Traditional banks in India are facing stiff competition from new fintech concepts. Danish Siddiqui/Reuters
Traditional banks in India are facing stiff competition from new fintech concepts. Danish Siddiqui/Reuters

India's fintech expansion a threat to traditional banks



The financial technology (Fintech) sector is rapidly expanding in India, which could pose a potential threat to retail banks.

There have been a wave of start ups in India in the Fintech space aiming to capitalise on the country's growing economy, rising incomes and gaps in the market, such as a large unbanked population.

One of many such companies, LoanTap, based in Mumbai, which launched last year, is completely online and specifically targets salaried professionals with loan products that are customised using minimal human interface behind its algorithms.

“We felt a constant need for credit solutions in the upwardly mobile salaried segment for acquiring assets or for personal consumption,” LoanTap's founders Satyam Kumar and former tech professional Vikas Kumar said in a statement. The company says it is using technology to target millennials.

A report released last month by Tata Consultancy Services and Clayton Christensen Institute for Disruptive Innovation, said that new entrants posed “a competitive threat to banks” but that if banks “are incentivised to adopt these solutions, rather than ignore them, disruption could be less of a factor”.

“The consumer lending space is where we see the most significant threat today, with the current wave of innovation and new entrant competition having the most impact”, said Aroop Gupta, the co-author of the report.

Indian banks are also pushing to make use of the latest technology.

For example, India's fourth biggest private sector bank Yes Bank, recently announced it is using digital technology and an artificial intelligence backed chatbot for retail loans to reduce the time it takes to issue a loan and save costs for the company through automation.

Veerchand Bothra, the chief innovation officer at Netcore Solutions, a marketing technology company, said the use of data analytics was helping banks to “position themselves as a financial supermarket”, so they can “upsell their various products”.

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How Filipinos in the UAE invest

A recent survey of 10,000 Filipino expatriates in the UAE found that 82 per cent have plans to invest, primarily in property. This is significantly higher than the 2014 poll showing only two out of 10 Filipinos planned to invest.

Fifty-five percent said they plan to invest in property, according to the poll conducted by the New Perspective Media Group, organiser of the Philippine Property and Investment Exhibition. Acquiring a franchised business or starting up a small business was preferred by 25 per cent and 15 per cent said they will invest in mutual funds. The rest said they are keen to invest in insurance (3 per cent) and gold (2 per cent).

Of the 5,500 respondents who preferred property as their primary investment, 54 per cent said they plan to make the purchase within the next year. Manila was the top location, preferred by 53 per cent.

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Name: Almnssa
Started: August 2020
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Based: Gaza
Sectors: Internet, e-commerce
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Name: HyperSpace
 
Started: 2020
 
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
 
Based: Dubai, UAE
 
Sector: Entertainment 
 
Number of staff: 210 
 
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
 
 
 
 
 
 
 
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This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home. 

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