How Fintech is mining gold in the capitalist economy
One of the main prerogatives given by a capitalist system to its citizens is a continuous attempt to make life comfortable. A system rewarding inventive solutions to problems and making various aspects of life easier; capitalist economies have outlasted many tests of economic ideologies. In 2021, when experts debate on the chances of a capitalist economy to prosper in environmentally sustainable ways and the prospects of it affecting it, and an array of other concerns, let’s look at a finance-oriented capitalist trend, the fintech industry.
Fintech, also known as financial technologies, are tech-based startups and companies that automate the process of financial services. Fintech companies are designed to help companies, businesses, and individual consumers to better manage their financial transactions, operations, etc. In the age of mobile transactions, digital currency, and increased use of technology — Fintech companies have seen an increase in the capitalist world. This trend appears to be gaining more fruit in the capitalist economies, with growing competition and fintech companies opening doors for new services through their platforms. The growth in fintech shows a new capitalistic trend in financial services.
India’s fintech sector is estimated to grow by three times in the next five years. The valuation of the fintech sector is expected to reach 150- 160 Billion by 2025. India has over 2,100 fintech firms and over 60% of them have been established only in the last 5 years. The fintech industry in India is given incentives for growth by government initiatives like Jan Dhan Yojana, Aadhaar, and the emergence of UPI. Having huge youth demography in India is proving advantageous for fintech technologies to incorporate unique features.
Fintech is an industry that thrives in any system dependent on technology. However, a technologically abundant economy doesn’t guarantee the same prospects of fintech as in capitalistic economies. Fintech technologies have seen a better acceptance in economies where traditional financial services have been expensive. The adoption is also observed to be more viable where the competition among traditional service providers is minimal. Here, the profit-making capitalistic tendency of new tech-based companies creates a trajectory in competition. Coupled with the competition of a capitalistic environment are the ambiguous regulatory government policies that complement the growth of fintech.
With a rousing technological advancement in India, it has become the second-largest fintech industry in the world. Seeing a funding boom in the last five years, Fintech in India is getting its major contribution from fintech startups from ‘payment’ services. Fintech in India is increasing to include services like lending, wealth tech, personal finance, insurance tech, and others.
Fintechs growth is being complemented by the advent and adoption of other trends as well, this includes Blockchain technologies. The growth of blockchain technology is helping in building the growth of fintech. Blockchain’s features that eliminate the third party, reduce time and cost promise to be the revamping factors in the fintech industry. Cloud computing infrastructure has also allowed fintech industries to scale up with anonymous control while sticking with the regulatory frameworks. The magnanimous growth of Fintech could be perceived to only be increasing and with the advent of new technologies.