India is the second-most populous country in the world, with a rapidly growing economy. Its population is highly tech-savvy and has a high level of adoption of digital technologies. The Indian government has taken several initiatives to promote digital transactions and financial inclusion. These initiatives have been instrumental in the growth of fintech in India. Fintech, or financial technology, is transforming the financial sector worldwide. Fintech solutions have led to the creation of new business models, streamlined operations, and enhanced customer experience. India is no exception to this trend, as it has witnessed a significant growth in fintech in recent years. The fintech ecosystem in India is highly diverse, consisting of startups, technology companies, banks, and non-banking financial companies (NBFCs). There are various challenges faced by fintech companies in India, such as lack of access to capital, regulatory hurdles, and competition from established players. This chapter proposal aims to provide a basic literature review on the development of fintech in India.
Top1. Introduction
The term “FinTech” was first used in 1972 by a banker in New York. Foreign exchange, e-commerce lending, Payment methods, mobile applications, financing and money transfers, distributed databases, digital currency, robots and AI in finance, crowd-sourced funding, insurance, and financial management are just a few of the services provided by fintech firms. Different people define FinTech differently. As a result, the financial services industry has been significantly impacted by new technical advancements that enable innovation. Nine more technologies or technology-enabled trends were discovered in a recent Ernst & Young report titled Capital Markets: Innovations and the FinTech Landscape that have the potential to, individually or together, improve both present and future FinTech innovations:
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Digital Transformation
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Artificial Intelligence (AI)
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Cloud technology
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Smart Contracts
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Blockchain
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Internet of Things
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Process and service externalisation
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Robotic Process Automation (RPA)
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Advanced Analytics
The global use of fintech, or new financial technology, has skyrocketed (Vijai et al., 2020). When someone uses the term “FinTech” or “financial technology,” they are referring to a business that uses the most recent technical developments to offer better financial solutions to their clients via digital payments and transactions (Varga, D. 2017). Numerous firms have recently joined the Indian fintech sector. With each new company, the sector has grown tremendously and is becoming more well-known worldwide. These 20 Indian fintech companies are among the 250 most promising ones worldwide. According to the most recent CB Insights study, startups (Rajeswari et al.; C., 2021) plus many other services available on a similar basis, like BHIM, digital banks, and many others. Which demonstrates the significance of both money and technology in our modern lives? (Pal et. al. 2018)
Coins and paper money were among the earliest financial instruments used in analogue technology. Fintech is commonly regarded as having origins in the 1867 installation of the transatlantic cable linking London, Paris, and New York to exchange telegraphic messages. Later, London was connected to Shanghai and Hong Kong and then to all other markets worldwide. To connect individuals, media, authorities, organisations, and financial markets worldwide, a sizable infrastructure was also being established at this time (Arner et al., 2016).
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Finance 2.0 (1967–2008)
Texas Instruments introduced the first handheld calculator in 1967, the same year Barclay's Bank installed the first ATM in London. They were both significant developments that ushered in the second fintech age. During this period of digitisation, the use of calculators, computers, and ATMs marked the beginning of the shift from the analogue world of paper to the digital one. Payment systems like SWIFT developed between 1960 and 1970, laying the groundwork for extensive online transactions. With the launch of the initial electronic stock exchange, NASDAQ, the stock market strived towards digitisation in 1971. The majority of banks in wealthy nations switched from manual to computerised systems around the beginning of the 1980s. The evolution of internet technology from email to online commerce services (Arner et al., 2017). There were three noteworthy market crashes between those two occurrences: the Black Monday stock market disaster in 1987 and the 2000 implosion of the dot-com boom. Due to defaults on subprime real estate financing, the dot com bubble burst in 1999, and the global financial system collapsed in 2008, SIDTM Journal Volume 13 Issue 1 September 2020 Telecom Business Review. Every time a catastrophe like this occurred, new laws and regulations were implemented.
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Fintech 3.0 (since 2008)