Page 33 - Banking Finance December 2022

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to the success of fintechs as the policy and guidelines are companies in this case help in the activities like customer
tweaked according to the changing times which resulted in onboarding through the KYC process, eligibility of the
their smooth and hassle-free establishment and customer for the loan, background screening, credit score
functioning.The approach of respective regulators like RBI, analysis and instant credit facilities. If we look at the above
IRDAI, SEBI, etc. providing sandbox environments and the processes, it is a combination of activities that involves
government promoting digital programs resulted in a various fintech sectors like LendingTech, InsurTech, RegTech,
favorable atmosphere for fintechs to establish and thrive. PayTech, etc.

What are the key sectors shaping LendingTech
Innovation in credit and ancillary services is the forte of
fintech?
LendingTech companies that use technologies to enable
Though the reasons for the rise of the fintech industry can
personalized, hassle-free, seamless and quick credit facilities
be multifold like an increase in connectivity, affordability, the
to their customers. Some of the bundled services include
demand of the new generation, etc., the contribution of the
credit scoring, customer verification, instant loans, etc. The
key sectors in shaping its present and future is unmissable.
huge gap in the supply and demand of credit facilities in
As of today, the Payments and BaaS sectors dominate the
small and medium business sectors is catered by these
fintech space in India and have a huge bucket of startups
LendingTechs by revolutionizing the way they envisage the
operating in these areas. The main reasons for this are the
products/ services. They use modern loan origination and
growing demand for digital and contactless payment
management systems, seamlessly connect to credit bureaus
methods and the requirement of simple and hassle-free
with alternate scoring mechanisms to ease the flow of credit
banking solutions.
to the unbanked segments of the Indian economy.
Examples include PineLabs, MoneyTap, ZestMoney,
Key Sectors
LendingKart, InCred, etc.
Banking as a Service (BaaS)
The term BaaS refers InsurTech
Fintech - Key Sectors
to providing banking
The success of fintech saw tech companies making inroads
services digitally and
into other sectors like insurance and providing customized
offering products/
and customer-centric insurance products online using
services by fintechs as
BaaS LendingTech cutting-edge technologies. The services include product
opposed to traditional
personalization, underwriting services, claims, etc.
players like banks. It
Examples include Acko, Policybazaar, Easypolicy, etc.
helps the third-party
InsurTech RegTech
distributors who wish
to provide banking
facilities to their
PayTech WealthTech
customers along with
selling a product or
service without
Crypto Security
charging any
premium. This will
help them achieve higher sales growth as the customer is
willing to purchase if a loan facility is provided along with
the sale.
For instance, when you are purchasing a costly electronic
item, during the checkout if a loan is offered with multiple
payment options like buy now pay later (BNPL), the chances
of customers going for the purchase are higher. The fintech

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