IndexAbstractIntroductionAn Evolving Indian Fintech Ecosystem“Facilitators” for a Favorable Fintech EcosystemUntapped Indian MarketIndian Human CapitalGrowth Capital and InvestmentDigital InfrastructureGovernment and Regulatory BodyOpportunitiesChallengesDiscussion and ObservationAbstractPost 2008 Global Recession, Financial Institutions Around The world has gone through tremendous change by including financial technology in their products and service offerings. The world has witnessed a surge in technology startups and new businesses working on a new platform called financial technology (Fintech) to meet the demand of financial institutions. According to NASSCOM, the Indian Fintech business is expected to reach $2.4 billion by 2020. Even in the Indian startup ecosystem, this is one of the fields where Indian startups are performing well and every year new Fintech startups are continuously born in the startup ecosystem. The government's policy framework is not only boosting this vibrant ecosystem but also creating a propagative environment of opportunities. The objective of this paper is to study the enablers of the Indian Fintech ecosystem which is creating a favorable environment for the growth of Fintech companies. Furthermore, it aims to study the opportunities that lie ahead to be exploited and to study the challenges that may represent an obstacle for the Fintech sector. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay IntroductionFinancial institutions around the world have gone through tremendous changes in their business processes by including financial technology in their products and service offerings. This change could be attributed to the global financial crisis of 2008. It could be said that the global financial crisis of 2008 jeopardized the entire banking system, leading to the crumbling of customer confidence in the banking sector. This crisis has pushed the banking sector to think about finding new innovative financial solutions to satisfy the problems of the customers and also to create a platform which could be efficient and effective enough to alarm the world of the impending crisis and also capable of meeting the demands of the global customers. . Today's fintech era has evolved through three phases, and this emergence has responded to both risk diversification and competition concerns and has also catalyzed opportunities. Arner, DWet al (2015, 2016) in their article state that the 2008 global financial crisis gave rise to the “Fintech 3.0” and “Fintech 3.5” series in developed and developing countries respectively. Technology development companies have since started to focus on banking and finance as prospects as this shift has been fueled by expectations and demand from consumers and the political community. Developing countries are still struggling with financial system inefficiencies and development needs, so this has led to the emergence of the “Fintech 3.5” series in developing countries. This is why the entire world has witnessed a surge in technology startups and new businesses working on a new platform called financial technology (Fintech) to meet the demand of financial institutions. According to BASEL (2017), “Fintech technologically enables financial innovation that could lead to new business models, applications, processes or products with an associated material effect on financial markets and institutions and on the provision of financial services”. According to NASSCOM, it is expected thatthe Indian Fintech business will reach $2.4 billion by 2020. Even in the Indian startup ecosystem, this is one of the fields where Indian startups are performing well and every year new Fintech startups are continuously coming up in the startup ecosystem startups . The government's policy framework is not only boosting this vibrant ecosystem but also creating a propagative environment of opportunities. The objective of this paper is to study the enabling factors of the Indian Fintech ecosystem which is creating favorable conditions conducive to the growth of Fintech startups. It also aims to study the opportunities that lie ahead to exploit and study the challenges that may pose a hindrance to the Fintech sector, as the Fintech sector in India is still at a nascent stage. Due to unavailability of data, compilation of secondary data is done from various research papers, reports and publications of various authors, research agencies, data aggregation websites, companies and government bodies. Over the last decade, many definitions regarding financial technology have emerged and all Somewhere definitions emphasize important components of the Fintech world, but in the evolution of definitions there still seems to be a lack of unanimity on the boundaries of the Fintech sector. Financial technology (Fintech) is technology embedded in financial products and services that aims to assist companies in organizing the financial aspects of their business. According to a comprehensive analysis report of the Indian fintech landscape conducted by YES bank report on fintech (2017-18), “Fintechs are high-growth organizations that combine innovative business models and emerging technologies to enable, improve and disrupt financial services ". (2018) states that new startups are continuously emerging in the fintech sector as financial services are still very expensive. The current regulatory approach has not brought about any major structural changes, but financial technology is capable of bringing about these changes and can also create important regulatory challenges. The IOSCO Research Report on Financial Technologies (2017) highlighted some key components that help the development of this sector, namely the abundance of consumer data, reducing the costs of goods and services, increasing the power of calculation, disintermediation and re-intermediation and the main demographic changes of consumers. Truong, O. (2016) finds in research that technology has enabled financial products to be innovative and at the same time increased the “flexibility and usability of financial services”. It has also become mandatory for companies to continuously innovate so that they can maintain healthy competition between organizations. Fintech providers are creating a financial inclusion revolution in both developing and developed economies. In addition to financial inclusion, financial technology offers moderate-income individuals several valuable facilities that will cost more if coming from the conventional banking channel. Varga, D. (2017) states that the fintech sector has impacted those who are out of reach of banks and has provided flexible and easy solutions to these areas. An evolving Indian fintech ecosystem Reserve bank of India Report of the Working Group on fin Tech and Digital Banking (2017) defines fin tech as “Fin tech is a technologically enabled financial innovation that could give rise to new business models, applications , processes or products with an associated material effect on financial markets and institutions and the provision of financial services”. services." According to Ernst and Young (2017), India with 52% ofdigitally active population ranks second after China in the rate of Fin Tech adoption. This means there are many opportunities because half the population still does not have access to fin tech services. Mumbai is the only state so far which has adopted a financial technology policy for startups and has provided support to financial technology accelerators and incubators. Startups are provided financial support of Rs 10 lakh for three years to meet startup expenses. This will allow startups to offer better products and services. According to NASSCOM and KPMG (2016), India's fin tech sector is expected to grow 1.7 times and could reach $2.4 billion by 2020. KPMG (2018) highlights that fin tech technologies are accelerating change prominently in three sectors: artificial intelligence, open banking and blockchain business. In order to strengthen open banking, the fin tech regulator has taken three important steps. Firstly, by bringing the Bharat Bill Payments System (BBPS) to facilitate security and easy and fast payment of bills. Secondly, the National Payments Corporation of India introduced the Unified Payment Interface (UPI) and Aadhaar-backed services. Thirdly, the Reserve Bank of India (RBI) has directed the Non-Banking Financial Company to set up a Non-Banking Financial Company - Account Aggregator (NBFC-AA) in India to share customer information with their consent to other entities financial. The Reserve Bank of India (RBI) has worked on the Public Credit Registry (PCR) so that credit information of any individual and company can be accessed at any time. According to IBEF (2018), the Securities Exchange Board of India (SEBI) is working on a “regulatory sandbox” framework so that fin tech innovations in products and services can penetrate the securities market in India. NASSCOM Artificial Intelligence Primer (2018) states that around 400 AI startups have worked in India and have secured funding worth $150 million in the last five years. The application of blockchain also plays an indisputable role in various banking services. The NASSCOM (2016) report “Indian fintech product innovation drives growth” states that 400 Indian startups emerged in 2016 in the fintech sector. The sector witnessed a growth of 282% between 2013 and 2014. “Facilitators” for a favorable fintech ecosystem While there are numerous factors responsible for the growth of the fintech sector. But we can say that the untapped needs of the Indian market and the abundant amount of efficient human capital are acting as enablers for a favorable fintech ecosystem. Along with this, the funding and financial structure created by the government and regulatory bodies serve as the foundation of the fintech ecosystem. Untapped Indian Market In India, even today a major portion of the population is beyond the reach of banking and financial institutions and their products and services. The RBI in a “Report of the Working Group on Fintech and Digital Banking” (2018) said that nearly 40% of the Indian population has no connection with banks and nearly 87% of transactions are done in cash mode . This gives fintech startups a broad landscape to capture an untapped market. Indian Human CapitalAccording to UNCTAD (2018), India has the largest pool of STEM (science, technology, engineering and mathematics) graduates. In 2012, of the five million STEM students passed globally, 29.2% belonged to India. India is far ahead of other countries in terms of human capital. This human capital serves as a cornerstone for the wholeIndian startup ecosystem. Growth capital and investments Investments in Indian fintech startups have increased dramatically over the past decade. According to data aggregator Your Story Research (2018), India's fintech and financial sector has secured total funding of approximately $2 billion as of November 30, 2018. The sector secured 132 deals in 2018 compared to 103 deals in 2017. Furthermore, the top ten startups managed to raise 60% of the total fintech and financial sector funding. Digital Infrastructure In recent years, India has focused on creating a framework for fintech startups by including the “stack” in its financial infrastructure. In this stack, JAM has brought a paradigm shift by including e-signature and digital locker in it. JAM provides infrastructure for fintech companies to create business models and processes using it. Additionally, Immediate Payment Service, Bharat Bill Pay, Aadhaar Enabled Payment System, India Quick Response, Unified Payment Interface and National Automated Clearing House have created a payment system that has facilitated the operation of this stack in the fintech ecosystem. has taken many initiatives to create an enabling environment and create linchpins in the framework of the fin tech sector. For the financial technology sector to thrive, government support is needed so that the majority of the unbanked population can directly access banking practices. The government has started an awareness movement called “Financial Inclusion” for the public to open bank accounts so that more and more people can get into financial services. This is done to monitor the inflow and outflow of money and to transfer subsidies to the needy population directly to their accounts. According to the National Payments Corporation of India (NPCI) and UIDAI, as of March 2018, banks had managed to link Aadhaar identity with 878 million bank accounts. In August 2018, around 312 million transactions worth Rs 542 billion were carried out through the Unified Payments Interface. For the government, the support of the Reserve Bank of India (financial technology sector regulator) is of utmost importance as the RBI has been working aggressively in formulating a framework for policy implementation. RBI introduced the “Unified Payment Interface” to evolve India towards a digital and “cashless” culture. The RBI has taken further steps. It allowed entities and NBFCs registered under the Companies Act to become players in the P2P lending platform. This P2P lending platform will solve the startup financing problem. Opportunities The Fintech sector can achieve financial inclusion of a large number of individuals by providing them with basic financial services and can avail financial services for sectors that are not yet reachable via mobile phones to the extent of 50% The population of emerging economies now has a mobile phone. According to the World Bank's 2017 Global Findex database, around 19 million Indian adults, or 11% of the total world population who do not have bank accounts, belong to India. This segment of the population represents both an opportunity and a challenge for the fintech sector. Furthermore, according to NITI ayog (2018), digital payments have increased significantly in India. Digital and mobile payment businesses are estimated to reach up to $1 trillion and $190 billion respectively by 2023. An estimated 15 billion machine-to-machine and consumer electronics devices could be added directly into the financial system.