Competition in the insurance space started to heat up as incumbent insurers enhanced their digital focus due to Covid-19 and niche payments players worked to expand into insurance.
To boost digital transactions and the fintech industry, the government has proposed significant support in their recent Budget announcements, which include a scheme to develop, promote and accelerate digital payments following a sharp growth in online and contactless payments during the lockdown months.
Sanjay Doshi, Partner and Head of Financial Services Advisory at KPMG in India, said many banks in India are now going down the path of digital.
"They are looking at tech and fintech companies that can help them move their digital activities forward, either investing in them directly or using them as service providers. That is going to be a big growth area for investment here -- banking-as-a-service platforms."
Given the increase in demand for digital payments, contactless payments and e-commerce platforms, fintech investment is expected to remain robust well into 2021, according to the report.
Corporate investment is expected to be particularly strong as incumbent businesses continue to work to accelerate their digital transformation efforts.
In addition to payments and platform models, B2B solutions will likely be a very hot area of investment globally in 2021, including such areas as embedded finance and 'buy now, pay later' solutions.
Blockchain is also expected to gain traction as blockchain-based solutions and digital asset offerings become more mainstream, said the report.
The overall global fintech funding across M & A, PE and VC totalled 105 billion dollars across 2,861 deals in 2020, the third highest level of investment in fintech ever.
With the exception of M & A -- which saw deal value drop over 50 per cent (from 130 billion dollars in 2019 to 61 billion dollars in 2020) -- the overall fintech market proved remarkably resilient in 2020 despite a broad array of uncertainties, from the global pandemic to the US presidential election.
Following a short Covid-19 driven pause in H1 2020, fintech investment bounced back strongly in H2, more than doubling from H1 (33.4 billion dollars) to H2 (71.9 billion dollars).
The United States was the dominant benefactor for fintech investment in 2020 while the payments space continued to dominate investment from a sector perspective, said the report.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.