Ecosystem of embedded finance will gain enormous traction in 2023: Gaurav Jalan

The start of a new year is seen as bringing in new operational efficiencies, stronger strategies, a far greater emphasis on building deep bonds with various stakeholders and consumers. In keeping with the current market ecosystem, technology and a human approach are seen as going hand in hand.

As 2023 kicks off, Adgully has approached key industry leaders to Crystal Gaze into 2023, as part of our annual Trending Now series, to highlight the major trends and developments that they see dominating the industry in the year ahead.

Gaurav Jalan, Founder & CEO, mPokket, speaks about the key trends dominating the fintech industry in 2023, alternative financing availed by new businesses, growth of digital banking, and more.

Key trends dominating the fintech industry in 2023

Constant innovative reforms and technological advancements have provided an impetus to the fintech industry growth in the country. As India makes its presence felt in the technology decade (or ‘techade’), fintech firms are leading the transition that is impacting all BFSI verticals. In 2023, the tech transformation will keep gaining momentum, thanks to the diverse benefits of adopting digital tools. The ecosystem of embedded finance will also gain enormous traction. Companies can use embedded finance to enhance customer satisfaction by providing financial services such as banking, credit, investment, payment processing, lending, and insurance.

Another prominent trend would be alternative financing, through which emerging fintech enterprises can attract funding. As the ‘techade’, 2023 will foster the development of innovative products and novel borrowing methods. In recent years, e-commerce and start-up entities have faced hurdles in raising funds from traditional lenders. Therefore, they have procured credit from non-banking institutions in the form of alternative financing and will continue doing so in the future.

India’s journey to financial inclusion is being paved by exceptional financial solutions provided by fintech companies. The work we do to make financial services accessible to all is a major positive outcome of digitalisation. But fintech will continue to grow at a faster pace and penetrate deeper into the country only if rural areas have a strong digital network.

Consequently, digital banking will gain major traction as consumers increasingly seek quick, easy access to bank accounts via smartphones. The emergence of digital-first banks and neo-banks in this environment is challenging the dominance of traditional lenders. As a result, traditional banks and financial institutions are scrambling to include their goods and services in mobile banking to provide seamless and easy user experiences.

Major expectations

According to a Market Data Forecast report, the global fintech space is anticipated to reach a market value of approximately $324 billion by 2026. Thanks to this, financial inclusion will remain an essential agenda for the government and private entities following the rising penetration of financial services in rural regions. Fintech businesses, including innovative neo-banking models, enjoy better prospects due to improved client experiences and specialised product requirements.

Companies in the fintech industry have been successful in attracting talented candidates from various sectors, which will help them continue to prosper. As India’s fintech ecosystem reaches maturity, the main growth tactics will comprise entering new markets, investing in technology, increasing operational efficiency, and forming ecosystem relationships. Besides supporting the rise of digital payments, the dynamic and fast development of a payments ecosystem, backed by the growing acceptance of technology and innovation, will also promote several safe, secure, cutting-edge, effective payment systems.

The rising maturity of India’s fintech ecosystem is coupled with the convergence of digital experiences in one of the largest markets – financial services. This instills confidence in overseas markets about the strength of the Indian fintech segment.

Key focus areas for mPokket in 2023

Many young people across the country lack a regular source of income or do not earn enough to be eligible for loans from banks and other financial institutions. Due to this, meeting small urgent financial needs becomes a challenge – be it a medical emergency, travel requirement or educational need. Thereby, mPokket is committed to helping such people by providing them with much-needed funds, faster, easily, and more efficiently.

At mPokket, we uphold a strong vision of empowering marginalised people and improving the lives of underserved, new-to-credit individuals who lack access to formal credit from traditional financial institutions. Recently, we completed seven years of operations during which we disbursed Rs 7,000 crore to date. Our major focus will now be to disburse another Rs 7,000 crore by the end of 2023.

Considering our strong commitment to developing cutting-edge technology aimed at making young India financially independent, we are aiming to augment our workforce in 2023 across all offices. Accordingly, we plan to hire around 500 people by March spanning various verticals such as product, technology, data analytics, and digital customer experience.