The Rise of Fintech in India: A Look at the Last 5 Years

 The evolution of Fintech in India has been remarkable. From its humble beginnings as a payment system for small businesses, Fintech has grown to become a major player in the Indian financial services industry. Today, Fintech is used to facilitate payments, loans, investments, and even insurance policies.

Fintech first made its appearance in India in the late 1990s, when it was used to facilitate payments for small businesses. The technology was seen as a way to increase efficiency and reduce costs, and it quickly gained traction. Over the next decade, Fintech slowly grew and began to be used in a variety of industries, including banking and insurance.

In the early 2010s, Fintech underwent a significant transformation. The development of mobile technologies and the emergence of cloud-based services further enabled the development of Fintech solutions. This period marked the emergence of several key Fintech startups, such as Paytm, Mobikwik, and PayU. These startups provided innovative solutions to customers, such as mobile wallets, payment gateways, and prepaid cards.

The growth of Fintech in India has been further fueled by the emergence of the Unified Payments Interface (UPI). UPI is a payment system developed by the National Payments Corporation of India (NPCI) and allows customers to make online payments quickly and securely. UPI has become the preferred payment method for many Indian customers, and Fintech companies have been quick to adopt it.

As Fintech has grown in India, so has the number of regulatory bodies that oversee it. The Reserve Bank of India (RBI) has long been the primary regulator of Fintech in India, but other regulators, such as the Insurance Regulatory and Development Authority (IRDAI) and the Securities and Exchange Board of India (SEBI), have also introduced regulations to ensure the safety and security of Fintech services.

The growth of Fintech in India has been rapid and its impact has been far-reaching. Fintech companies now provide services that were once only offered by traditional financial institutions, such as loans, investments, and insurance. The sector has also created thousands of jobs, and has helped to boost the Indian economy.

Over the past five years, the Indian fintech industry has seen tremendous growth, thanks to a combination of factors such as increasing smartphone and internet penetration, favorable regulatory policies, and a growing middle-class population.

According to a report by the National Association of Software and Services Companies (NASSCOM), the Indian fintech industry is estimated to reach a valuation of $150 billion by 2025. The industry has seen a 22% year-on-year growth in terms of transaction value, reaching a total value of $65 billion in 2019. This growth is expected to continue in the coming years.

One of the major driving forces behind the growth of fintech in India is the government’s push towards a cashless economy. The demonetization of high-value currency notes in 2016 led to a surge in digital payments, and this trend has continued. The government has also launched initiatives such as the Pradhan Mantri Jan Dhan Yojana (PMJDY) and the Unified Payments Interface (UPI), which have made it easier for people to access financial services and transact digitally.

Another factor contributing to the growth of fintech in India is the increasing use of smartphones and internet. India has over 500 million smartphone users and over 700 million internet users, making it one of the largest digital markets in the world. This has created a huge opportunity for fintech companies to offer their services through mobile apps and online platforms.

The rise of fintech has also led to a wave of innovation in the industry, with companies developing new products and services to cater to the needs of consumers. One such example is the emergence of digital lending platforms, which use technology to provide loans to individuals and small businesses. These platforms have disrupted the traditional lending industry, which was dominated by banks and other financial institutions.

In addition to digital lending, fintech companies in India are also offering a range of other services such as insurance, wealth management, and investment products. The ease of access and convenience offered by these platforms has made them popular among the younger generation, who prefer to manage their finances through their smartphones.

The growth of fintech in India has also been fueled by the increasing number of startups in the industry. According to NASSCOM, India is home to over 2,000 fintech startups, making it one of the largest fintech ecosystems in the world. These startups are leveraging technology to solve problems and create new opportunities in the financial sector.

Finally, the regulatory environment in India has been supportive of the fintech industry. The Reserve Bank of India (RBI) has introduced a number of initiatives to promote digital payments and encourage innovation in the financial sector. The introduction of the Payment and Settlement Systems Act, 2007, and the Payment and Settlement Systems Regulations, 2008, has created a level playing field for fintech companies and traditional financial institutions.

The future of Fintech in India looks very promising. With the emergence of new technologies, such as artificial intelligence and blockchain, Fintech companies are well-positioned to take advantage of these innovations and continue to revolutionize the Indian financial services industry. The sector is expected to continue to grow in the coming years, and Fintech companies are likely to become even more important players in the Indian economy.

In conclusion, the growth of fintech in India over the last five years has been impressive, driven by a combination of factors such as government initiatives, increasing smartphone and internet penetration, innovation, the rise of startups, and a supportive regulatory environment. It has revolutionized the Indian financial services industry, created jobs, and enabled the growth of the economy. With the emergence of new technologies, Fintech companies are well-positioned to further disrupt the financial services industry and continue to shape the future of the Indian economy. With the continued growth of the digital economy and the increasing adoption of technology, the fintech industry in India is poised for even greater success in the coming years.

Happy Diwali!

Here’s wishing a very happy Diwali to you and your family!

Deepavali, or Diwali, is a major Indian holiday, and a significant festival in Hinduism, Sikhism, Buddhism, and Jainism. Many legends are associated with Diwali. Today it is celebrated by Hindus, Jains and Sikhs across the globe as the "Festival of Lights," where the lights or lamps signify victory of good over the evil within every human being. Diwali is celebrated on the fifteenth day of the month Kartika.

In many parts of India, it is the homecoming of King Rama of Ayodhya after a 14-year exile in the forest, after he defeated the evil Ravana. The people of Ayodhya (the capital of his kingdom) welcomed Rama by lighting rows (avali) of lamps (deeva), thus its name: Deepavali. This word, in due course, became Diwali in Hindi. But, in South Indian languages, the word did not undergo any change, and hence the festival is called Deepavali in southern India. There are many different observances of the holiday across India.

In India, Diwali is now considered to be a national festival, and the aesthetic aspect of the festival is enjoyed by most Indians regardless of faith.

Back to the moon…

India, with its launch of the unmanned moon probe entered the race of return to the moon – earth’s only and somewhat abnormally large – natural satellite.

Abnormal? What is so abnormal about our moon – which has inspired different emotions in humankind throughout the ages – from awe, superstition to much more tender emotions such as love, etc. well, as it happens, the Moon happens to quite large as compared to its capital body around which is revolves, in fact it is the fifth largest natural satellite in the entire SOL’s (sun) Solar System. Take for example other large moons of the solar system such as Triton, Titan, IO, Europa, Cheron (what!!! – you didn’t know that Pluto had a moon too?) – They are all huge, but pale when compared to their “parent” body. In fact, Jupiter and Saturn are so big (full of gas) that their moons or satellites are very small indeed when compared to their own mass or size. The earth’s moon, in comparison, is very large indeed – in terms of diameter - a little more than a quarter that of the Earth. This means that the Moon's volume is about 2 percent that of Earth and the pull of gravity at its surface about 17 percent that of the Earth. In fact, in astronomy, it is found quite astonishing to have such a large body orbiting a relatively small core planet. Indeed, sometimes, from galactic perspective, Earth-Moon system is often referred to as the double-planet system.

By the middle of the 17th century, Galileo and other early astronomers made telescopic observations, noting an almost endless overlapping of craters. It has also been known for more than a century that the Moon is less dense than the Earth. Although a certain amount of information was ascertained about the Moon before the space age, this new era has revealed many secrets barely imaginable before that time. Current knowledge of the Moon is greater than for any other solar system object except Earth.

Various facts, especially the NASA photographs of Apollo missions are lucidly presented in this article by Rosanna L. Hamilton.

But really, how much do we know about our own galactic backyard?

The Moon makes a complete orbit around the Earth every 27.3 days (the orbital period), and the periodic variations in the geometry of the Earth–Moon–Sun system are responsible for the lunar phases that repeat every 29.5 days (the synodic period). The Moon is in synchronous rotation, meaning that it keeps nearly the same face turned towards the Earth at all times. Early in the Moon's history, its rotation slowed and became locked in this configuration as a result of frictional effects associated with tidal deformations caused by the Earth. The far side had never been seen by any human until the launch of moon probes in the last 1950’s.

You can see the Virtual Reality Moon Phase Pictures here.

The Moon is the only celestial body to which humans have travelled and upon which humans have landed. The first artificial object to escape Earth's gravity and pass near the Moon was the Soviet Union's Luna 1, the first artificial object to impact the lunar surface was Luna 2, and the first photographs of the normally occluded far side of the Moon were made by Luna 3, all in 1959. The first spacecraft to perform a successful lunar soft landing was Luna 9, and the first unmanned vehicle to orbit the Moon was Luna 10, both in 1966. The United States (U.S.) Apollo program achieved the only manned missions to date, resulting in six landings between 1969 and 1972. Human exploration of the Moon ceased with the conclusion of the Apollo program, although several countries have announced plans to send people or robotic spacecraft to the Moon – well – India and China are amongst the nations now raring to literally reach for the moon!

Okay, back to moon J

One distinguishing feature of the far side is its almost complete lack of maria. The dark and relatively featureless lunar plains which can clearly be seen with the naked eye are called maria (singular mare), Latin for seas, since they were believed by ancient astronomers to be filled with water. These are now known to be vast solidified pools of ancient basaltic lava. The majority of these lavas erupted or flowed into the depressions associated with impact basins that formed by the collisions of meteors and comets with the lunar surface. Maria are found almost exclusively on the near side of the Moon, with the far side having only a few scattered patches covering only about 2% of its surface compared with about 31% on the near side.

The lighter-colored regions of the Moon are called terrae, or more commonly just highlands, since they are higher than most maria. Several prominent mountain ranges on the near side are found along the periphery of the giant impact basins, many of which have been filled by mare basalt. These are believed to be the surviving remnants of the impact basin's outer rims. In contrast to the Earth, no major lunar mountains are believed to have formed as a result of tectonic events.

The Moon's surface shows obvious evidence of having been affected by impact cratering. Impact craters form when asteroids and comets collide with the lunar surface, and globally about half a million craters with diameters greater than 1 km can be found. Since impact craters accumulate at a nearly constant rate, the number of craters per unit area superposed on a geologic unit can be used to estimate the age of the surface (see crater counting). The lack of an atmosphere, weather and recent geological processes ensures that many of these craters have remained relatively well preserved in comparison to those found on Earth. The largest crater on the Moon, which also has the distinction of being one of the largest known craters in the Solar System, is the South Pole-Aitken basin. This impact basin is located on the far side, between the South Pole and equator, and is some 2,240 km in diameter and 13 km in depth.

Blanketed atop the Moon's crust is a highly comminuted (broken into ever smaller particles) and "impact gardened" surface layer called regolith. Since the regolith forms by impact processes, the regolith of older surfaces is generally thicker than for younger surfaces. In particular, it has been estimated that the regolith varies in thickness from about 3–5 m in the maria, and by about 10–20 m in the highlands. In other words, the soil is thick and slick…

But why the rush of back to moon, why now?

India launched Chandrayaan-1 - in a historic feat, on October 22, 2008 from the Satish Dhawan Space Centre in Sriharikota. The successful launch of India's maiden unmanned moon mission Chandrayaan-1 has catapulted the country into the league of a select group of nations. One of the prime reasons is national pride and then the other is the possibilities it affords. With the western economy in decline and ascendency of India and China in this century, it was only a matter of time before these two nations realized the importance of breaking the bounds of earth’s puny gravity well and soar beyond.

But beyond the political hype and all the aspirations of becoming a superpower, there is a much more practical aspect to race towards the moon.

The Moon holds several minerals and elements not found or manufactured easily on earth. Helium-3 for example. Then there are spin-off benefits from the technology that must be developed to reach moon. The sophistication and cost effectiveness of the journey outwards ultimately holds the key to cheap and profitable exploration of outer space.

India's love fest with deep space has only just begun. It could well become a force to reckon with giving the established space agencies a run for their money as the Indian moon mission is the cheapest till date of all moon missions in this century, but one also which creates a world record of carrying the largest suite of scientific instruments ever to be carried to the moon till date.

And frankly, I would want to see a difference from NASA – whose every mission has to cost a billion dollars and then explode either while leaving or entering earth’s gravity well. I’ve got nothing against NASA – bunch of great guys (lot of Indians there in fact if I heard it right), but everything they do - why DOES IT HAVE TO COST SO MUCH?

If the technology wasn’t ready to allow human exploration of space in a safe way, why send humans? Robotic vehicles can also operate with certain amount of efficiency and the money could have been better utilized in developing technologies which would have ultimately resulted in cheaper access to outer space.

And now NASA’s mantra has indeed become – faster, cheaper and better (FCB) – evident in the Mars probes.

In fact, if the price tag wasn’t so high, space exploration would have proceeded at a much quicker pace than what happened in the aftermath of Apollo missions.

We keep on saying that man has landed on the moon and we are not exploring our own cosmic backyard. But, without the intention of belittling our (humankind’s) achievements so far, what we have done till now is slingshot a few missions to moon (with humans in it), put a space station in orbit (with the ever present danger of it falling down on our heads – e.g. MIR) and sent some probes to near by planets. Voyager I & II and the pioneer missions were an exception. They were real value for their money because of the wealth of information that they afforded to humanity about the outer side of our solar system.
I would closely watch India and humanity’s collective progress of back to the moon, mars and then ultimately the solar system.