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Kumar, a farmer, living in Eastern Maharashtra sits on a rattling, crowded bus, halfway through his 10 hour journey to the city. He clutches a black strapped bag close to his chest as he is jostled into the corner seat. He knows the dangers of traveling like this, only last month he had seen a man frantically searching under the seats for his bag that had contained all the money he had saved that month. Kumar’s children have gone to the city to pursue their higher education, and perhaps eventually, look for employment there. Every month, he takes a 10 hour bus ride to the city to give them money in the form of hard cash. As a farmer, at a transactional level, Kumar only deals with crops and hard cash. Unlike urban populations, the nearest bank for him is 2 hours away, and even if he could’ve managed that, his cash flow is unpredictable. There are months where he barely makes ends meet, the rest of the time, the money feels safer under his bed than in some far away bank. There are other challenges too: the local money lenders can’t be trusted with cash; his neighbour learnt that the hard way, travelling for 10 hours with loose money in his hand was also a perilous choice, but at least he is in constant vigilance over his saved money.

Kumar is not alone. Thousands of Indians face this quandary on a regular basis, financial security and protection are luxuries that they can only dream of. But what if they could be provided these ‘luxuries’? The answer to that question is no longer hypothetical, because “Fintech” companies like BankingUp are providing services specifically tailored to address concerns like Kumar’s. While BankingUp is limited to the US, its concept is something that could transcend geographical boundaries. BankingUp for example strives to provide lower sections of society (Particularly those without access to a bank account or a credit card) who live in ‘high fraud environments’ the ability to send and receive money electronically, safely.

So what is ‘Fintech’? Fintech – Finance + Technology, is the newest, fast growing business line in the ecommerce space. Indian Fintech start-ups include Policybazaar, Milaap, Jocap and Bankbazaar. More traditional ones include the big powerhouses like Tata Consultancy Services and Cognizant. Fintech companies look to change the game in the financial world, it is because of Fintech companies, that we no longer have to travel to the bank to transfer money between accounts or that we can deal with cryptocurrencies like Bitcoin. The Fintech industry has the potential to be hugely disruptive and will affect the way society fundamentally deals with transactions and financial mechanisms, that is why global investment in the space has more than tripled between the years 2008 to 2013, from nearly $1 Billion to $4 Billion. It’s projected to grow to more than $8 Billion by 2018. Fintech start-ups are already affecting the financial business. Take for example Pindrop, a company that uses software to detect call centre fraud or Lenddo, a company that allows for underwriting small loans; these companies are revolutionizing the way consumers interact with their finances and the market. The Fintech industry is shifting gear and this year already, Australia opened a Fintech Hub for Southeast Asia in Sydney, while a Fintech lab is being launched in Hong Kong to incubate new Financial Technologies from the region.

The Financial Industry is ripe for a disruptive innovation and Fintech start-ups are the next big thing. Can you get your idea out there?

Anirudh Valluri

Aditya Patro