International expansion through South-East Asia, Fintech survey
The Indian FinTechs are at the precipice of significant value-creation of US$100 billion over the next five years, said Prateek Roongta, Managing Director and Partner, Boston Consulting Group India.
“To actualize this potential, the industry would require investments to the tune of US$20-25 billion till 2025. Consequently, the number of Indian FinTech Unicorns will more than double over the next few years,” Roongta said at the launch of a report ‘India FinTech: A US$100 billion Opportunity’.
The report, unveiled on 13 Mar 2021, is by FICCI and Boston Consulting Group (BCG). The report details the findings from the study that BCG and FICCI undertook to size the value-creation potential and identify imperatives for India’s FinTech growth.
The Indian FinTech industry has been growing at a fast clip. FinTech players are redefining the business models across different segments of financial services industry, helping improve service delivery and contributing to digital financial inclusion, according to FICCI Secretary General Dilip Chenoy at the launch of report.
“This is a clear area of focus for us in FICCI and through our multiple initiatives, we will continue to promote this industry both in India and abroad,” he said.
India’s dynamic FinTech industry has 2,100+ FinTechs of which 67% have been set up over the last five years alone. The total valuation of the industry is estimated at US$50-60 billion, he highlighted.
The industry’s growth has been undeterred by the pandemic, as it has seen the emergence of three new Unicorns and five new Soonicorns (US$500 million+ valuation) since Jan 2020.
The Fintech industry’s strong growth is due to India’s deep-rooted customer demand, diverse capital flows, strong tech talent and enabling policy frameworks. Over the next five years, India’s FinTech industry is expected to continue its strong upward trajectory, according to Chenoy.
“The landscape will be defined by FinTechs that pursue their strategic play with deep, relentless discipline,” believes Ruchin Goyal, Managing Director & Senior Partner, Boston Consulting Group India.
“Tomorrow’s FinTech winners are expected to ‘master the core’ – by innovating on product, user-experience or through deep-tech capabilities. India will also see the emergence of ecosystem orchestrators and multinational FinTechs, as it evolves into a global FinTech powerhouse,” stressed Goyal.
Among the themes covered in the report is the internationalization of Indian FinTechs. To develop a close understanding of the FinTech industry’s multinational ambitions, BCG and FICCI conducted the BCG-FICCI FinTech survey 2021.
The survey reveals that 39% of Indian FinTechs surveyed have presence outside India and 73% of FinTechs surveyed are actively considering international expansion opportunities.
South-East Asia was the most sought-after destination for international expansion, followed by North America. Several Indian FinTechs are well-positioned to establish a global footprint owing to their transplantable business models and proven track record of success.
To ensure that Indian FinTechs achieve their potential, all stakeholders – FinTechs, Financial Institutions and policymakers have a role to play. Imperatives for stakeholders have been identified in the report, said FICCI in a release. #fintech #investment #projects #economy #manufacturing #banking /fiinews.com
