaNovember 17, 2018
Fintech companies move ahead with creative innovations in both the field of finances and technology. In India, Fintech does have a successful turnover in the Indian market which concern financial transaction between masses through various media. Citing examples of Fintech in daily lives of Indians, one may note the usage of payment apps like Paytm, PhonePe or Google Tez app which have progressively changed the process of monetary transactions for various purposes.
Such apps are especially popular for peer-to-peer (PtoP) transactions i.e. digital money exchanges at the local level. In fact, these Fintech start-ups have been on the increase in the subcontinent giving multiple options to a larger section of the community without the documentary hassles which had often been associated with the banks. One can thus say that Fintech is a booming process in India be it the upper class or the much larger population of rural India.
Nonetheless, one can easily accept that as opportunities grow for these Fintech courses, new challenges also crop up. The online money transfer feature was a huge success for the initial start-ups in the field especially during the period of Demonetisation when larger currencies were banned. Eventually, a lot of start-ups have opened up providing the same feature increasing the competition in the market. Only those can stay put in the market that have a robust foundational framework and have been kept intact with a strong experienced team.
A firm foundation depends on apt funding which can be a problem in India due to the cap on foreign investment. It is a well regarded fact that most Fintech players can only stay intact in the long run if they work on collaborating with the bigger well-established banks in India and the top few players can hit the home run on that front.
One of the major obstacles faced by these Fintech organizations is the lack of proper regulations since the Reserve Bank of India and the Exchange Board of India are yet to work on a comprehensive, exclusive set of guidelines for them. Moreover, the organizations must have a firm outlook while developing strategies making them reliable to the banking firms. Key technologies like cryptocurrency have not been given due credit in India.
At this point that Fintech is all about fresh new innovations at the right time since the digital market is a volatile playground. India’s record on that part is yet to reach a world class level. The market is specifically dynamic sensitive to small changes in prices and the evanescent base of customer loyalty. Cryptocurrency is a primary keyword of Fintech incorporating concepts like blockchains and liquid money to enhance the digital market.
Cryptocurrency with AI technology like Robotics Automation Process (RPA) can have great potential. RPA has in fact been actualized by organizations like Wipro and Accenture. Insurance companies have maximum usage of RPA followed by banking and financial services. A cost-effective solution is still being tested to explore the possibilities of this rather new tool.
Talking about the audience, there is a significant gradient scope in the level of digital awareness of masses. While there is an increasing base of tech-savvy people, there is also a large section deprived of basic literacy. Thus, in spite of a huge population, these organizations fail to reach the masses and even those who desperately need it. The sellers therefore need themselves to be aware of the fact that there’s a large portion of the crowd that needs awareness. While developments are being made, it will still take a considerable amount of time to cover this gap of knowledge.
Finally, one comes to the discussion of the anxieties of data security which is a constant threat to any Fintech industry. Personal financial data of individuals are very sensitive which can never be under-valued. A strong force of security should be the topmost priority in a country of massive population.
Cyber security rules in India are still under development and several cases keep coming up of hackers and their threats. Sellers should be extremely cautious from the beginning since any vulnerability displayed may cause a massive rupture in reputation and future prospects.
The Government and finance controls play indispensable roles for these Fintech firms. Newly developing products go on to increase complexities before the resolution of the previous problem and as such, a stack of issues crop up which leads to the ultimate downfall. While Indian firms are working on these issues but the audience adaptations is a crucial area to explore.