Financial technology companies may see additional investor interest this year after the government’s push to digital transactions post demonetization drive, says a report.

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Fintech Space Sets High Expectations For
Investment
Financial technology companies may see additional
investor interest this year after the government’s push
to digital transactions post demonetization drive, says
a report.
#DigitalErra Thought Corner
“With the demonetization effort that started in late
2016, there has been a big increase in the number of
transactions managed by both payments companies

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and wallet providers. As this effort continues, we
should see momentum growing for digital platforms
and fintech solutions,” Neha Punater, Head of
Fintech, KPMG in India said.
According to KPMG, corporate interest in financial
technology (fintech) is also expected to increase in
India over the next year. Already, many of India’s
banks and insurance companies have created
innovation funds to invest in fintechs or set aside
funds for collaboration.
According to Law and IT Minister Ravi Shankar
Prasad, digital transactions surged in the range of
400-1000% in a single month post demonetization.
Demograhic Conditions Supporting Fintech
Growth
India has large population and a high adoption rate of
new technologies, making it fertile ground for fintech

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companies looking to disrupt traditional players such
as banks, insurance companies and credit card
operators.
Nearly two-fifths of India’s 1.27 billion people have
no bank accounts and only 252 million have Internet
access, is seen as a promising growth market for firms
looking to leverage technology to connect financial
services and products, particularly through mobile
phones.
“The rising number of people getting used to
smartphones and new technologies in India will result
in more funds flowing into the fintech solutions
providers in the near-term at least,” said Harish HV,
an India-based partner at advisory firm Grant
Thornton.
Recently, mobile payments services firm One97
Communications came in sixth among global fintech

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giants, underscoring the potential value investors
place on such firms in the region.
Asia Sees The Advent Of Fintech Revolution
Investors poured a record $4.5 billion into financial
start-ups in Asia last year, four times as much as the
previous year, data shows, putting the region at the
center of the global tech revolution poised to shake up
the financial services industry.
Total investments into peer-to-peer lenders, payment
services companies and Internet insurers globally rose
to $19.1 billion, 60 percent more than in 2014, data
from KPMG and CB Insights showed.
In Asia, investments rose at a much faster pace, led
by mammoth funding rounds for fintech companies in
China and India, and with billions of consumers in the
region using their mobile phones for everything from

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buying insurance to paying for goods, the trend is
expected to continue.
China, where investments surged to $2.7 billion,
attracted nearly three times the investments seen in
Britain over the 2014-2015 periods, the data showed.
Conclusion
Different financial services industry trends have
given rise to a host of new financial service
products that are poised to change the way
consumers deal with their banks. Since growth in
India is quite high, one can naturally expect to
see continued investment.