India becoming the hub for fin-tech start-ups

Pune: In June this year, UK-banking giant Barclays will operationalise its fintech innovation hub Rise in India. This will be the banks fifth centre across the globe to tap into the fintech start-up ecosystem.

According to a report by Nasscom, there are close to 400 companies in India focused on the fin-tech market globally. This is also attracting investor attention with almost $450 million being invested in fin-tech product startups in 2015. No wonder then, several fin-tech focused accelerators and incubators are being set up in India.

It is not just Barclays that is tapping into the Indian fintech start-up ecosystem. Several accelerators and incubators are being set up in India to nurture this talent. Some of these include, PayPal's StarTank, Bangaluru-bases Rainmatter, Yes Bank collaborating with T-Hub and others.

Nasscom predicts that the Indian fin-tech software market is estimated to cross $2 billion by 2020, representing a 2x growth. In total, there are around 200 fin-tech start-ups, almost 60% are focused on the payment processing segment.

With the banking industry always at the forefront of technology adoption, the need to tap into fin-tech start-ups also arises as they need to be fast at adopting these new changes. As Ian Buchanan, group chief information officer at Barclays, earlier said: "The banking industry has always been the first to face disruption from technology. With these centres, the intent is to connect with the startup eco-system so that problems that we need to solve can be shared. We feel that a lot of startups and smaller companies can come in and help accelerate this. I think they can be the change agents for us and our partner ecosystem."

Additionally, the global fin-tech industry is a $45 billion opportunity by 2020, growing at a compounded annual growth rate of 7.1%. Importantly, the Indian fin-tech industry too is expected to grow by 1.7x by 2020. At present, the total Indian fin-tech market is about $8 billion with fin-tech software market at $1.2 billion.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.