2016印度金融科技报告（英文版）.pdf

2016 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Fintech in India A global growth story Joint publication by KPMG in India and NASSCOM 10,000 Startups June 2016 KPMG/in 2016 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Disclaimer The information contained in this report is of a general nature and is not intended to address the circumstances of any particular individual or entity. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. 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Table of contents Foreword Fintech ecosystem: A collaborative network Fintech in India: New techno banking realm Growth Levers for fintech: A mature market driven approach Fintech themes: New frontiers changing the face of financial services in India 06 01 16 22 04 42 Learnings from global experience: Opportunity for India to solidify its position as a global fintech hub 2016 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Foreword The buzz around fintech has gained substantial attention of traditional financial institutions, startups, venture capitalists and regulators. Banks and regulators are hard- pressed to revisit their operating model and policies respectively to create a conducive environment of collaboration and dynamism amidst the participants in the fintech ecosystem. The year 2015 was a formative year for the Indian fintech sector, which saw the emergence of numerous fintech start-ups, incubators and investments from public and private investors. It was clearly reflected that a right mix of technical skills, capital investments, government policies, regulatory framework and entrepreneurial and innovative mind-set could be the driving force to establish fintech as a key enabler for financial services in India. Building a robust fintech ecosystem where start-up firms engage in external partnerships with financial institutions, universities and research institutions, technology experts and government agencies is expected to be a key enabler for growth and innovation in the fintech sector. With KPMG and NASSCOMs 10000 Startups experience and proficiency in the sector, the report offers a thorough view of global fintech hubs and themes, thereby drawing key learnings, addressing opportunities and challenges for India to propel the much needed growth of the fintech sector. Our focus through this report is on the seven key themes, which are creating transformational waves across the financial ecosystem in India. These fintech themes serve a dual purpose. While they help financial institutions renovate their back-end processes and provide a competitive edge, they also offer customers a smooth user experience, unexplored value added services and an interactive marketplace. Some of these themes such as next- generation payments and financial inclusion are quite mature in India in terms of fintech start-up ecosystems, government regulations and steps taken by the incumbent market participants. While P2P lending, robo advisory, Bank in a Box, security and biometrics are striding fast towards mass market implementation, blockchain has just marked its entry with a promising future in the financial services arena. This is in line with the excitement about the extensive usage of fintech across the value chain of financial services institutions, which has increased in recent times. A wide gamut of fintech sub-sectors have emerged and have been adopted by key players of the financial sector globally. The Indian financial services sector has embarked upon its digital journey and is catching up fast with its global peers in terms of adoption. Multiple fintech hubs have evolved across the globe the U.S., the U.K., Israel, Singapore, Hong Kong and Sydney to name a few which may well serve as a yardstick of fintech evolution for the emerging markets. Finally, this report from KPMG in India and NASSCOM 10000 Startups intends to highlight leading practices and serve as a guide to strengthen Indias position in the global fintech landscape. We hope that you enjoy reading our publication and as always, we look forward to your feedback/suggestions. Neha Punater Partner Fintech KPMG in India Vidhya Shankar Head Partnerships NASSCOM 10,000 Startups 01 Fintech in India - A global growth story 2016 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Introduction This report assesses the rise of fintech (financial services technology) as a new chapter in the Indian Financial Services (FS) sector. One of the core objectives of this report is to throw light on the emergence of fintech tools across new frontiers such as next generation payments, P2P lending, security and biometrics, Bank in a Box, blockchain, robo advisory and financial inclusion in India. Alongside, we have aimed to capture a glimpse of the fintech evolution in India and its adoption of the “fourth industrial revolution” by Indias financial and technology hubs. For this, we have taken an approach that learns from the best-in-class fintech ecosystems of mature markets of the United Kingdom (U.K.), the United States (U.S.), Singapore, Israel, Australia and Hong Kong. We sincerely hope that the insights provided through this report prove to be useful for all stakeholders in the fintech ecosystem. Context This research report, by KPMG in India in collaboration with NASSCOM 10,000 start-ups and Matchi, is developed with a vision to help and guide India to become a key fintech hub through cross- industry collaboration and global benchmarking. Our research has focused its base objective towards assessing the Fintech landscape in India, analysing the various stakeholders, identifying key growth drivers. Thereafter, we have recommend action points that could enable India to establish itself as a mature fintech ecosystem by global standards. Content This reports content is structured to address the following key questions: What are the key growth drivers and benchmarks set by key global fintech ecosystems, and where does India stand in comparison? What are the prerequisites and prerogatives for different stakeholders (financial institutions, start-ups, government and regulators) to establish a successful fintech ecosystem in India? Which new frontiers are enabling growth and innovation for incumbent financial institutions? Approach The following three-stage approach has been taken by the research team to analyse the Indian fintech market: Studying the India markets key stakeholders: Leverages KPMG and NASSCOMs wide client- base and sector expertise to study the Indian fintech ecosystems different stakeholders for their current state of maturity. Assessing the Indian landscape from the global perspective: Leverages KPMGs extensive research capabilities and global network to extract insights from global fintech hubs, and structure them to guide the Indian ecosystem through detailed recommendations for each stakeholder. Key theme identification: Identifies key fintech themes which are shaping up the industry and investigates each one to understand leading practices that can be replicated in India. 2016 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 2016 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Pillars of a fintech ecosystem Fintech ecosystem: A collaborative network Innovation and technology have brought about a radical change in traditional financial services. The world has seen the emergence of more than 12,000 start-ups and massive global investment of USD 19 billion in 2015 01 in the fintech space. These innovators are utilising tech tools to bring in seamless and innovative financial services for the banked and unbanked population. The global fintech software and services sector is expected to boom as a USD 45 billion 02 opportunity by 2020, growing at a compounded annual growth rate of 7.1 per cent as per NASSCOM. Fintech may be defined as technology-based businesses that compete against, enable and/or collaborate with financial institutions 03 . Fintech start-up firms engage in external partnerships with financial institutions, universities and research institutions, technology experts, government agencies, industry consultants and associations. Through these partnerships, they create a highly integrated ecosystem that brings with it the expertise, experience, technology and facilities of all the entities together. Growth and market success of any fintech hub originate from an integrated ecosystem. A successful fintech ecosystem is where all the market participants connect, engage and share ideas across vibrant communities and networks, as well as identify and convert opportunities into business. In the current age of technology driven financial services, no market participant can afford to operate in silos. Fintech in India - A global growth story 04 01 The Pulse of Fintech, KPMG, 2016. 02 India emerging a hub for Fintech start-ups, Business Standard, business-standard/article/companies/india-emerging-a-hub-for- Fintech-start-ups-116051700397_1.html, 17 May 2016. 03 KPMG website, portal.ema.kworld.kpmg/Adv/GM/Pages/MarketIssue s/Fintech.aspx, accessed on 17 May 2016. 2016 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 2016 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. India is transitioning into a dynamic ecosystem offering fintech start-ups a platform to potentially grow into billion- dollar unicorns. From tapping new segments to exploring foreign markets, fintech start-ups in India are pursuing multiple aspirations. The Indian fintech software market is forecasted to touch USD 2.4 billion by 2020 from a current USD 1.2 billion 01 , as per NASSCOM. The traditionally cash-driven Indian economy has responded well to the fintech opportunity, primarily triggered by a surge in e-commerce, and smartphone penetration. The transaction value for the Indian fintech sector is estimated to be approximately USD 33 billion in 2016 and is forecasted to reach USD 73 billion 02 in 2020 growing at a five-year CAGR of 22 per cent. The investor attention has been concentrated towards hi- tech cities in 2015, with Bengaluru witnessing eleven VC- backed investment deals of USD 57 million 03 , followed by Mumbai and Gurgaon with nine and six deals, respectively. Bengaluru, the start-up capital of India has benefitted from the same, and is ranked 15 among the worlds major start-up cities. Indias growth wave may still not be of the scale when viewed against its global counterparts, but it is stacked well, largely due to a strong talent pipeline of easy-to-hire and inexpensive tech workforce. From wallets to lending to insurance, the services of fintech have redefined the way in which businesses and consumers carry out routine transactions. The increasing adoption of these trends is positioning India as an attractive market worldwide. The following sections elaborate key constituents of the Indian fintech ecosystem, with due credence to key growth drivers, emerging strengths and challenges. Ecosystem coverage of the Indian fintech sector Government The government is naturally the prima facie catalyst for the success or failure of fintech in a heavily regulated financial industry. The Government of India along with regulators such as SEBI and RBI are aggressively supporting the ambition of the Indian economy to become a cashless digital economy and emerge as a strong fintech ecosystem via both funding and promotional initiatives. The following multi-pronged approach has been taken to enable penetration of the digitally enabled financial platforms to the institutional and public communities: Funding Support The Start-Up India initiative launched by the Government of India in January 2016 includes USD 1.5 billion fund for start-ups 04 . Financial inclusion and enablement Jan D