FinTech | Market Report

V10, 28thFebruary, 2018

Table of Contents
Executive Summary ................................................................................................................................................................................ 2

Global Taxonomy ................................................................................................................................................................................... 3

Introduction: ............................................................................................................................................................................................. 4

Investment Scenario: ........................................................................................................................................................................ 6

Segment / Application Wise Split of FinTech in India ............................................................................................................ 8

Industry – Segment wise Summary:............................................................................................................................................. 9

Sector Snapshots: ............................................................................................................................................................................26

Top Areas Attracting Investments in FinTech .........................................................................................................................27

Top 10 most funded startups in FinTech in India ..................................................................................................................28

Top 10 Active Investors in FinTech in India .............................................................................................................................30

Top most active FinTech investments in 2017 ........................................................................................................................31

Key Trends: ........................................................................................................................................................................................35

Enablers for FinTech in India ........................................................................................................................................................36

Upcoming Segments: ..........................................................................................................................................................................38

Alternative Lending:........................................................................................................................................................................38

Wealth Management .....................................................................................................................................................................42

InsurTech............................................................................................................................................................................................46

RegTech .............................................................................................................................................................................................52

Payments ................................................................................................................................................................................................56

Banking Technology ............................................................................................................................................................................60

Upcoming Tech:....................................................................................................................................................................................63

Government Measures: ......................................................................................................................................................................64

Future Outlook: ....................................................................................................................................................................................65

Bibliography ...........................................................................................................................................................................................67

1
 Executive Summary
Upcoming Segments & Technologies Fintech Sector in India
•Alternative Lending, Wealth Management, •India ranks 2nd in fintech adoption i.e. a
RegTech, InsurTech are segments with highest percentage of the digitally active population.
funding in India •Leverage Existing Data and Analytics, Improve
•Upcoming trends include: Customer Retention and Expand Products and
•Data Analytics, AI/ML and voice, Blockchain, Next Services are most promising FinTech
Gen Chatbots, Robotic Process Automation opportunities in India
•Lower SME segments, P2P lending
•Hybrid advice solutions for wealth management
& public market investing

Top Areas Attracting Investments in India

Future Outlook / Trends •Mobile Payments - ($2.9Bn) - 58% of totalFintech
•Indian FinTech space poised to grow to reach funding in India
an expected $2.4 billion by 2020 •Wallet - $2.6Bn
•Key Government measures impacting Fintech: - •Payments - ($756Mn) 15% of totalFintech funding in
India
UPI, BHIM, Adhaar, Smart Cities, Jan Dhan Yojna
•Gateway - $343Mn
•Better mobile tech and increasing digital •Processor - $148Mn
coverage to be key driver for growth of fintech •Lending ($894Mn) 18% of totalFintech funding in India
in India, leading to high demand and need for • Business Loans - $499Mn
fintech services / product •Enabler - $156Mn

Investment Scenario | India

•$ 5Bn invested in FinTech - India startups till date.
•# 2371 fintech players in India, 365 of them are
funded
•Top funded startups - Paytm, Billdesk,
Policybazaar, MobiKwik, etc.
•Most active investors - Sequoia Capital, Accel
Partners, Starupbootcamp, IDG Ventures etc.
•Annual returns on FinTech investment in India are
highest worldwide at 29 %

2
Global Taxonomy

$2.8Bn investment made in last 2 Years, out of which - investments in Lending and
Investment Tech segment has been the highest i.e. 23% and 3.25% respectively.

Lending:

 Horizontal Lending Platforms

 Business Loans
 Consumer Loans
 Enabler

Investment Tech:

 Public Market Investing

 Wealth Management
 Trading Platform
 Data Platform
 Advisory
 Private Market Investing

3
Introduction:
Meaning of Fintech: Organizations combining innovative business models and technology to
enable enhance and disrupt financial services.

The rapid increase of FinTech firms operating in the financial services industry, and the
corresponding venture capital and corporate investment in this sector, has attracted significant
attention from both industry observers and the media.

4
As shown below India ranks 2nd in adoption of rates across 20 markets i.e. a percentage of the
digitally active population.

5
Investment Scenario:

Global

Investment activity (VC, PE and M&A) in FinTech companies

India
"Annual returns on FinTech investment in India are highest worldwide at 29 %, compared to
Asia's average of 25 % and the global 20 % standard," the report, collated by Asia House, said.

6
“Leverage Existing Data and Analytics, Improve Customer Retention and Expand Products and
Services are most promising FinTech opportunities in India” as per shown below

In 2017, the total investment went up by 162% compared to 2016 in India

7
Segment / Application Wise Split of FinTech in India

FinTech
#2370 I $5Bn

Mobile Payments Payments

232 I $2.9Bn 179 I $756Mn

Lending Banking Tech

373 I $887Mn 178 I $155Mn

Insurance Tech Investment Tech

125 I $409Mn 442 I $100Mn

Software for Institutional Investors Consumer Finance

83 I $18Mn 270 I $59Mn

Enterprise Finance Crowdfunding

314 I $45Mn 105 I $4Mn

Cryptocurrency Forex
53 I $4Mn 14 I $5Mn

# Co.’s tracked | Total Funding $Mn

As shown above investment in Mobile Payments, Lending and Payments is highest i.e.58%, 18% and
15% respectively.

8
 Industry – Segment wise Summary:
#Funded
Funding
Segment Market Size Global Sub Segments Startups Key Trends / Future Outlook
India
in India
 Digital payments on the rise
Payments - Processor, Gateway, with mobile being key focus area
PoS Payment Processing,  Regulatory initiatives to be
Cash Collection, Cards, introduced for Cross-border
Mobile Mobile
Mobile Payments - Remittances, Wallets, payments domain
Payments Payments
$3,388 Bn (2022) Technology, Money Transfer,  Adoption of open APIs leading
Payments - 39 - $2.9Bn
Digital payments - B2B Payments, Service to paradigm shift in payments via
Payments Payments
$500 Bn (2020) Aggregator 3rd parties
- 36 - $738Mn
Mobile Payments – mPOS,  Threat of risk and fraud have
Wallet, Money Transfer, Direct made security and
Carrier Billing, Technology authentication top priorities for
payment firms

 Data Analytics, Machine

Learning and voice, Next Gen
Marketing Solutions, Regulatory
Chatbots
Compliance, Fraud & Risk
 Robotic Process Automation and
Management, Software
Banking Tech - 36 $155Mn Operationally Agile Institutions
Solutions, Banking Frontend,
 Smart Cities, Block Chains, Cyber
Technology Solutions, Financial
Security and Biometrics
Inclusion, Aggregation API
 Banks will Create In-house
Technology Team
 Favorable terms to Borrowers
also in the lower SME segments,
Horizontal Lending Platforms, P2P lending
Alternative
- Business Loans, Consumer 100 $854Mn  New products for specific
Lending
Loans, Enabler financing needs
 Increasing event risk (credit risk,
platform risks, cyber security)
 Application of Cognitive
Computing, Machine Learning,
and AI expansion
Robo Advisors -
Public Market Investing, Private  Robotic process automation,
$100 billion
Wealth Market Investing, Company Cyber security in WM firms
Asset and wealth 63 $118Mn
Management Data, Software for Institutional  Advent of hybrid advice solutions
management - $16
Investors  Next-gen genome-based
trillion (2025)
segmentation and increase
focused on traditionally
undeserved segments

9
 #Funded
Funding
Segment Market Size Global Sub Segments Startups Key Trends / Future Outlook
India
in India
 Automation and AI in Insurance,
underwriting algorithms and
more intelligence to reduce risk
on the insurer side
Internet-first Insurer, Insurance  Big Data and Analytics - Reduces
Aggregators, Analytics, Software the length of underwriting
InsurTech - 22 $409Mn
Solutions, Data Providers, cycles, spot claim settlement
Repository, Agents Aggregator  Blockchain - Automate claims
processing and fraud detection
 75% of non-life insurance
expected from online channels
by 2020
 Smart automation and near real-
time analytics capabilities
 Automate and enable the world
RegTech $118.7Bn (2020). - - -
of regulatory assessment and
control management

10
 #IPO,
#Cos. #Funded Total Notable
# Area Description Unicor
Tracked Cos. Funding Companies
ns

Companies that offer mobile based

Mobile MoneyOnMobil
1 => payment solutions to individuals and 232 40 $2.9B 2
Payments e
businesses

Companies that offer Point of Sale

1.A -> mPOS (PoS) for hand held devices such as 29 9 $300M Aasaanpay
mobile or a tablet providing app

Companies that offer instruments to MoneyOnMobil

1.B -> Wallet 108 17 $2.6B 2
store money in digital format e

Companies that offer prepaid wallets

Semi-Closed MoneyOnMobil
1.B.i which can be used only at partner 70 11 $2.6B 2
System e
stores

Companies that offer companies that

1.B.ii White Label offer white label prepaid mobile 8 1 $19M Transerv
wallets

Companies that allow users to pool

Group
1.B.iii money from a group and make 10 3 $368k MyPoolin
Payments
payments

Money Companies that allow users to

1.C -> 74 10 $13M Binge
Transfer transfer money to other users

11
 #IPO,
#Cos. #Funded Total Notable
# Area Description Unicor
Tracked Cos. Funding Companies
ns

Proximity Companies that allow users to

1.C.i 20 3 $3M ToneTag
Payments transfer money at point of sale

Companies that aggregate multiple

1.C.ii Aggregator payment instruments like Wallets, 10 2 $668k Ftcash
Cards, UPI, etc

Companies that allow users to pay

Direct Carrier
1.D -> for the product via their phone bills 7 2 NA QubeCell
Billing
and prepaid mobile balance

Companies that offer technology

1.E -> Technology solutions to mobile payment 13 2 $10M JusPay
companies

Companies that participate in

traditional web based and offline
2 => Payments 179 37 $756M Transcorp
payment cycle. Also includes
companies which...

Companies that receive the data sent

by payment gateways on behalf of
2.A -> Processor 6 3 $148M Venture Infotek
the acquiring bank, and settle
transactions...

Companies that capture consumer

payment instrument and transaction
2.B -> Gateway 73 16 $343M Citrus Pay
amount data online and pass them
to acquiring...

Companies that capture card-present

PoS Payment
2.C -> transaction data and pass them to 11 5 $71M Innoviti
Processing
the acquiring bank for authentication

12
 #IPO,
#Cos. #Funded Total Notable
# Area Description Unicor
Tracked Cos. Funding Companies
ns

Cash Companies that offer cash collection

2.D -> 2 1 NA Kyash
Collection services to businesses

Companies that offer alternate card

2.E -> Cards issuing and program management 23 2 $23M QwikCilver
services

Companies that provide cards which

Pre-Paid
2.E.i can be preloaded with cash and used 18 2 $23M QwikCilver
Cards
as debit cards

Companies that offer cross-border

2.F -> Remittances 17 3 $19M FxMart
money transfer services

Companies that offer a web based

2.G -> Wallets instrument to store currency in 2 0 $0 PayPortal
digital format

Companies that offer technology

2.H -> Technology 13 0 $0 1OMK
solutions to payments companies

Money Companies that offer a web-based

2.I -> 3 0 $0 1 Cashfer
Transfer platform for transferring money

B2B Companies that facilitate invoicing

2.J -> 4 1 $18M PayMate
Payments and related payments for businesses

Companies that operate network of

Services
2.K -> retail touch points which offer 20 6 $134M YTS
Aggregator
variety of payment services

13
 #IPO,
#Cos. #Funded Total Notable
# Area Description Unicor
Tracked Cos. Funding Companies
ns

Companies that enable individuals

3 => Lending 372 102 $894M ONEMi
and businesses to avail loans

Horizontal
Companies that offer loans to both
3.A -> Lending 20 6 $83M InCred Finance
individuals and businesses
Platforms

Companies that have a NBFC license

3.A.i Direct Lender and offer loans to both individuals 4 2 $81M InCred Finance
and businesses on their own books

Companies that partner with

B2C
3.A.ii financial institutions to offer loans to 10 3 $343k Capzest
Marketplace
both individuals and businesses

Companies that allow individuals to

P2P
3.A.iii offer loans to both individuals and 6 1 $1M BillionLoans
Maketplace
businesses

Companies that offer term loans and

Business
3.B -> working capital loans loans to small 71 20 $499M Credit Period
Loans
and medium businesses

Companies that offer working

Horizontal capital, term, equipment financial
3.B.i 22 7 $131M Capital Float
Platforms and other types of loans to
businesses

Companies that have an NBFC

license and offer working capital,
3.B.i.1 Direct Lender 6 5 $106M Capital Float
term, equipment financial and other
types...

Companies that partner with

B2C financial institutions to offer working
3.B.i.2 16 2 $24M Flexiloans
Marketplace capital, term and equipment
financial

14
 #IPO,
#Cos. #Funded Total Notable
# Area Description Unicor
Tracked Cos. Funding Companies
ns

Companies that offer fixed tenure

3.B.ii Term Loans 13 2 $3M CoinTribe
loans to businesses

Companies that offer working capital

Working
3.B.iii loans to businesses to meet their day 36 11 $366M Credit Period
Capital
to day cash requirements

Unsecured Companies that offer unsecured

3.B.iii.1 12 4 $213M Lendingkart
Loans working capital loans to businesses

Invoice Companies that offer loans to

3.B.iii.2 18 6 $11M Credit Period
Financing businesses against unpaid invoices

Merchant Companies that offer financing

3.B.iii.3 2 1 $142M NeoGrowth
Cash Advance against future sales of the business

Consumer Companies that offer loans to

3.C -> 166 55 $156M ONEMi
Loans individual borrowers

Companies that offer a wide range of

Horizontal lending products like personal loan,
3.C.i 1 1 $7M LoanTap
Platforms education loan, etc to individuals,
companies.

Personal Companies that offer unsecured

3.C.ii 90 25 $50M InstaPaisa
Loans personal loans to individuals

Companies that partner with

B2C financial institutions to offer
3.C.ii.1 17 7 $15M InstaPaisa
Marketplace unsecured personal loans to
individuals

15
 #IPO,
#Cos. #Funded Total Notable
# Area Description Unicor
Tracked Cos. Funding Companies
ns

Companies that allow individuals to

P2P
3.C.ii.2 offer unsecured personal loans to 59 12 $8M Faircent
Marketplace
individuals

Companies that extend a credit line

3.C.ii.3 Credit Line to users which users can access 7 3 $20M MoneyTap
when needed

Companies that offer unsecured

3.C.ii.4 Short Term personal loans to individuals for a 4 2 $7M CASHe
period of 60-90 days

Companies that offer gold backed

3.C.iii Gold Loans 2 1 $9M Rupeek
secured loans to individuals

Companies that partner with

B2C
3.C.iii.1 financial institutions to offer gold 2 1 $9M Rupeek
Marketplace
backed secured loans to individuals

Companies that offer loans for

Education
3.C.iv financing education and education 11 4 $4M Gyandhan
Loans
related activities

Purchase Companies that offer point of sale

3.C.v 27 14 $51M KrazyBee
Loans financing option to users

Companies that offer EMI-based

3.C.v.1 EMI based point of sale financing option to 15 9 $45M KrazyBee
users

Companies that allow users to make

3.3.C.v. Buy Now Pay
purchases now and make an interest 7 4 $5M Simpl
2 Later
free payment later

Companies that offer short term

3.C.vi Payday Loans 11 2 $26M EarlySalary
loans up to 30/60 days

Companies that allow individuals to

P2P
3.C.vi.1 offer short term loans up to 30/60 4 1 $4M Kadki
Marketplace
days to other individuals

16
 #IPO,
#Cos. #Funded Total Notable
# Area Description Unicor
Tracked Cos. Funding Companies
ns

Companies that have an NBFC

3.C.vi.2 Direct Lender license and offer short term loans up 2 1 $22M EarlySalary
to 30/60 days

Companies that partner with

B2C
3.C.vi.3 financial institutions to offer short 2 0 $0 Rupeelend
Marketplace
term loans up to 30/60 days

Companies that offer loans via

Employer
3.C.vii employers and collect repayments 4 1 $5M OptaCredit
Loans
from employee salaries

3.C.viii Home Loans Companies that offer home loans 3 1 $228k HomeCapital

Companies that offer auto loans to

3.C.ix Auto Loans 3 1 $500k CreditMate
individuals

Companies that offer healthcare

3.C.x Healthcare 5 2 $3M LetsMD
financing solutions to individuals

3.C3.C. Micro Companies that offer micro loans to

7 3 $2M Milaap
xi Finance individuals

17
 #IPO,
#Cos. #Funded Total Notable
# Area Description Unicor
Tracked Cos. Funding Companies
ns

Companies that provide allied

services like credit scoring, lead
3.D -> Enabler 111 21 $156M BankBazaar
generation, credit score
improvement, etc.

Companies that allow borrowers to

Loan
3.D.i compare loan quotes from multiple 86 15 $137M BankBazaar
Comparison
lenders

Companies that generate credit

Credit
3.D.ii scores of individuals or enterprises 7 2 $7M CreditVidya
Scoring
using alternative data

Companies that help users to

Credit Score
3.D.iii identify and solve problems in their 8 3 $12M CreditMantri
Improvement
credit scores

Loan Agents Companies that connect borrowers

3.D.iv 3 1 NA Cashcow
Marketplace to local loan agents

Companies that offer software

4.A => Banking Tech 178 36 $155M 4 IRIS
solutions to banks

Companies that offer card linked

Marketing
4.A.i marketing, loyalty, and marketing 10 5 $25M Loylty Rewardz
Solutions
analytics solutions to Banks

18
 #IPO,
#Cos. #Funded Total Notable
# Area Description Unicor
Tracked Cos. Funding Companies
ns

Regulatory Companies that enable Banks to

4.A.ii 31 7 $25M 1 Fintellix
Compliance comply with the regulations

Companies that enable banks to

4.A.ii.1 KYC perform Know Your Customer checks 18 4 $7M IDfy
while onboarding new customers

Companies that help Banks to keep a

Anti-Money
4.A.ii.2 track of Anti Money Laundering 3 0 $0 NextAngles
Laundering
activities

Companies that offer software to

Fraud & Risk
4.A.iii Banks to manage risk and reduce 15 4 $18M Uniphore
Management
frauds

Companies that offer software

Software
4.A.iv solutions that help banks to manage 71 8 $35M 3 3i Infotech
Solutions
their back-end operations

Companies that offer a wide range of

software solutions like core banking, Intellect Design
4.A.iv.1 Horizontal 17 3 $25M 2
loan management, account Arena
management

Companies that offer software

Loan
4.A.iv.2 solutions to lenders to manage 22 2 $8M Cloud Lending
Management
lending operations

19
 #IPO,
#Cos. #Funded Total Notable
# Area Description Unicor
Tracked Cos. Funding Companies
ns

Companies that enable banks to

Banking
4.A.v offer services through digital 17 5 $32M Comviva
Frontend
channels

Technology Companies that technology solutions

4.A.vi 6 1 $4M MRL Posnet
Solutions to banks to improve operations

Financial Companies that offer financial

4.A.vii 8 3 $7M A Little World
Inclusion inclusion solutions

Companies that offer APIs to banks

Aggregation
4.A.viii and fintech companies to access 1 1 $8M Perfios
API
customer's financial data

Companies offering insurance

Insurance
5.A => comparison services and software 125 23 $405M 1 HealthHiway
Tech
solutions to insurers

Companies that hold an insurer

Internet-first
5.A.i license and distribute their products 2 2 $85M Digit Insurance
Insurer
only via the internet

Companies with web-aggregator or

Insurance
5.A.ii direct broker license that allow users 62 10 $232M Auto Sense
Aggregators
to compare insurance quotes.

20
 #IPO,
#Cos. #Funded Total Notable
# Area Description Unicor
Tracked Cos. Funding Companies
ns

Companies that offer analytics

5.A.iii Analytics 2 0 $0 EigenRisk
solutions to insurers

Companies that offer software

Software
5.A.iv solutions to Insurers and insurance 24 4 $10M 1 HealthHiway
Solutions
agents to manage their operations

Companies that offer data which can

Data Skymet Weather
5.A.v be used by Insurers for better claims 12 5 $48M
Providers Services
and fraud management

CAMS Insurance
Companies that enable users to store
5.A.vi Repository 5 0 $0 Repository
their policies in digital format
Services

Companies that allow individuals to

Agents
5.A.vii locate and get in touch local 3 0 $0 PolicyTray
Aggregator
insurance agents

Investment Companies that enable retail

6.A => 442 57 $99M 6 Arihant Capital
Tech investors to invest in different assets

Public Market Companies that help users to invest

6.A.i 359 47 $76M 6 Arihant Capital
Investing in public markets

Companies that enable users can

Trading
6.A.i.1 trade various assets like stocks, 109 12 $5M 6 Arihant Capital
Platform
commodities, forex, etc.

Online Stock
6.A.i.1. Companies that enable individuals to
Trading 63 8 $4M 4 Arihant Capital
a trade in stock markets
Platform

6.A.i.1. Commodity Companies that offer an online

5 0 $0 Enrich
b Trading platform for commodity trading

6.A.i.1. Thematic Companies that allow users to invest

8 2 NA Smallcase
c Investing in stocks based on themes and ideas

21
 #IPO,
#Cos. #Funded Total Notable
# Area Description Unicor
Tracked Cos. Funding Companies
ns

Companies that allow users to

6.A.i.1. Virtual
practice trading in real market 7 0 $0 Moneypot.in
d Trading
situations using virtual currency

Companies that offer investment

6.B -> Data Platform data and analytics solutions to 56 5 $877k Stockal
individuals

Companies that offer fundamental

6.B.i Analytics 28 2 $577k Stockal
stock analytics to investors

Companies offering tech based

6.C -> Advisory portfolio management and 68 3 $406k Moneysights
investment alerts

Platforms that offer trading tips to

6.C.i.1 Trading Tips 40 0 $0 Aimprofits
individuals

Companies that offer content on

6.D -> Content savings, investment, and personal 33 4 $545k Amigobulls
finance management

Wealth Companies that offer wealth

6.E -> 87 23 $68M MyUniverse
Management management solutions to individuals

Mutual funds
Companies that allow users to invest
6.E.i.1 investment 18 4 $16k CashRich
in mutual funds
platforms

Companies that offer automated,

Robo
6.E.i.2 algorithm-based portfolio and 68 19 $69M MyUniverse
Advisors
wealth management services

Private
Companies that enable users to
6.F -> Market 40 7 $17M Tracxn
invest in private markets
Investing

Companies that enable users to

6.F.i Real Estate 8 3 $100k TheBuyerPower
invest in real estate

22
 #IPO,
#Cos. #Funded Total Notable
# Area Description Unicor
Tracked Cos. Funding Companies
ns

Companies that enable private

Secondary
6.F.ii market investors to participate in 4 0 $0 Lequity Capital
Market
secondary market transactions

Companies that enable private

6.F.iii Data Platform market investors to track the market 9 2 $11M Tracxn
trends and companies in the market

Company Companies that offer financial data

6.J 19 3 $6M VCCircle
Data on registered companies

Software for Companies that offer software

7.A => Institutional solutions to institutional investors to 83 7 $17M Cogencis
Investors manage their back-end operations

Companies that offer solutions to

Consumer
8.A => consumers to manage and monitor 269 24 $57M RupeeTalk
Finance
their financial health

Personal
Companies that help users track and
8.A.i Finance 209 20 $55M RupeeTalk
manage their finances
Mangement

Companies that help individuals to

8.A.i.1 Savings 20 6 $5M Affordplan
save money towards their goals

Companies that allow users to view

Expense
8.A.i.2 and manage their expenses and 56 3 $29M MoneyView
Management
personal finances

Companies that help users to file tax

8.A.i.3 Tax Filing 60 6 $17M Cleartax
returns

Financial Companies that offer financial

8.A.i.4 43 3 $4M Big Decisions
Planning planning services to individuals

Multiple Companies that offer quotes for

8.B -> Products various financial products like loans, 20 1 $2M Afinoz
Aggregator credit cards, insurance, mutual funds

23
 #IPO,
#Cos. #Funded Total Notable
# Area Description Unicor
Tracked Cos. Funding Companies
ns

Companies that offer software

Enterprise
9.A => solutions for automating functions of 314 17 $44M Hummingbill
Finance
finance and accounting department

Companies that provide financial

Accounting accounting related solutions such as
9.A.i 252 10 $29M Hummingbill
Tool bookkeeping, invoicing, tax, and
payroll Services

Invoice Companies that offer solutions to

9.A.i.1 86 2 $4M Spotdraft
Management manage and process invoices

Companies that offer employee

Expense
9.A.i.2 expense management software to 23 3 $18M Happay
Management
enterprises

Companies that offer solutions to

Subscription
9.A.i.3 manage the subscription billing 11 2 $6M Chargebee
Billing
processes

Companies that offer tools to

Compliance
9.B -> enterprises to comply to accounting 9 1 NA Adept XBRL
Tool
standards

Companies that offer compliance

and tax filing solutions related to
9.C -> Taxation 33 2 $1M GST Star
sales tax and other transactional
taxes

Employee
Companies that help enterprises to
9.D -> Benefits 6 2 $14M Niyo Solutions
manage employee benefits
Management

Crowd Companies that enable multiple

10.
=> individuals to fund/lend money to 105 13 $4M LetsVenture
A
funding different programs

10. Companies that allow users to fund

-> Equity 23 4 $1M LetsVenture
B startups in exchange for equity

24
 #IPO,
#Cos. #Funded Total Notable
# Area Description Unicor
Tracked Cos. Funding Companies
ns

10. Companies that enable users to

-> Donation 45 3 $500k Impact Guru
C donate money to various causes

Companies that allow users to

10.C.i Causes 21 3 $500k Impact Guru
donate money to social causes

Companies through which users get

10.
-> Rewards non-monetary perks in return for 20 5 $1M Wishberry
D
their contribution

Crypto Companies that offer solutions to

11.
=> buy, trade, invest, exchange and 53 6 $4M Coinsecure
A
currency mine digital currencies

Companies that offer digital wallets

11.A.i Wallet for storage and transfer of 3 1 $16k CCX India
cryptocurrencies

Alternative Companies that offer non-traditional Primechain

11.A.ii 5 0 $0
Currency decentralized currencies Technologies

Companies that enable users to

11.A.iii Bitcoin store, exchange, trade and mine 33 4 $4M Coinsecure
bitcoins

11.A.iii. Companies that help users trade

Exchange 19 2 $3M Unocoin
1 Bitcoins for other currencies

11.A.iii. Companies that offer digital wallets

Wallet 8 1 $1M ZebPay
2 for storage and transfer of Bitcoins

11.A.iii. Companies that provide hardware &

Mining 3 1 NA Bitmin
3 software solutions for Bitcoin Mining

12. Companies that offer forex quotes

=> Forex 14 3 $5M BookMyForex
A and offer currency delivery services

25
Sector Snapshots:
 Payments –
 80% of economic transactions in India still happen through cash, as
opposed to 21% for developed economies.
 Digital payments sector - To grow to USD 500 billion by 2020, up from
roughly USD 50 billion last year, and representing around 15% of GDP in
2020.
 Alternative Lending –
 The major contributors to the growth of this sector include unmet
demand for loans from MSMEs
 With a gap of roughly USD 200 billion in credit supply.

 Banking Technology:
 Includes software solutions, fraud and risk management suites,
regulatory compliance and other solutions.
 Artificial intelligence and machine learning have the potential to
revolutionize the customer experience in this.
 Insurance Tech:
 Internet-of-Things (IOT) enabled solutions are gaining popularity globally
within the InsurTech sector.
 Linking of health and wellness data –
 Help insurers predict consumer behavior better
 Increased revenues through smarter pricing strategies

26
Top Areas Attracting Investments in FinTech

#Cos. #Funded Notable

# Taxonomy Description Total Funding
Tracked Cos. Companies

Companies that offer

Mobile mobile based payment MoneyOnMobile,
1 229 39 $2.9Bn
Payments solutions to individuals FreeCharge
and businesses

Companies that
participate in traditional
web based and offline
payment cycle. Also
includes companies
Transcorp, GI
2 Payments which provide alternate 175 36 $738Mn
Technology
modes of payment,
companies which support
the payment companies
in terms of security,
analytics, platform, etc.
Companies that enable
Paisalo Digital,
3 Lending individuals and 367 98 $860Mn
ONEMi
businesses to avail loans

27
 Top 10 most funded startups in FinTech in India

Round
Total /Stage –
Segment Company Description HQ Year Funding Latest Investors
($Mn) amount
raised
Payments Paytm RBI-licensed semi- Noida 2010 2180 Series F Institutional Investors: SoftBank
/ Mobile closed pre-paid (May, Group, Media Tek, ICICI Bank,
Payments payment instrument 2017) – Alibaba Group, HDFC Bank, SAIF
app allows users to $1.4Bn Partners, Sapphire Ventures, Silicon
shop for both Valley Bank, Intel Capital
physical and digital Angel Investors: Ratan Tata
goods

Payments Billdesk Electronic payments Mumbai 2000 253 Series D Institutional Investors: General
/ and collections (Mar, Atlantic, Temasek, Claymore
Consumer services for banks, 2016) - Investments, Inc., TA Associates
finance businesses and other $150Mn Management, Clearstone Venture
institutions Partners, State Bank of India, SIDBI
Venture Capital, Bank of Baroda

Insurance Policy Online insurance Gurgaon 2008 164 Series E Institutional Investors: True North
Tech bazaar aggregator for (Oct, Co, IDG Ventures India, Temasek,
comparative analysis 2017) - Tiger Global Management, Premji
of products $76.6Mn Invest, Wellington Management, Info
Edge India, Inventus Capital Partners,
Steadview Capital, Ribbit Capital,
ABG Capital, Intel Capital
Angel Investors: Laksh Vaaman
Sehgal

Mobile MobiKwik Is a digital wallet Gurgaon 2009 162 Series D Institutional Investors: Bajaj Finserv,
Payments service (Aug, NET1, Brand Capital, Cisco
2017) - Investments, American Express, GMO
$35.2Mn Venture Partners, MediaTek, Sequoia
Capital, Tree Line Investment
Management, InnoVen Capital

28
 Round
Total /Stage –
Segment Company Description HQ Year Funding Latest Investors
($Mn) amount
raised

Lending Lendingkart Web platform that Ahmed- 2014 154 Series C Institutional Investors: Fullerton
enables SMBs to abad (Feb, Financial, Saama Capital, India
apply for collateral 2018) - Quotient, Mayfield, Bertelsmann
free working capital $87.8Mn India Investments, Sistema, FMO,
loans State Bank of India, IFMR Capital,
Capital First, Manappuram Finance,
Rhythm Ventures,
tatacapitalfinancialservices.com,
Kotak Mahindra Bank, Aditya Birla
Financial Services, YES BANK, Anicut
Capital, IFMR Trust,
Mobile Obopay Consumers and Bangalore 2005 145 Conventi Institutional Investors: Banque
Payments businesses purchase, onal Debt Atlantique, Nokia, Essar Global,
/ pay, and transfer (Oct, AllianceBernstein, ONSET Ventures,
Enterprise money through any 2017) - Redpoint Ventures, Olayan,
Finance mobile phone using $15Mn Citigroup, Qualcomm, Richmond
on its mobile app, by Global, Elephant Capital, Societe
text message, mobile Generale
Web, or
Obopay.com.
Payments Financial Offers a range of Chennai 1991 127 Series C Institutional Investors: Premji
/ Banking Software services for banks (Oct, Invest, Jacob Ballas Capital, New
Tech Systems and financial 2014) – Enterprise Associates, The Carlyle
institutions in the 57Mn Group
areas of electronic
payment, financial
transaction
processing solutions
Mobile FreeCharge Provides online Mumbai 2010 117 Series C Institutional Investors: Sequoia
Payments facility to recharge (Feb, Capital, Sofina, ruNet, Tybourne
any prepaid mobile 2015) Capital Management, Tandon Group,
phone, postpaid InnoVen Capital
mobile, DTH & data
card in India Acquired by: Axis Bank
Lending / BankBazaar Online financial Chennai 2008 110 Series D Institutional Investors: Institutional
Consumer product comparison (Oct, Investors: Experian, Amazon,
Finance platform 2017) – Sequoia Capital, Eight Roads
$30Mn Ventures, Walden International
Lending NeoGrowth Is a tech NBFC that Mumbai 2013 93.5 Series E Institutional Investors: LeapFrog
offers merchant cash (Jan, Investments, Aspada Investments,
advance to 2018) - Accion, Omidyar Network, Aspada
businesses $47Mn Investments, Khosla Impact, Accion,
India Infoline Asset Management,
ACTIAM, UTI Mutual Fund,
MicroVest, Symbiotics Group

29
Top 10 Active Investors in FinTech in India

Investor
Rank Investor Name Portfolio Portfolio Companies
Type
Numberz, Tracxn, Chillr, OneAssist,
MoneyTap, Clink, Comviva, FreeCharge,
Kredx, Gharpay, Hitachi Payment Services,
1 Sequoia Capital Institutional 24
Rupeek, Fintellix, Happay, Walnut, Tarang,
Cleartax, ZaakPay, Capital Float, Apnapaisa,
BankBazaar, Pine Labs, Citrus Pay, MobiKwik
Drip Capital, Tracxn, Acko, Probe
Information, Quiklo, Wibmo, Indifi, Rupeek,
2 Accel Partners Institutional 15 MoneyView, QwikCilver, LetsVenture,
MyPoolin, Scripbox, Coverfox, JusPay,
Chargebee
Gift Assets, Bitgram Technologies, Doboz,
Propelld, Cefy, RuPie, QuikkLoan, Mtrakr,
3 Startupbootcamp Institutional 15 Enterprise Bot, Expowealth, Zilra, Canopi,
CreditSeva, Sherelt, Connaizen,
ManageMyFortune
Vayana, Uniphore, Vayana Network,
CreditMantri, Active Intelligence, Trupay,
4 IDG Ventures India Institutional 12 EarlySalary, Fintellix, LetsVenture, Momoe,
Agile Financial Technologies, Policybazaar,
Heckyl Technologies
LotusPay, Cashfree, Drip Capital,
5 Y Combinator Institutional 10 SimpleMoney, Credy, Piggy, Groww,
RedCarpetUp, CashFree, Razorpay, Cleartax
IDfy, Chillr, Clink, SlicePay, Gharpay,
6 Blume Ventures Institutional 10 Turtlemint, Unocoin, Moneysights,
Instamojo, QubeCell
Numberz, Credifiable, Clink, LoanTap,
7 Kae Capital Institutional 9 Gharpay, Trupay, BankSmarts Solutions,
FortunePay, QubeCell
Citrus Pay, Tracxn, IDfy, Shubhloans, Fyle,
8 Beenext Institutional 8
Koinex, Property Share, Cube
Prime Venture Ezetap, Happay, Niyo Solutions, MoneyTap,
9 Institutional 8
Partners Tracxn, Kredx, Affordplan, SmartOwner
Ketto, Aureus Analytics, Wishberry, LetsMD,
10 LetsVenture Institutional 7
Hummingbill, QuikkLoan, Amigobulls

30
 Top most active FinTech investments in 2017
Round
Total /Stage –
Global
Segment Equivalent in India Description Funding Latest Investors
Company
($Mn) amount
raised
Alternative Revolut Open an on-premise 0.406 Seed – (Dec, Institutional Investors: ISME ACE
Banking / (London) (Bangalore) banking services 2017) – Angel Investors: Jitendra Gupta,
Lending platform for $0.156K Amrish Rau
businesses

Alternative Tala Cash Suvidha is a provider of micro 5.5 Conventiona -

Lending (Los Angeles) (Delhi) business loans to l Debt –
SMEs, entrepreneurs (Feb, 2018) -
and woman who do $2.5Mn
not have easy access
to traditional banking
services

RangDe is a non-profit - Seed – (Sep, -

(Bangalore) organisation that 2015) –
allows individuals to Undisclosed
lend money to
Indians from low
income households
that require a small
amount of money
(microloans) to start
or grow a business

MicroGraam is a P2P micro-loans 0.172 Seed – Institutional Investors: Artha

(Bangalore) lending marketplace (June, 2013) Venture Challenge, Villgro
platform. – $0.172K Innovations Foundation

Milap an online 1.35 Series A – Institutional Investors: Jungle

(Bangalore) microlending (Jul, 2013) - Ventures, Unitus Seed Fund,
platform that $1.1Mn LionRock Capital, Sangam
enables Indians, non- Ventures, Village Capital, Dasra,
Indians, NRIs to offer Khosla Impact
loans or donate to Angel Investors: Vijay Shekhar
communities and Sharma
individuals in India

31
 Round
Total /Stage –
Global
Segment Equivalent in India Description Funding Latest Investors
Company
($Mn) amount
raised
Alternative Funding TAB Capital is a digital NBFC 2.32 Conventiona Institutional Investors: Bank of
Lending / Circle (Pune) offering unsecured l Debt – India, Mas Financial Services,
Direct (London) business loans, (Oct, 2017) - Vijaya Bank, South Indian Bank
Lending / working capital, $1.23Mn Angel Investors: Anand Agarwal,
Commercial loans against Kavita Agarwal
Loans property, and
equipment purchase
loans to professional,
MSME, and services
sectors.

Loan Frame SME lending 2.25 Seed – (Jan, Institutional Investors: Vedanta
(Gurgaon) marketplace offering 2017) - Capital
secured and $2.25Mn Angel Investors: Toos Daruvala,
unsecured loans. William Campbell

SMEcorner an online platform 1.35 Angel – Institutional Investors:

(Mumbai) that enables SMEs to (May, 2017) Government of the Netherlands,
avail of loans from - $618K Accion
banks and NBFCs

Prest loans Offers short term, 0.570 Angel – -

(Delhi) long term loans, bill (Nov, 2017)
discounting and Agri - $570K
financing services to
businesses that have
completed at least
two years of
establishment.
InstaKash offering terms loans - Angel – -
(Bangalore) and line of credit to (June, 2015)
small businesses –
Undisclosed
Banking GoCardless Chargebee Offers subscription 6.17 Series B – Institutional Investors: Tiger
Tech / (London) (Chennai) billing solution for (Mar, 2015) Global Management, Accel
Payments online SMEs. - $5Mn Partners
Angel Investors: Girish
Mathrubootham
Indepay aims to product - - -
(Delhi) prepaid debit cards
to address under
banked customers

32
 Round
Total /Stage –
Global
Segment Equivalent in India Description Funding Latest Investors
Company
($Mn) amount
raised
Banking TransferWise Transcorp provides various - - -
Tech / (London) (Jaipur) financial services to
Mobile its customers such as
Payments inward remittance,
outward remittance,
domestic money
transfer,
investments,
insurances, tours and
travel bookings, and
more
Times of Money digital payments & - Acquire – Acquired by: Network
(Mumbai) remittances service (Nov, 2012) International
provider catering to -
retail & institutional Undisclosed
clients in India &
across the globe
Remitr allows users to 1 Seed – (Oct, Institutional Investors:
(Mumbai) transfer money to 2016) - SmartStartFund, Singapore Angel
other countries $1Mn Network, OperatorVC
Angel Investors: Pravin Gandhi,
Vijay Shekhar Sharma, Kunal Shah,
Sandeep Tandon, Vishal Gondal,
Japan Vyas, Yezdi Lashkari
RemitGuru offers money 0.464 Seed – Institutional Investors:
(Mumbai) transfer service to (May, 2017) CCAvenue, Infibeam
India across different - $464K
countries for
individuals and
businesses
Automation UiPath Datamatics Global a provider of 3 PE – (Jan, Institutional Investors: IL&FS
/ Robotic (Bucharest) Services consulting, IT, and 2004) - Investment Managers
Process (Mumbai) BPO services $3Mn

Textual Analytics is a SAAS firm that 0.250 Seed – (Jun, Institutional Investors: Mumbai
Solutions provides 2008) - Angels
(Bangalore) infrastructure for $250K
information
processing and
analysis.

33
 Round
Total /Stage –
Global
Segment Equivalent in India Description Funding Latest Investors
Company
($Mn) amount
raised
Fraud & Signifyd Thirdwatch provides an AI- 0.07 Seed – (Oct, Institutional Investors: Batlivala &
Risk (Palo Alto) (Gurgaon) enabled fraud 2017) - Karani Securities, Splice Capital,
Manageme prevention solution $70.2K Tholons Capital, Indian Angel
nt to protect e- Network, GrayCell Ventures
commerce sites from Angel Investors: Rahul Agarwalla,
abuse, monetary and Keshav Sanghi, Digvijay Singh,
reputation loss Ananda Kallugadde, Anjali
Malhotra Nanda, Ankit Agarwal,
Anuj Munot, Ashok Atluri, Gopal
Menon, Jyoti Sagar, K V Reddy,
Manoj Aheeray, Mohit Goyal,
Mridula Ramesh
Sentropi provides online 0.04 Seed – (Aug, Institutional Investors: Start-Up
(Ahmedabad) identification and 2013) - $40K Chile, Agiletree
fraud detection and
prevention solutions
using device
fingerprinting
technology and
tagging methods
Consumer Acorns Balance micro-savings app 0.233 Seed – Institutional Investors:
Finance (Irvine) (Bangalore) through which users (May, 2017) Rainmatter Technology
can save for a goal – $233K
Payment Raise Doboz an upcoming 0.016 Grant – (Jan, Institutional Investors:
cards / (Chicago) (Mumbai) platform to buy, 2016) – Startupbootcamp
Online resell, share & $16K
Gifting exchange gift cards

34
Key Trends:

FinTech Software Services market –

“Currently, more than 600 startups are in the field of lending, payments, insurance and trading
and the current financial technology software services market stands at USD 8 billion and this is
expected to grow to about USD 14 billion by 2020," Amitabh Kant said.

FinTech Software Product Market –

The Indian FinTech Software Product Market is estimated to grow 2 times by 2020

35
Enablers for FinTech in India

36
Readiness of Indian FinTech for takeoff:
The following table summarizes the current status of fintech in India.

 Considering factors influencing the demand and supply, we can say that the Indian market is
ready for the fintech wave.
 However, significant efforts need to be undertaken to strengthen the necessary enabling
environment for fintech to grow in India, primarily in the form of increasing financial literacy,
building on industry coordination and creating stronger links with academia.

Source: https://www.nathaninc.com/sites/default/files/Fintech%20in%20India.pdf

This provides a framework for identifying where are the key gaps in the Indian fintech
landscape, and the areas that could be supported to assist its growth.

Key Gaps that needed support:

 Demand Side –
 Financially literate population
 Support Function –
 Large and varied pool of capable investors
 Industry coordination and systems for collaboration
 Links to academia and cutting edge research

Conclusion:
 Regulatory support, financial inclusion and the digitalization 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.

37
Upcoming Segments:
Alternate Lending, Wealth Management, RegTech and InsurTech are poised for growth

Alternative Lending:
 Alternative lending is the second most funded and one of the fastest growing segments
in the Indian FinTech space
 Around 37% of GDP is contributed to by MSMEs but the supply of credit lines is
disproportionate
 The major contributors to the growth of this sector include a large amount of unmet
demand for loans from MSMEs, with a gap of roughly $200 billion in credit supply, and
a significant under-banked and new-to-bank population which lies at the heart of the
Indian FinTech opportunity

Funding Trend India ($)

38
 Lending Platforms and Enablers
 Growing industry for digital lending aimed at different borrowing needs,
including consumer loans, SME loans, working capital loans, and payday loans
among others.
 Industry primarily consists of digital lending platforms and enablers who
facilitate such platforms.
 These platforms connect lenders, seeking higher returns than banks currently
offer, with customers seeking fast, short-term loans.
 Alternative Lending Boom
 More than 225 alternative lending companies have been founded in India as of
2017.
 Underserved and Unserved
 These consumers broadly fall into the following categories:
 Consumers seeking to consolidate debt
 SMEs
 Students
 New-to-bank and underbanked consumers
 Direct lending
 Includes platforms that have a lending license
 Digitization of the involved sub-processes, such as verification and profiling,
has reduced costs and given the NBFCs an edge over banks
 P2P lending
 Involves building a marketplace to bring together individual borrowers and
lenders through tech-enabled platforms
 Allows borrowers to access low-cost quick loans at a rate they can afford
 India suffers from a lack of regulatory clarity, although the RBI has issued certain
papers on the topic to create industry consensus from a regulatory perspective
 Marketplaces and Comparison Platforms
 Connecting borrowers and lenders
 Digital platform reduces the loan processing time while matching the borrower
to the best fit lender
 Invoice trading
 Assists MSMEs that often struggle with working capital and cash flows due to
delayed payments
 FinTech companies are providing platforms to such MSMEs to sell their invoice
or other receivables at a discount for working capital
 Crowdfunding
 Entails raising external finance pooled from a large group of investors

39
  The investors can interact with the investees and view their ideas on a
crowdfunding platform.
 Credit scoring
 Many companies have taken up the role of enabler in the industry, using
alternative data sources to build credit scores of the 350 million credit invisible
people without a documented credit history
 Alternate data points used by such companies include social media, utility bills
payment, mobile payments history and psychometric analysis

40
Key Trends in Alternative Lending

Future Outlook
With regards to the Indian government’s goal of financial inclusion and the growth of
entrepreneurial ventures which are value accretive, alternative lending will definitely lend
support to extending the credit availability space. A PWC paper titled “Fintech Trends Report”
(2017) suggests that in FY 16-17, 4 out of 11 start-ups have successfully raised capital via the
alternative lending mode.

Conclusion
Predictive analytical skills will identify new lending opportunities and better risk pricing. The
emerging players will offer financing options to many innovative companies and consumers
that currently may not have access to competitive funding. Technology-driven lending solutions
will become main stream. A PWC paper titled “Fintech Trends Report” (2017) suggests that in
FY 16-17, 4 out of 11 start-ups have successfully raised capital via the alternative lending mode.

41
Wealth Management
Market Size:
 Currently an estimated $100 billion is managed worldwide by digital wealth
managers better known as robo advisors (source: TechFluence).
 Asset and wealth management industry manages approximately $60 trillion.
 However, the growth picture is very strong with realized annual rates of +50%.
 An expectation of a market size of 16 trillion dollars by 2025 according to Financial
Times.

42
Top 10 Trends in Wealth Management

Robo-advisory adoption –
 Robo advisors offer access to sophisticated planning and portfolio management tools
that were formerly available only to HNW investors.
 In addition, advanced analytics capabilities have become main stream and are
increasingly used to track investment results and align portfolio allocations against
planning goals.

 The key components of the evolving robo advisory platform include:

 Algorithm-driven investing: Algorithms built to control for risk appetite and cost
minimization, and lower the impact of discretion/emotion in decision-making.
 Low barrier of entry: Mass affluent investors generally do not have access to
human advisors. Can even the playing field given their lower fees.
 Low costs: Ranging from practically free to a fraction of the cost of professional
investment assistance.
 Customization: Customizable to specific preferences and principles-based
investments, and can work with various constraints.

43
  Greater fee transparency: Offer greater transparency into both the cost and
types of financial advice available.

Comparison of Offerings from Traditional Wealth Managers and Robo

Advisors

Untapped Potential for Expansion of Service

44
  Kotak Wealth Management report is based on a survey that was carried out between
July 2017 and September 2017. Its findings in the report show that almost 66% of the
respondents were unfamiliar with robo-advisory services.
 “Indian ultra HNIs still prefer traditional wealth management services, which allow them
to interact with their wealth managers,” the report noted.
 Out of 39 fintech companies (WM), 10 have announced receiving funding in robo
advisory domain.
 Lack of education, Lack of personal touch & Lack of reliable data creates a challenge for
Robo advisory.

Conclusion:
Despite these challenges, wealth management is an exciting space which is expected to
continue to evolve with new players and models expected to gain ground over the next few
years.

45
InsurTech
Market Size
 According to data from CB Insights, global InsurTech investment totalled US$1.7bn in
2016 (across 173 deals).
 One major factor is the actual (and potential) number of InsurTechs focusing on the
Internet of Things (IoT), which has a huge range of applications for the industry.
 There are already around 6.4 billion ‘connected things’ in use globally, with around 5.5
million devices being added every day.
 By 2020 the total number will likely exceed 21 billion, according to Gartner.
 According to the National Health Profile 2015, published by the Central Bureau of Health
Intelligence, less than 20% of Indians are covered under the most basic health
insurance.

Expected Market Sizes for InsurTech

Source: http://burnmark.com/wp-content/uploads/2016/11/Burnmark-Report-November-
2016.pdf

46
Funding Trend India ($)

Relevant technologies such as artificial intelligence, big data and analytics, blockchain can
have a major contribution to the insurance value chain by providing faster claims
settlements, easier onboarding, fraud control and other benefits.

Automation and AI in Insurance:

 Wide range of back-office functions can be automated allowing improving front-office
services
 Provide insurers with more advanced processing capabilities, as well as lower costs
through streamlined operations

47
Automation of Business Processes across the Value Chain

Big Data and Analytics:

 Reduces the length of underwriting cycles and the claims lifecycle by real-time quotes,
and aids on-the-spot claim settlement.
 Improve insurer’s profitability through better risk selection.

Big Data Analytics across Insurance Value Chain

48
Blockchain:
 Enable firms to automate claims processing and fraud detection.
 Decentralized databases will also ease the process of data sharing between firms.

Applications of Blockchain in Insurance

Focus

Underwriting Automation
Underwriting automation will become a significant field of innovation around both reducing
staffing and coping with the new amounts of data, with each business line requiring its proper
automation technology.

Reasons for exploring automated underwriting

 Support decision making analytics
 Eliminate underwriters
 Reduce time for underwriters to take decision
 Recommend final decision to underwriter

49
Micro - insurance
Micro – insurance model shifts the focus from long term insurance offerings to insurance of
small amounts for a particular time or miles count.

P2P insurance
 Use of peer networks where insurance groups, consisting of people with similar needs
and circumstances are formed.
 Insurance funds of the group are pooled together to cover minor claims, while a
separate insurer is called upon for major claims.

Facing disruption

50
Some Insurtech Partnerships with FinTech Companies

Conclusion
 75% of non-life insurance expected from online channels by 2020
 These technologies have the potential to bring better and more customized insurance
coverage to more people, including those in the lower income bracket, and bring
greater financial protection.
 While this transformation may happen more slowly than in other industries, staying
alert on latest developments and collaborating with InsurTechs to create a better value
proposition to clients will be the key to success.

51
RegTech

RegTech benefits

52
RegTech Ecosystem

RegTech Global Deal Share outside the US

Outside the US, the UK leads with 37% of deal share, India came in second with 10% of deals,
followed by Canada with 9%.

53
Trends

 Investors are betting on further automation

 AI eats the compliance office

 Risk Identification
 Compliance Intelligence
 Identity Management
 Background Screening

 Tech specific to regulation

54
 AND BREAKING THE BANKS’ MONOPOLY

Robo-Regulators

Conclusion
The future of financial regulatory compliance rests on smart automation and near real-time
analytics capabilities. RegTech has a very bright future, with a huge amount to opportunity for
those developing this type of technology to automate and enable the world of regulatory
assessment and control management, bringing clarity and control to an area of the business
that is so incredibly important, but so often cumbersome and time-consuming.

55
Payments
Mobile payment solutions, such as wallets, P2P transfer applications and mobile points of sale,
are enjoying strong user adoption, and heading towards one-stop-shop solutions in the future

Market Size

 Mobile Payments Market to Reach $3,388 Billion, Globally, by 2022 - Allied Market
Research.
 The digital payments sector in India is estimated to grow to USD 500 billion by 2020, up
from roughly USD 50 billion last year, and representing around 15% of GDP in 2020
 Payment companies are also heavily invested in blockchain technology, with 90%
planning to adopt it as part of an in production system by 2020
 Globally, credit card payments overtook cash payments for the first time in history, and
although digital payments accelerated in India as well
 It is estimated that 80% of economic transactions in India still happen through cash, as
opposed to around 21% for developed economies
 Overall, payment companies are confident in their ability to innovate and have high
expectations for returns, with an expected annual ROI of 21% on FinTech-related
projects

Consumer and Retail Payments

 Mobile Wallets: mobile wallets are like virtual bank accounts or credit cards that are
stored in consumers’ mobile phones and allow consumers to make payments via their
mobile phones.
 Mobile merchant payment solutions: allows merchants to accept payments in the form
or credit cards, debit cards or cheques from the customer’s mobile phone, making it
easier for merchants to run their businesses. Square and VeriFone’s PAYware mobile are
major players in this area.
 Digital currency solutions: digital currency is an alternative form of money, which exists
only in the virtual space and is not tangible. It is gaining acceptance as store of value as
well as for transferring value between individuals. Bitcoin is one of the most popular
digital currencies yet.
 Peer-peer (P2P) money transfers: this involves the transfer of value between individuals
or even institutions via mobile devices, using bank accounts or credit cards.

56
  Real time payments: these payments systems run in real time, instead of the batch
processing method of archaic payment systems. This technology reduces payment
processing time, so customer’s transactions can be settled faster, and businesses benefit
from increased availability of funds.
 Closed-loop solutions: closed-loop payments are when companies create their own
type of mobile payment system. It allows consumers to load money into a spending
account that is linked to a payment device. Mobile closed loop payments applications
work by adding the transactions amount to customers’ mobile bill.

Corporate Payments
 Bank Payment Hubs: BPH are centralized payments hubs, that enable banks to route all
of its electronic payments to a centralized hub for processing. It integrates various
elements of a banks payment infrastructure to enable better management and more
flexibility in payments processing.
 Supply chain finance: recent innovations aim to facilitate businesses as they strive to
establish relations with partners in the supply chain to create mutually beneficial
arrangements.

Mobile Payments Funding Trend India ($)

57
Payments (Excl. Mobile Payments) Funding Trend India ($)

Business Model Description

58
Top 10 Trends in Payments
Markets

1. Adoption of Digital Payments is on the rise with Instruments such as Wallets, Cards, and
Mobile Becoming Mainstream
2. Instant Payments are potential alternative to existing instruments while a Few
Challenges Still Exist

Regulatory and Industry Initiatives

3. Banks Need to Adopt a Transformational Approach to Address the Dynamics of

Regulatory Compliance Landscape
4. Regtechs and Regulatory Sandboxes Emerge as Key Themes in the Regulatory
Compliance Landscape
5. Implementation of Instant Payments and Basel-III Norms Could Trigger Changes in
Liquidity Management of Banks and Corporates
6. Technology and Regulatory Initiatives are Inducing Transformation in Cross – Border
Payments Domain

Stakeholder Strategies

7. Fintech activity in Corporates and Retail Domain can Disrupt payments analytics and
authentication
8. Adoption of open APIs is leading to paradigm shift in payments through Third-Party and
Industry initiatives
9. Increased threat of risk and fraud have made security and authentication top priorities
for payment firms
10. Transformation of Back-End payments systems is still high priority for firms to support
Front-End innovation

Conclusion
The payments sector is in the midst of rapid evolution, driven by a sharp uptick in innovation,
changing patterns in consumer consumption and a number of industry initiatives and shifts in
market conditions. Blockchain technology is presenting a very rare opportunity to address
current payment constraints.

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Banking Technology
 The ‘Banking Technology’ segment includes software solutions, fraud and risk
management suites, regulatory compliance and other solutions for banks and other
financial institutions (FIs)
 The transition of the Indian banking sector to a cashless society is creating many
opportunities for technology investment in digital payments infrastructure, according to
Gartner, Inc.
 IT spending by banking and securities firms in India will increase 11.7 % in 2017 to
reach $9.1 billion.

Top 10 Trends in Banking Technology

1. Data Analytics, Machine Learning and voice
 Banks will start meaningfully adopting machine learning tools and techniques to
draw insights from various data points employed to collect customer’s profile
and transaction behavior.
 Predict user needs and design better customer experience.
2. Next Gen Chatbots
 Predicts better quality of interactions with bots, likened to human interactions
and eventual transformation of bots to Personal Financial Assistants
 Helping customers in financial decision making.
3. Analytics of Things and Alternate Lending
 Increasing implementation of Big Data and Mobility Solutions by Banks, we
could see a new wave of Analytics of Things or AOT
 Help banks analyze customer interactions with various devices on IoT and
deploy this information to enhance customer experience and design better
lending opportunities.
4. Robotic Process Automation and Operationally Agile Institutions
 Operations of Banks would undergo automation
 Banks would move into agile architecture and cloud infrastructure in order to
shrink various project timelines and budgets resulting in faster go-to-market of
various payment solutions.
5. Open Banking and Fintech Partnerships
 API-integrations have made banking more open than ever
 Provides an enterprises a seamless banking experience
6. Digital Convergence of Fintechs, Ecommerce and Banks

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  We see a convergence of Fintechs, Banking and e-commerce companies aimed
at providing a one-stop solution to customers
 Increasing respective mindshare and wallet share
7. Smart Cities and Block Chains
 Implementation of Smart Cities could see heightened activity and 2018 could
herald interesting times for connected payments and IoT.
 NITI Aayog focusing on setting up IndiaChain, Banks could look for potential
participation on this platform
8. Cyber Security and Biometrics
 Digital India at the core of National Agenda, digital footprint of consumers will
grow at unprecedented levels
 Banks will going forward have a laser- focus on cyber security investments and
in implementing newer tools and techniques to defend possible threats
9. Impetus to Digital Acceptance
 Government policies around MDR would definitely incentivize small-size peer-
to-peer transfers and small merchant transactions
 Multiplier effect on acceptance of digital payment solutions
10. Banks will Create In-house Technology Teams
 Preliminary elimination process- case in point being the increased use of video
resume softwares for automatic screening of candidates by bots
 Help in identifying certain pre-defined characteristic matches from video
interviews submitted by candidates

Funding Trend India ($)

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Conclusion
Emerging technologies such as artificial intelligence and machine learning have the potential to
revolutionize the customer experience, especially at the ‘last mile’ by providing greater levels of
personalized service and greatly improving the back-office efficiencies at financial institutions.

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Upcoming Tech:
Artificial Intelligence, Machine Learning & Blockchain will be the Hottest Technologies to Watch

 AI use cases in Banking - Customer Acquisition, Customer Service, KYC and Onboarding,
Brand Management, Accounts and Loans & Risk and Credit.
 Blockchain – The potential use cases around the underlying architecture of blockchain,
i.e. Distributed Ledger Technology (‘DLT’), look promising.

Going forward, we expect to see 3 main applications of DLT that will develop in the Indian
market:

 Payments/fund transfer infrastructure

 Smart contracts
 Digital identity

Potential Blockchain use cases in Banking – Payment Infrastructure, Funds Transfer, Digital
Identies

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Government Measures:
 India Stack -
 An open-source set of APIs provided by the Unique Identification
Authority of India (UIDAI), presents an enormous opportunity for both
government and business to build innovative tech products enabling
frictionless payments and other banking services.
 Currently has 50 banks live on the platform and has seen growth from
92,000 transactions at the time of launch in August 2016 to 9.2 million
transactions in May 2017.
 Jan Dhan Yojana – Financial inclusion in the country has grown significantly due
to this.
 Startup India Program -
 Includes the simplification of regulatory processes
 Tax exemptions
 Patent reforms
 Mentorship opportunities
 Increased government funding.
 Aadhaar Adoption –
 Allow financial services companies to do e-KYC checks
 More economically, thereby reducing transaction costs for customers

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65
Future Outlook:
 Small merchants and Low Income Customers moving from cash to digital
transactions: With the push from Government, growth of digital transactions is
imminent and future will be an interesting period.

 Front end innovation to gain prominence with multi-lingual support and

localization of services using AI: Help in improving the financial literacy of
the unbanked and under-banked customers.

 ChatBots, Robotics and Artificial Intelligence to enhance the experience of

customers: In the times to come, we may find that customer service is largely
automated and available round the clock at the finger tips.

 Sophisticated Aadhaar based fingerprint, biometric and other authentication

technologies: multiple digital products hitting the market and too many
password based authentications, biometric authentication could be the way
forward.

 Predictive Analytics will result in a personalized experience for customers:

Analytics framework with robust algorithm and sophisticated predictions
will be important elements for designing the entire banking experience.

 Banks and FinTech startups will try to innovate BlockChain technologies to

increase efficiencies: Blockchain eliminates the need of a central intermediary
to do asset transfers. The advent of BlockChain technologies is expected to bring
more efficiency and bring down turnaround time in key banking functions.

 Smart Cities, Internet of Things & Cybersecurity: it is important that IoT as a

concept will become reality when it comes to payments, lending, investing.
IoT help financial institutions to learn more about the customer and interact
appropriately.

 Regulatory body for FinTech: There need to be guidelines and regulations set
for due diligence, data protection, cyber security and client protection.
Interaction of these will contribute greatly to the next leg of progression in
delivering financial services to consumers and organizations.

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Articles

1. http://www.livemint.com/Money/KJdvbHDq4LN5pWz8MswDRK/UltraHNIs-not-keen-on-
roboadvisors-report.html
2. https://www.nnip.com/Default-Display-on/Europe-2018-Four-key-trends-investors-can-benefit-
from-in-Alternative-Lending.htm
3. https://analyticsindiamag.com/exactly-regtech-trending-right-now/
4. http://fintechcircle.com/insights/wealthtech-market-standard/
5. https://gomedici.com/a-report-on-global-regtech-a-100-billion-opportunity-market-overview-
analysis-of-incumbents-and-startups/

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