Evolution and impact of monetary and regulatory policies on fintech companies in India

Abstract

The origin of Fin Tech is a debatable topic. While some believe it was back in 2005 when Zopa, a UK-based P2P firm was established, the others believe that Reuters which was launched in 1851 was the first FinTech. However, rise of modem FinTech and BigTech companies has considerably been after the 2008 Financial Crisis. Banks were losing their reputation, benchmarks like LIBOR were in scandals and the regulatory authorities like Moodys or S&P were seen helping hands in bringing down the financial markets rather than protecting them. This led to the rise of Challenger banks and the decentralized blockchain in the Western economies. The effect of which could be felt in India too. (Lowther, 2021) What started as a competition to the banking system, now was looking to collaborate with them. Banks had the scale and network that FinTechs needed, while Banks needed the technology of these modem firms. This is where we are at today, a collaborative environment. However, now, FinTech doesn't limit just to lending, it has rather spread its wings to a variety of spheres- Robo-advisory, alternative credit scoring, payment gateways, digital wallets, digital insurance, automated wealth management, crypto-trading, to name a few.