‘FINTECH WILL HELP UNLOCK BHARAT'

A new kind of financial institution, powered by technology, will have far-reaching implications for the overall economy

- Sashank Rishyasringa And Gaurav Hinduja

We tend to overestimate the effect of a technology in the short run and underestimate its effect in the long run,” wrote Roy Amara, the noted futurist. Fintech lending began to emerge in India around 2014, and soon mushroomed into a rapidly expanding ecosystem. Within the last five years, well-funded startups, banks, and big tech companies have all staked their claim to the fintech mantle with a plethora of products, partnerships, and apps. However, while this has created pivotal moments of innovation and disruption, some would also argue that the scale of fintech lending today is still small, relative to the overall market. Regulatory and infrastructure enablers remain a work in progress, and new-age risk and liquidity models are only now being truly tested by the economic slowdown.

These are valid observations. But what is missed is the extent to which the rise of fintech has catalysed broader changes in the economy. These are now beginning to accelerate. It was under similar conditions post the 2008 financial crisis, both in the US and in China, that fintech truly took off. We believe that India is poised at a similar inflection point, and here are five predictions of how that will unfold: