How FinTechs are Revolutionising India’s Digital Financial Services Ecosystem

Today’s rapidly evolving digital landscape has significantly lowered the barriers to entry, making it easier for FinTechs like CredAble to enter and gain a competitive advantage in the financial services industry, Mr. Ashutosh Taparia, Chief Revenue Officer, CredAble, shares more insights on the same

Question 1: How is CredAble simplifying the new age supply chain financing solutions?

Founded in 2017, CredAble has an overarching vision to shape the future of supply chain financing. Our 360° solutions suite makes supply chain financing easily accessible to businesses in a tech-enabled format.

With our robust technology platforms, we are enabling businesses to step into new-age supply chain models. We help them move away from complex, linear models into ones that are driven by digital ecosystems and nimble networks.

Today, businesses are coping with the ramifications of global economic headwinds. At a time like this, CredAble has established itself as India’s single largest enabler of working capital. With a world-class working capital infrastructure, we are enabling more than USD 5 billion annually.

Over the years, we have carved out a space for ourselves on the world stage by taking up a global supply chain reinvention initiative and focusing on holistic financial inclusion. With 35+ strategic FI partnerships, CredAble is the bank’s exclusive technology partner for supply chain financing solutions. We cater to the needs of every participant in the supply chain ecosystem, right from the purchase order stage to the post-invoice acceptance stage. We have also designed a modular Banking-as-a-Service tech stack for banks to stay ahead of the curve with transformative solutions.

Question 2: What are some of the recent technology trends in supply chain finance?

Disruptions to supply chain finance will be constant with the current inflationary pressures. While banks have been dominating the space, FinTechs have now emerged to command a sizeable proportion of the value pool. Technology lets you take a more agile and intuitive approach to supply chain finance. Digitalisation and advanced technologies have the potential to reduce the cost of financing. Today, we see trends such as blockchain technologies, data analytics, machine learning, and artificial intelligence restructuring supply chain financing models. The fast-tracked adoption of these technologies has optimized working capital needs. Digitised credit underwriting mechanisms help expand the scope of financing. Distributed ledgers also promise groundbreaking advances in supply chain finance.

At CredAble, we understand that the true potential lies in the right combination of various technologies. We help businesses prioritize supply chain resilience with technology-based solutions. Our platform-based supply chain financing solutions push the frontiers of innovation and help businesses unlock their full potential. We leverage advanced analytics for better decision-making. We also deploy AI tools to be able to detect any intrusion threats in real time.

Technology and credit facilitators are now joining forces to offer a wide array of financing options. While disruptions will be constant, prioritising technology investments will be integral to remaining competitive.

Question 3: What are your views on the fintech & digital transformation in the BFSI ecosystem?

In the last decade, the financial industry has undergone a phenomenal transformation. I look at it as the big digital pivot in financial services. FinTech companies are rolling out innovative and personalized financial products. Recent reports state that the global FinTech market will reach $309 billion in revenue by 2023. By blending traditional expertise with new-age technologies, FinTechs are building a more inclusive and effective financial services system. They are outpacing the incumbents in driving the shift to a cashless society.

Digital transformation programs are rewiring the organisational DNA of banks and financial institutions. FinTechs have seized digital transformation initiatives and are revolutionising how financial services are structured and delivered. The expansion of the FinTech sector was a response to the technological shortcomings of the traditional BFSI industry. That said, in the quest to achieve market leadership, traditional financial institutions are strengthening their efforts to become holistically digital. Financial institutions have a lot to gain from the emergence of new-age BaaS offerings. With lower technological barriers, FinTechs have laid the foundation for future disruptions. Financial institutions now have the advantage to shop the FinTech landscape for new capabilities and deploy them with mutually beneficial partnership models.

Question 4: Thoughts on the digital lending vision for India?

India is currently experiencing a digital lending boom. The level of digital transformation in the lending sector has been unprecedented in recent times. The online loan market in the country is expected to grow four times in value to reach $1.3 trillion by 2030. A dynamic economy such as India progresses on the pillars of financial inclusion. FinTechs with new-age digital lending solutions are transforming loan origination and credit evaluation processes to build an inclusive financial ecosystem. FinTech digital lenders leverage pioneering technologies and alternative credit scoring mechanisms. This gives them a tremendous advantage over their traditional counterparts in catering to underserved segments of borrowers.

It’s safe to say that digital lenders have brought a paradigm shift in how credit is disbursed in the country. The burgeoning digital lending space in India is set to account for 60% of the total FinTech market in the country by 2030. Digital loan disbursements have more than doubled in recent months. The recent regulatory developments concerning digital lending will further help us achieve greater financial inclusion. India also has a unique digital lending ecosystem that can have a deep-rooted impact on the country’s socio-economic well-being in 2023 and beyond.

Question 5: Is bank-fintech collaboration reshaping India’s banking sector?

Client journeys are increasingly venturing outside the scope of the purely financial landscape. Success is predicated on the bank’s ability to rapidly deploy partnerships with disruptive FinTech companies.

We have come a long way, where competition between banks and new entrants is giving way to win-win collaborations. The rise of digital ecosystems and platform-based business models in the banking sector has led to evolving collaborations between banks and FinTechs. All this has resulted in India becoming a global pioneer in technological innovations in finance.

FinTechs see a greater opportunity in disaggregating the components of traditional banking systems and offering tailored solutions. For banks, drivers to partner with FinTechs span from their product design to technological capabilities. For FinTechs, the bank’s established client base, distribution, and infrastructure capabilities are the main drivers. Bank-FinTech collaborations have also led to the growth of the Banking-as-a-Service (BaaS) market. In recent times, we see the emergence of ‘plug and play’ platform collaboration models. This allows banks and FinTechs to explore partnership models without making large financial commitments while providing a seamless digital experience for the customer. The platform approach will further provide much-needed flexibility and diversification to India’s banking sector.