‘Make the pie bigger’ is philosophical line that aptly suits any discussion about collaborations, and when it comes to FinTech in India, a subcontinent that doesn’t fit a homogeneous cohort, collaboration is the only way to participate and thrive in India’s exponentially growing FinTech and digital economy movement.
Government is collaborating with startups (BHIM and Uber), startups are collaborating with banks (mSwpie), banks are collaborating with accelerators (Axis bank Thought Factory), accelerators are collaborating with BFSI industry players in general (Fintegrate Zone 2018). The circle of collaboration in FinTech has always been a full 360 degrees; but the speed at which digital is seeping into people’s lives, collaboration is a cornerstone for FinTech players to innovate and avoid a ‘Kodak’ moment. Here are some scenarios where collaboration is driving growth and innovation in FinTech.
Collaboration for better digital inclusion.
Banks need to look further than the conventional indicators to underwrite credit risk, something they have relied upon for decades. The informal sector is a huge chunk of people who are still not technically ‘eligible’ for a bank loan; this exclusion is bad for the economy. But tech savvy startups like Flexiloans and India Lends are using technology to underwrite credit worthiness and redefining lending in alternative space. Banks can sure collaborate to have better financial inclusion.
Collaboration for concentric expansions.
Peer to peer lending (P2P) is one of the hottest area of FinTech, and conventional business conglomerates are yet to warm up to the idea as much as startups have. With RBI regulating the NBFC space including laying bare the directions and norms for P2P lending, the market is poised to grow upto $5bn by 2023. Other NBFC and BFSI players collaborating with existing startups may grow the space and bring in more excitement to the space.
Collaborating with startups for innovation.
ICICI Bank is partnering with Stellar, a blockchain startup, to build blockchain-enabled payments network. Stellar provides ICICI Bank with an open-source online ledger, or blockchain, designed to oversee the movement of money. ICICI Bank customers in India and abroad can transfer money through a free mobile wallet over Stellar’s platform
Collaboration with ecosystem for building a better tomorrow.
Banks like Axis and Barclays India has committed to innovations in FinTech by partnering with not just a few, but with entire startup and tech ecosystem. Axis run ‘Thought Factory’ and Barclays run ‘Rise’ program are long term initiatives to have continuous, seamless, and ongoing dialogue with FinTech startups, accelerators and industry experts to internalise the way they innovate.
From Design sprints to Hackathons, the Goliaths are leaving no stone unturned to stay in the game with Davids.
Collaboration for service quality
The way customers interact with financial institutions is also changing. The millennials prefer chatbots to actual human interaction. Collaboration also helps to transform traditional services into new avatars of delivery. MetLife is collaborating with Imaginate, a virtual reality and augmented reality software developer based in Hyderabad, to create a unique customer journey for insurance policyholders throughout India. The FinTech allows MetLife customers to immerse themselves in a virtual branch where they can engage with agents digitally to have questions answered and submit claims; similarly, Bajaj Insurance partnered with Amazon Alexa and customers can get all their insurance policy related questions answered with just voice.
All the verticals of finance and banking need collaboration. It is crucial to create a sustainable foundation for the superstructure of digitisation in finance.
Join us at fintegrate.zone to witness the movers and shakers of FinTech collaborating under one roof. <link>