Fintech Space Sets High Expectations For Investment Financial technology companies may see additional investor interest this year after the government’s push to digital transactions post demonetization drive, says a report. #DigitalErra Thought Corner “With the demonetization effort that started in late 2016, there has been a big increase in the number of transactions managed by both payments companies and wallet providers. As this effort continues, we should see momentum growing for digital platforms and fintech solutions,” Neha Punater, Head of Fintech, KPMG in India said. According to KPMG, corporate interest in financial technology (fintech) is also expected to increase in India over the next year. Already, many of India’s banks and insurance companies have created innovation funds to invest in fintechs or set aside funds for collaboration. According to Law and IT Minister Ravi Shankar Prasad, digital transactions surged in the range of 400-1000% in a single month post demonetization. Demograhic Conditions Supporting Fintech Growth India has large population and a high adoption rate of new technologies, making it fertile ground for fintech companies looking to disrupt traditional players such as banks, insurance companies and credit card operators. Nearly two-fifths of India’s 1.27 billion people have no bank accounts and only 252 million have Internet access, is seen as a promising growth market for firms looking to leverage technology to connect financial services and products, particularly through mobile phones. “The rising number of people getting used to smartphones and new technologies in India will result in more funds flowing into the fintech solutions providers in the near-term at least,” said Harish HV, an India-based partner at advisory firm Grant Thornton. Recently, mobile payments services firm One97 Communications came in sixth among global fintech giants, underscoring the potential value investors place on such firms in the region. Asia Sees The Advent Of Fintech Revolution Investors poured a record $4.5 billion into financial start-ups in Asia last year, four times as much as the previous year, data shows, putting the region at the center of the global tech revolution poised to shake up the financial services industry. Total investments into peer-to-peer lenders, payment services companies and Internet insurers globally rose to $19.1 billion, 60 percent more than in 2014, data from KPMG and CB Insights showed. In Asia, investments rose at a much faster pace, led by mammoth funding rounds for fintech companies in China and India, and with billions of consumers in the region using their mobile phones for everything from buying insurance to paying for goods, the trend is expected to continue. China, where investments surged to $2.7 billion, attracted nearly three times the investments seen in Britain over the 2014-2015 periods, the data showed. Conclusion Different financial services industry trends have given rise to a host of new financial service products that are poised to change the way consumers deal with their banks. Since growth in India is quite high, one can naturally expect to see continued investment.