FinTech Research Global & Future of FinTech

ON FINTECH
REVOLUTION
RESEARCH

Executive Summary
The document briefs the FinTech Revolution describing the Fintech dynamics globally.
It includes suggestions and recommendations based on the latest trends and projections
done by various industry experts.
What’s included in the report?
➢ What is FinTech
➢ Segments in FinTech
➢ How is It Different from Traditional Banking
➢ SWOT Analysis
➢ Global Investment in FinTech with key players insights
➢ Top 5 global investment deals in Q1-2019
➢ Indian FinTech Growth (segment and location wise)
➢ Observed growth of Indian FinTech Industry
➢ Expert predictions of FinTech Globally
➢ FinTech’s Impact in Job Market
➢ Recommendations & predictions on Future of FinTech in India
➢ Top 10 trends in Indian FinTech Industry
➢ Suggestions to a Tech Search Firm based on Funding raised in different FinTech segments

FinTech is the short of Financial Technology
If you have checked your bank statement or
transferred and receive money online or even if
you ever paid using your phone then, you are
already a part of a Multi-Billion Dollar Industry
that’s changing economies around the globe.
What is FinTech?

Few Examples of FinTech in the Global Market
It comprises of various innovative products, technologies and Business models to make the overall financial transactions and user experience easy yet safe
Robo Advisory
Class of financial advisor
providing the financial/
investment advice with limited
human intervention
Helping people raise
money online for a cause
Digitally from crowd
Crowd Funding Platforms
Payment Wallets such as-
Applepay, PayPal, Google
Pay, Paytm etc.
Cashless Payments
Blocks consisting of list of
transactional records that are
linked using cryptography and
can’t be changed easily
Blockchain
Unregulated digital money
used in form of transaction
between members of specific
virtual community
Virtual Currencies
Asset Management
Digital Management of both
tangible or non-tangible
Wealth or investment related
assets

5
How isFinTechdifferentfrom TraditionalBanking?
Parameters Traditional Banks FinTech Products
PURPOSE
As regulated bodies the core goal is
management of risks involved with Lending
& Deposit or any transactions
FinTech products are ideally created to fill the gaps
between traditional banks & customers
experience
PERSONALISATION
Main focus is always on deposits,
credit/lending based on trust, credit scores
& security
Focuses on mobile functionality, accessibility,
agility, cloud computing and convenience
COMMUNICATION
PATTERN
Chatbots provides robotic experience
pushing customers away
Enhanced Customer Experience promulgates
faster transactions, 24x7 permanent access,
immediate consultation and security
POTENTIAL
COVERAGE
Physical distribution of traditional banks is
less which gives FinTech an uncanny
advantage over it
Market distribution of FinTech is higher due to
higher penetration of mobile phone connectivity.
e.g- In India mobile penetration is at 80% in
comparison to Banks’s 35% distribution
TAT LOAN
PROCESSING
Average time to process loan earlier- 28 days
Average time taken online- 1 day
Average Time taken to process loans- 5-10 mins

6
01
LENDING
Market place lending
and alternative
underwriting platforms
Different Segments in FinTech Industry in 2019
02
BLOCKCHAIN
Companies leveraging
blockchain technologies
for financial services
03
REGTECH
Audit, risks &
regulatory compliance
software
04
PERSONAL FINANCE
Tools to manage bills &
expense- personal or
credit accounts
05
PAYMENTS/BILLING
Payment processing, card
developers, & subscription
billing software
06
INSURANCE
Companies selling insurance
digitally or providing data
analytics reports to re-assurers
07
CAPITAL MARKETS
Sales & trading, analysis
and infrastructure tools for
financial institutions
08
WEALTH MANAGEMENT
Investment & wealth
management platforms
and analytical tools
09
MONEY TRANSFER
International money
transfer and tracking
software
10
MORTGAGE/REAL ESTATE
Digitized mortgage
lending and financial
platforms

- Easy market penetration
- Rapid Customer adaptability
- Application based self
explanatory services
Strength
-Credibility for bigger
transactions and lack of trust
-Early stage of adoption
- Need to market and spread
awareness
Weakness
- Easy lending, transferring &
payment process for wide sectors
- Cashless transactions to disrupt
monopoly of banks
- Ability to meet the personalized
need of Financial service in the
market
Opportunity
- Any Objections from
Government and regulatory
bodies
- Risk minimization offered by
regulatory bodies like banks
etc.
Threat
SWOTANALYSIS

8
Global Investment in FinTech Sector has
added up to nearly $500 Billion since 2010
Source- Accenture Research/ CB Insight, 2018

9
Source-Accenture Research/ CB Insight, 2018
GLOBAL FINTECH
FINANCING ACTIVITY
BY PRODUCTS-2018

10
$1.90 $2.50 $3.20
$4.80
$13.30
$21.20
$23.38
$27.48
R² = 0.9526
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
2010 2011 2012 2013 2014 2015 2016 2017
InBillionDollars
GLOBAL INVESTMENT GROWTH TILL 2017

11
Source-FinTech Report CB Insight, 2019=Q1
$21.20
$23.38
$27.48
$40.30
$6.30
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
2015 2016 2017 2018 2019-Q1
InBillionDollars->
GLOBAL INVESTMENT FUNDING HITS $6.3B in Q1-2019

12
$2,159 $2,203 $1,928
$2,612
$874
$2,595
$3,483
$3,120
$3,571
$3,492
$1,083
$942
$804
$803
$1,713
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
Q1-2018 Q2-2018 Q3-2018 Q4-2018 Q1-2019
MillionDollars->
Asia NorthAmerica Europe Africa Australia
Global Investment Growth Dynamics in till Q1-2019
EUROPE FOR THE FIRST TIME IN PAST 5 QUARTERS HAS PULLED AHEAD OF ASIA

41 FinTech unicorns valued at $154.1B
Source- CB Insight FinTech Report Q1, 2019

Top 5 Global Investment Deal in Q1-2019
Company Investment Investors Value Proposition
$500M
(Jan’19)
Greenoaks Capital
Management, First
Round Capital, Sequoia
Capita
Tech enabled health carrier
$300 (Jan’19)
Insight Venture Partners,
GIC, Greyhound
Capital
Digital “challenger bank” for retail
banking service allowing customer
to open accounts digitally
$250 (Mar’19)
Bessemer Venture Partners,
Generation Investment
Management, Lead Edge
Capital, T. Rowe Price, Tiger
Global Management, TCV
Restaurant Management System
$240 (Jan’19)
Fifth Wall Ventures,
Foundation Capital
Tech enable Insurance carrier
$200 (Mar’19)
Coatue Management,
Dragoneer, DST, Forerunner
Ventures, General Atlantic,
ICONIQ Capital, Menlo
Ventures
Digital-first “challenger bank” for
retail banking services that allows
customers to open accounts
remotely using just a mobile
application
Source- CB Insight FinTech Report Q1, 2019

INDIAN FINTECH GROWTH
INDIA IS WORLD’S 2ND BIGGEST
FINTECH HUB WITH 2,035 STARTUPS
Source- FintegrateReport_executiveSummary_v26, 2019

1600
1300
550
250
160
0
200
400
600
800
1000
1200
1400
1600
1800
US INDIA UK SINGAPORE GERMANY
Number of New FinTech Startups Founded (2015-2018)
In 2015–16, India had more number of new FinTech startups being
founded than any other country (except China*). Globally, the US and
India have been at par over the last four years in terms of new FinTech
startups founded in a particular year.

India’s Evolution as a Progressive FinTech Nation
PAYMENTS
375
LENDING
338
WEALTH TECH
(RETAIL) 303
INSURE TECH
108
PERSONAL
FINANCE 169
REG TECH
CYBERSECURITY 108
OTHERS
684
NUMBER OF FINTECH STARTUPS BY SEGMENTS

.
Mumbai and Bangalore lead the momentum in FinTech and together,
these cities represent 42% of the startup headquarters. Apart from
the top five FinTech destinations including Mumbai, Bangalore, New
Delhi, Gurugram, and Hyderabad, the rest of India accounts for 738
FinTech startups
119
New
Delhi
116
Gurugram
125
Hyderabad
432
Bengaluru
428
Mumbai
India FinTech Landscape:
A Breakdown of 2035 Startups
In the past couple of years, India’s economic and business
environment has shown great acceptance and potential for
a FinTech revolution. There is a huge top-down push from
the government for the adoption of digital payments. The
demonetization in November 2016 was the focal point
around which Paytm and other players gained prominence.
In the last few years, there have been several exciting
innovations in this space, such as UPI, Aadhaar for e-KYC,
BharatQR for QR-based payments, biometric payments
(AEPS), e-wallets by 50+ banks, payment banks & sound-
wave-based payments for rural engagements, and last-mile
connectivity.

PAYMENTS
375
Source-
FintegrateReport_executive
Summary_v26, 2019

PAYMENTS
375
LENDING
338

INSURE
TECH 108

INSURE
TECH 108
WEALTH TECH
303

Observed Growth of FinTech Services in INDIA
Source- Indiabriefingnews_uture-fintech-india-opportunities-challenges, 2019
Fintech service firms are currently redefining the way companies and
consumers conduct transactions on a daily basis.
This is why global investments into fintech ventures have been
increasing at record speed – tripling to US$ 12.2 billion in 2014 from
US$ 4.05 billion in 2013 and reaching US$ 19.1 billion in 2015.
In India, the scale has been much smaller but at similar growth rates –
investment in India’s fintech industry grew 282 percent between 2013
and 2014 and reached US$ 450 million in 2015.
While traditional banks (around 100) and NBFCs (around 1100) in
India use technology to simply calculate credit scores, fintech
ventures use machine learning algorithms and alternative data
points such as social media footprints, call records, shopping
histories, and payments to utility service providers to increase
efficiency and provide greater access to credit.
The turnaround time is also much faster for the approval and
disbursal of loans by fintech firms despite several banks (State
Bank of India, ICICI, HDFC, and Axis bank) digitizing and speeding
up these processes markedly.

Scope of FinTech Services in INDIA
• India has a large untapped market for financial service technology
startups – 40% of the population are currently not connected to banks
and 87% of payments are made in cash.
• With mobile phone penetration expected to increase to 85-90% in 2020
from 65-75% currently, and internet penetration steadily climbing, the
growth potential for fintech in India cannot be overstated.
• Moreover, by some estimates, as much as 90% of small businesses are not
linked to formal financial institutions.

WHAT EXPERTS PREDICT
FUTURE OF FINTECH 2019-25

Community banks & credit unions will never have the same resources as larger ones to create the Amazon-like
customer friendly experience. But there are a lot of new capabilities like open APIs and cloud-based delivery that they
can take advantage of to build digital experience in cost-effective ways
A progressive growth in AI & Machine Learning Demand
The technologies we’ll see much more are artificial intelligence and machine learning, which have clearer applications and
benefits. We’ll see AI dominate in the coming year not as a product itself, but as a crucial ingredient in back-end technology.
So while it won’t be recognizable by consumers, it will be pervasive.
Financial institutions and FinTechs will spend more time working on and launching better ways for consumers to have more
control of their cards and their personal information. Forget Me & New text-messaging tools for authorizing or
preauthorizing transactions, as well as authentication tools for validating users based on login and engagements will all
provide additional hurdles for fraudsters to navigate.
Data breaches won’t let up, but we will see crucial developments in authentication
and combating fraud
Consumers who are becoming more accustomed to spending money without reaching into their wallets. However,
while contactless payments will be huge in 2019, it won’t see wholesale adoption because of the cost to issuers.
While the big banks are being more aggressive in this space, other financial institutions will roll out contactless
technology as cards expire, instead of as a mass reissue.
Industry will move in the direction of contactless technology
Points and loyalty will become more of a currency
Future of FinTech
2019-25
Source-paymentsource.com_Fintech_Predictions, 2019
Smaller banks’ digital capability won’t reach that of the big banks, but open
banking and other disruptive technology will help narrow the gap
Strides are being made in the loyalty space that will allow people to redeem their rewards at a point of sale,
whether it’s saving money on gas or getting a free item at a retailer. On the back end, loyalty processors will spend
less time on marketing and recordkeeping and will shift their focus toward technologies augmented with real-time
settlement.

Applications Developers on latest technology
As sector is moving towards mobility & agility
Huge demand for Data Scientists skilled in AI
& Machine Learning, Data Mining and Big
Data engineers will be most highly paid
FINTECH’S EFFECT IN THE JOB MARKET
Based on the frustrating experience provided by
many Chatbots, hybrid Chatbots with human
intervention will be needed implying need of
more- Customer support staff, fintech style
With thousands of companies disrupting the banking & finance industry and changing the way we pay & borrow
money, some old jobs in the finance sector will be displaced with advance banking/investment jobs
Challenging UI/UX Jobs roles to make financial
technology SIMPLE and SMOOTH on mobile
applications
Product Managers, Business Analysts and
Cyber Security Analyst jobs will become more
popular
Sources- siliconrepublicjobs.com_Fintech_Jobroles_Predictions, 2019

NASSCOM predicts that India’s
fintech software market alone
could touch US$ 2.4 billion
by 2020, doubling on the
current rate of growth.
Future of FinTech in INDIA
Source- Indiabriefingnews_future-fintech-india-opportunities-challenges, 2019

Future of FinTech Services in INDIA
Services Predictions and companies/startups involved
Peer-to-Peer
(P2P) Lending
Companies use alternative credit models and data sources to provide consumers and businesses with faster and easier access to capital. P2P
lending allows online services to directly match lenders with borrowers who may be individuals or businesses.
Companies/Startups- Lendbox, Faircent, i2iFunding, Shiksha Financial, GyanDhan, and MarketFinance
Payment Companies allow both private individuals and businesses to accept payments over the web and on mobile without needing merchant
accounts. Transfers are made directly to the bank account linked to the payee in order to secure against fraud
Companies/Startups- Mobikwik, Paytm, and Oxigen Wallet
Remittance A few startup ventures, albeit registered abroad, are trying to address the gaps in remittance transactions (both inbound and outbound) as
the current process is cumbersome and expensive. These startups aim to disrupt the current monopoly held by firms like Western Union and
MoneyGram.
Companies/Startups- Instarem, FX, and Remitly
Personal Finance/
Retail Investment
Fintech companies are also growing around the need to provide customized financial information and services to individuals, that is, how to
save, manage, and invest one’s personal finances based on one’s specific needs.
Companies/Startups- FundsIndia.com, Scripbox, PolicyBazaar, and BankBazaar
Equity Funding Crowdfunding platforms that enable the funding of a project or business venture by raising funds from a large number of people. Such
internet-mediated platforms are gaining popularity across the world as access to venture capital is often difficult to secure. These services
are particularly targeted at the early stage of a businesses’ operation.
Companies/Startups- Ketto, Wishberry, and Start51
Cryptocurrency India being a more conservative market where cash transactions still dominate, usage of digital financial currency such as ‘bitcoin’ has not
seen much traction when compared to international markets
Companies/Startups- Unocoin, Coinsecure, and Zebpay

Miscellaneous FinTech Services in INDIA
Companies are offering a range of cloud technology solutions to improve accessing
financial products and increase efficiency in day to day business operations. The scope
of fintech is rapidly diversifying at both macro and micro levels, from providing online
accounting software to creating specialized digital platforms connecting buyers and
sellers in specific industries.
Examples include-
• Catalyst Labs in the agriculture sector
• AirtimeUp which provides village retailers the ability to perform mobile top ups
• ftcash that enables SMEs to offer payments and promotions to customers through a
mobile based platform
• Profitbooks (online accounting software designed for non-accountants)
• StoreKey, and HummingBill.

Top 10 Trends in Indian FinTech Industry’2019
1. Specialized players may help with offline on-boarding
Looking at the industry-wide impact, many FinTech's have turned to offline collection of documents to
keep their operations afloat. However, 2019 might well see an interesting trend with the evolution of
specialized players who support FinTech's by helping them onboard offline customers.
2. Payment ecosystem coming under the ambit of the RBI
Just a month into 2019, and the Reserve Bank of India’s intention to regulate the digital payments
space in the country is becoming increasingly clear. The apex bank has not just formed a digital
payments committee with former UIDAI Chairman Nandan Nilekani at the helm, but has also launched
an Ombudsman Scheme for Digital Transactions (OSDT) for redressal of complaints regarding digital
transactions.

3. The narrative around digital payments ‘WILL BE’ on offline
Analysts predict that payments as an industry has come of age, with players doubling their presence
in the offline space. Merchant discount rates (MDRs), a charge for facilitating digital transactions, is no
longer expected to be the cornerstone of conversation. Neither will it provide any competitive
advantage to a given form of payment. In September last year, the Payments Corporation of India
(PCI) had raised concerns over non-receipt of reimbursements relating to MDRs.
4. Voice and vernacular will be the next frontier
Indian payments startups’ major challenge is to grow the pie and focus their services on the next 500
million users. Manish Jain, Partner, Fintech, at KPMG, believes that voice and vernacular will be their
vehicle to do so.

5. In wealth management, savings products could be provided as
incentives
Last year, payment companies increasingly started morphing into financial service entities. Digital
payment majors Paytm and PhonePe stepped into wealth management last year. While Paytm
launched its direct mutual funds platform Paytm Money in September, Gurugram-based MobiKwik
chose to acquire startup Clearfunds for a faster release to market.
6. Lending will see small-ticket consolidations; some verticals may die
75 percent of Indian fintechs are either in lending or payments. In 2018, lending continued to be the
hottest sub-sector, mopping up half the equity funding invested in Indian fintech.However, the last
quarter of 2018 saw a liquidity crunch for lending startups due to IL&FS’s defaults. Still, one cannot
deny that there has been a ripple effect on smaller NBFCs or fintechs relying on just one capital
partner (or NBFC). The liquidity crunch is being perceived as a correction by the rapidly growing digital
lending industry.

7. SME financing will continue to be bigger than consumer, might even
birth a ‘unicorn’
Consumer and retail lending startups will find it difficult, but specialised SME lending startups will
continue to grow. The focus will shift towards creation of new-age financial instruments like credit
cards for corporates, automated bill discounting, treasury management, automated collateral
evaluation, specific event-based insurance, AI-based hedge funds, etc. These will see good growth.
8. Underwriting will get precise, lead to better products
Analysts also believe that lending will become more robust as a sector, owing to newer data sets and
underwriting principles that lenders will leverage. With GST and other initiatives in place, lenders will
be able to better access businesses before providing them loans.

9. AI and ML to become more mainstream
Analysts add that AI, along with facial recognition networks, will resolve the onboarding process in
backward areas, helping bring more individuals into the financial services arena. Today, the
onboarding process is more complex, and includes signing in with different user IDs and passwords.
This year, we might see AI-based digital identity solutions, which will simplify the experience further
for the user
10. Personal data protection bill will shake up things for FinTech's
2019 should also see a new data protection law being tabled in Parliament, a draft of which was
introduced last year. The Personal Data Protection Bill, 2018, states that a private entity must seek
user consent before collecting personal data. A user can also choose to remove consent at any point
while availing a service. This is expected to shake up the backend infrastructure of FinTech's, who will
have to really prove the value for receiving a user’s consent to use their personal data. This means
FinTech's will need to upgrade their infrastructure from a data privacy and client on-boarding
perspective. Vivek believes there is the possibility of an alternative credit bureau.

PolicyBazaar- $200M
Digit- $44M
InsureTech
ChargeBee- $18M
Niyo Solutions- $13.2M
B2BFinTech
QwikCilver- $10M
Sequretek- $3.7M
Others
Paytm - $356M
PineLabs- $125M
Payments
LendingKart- $87M
NeoGrowth- $47M
Lending
Top Two Recent Funding Raised In Each Fintech Segment
As a Tech Search Firm the focus should be majorly on the following players from different FinTech Segments

THANK YOU!
TELEPHONE
PREPARED BY-
SABA FATIMA
+91-9513026086
EMAIL
Saba.fatima20@gmail.com

FinTech Research Global & Future of FinTech

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