In the next three years, Indian fintechs are targeting product/service innovation, transaction value and gross margin as key performance indicators. The top values they offer include seamless execution, responsiveness to customer needs, security and low product costs. The main competitors for Indian fintechs are other fintechs and traditional financial services firms.
Targeted KPIs: Innovation, gross margin, transaction value
According to Indian fintechs, product/service innovation, gross margin and transaction values are the key performance indicators they are tracking. In contrast to fintechs in other emerging markets, those in India are more focused on the number of users, product and service innovation, and brand strength.
In our previous survey, product/service innovation, customer loyalty and transaction values were the top targeted KPIs. The focus on customer loyalty has declined, while transaction value has gained in importance.
Product and service innovation
Product and service innovation enable fintechs to reach their customers more cheaply and effectively and can also help them be more relevant by offering them greater convenience and/or a better user experience. Indian fintechs citing product/service innovation as a KPI include Eko Indian Financial Services payments) and PayMe India (lending).
Gross margin
Once a certain level of scale is achieved, fintechs can typically then focus more on generating financial returns for their investors. A higher gross margin allows companies to lift investment in branding, marketing and product development. Indian fintechs targeting gross margins include PayMate (payments) and Wizely (lending).
Transaction value
This is one of the most frequently targeted KPIs cited by Indian fintechs and is also one of the main metrics used by investors to assess operators, particularly in the payments segment. Firms actively targeting transaction value include MobiKwik (payments) and NeoGrowth (lending).
Customer value proposition: Seamless execution, security, low-cost products, customer needs
The key values delivered by Indian fintechs are seamless execution, good security, responsiveness to customer needs and low-cost products. Relative to fintechs in other emerging markets, those in India are more focused on company branding, convenience and low-cost products, while less importance is assigned to seamless execution and fast approvals.
In our previous survey, Indian fintechs regarded security and fast approvals as their top values. In comparison with that survey, Indian fintechs give more importance to low-cost products, convenience and responsiveness to customer needs, and place less emphasis on fast approvals, personalised service and transparent pricing.
Seamless execution
Users increasingly demand that fintech platforms should operate without delays or interruptions. Indian fintechs citing seamless execution as their key value include Spenny (investech) and Coindust (blockchain).
Security
Security is a major consideration when customers seek out a financial services provider. Fintechs that regard this as a key value include Wizely (lending) and GREX (software solutions).
Low-cost products
In a highly competitive market like India, consumers are willing to switch brands if they get better deals elsewhere. Therefore, it is important for fintech to focus on minimising product costs to attract and retain customers. Indian fintechs focusing on this aspect include FundsinIndia (investech) and Streak (neobanking).
Responsiveness to customer needs
Many incumbent firms are failing to address customers’ specific needs (due to difficulties in tailoring products/services), which is creating opportunities for fintechs such as StockEdge (investech) and MobiKwik (payments).
The competitive landscape for Indian fintechs
Indian fintechs regard other fintechs and traditional financial services firms as their main competitors, followed by the informal sector and telecom firms.
Comparing these results with our 2020 survey, competition from other fintechs and traditional financial services has dropped and, in contrast, competition from telecom and media firms has increased. The rise in competition from these two categories may reflect the growing presence of services like Google Pay, WhatsApp Pay and Amazon Pay Later.
The increased perception of traditional financial services providers as competitors likely reflects two trends: fintechs gravitating towards the mainstream, and traditional providers embracing digital tools, such as using the UPI interface to process transactions.
Our Ultimate Guide to India fintech gives a more comprehensive overview of the sector and can be accessed here.