India’s fintech landscape is undergoing a transformation, driven by innovative companies leveraging artificial intelligence (AI) and blockchain technology. These fintechs are not just creating products; they are addressing the needs of underserved customer segments and unearthing hidden revenue opportunities. This evolution is reshaping how millions access financial services.
The Power of Fintech in India
Let’s dive into the stories of individuals like Sarika Shetty, who faced barriers in achieving her dream of homeownership. After being denied a loan due to a lack of consideration for her rental history, Shetty was inspired to start RentenPe, India’s first rental score system. Her journey highlights the gaps in traditional financial systems and the opportunities fintech can exploit.
Addressing the Rental Market Blind Spot
In India, nearly 50% of the population is under 40, with many young professionals moving to major cities and spending up to 30% of their income on rent. Yet, these significant payments often go unrecognised by banks.
- RentenPe uses AI, machine learning (ML), and natural language processing (NLP) to convert rental payment data into credit scores.
- This innovative approach not only helps renters but also provides banks with reliable data to assess creditworthiness.
Transforming Financial Metrics
By utilising algorithms that align with global credit rating standards, RentenPe offers a much-needed solution. This empowers renters and unlocks access to credit, which is vital for purchasing homes or investing in other financial products.
Revolutionising Trading with AI
Another player in the fintech space, Angel One, is leveraging AI to enhance trading experiences. The company’s ARQ Prime platform is changing how trades are executed and portfolios are managed.
Smart Trading Strategies
- Angel One’s platform uses a rule-based recommendation engine that scans various stock categories.
- By employing “smart beta” principles, it strategically enters and exits markets, minimising losses and maximising profits.
Deepak Chandani, the Chief Data Officer at Angel One, explained how AI reduces human biases and improves trading outcomes.
The Rise of Decentralised Finance (DeFi)
The DeFi space is also experiencing significant innovations. CIFDAQ, led by Himanshu Maradiya, showcases how AI can unlock new revenue opportunities in blockchain.
AI in DeFi
- AI-powered predictive trading models optimise tokenomics and conduct rapid market analyses.
- This results in more precise trading decisions compared to traditional manual methods.
Maradiya notes that these innovations in DeFi not only improve financial outcomes but also enhance personalisation for users.
Personalised Financial Solutions
Enter MyFi, a conversational AI investment advisor. This platform is revolutionising wealth management by providing tailored financial recommendations.
The Role of AI in Personalisation
- MyFi’s AI models are built and tested by seasoned investment professionals.
- The result? Highly accurate and personalised investment advice that adapts to market trends and user preferences.
By embracing personalisation, fintechs are making financial advice accessible and relevant to a broader audience.
Enhancing Security and Fraud Prevention
AI’s potential goes beyond product innovation; it plays a critical role in fraud prevention and risk management.
Real-Time Fraud Detection
- Maradiya highlights that AI can analyse blockchain data to identify fraud and suspicious activities.
- This capability significantly enhances transaction security, reduces risks, and increases market liquidity.
Even traditional industries, like insurance, are recognising the value of AI. Companies like Munich Re are developing solutions to quantify AI model reliability and address potential risks, including errors and discrimination.
The Future of Fintech in India
The early success of these fintech innovators demonstrates a vast potential for exploring neglected financial areas. RentenPe’s collaboration with Ernst & Young validated the growth prospects of India’s residential rental market.
Broadening Financial Access
- Angel One serves nearly 23 million clients, benefiting from AI-driven enhancements.
- As fintechs continue to innovate, they are expanding financial access and inclusion.
The convergence of AI and blockchain is not just about efficiency; it’s about creating new avenues for financial empowerment and security.
Conclusion: Embracing the Fintech Revolution
India’s fintech revolution is just beginning. By addressing underserved segments and harnessing advanced technologies, companies are reshaping the financial landscape.
As we witness these transformations, it’s clear that fintech is not only about profit—it’s about empowering individuals and fostering financial inclusion. The stories of innovators like Sarika Shetty remind us that the potential for change is immense, and the future looks promising.
