NBFCs are a perfect fit for emerging Fintech start-ups as they offer far more agility and flexibility when compared to many of their banking counterparts.
Over the past decade, Fintechs have been focussed on customer-centric innovation. 2015 saw Fintech companies transforming customer experiences by focusing on convenience, efficiency and user interface. 2016 witnessed the emergence of several ventures creating new solutions to meet the needs of millennials, provide online advice and discretionary wealth management tools, utilise Big Data and analytics, provide greater automation of processes, deliver alternative finance options like peer-to-peer (P2P) lending etc.
Given the potential of the Fintech spectrum, traditional banks and financial services players need to find increased opportunities to work with them. With Fintech players offering innovative solutions across payments, analytics and supply chain financing, traditional players ought to view this as an opportunity to redefine their service to enhance consumer engagement.
Conversely, traditional financial players are lucrative for Fintech start-ups to partner with as it allows them to expand their footprint and get access to scale.
Thus far, NBFCs have shown robust growth, contributing significantly to the Indian economy. NBFCs have recorded a healthy growth—a compound annual growth rate (CAGR) of 19 percent over the past few years—comprising 13 percent of the total credit and expected to reach nearly 18 percent by 2018–19.