The use of embedded infrastructure is playing a significant role in changing the landscape of fintech in India. Embedded infrastructure refers to the integration of financial services into non-financial services and products such as e-commerce platforms, HR tech platforms, or an offline investment manager who wants to launch an online platform. The integration enables customer to access financial services seamlessly without leaving the platform they are already using.
With over 1.3 billion people and a rapidly growing digital economy, India presents a massive opportunity for fintech companies looking to offer innovative financial services to consumers.
Here are some ways embedded investing is changing the fintech landscape in India:
Enhanced accessibility
By integrating financial services into non-financial platforms or as an added on service in financial platforms, embedded finance is making it easier for individuals in India to access financial products and services. With embedded finance, people can now use all the financial services at one place.
Increased adoption of digital payments
The integration of payment gateways into e-commerce platforms and other non-financial services is facilitating the adoption of digital payments in India. Individuals can now make seamless digital transactions without the need to switch between different apps or platforms.
Improving barriers of entry for investing in India
Embedded investing is lowering the barriers of entry for investing in India. Individuals can now invest small amounts of money through their favorite apps or platforms, making investing more accessible to wider audience.
Improved user experience
Embedded finance is enhancing the user experience for individuals in India by providing a seamless and a convenient way to access financial services. The integration of financial services into non-financial platforms eliminates the need for individuals to download separate apps and provides a one-stop-shop for all their financial needs.
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Expansion of financial services and improved financial inclusion
Embedded finance is also expanding the availability of financial services in India. With embedded finance, individuals who were previously underserved or excluded from traditional banking services can now access financial products and services. Embedded finance is also improving financial inclusion in India by providing individuals with greater access to financial services.
New revenue streams for non-financial companies
By offering financial services alongside their core offerings, non-financial companies in India can generate new revenue streams while providing value-added services to their customers.
New business models
Embedded finance is enabling new business models to emerge. For example, companies can offer loans to customers to purchase products directly from their platforms, or they can provide insurance policies that are tailored to specific products or services, companies can also provide an option for investing by offering a wealth management product directly on their platforms for the unused credit.
Improved Credit Access
Embedded finance is also helping to improve credit access for small and medium-sized enterprises (SMEs) in India. With embedded finance, SMEs can now access credit products directly from the platforms they use to run their businesses, such as accounting software or e-commerce platforms. This is especially important in India, where access to credit for SMEs has traditionally been limited.
Increased Competition
Embedded finance is disrupting the traditional financial services industry by introducing non-financial players into the market. This has led to increased competition, forcing traditional players to innovate and improve their services to remain competitive.
Overall, embedded finance is transforming the fintech landscape in India by creating new opportunities for innovation and growth. As digital payments continue to increase in popularity and more consumers demand easy access to financial services, we can expect to see even more embedded finance offerings emerge in the years to come.
