The future of the Indian FinTech ecosystem is bright due to open innovation says new report from Startupbootcamp FinTech Mumbai in association with PwC
The FinTech ecosystem in India has evolved significantly since its emergence and has witnessed a shift from its traditionally competitive nature to a more collaborative one, where both startups and incumbents are looking for growth through partnerships.
Research conducted by Startupbootcamp FinTech Mumbai and PwC on the Indian FinTech ecosystem has found that the open innovation paradigm is increasingly been adopted by many traditional financial institutions, albeit in different ways and intensities:
- • Over 95% of financial services incumbents are seeking to explore FinTech partnerships through collaboration rather than competing with FinTech startups, realising it is a more effective digital innovation strategy;
- • • Many financial institutions have started investing directly in promising FinTech startups, supporting them to develop products which supplement their current offerings;
- There is also a growing trend of FinTech startups white-labelling their existing consumer facing solutions for banks and other financial institutions;
- • Partnerships with FinTech companies in India are expected to go up from 42% in 2016 to 95% this year on average.
Despite significant reductions in incoming global investments in the FinTech space, the India opportunity remains promising. At the end of the Mumbai FinTech program earlier this year, we announced several partnerships and pilots being undertaken by members of the cohort with leading Indian banks. India offers the largest unbanked or underbanked population, along with a strong technology and entrepreneurial ecosystem.
Adrian Johnson, Managing Director of Startupbootcamp FinTech Mumbai said: “The concept of open innovation has taken hold in the Indian Fintech ecosystem, and I only see it becoming more widely accepted in the coming years. Collaboration is the need of the hour for startups and corporates, and as digital transformation makes its way through the economy, we foresee increased collaboration between startups and corporates, as well as continued efforts from banks and other financial institutions to reduce friction at all customer touch points.”
The road ahead
The past year has seen an abundant amount of external influence on the financial sector besides the internal innovation carried out by startups and incumbent institutions. FinTech startups have made use of new technologies and disruptive approaches to come up with superior offerings. This trend is expected to continue for the coming years, with the number of outsiders continuously increasing. Research shows that the following trends should play a significant role in the coming years: digitisation of retail banking; SME lending and payments; wealth management; insurance; and corporate and investment banking.
Regulatory support, financial inclusion and demand for the digitisation of services in the industry are likely to boost investment in the area going forward and will rapidly increase the adoption of emerging technologies in the financial services industry.
Vivek Belgavi, Partner and India FinTech Leader at PwC added: “The FinTech revolution is being further encouraged by the initiatives of the government and regulatory bodies which are ready to go the extra mile to enable innovation in financial services a reality. This shows that India is on the verge of financial revolution. The total investment that the FinTech industry has witnessed in has boomed in 2015-17. There is still considerable momentum in the industry and we will continue to see this trend continuing hereafter.”
Download the full report here
Launched in 2014, Startupbootcamp FinTech is the leading global FinTech accelerator focused on innovation for the financial services industry. Based in London, Singapore, New York, Mumbai and Mexico City, each program is supported by a network of financial services partners, as well as an extensive mentor and alumni network from more than 30 countries across the globe. Startupbootcamp FinTech is part of the global award-winning Startupbootcamp, a network of industry focused start up accelerators.
Startupbootcamp FinTech is supported locally in India by ICICI Bank, RBL Bank, Capital First, ICICI Lombard, PwC and AZB & Partners.
Founded in 2010, Startupbootcamp is a global accelerator network with 20 programs in Amsterdam, Barcelona, Berlin, Cape Town, Chengdu, Dubai, Eindhoven, Istanbul, London, Mexico City, Miami, Mumbai, New York City, Rome, and Singapore, and a 3,000+ strong mentor and alumni network in more than 30 countries. More than 400 startups have been accelerated by Startupbootcamp worldwide, raised over €210 million, and achieved a combined valuation of more than €500 million. 80% of these startups are still active.
At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 157 countries with more than 223,000 people who are committed to delivering quality in assurance, advisory and tax services.