Context:
Prime Minister highlighted India’s fintech prowess at Global Fintech Fest (GFF), 2024 In Mumbai.
Fintech Sector:
- Fintech (financial technology) – Refers to the integration of technology into offerings by financial services companies to improve their use and delivery to consumers.
- Key Players – Paytm, PhonePe, Razorpay
Fintech in India:
- India remains a global leader in fintech, 3rd highest globally after the US and UK
- Adoption rate of Fintech in India is 87%, significantly higher than the global average of 67%.
- The sector has received over $31 billion in investments over the past decade.
- Startup Growth – There has been a 500% growth in Fintech startups in the last 10 years.
- Key Drivers –
- JAM Trinity – The combination of Jan Dhan Yojana (financial inclusion), Aadhaar (unique identification), and Mobile connectivity has been crucial in driving Fintech adoption.
- Digital Transactions – India accounts for approximately 50% of the world’s digital transactions, largely due to platforms like UPI (Unified Payments Interface)
- Sub-Sectors –
- Payments – Digital payments have seen significant growth, with monthly transaction volumes exceeding 5.7 billion and a value of around $2 trillion in 2021
- Lending – Digital lending platforms have made credit more accessible.
- WealthTech – Platforms offering investment and wealth management services.
- InsurTech – Technology-driven insurance solutions.
- RegTech – Regulatory technology to help companies comply with regulations efficiently.
- Regulatory Sandbox – Initiatives by the Reserve Bank of India (RBI) to foster innovation in fintech while ensuring consumer protection.
Source: PIB
Previous Year Question
In the context of finance, the term ‘beta’ refers to:
[UPSC Civil Service Exam – 2023 Prelims]
(a) the process of simultaneous buying and selling of an asset from different platforms
(b) an investment strategy of a portfolio manager to balance risk versus reward
(c) a type of systemic risk that arises where perfect hedging is not possible
(d) a numeric value that measures the fluctuations of a stock to changes in the overall stock market
Answer: (d)
