As far as financial services in India are concerned, BaaS (Banking as a Service) has emerged as a crucial component of open banking. BaaS is an end-to-end model which allows digital banks and other third parties to connect with banks’ systems directly via APIs. And with this transparent provision, BaaS is reconfiguring the banking value chain by enabling third-party distributors to offer banking products and services.
BaaS hence provides core elements of the banking product and operations stack by bringing together all the elements into a usable solution, and distributing them through proprietary customer channels. With this revolution of the banking industry, the customers can experience modernized and contextualized financial offerings.
Another segment of the financial services in India into which digitalization has penetrated is the broking industry. Growing digitalization is now also influencing the investment patterns and ways of Indians. But a unique aspect of the emerging technology of digital broking in India is that it is not a tier-1 phenomenon. As mentioned in 3One4 Capital’s new report, India- A Startups Nation, if we look at the top 10 districts in terms of new investors (in May 2021), we see that Barpeta, a city in Assam, with a population of just 1.9 million, which is 1/4th of Hyderabad, 1/5th of Ahmedabad, and 1/3rd of Surat, beat all these three cities in terms of new investors addition.
These paperless instant credit markets based on digital tools are bringing millions into the formal economy and developing the financial sector the country rapidly, ushering in a new era of banking and investment.
