Indian Banks Become Early Tech Adopters

Banks and fintech companies often work on a symbiotic basis by bringing new technologies and algorithms to legacy institutions.


LENDERS: LendingKart, Capital Float, NeoGrowth

PAYMENTS: PayU, CCAvenue. BillDesk

E-WALLETS: PayTM, MobiKwik

PAYMENT BANKS: Airtel Payments Bank, India Post Payments Bank, PayTM

PEER TO PEER (P2P) LENDERS: (Still under regulatory prohibition and awaiting guidelines from RBI)

Private banks, as early adopters of tech advancements in the field, have played a pioneering role in the financial industry in India. In September, HDFC Bank launched EVA, a chatbot developed by Bengaluru-based artificial-intelligence company Senseforth. Meanwhile, the State Bank of India announced that it is beta testing a chatbot to help in operations. That software is being developed by AllinCall, another Indian start-up, according to reports in Indian media. Late last year, City Union Bank introduced Lakshmi, a robot named after the Hindu goddess of wealth, which would help customers at a branch in Chennai.

“The entire premise of fintech today in the financial ecosystem is to pile a layer of services onto mechanisms that have been instituted by the government,” says Namita Dhepe, a tech and media sector consultant at Investec in Mumbai who has worked extensively in ecommerce and digitization.

Banks and fintech companies often work on a symbiotic basis by bringing new technologies and algorithms to legacy institutions. Companies like Lendingkart and Capital Float in the lending segment, PayU and CCAvenue when it comes to payments, and ewallets like MobiKwik and Paytm all play a major role in the fintech market in India.

These fintechs are a relatively new phenomenon, and many of them were catapulted forward when the country undertook to curb illegally hoarded cash by invalidating 500 rupee and 1000 rupee notes (a little under $8 and $16).


WHAT: A card with a unique identification number issued to each citizen of India. It ties biometrics like iris scan and fingerprints to mobile phone number, address, PAN cards, and bank account numbers, to establish and confirm identity. It is also linked to bank accounts to ensure that government benefits reach the right individual.

WHO: It is issued to all residents of India, even children. While it isn’t mandatory,  it is widely accepted as identification. As of Sep 2017, Aadhaar enrollment exceeded one billion—1.17 billion to be precise—nearly all of the country’s total population of about 1.2 billion.

WHEN: Aadhaar Card was launched in 2009, and gained backing from government through legislation passed in March 2016.

For a citizenry heavily reliant on cash, panic, serpentine queues and a whole lot of uncertainty followed. Ewallets like Paytm turned from a noun into a verb overnight. The inconvenience of demonetization, temporary as it was, prompted many Indians to look at alternatives to cash—to the benefit of the banks.

A report by PwC on fintech in India suggests that almost 80% of transactions still happen through cash, however. Compare this to the global scene, where the figure is at 21%; the market is clearly nascent and up for grabs. “Fintech is definitely making a dent in the banking sector in urban areas, the [major] cities,” says Investec’s Dhepe. “Still, Internet penetration remains abysmally low in rural India.”