Dissertation Project Report

On
THE EMERGING REFORM IN FINTECH: FINANCIAL INCLUSION
OR BANKING DISRUPTION

Submitted by:
Student Name- Monalisha
Sahoo University Regd. no.-
2306286083
MBA [2023-25]

(A dissertation report submitted to Srusti Academy of

Management and Technology (Autonomous),
Bhubaneswar, Odisha for partial fulfillment of the
requirements for the award of MBA Program)

Under the guidance of

Internal Guide:

Mr. Arpan Mahapatra (Associate Professor)

Srusti Academy of Management and Technology, (Autonomous)

Srusti Academy of Management and Technology

,(Autonomous)
1st B-School in Odisha with “A” Grade Accreditation by NAAC
Approved by AICTE, New Delhi Affiliated to BPUT,Rourkela

38/1, Chandaka Industrial Estate, Near Infocity, BBSR, Odisha-751024

www.srustiacademy.org
 Declaration

I am Monalisha Sahoo a bonafide student of Srusti Academy of

Management and Technology, pursuing MBA, do hereby declare
that the study entitled “The Emerging Reforms in FinTech:
Financial inclusion or Banking disruption” is my authentic work,
I have completed my study under the guidance of Mr. Arpan
Mahapatra (Associate Professor), Srusti Academy of
Management and Technology, Bhubaneswar

All the data furnished in this project report are authentic and genuine and
this report neither full nor in part has ever been submitted for award of any
other degree to either this university or any other university.

Monalisha Sahoo
MBA (2023-2025)

University Regd. No: - 2306286083

Srusti Academy of Management, Bhubaneswar, Odisha
 Internal Guide Certificate

This is certifying that Ms. Monalisha Sahoo a student of 4th Semester

MBA of Srusti Academy of Management, (Autonomous), Bhubaneswar
has successfully completed his Dissertation Project on the topic of “The
Emerging Reforms in FinTech: Financial inclusion or Banking
disruption”.

Signature:

Name of the Guide:

Dt:
 Acknowledgement

This Dissertation project report bears the imprint of many people on

it. I am very much thankful to Srusti Academy of Management and
Technology, (Autonomous), Bhubaneswar for the successful
completion of my Dissertation report.

I would like to thank my project supervisor and guide Prof. Prof.

Mr.Arpan Mahapatra the Faculty Member, Srusti Academy of
Management and Technology, for her invaluable guidance and
assistance in preparing the project report and also contributing a lot for
accomplishment of this Project.

I am also expressing my indebtedness to my parents and my friends

who gave their full-fledged co- operation for the successful
completion of my project.
 Preface

It is a great opportunity for me to pursue my MBA in Srusti

Academy of Management and Technology, (Autonomous) under
BPUT, Rourkela, Odisha. In the accomplishment of Dissertation
Project Report, I am submitting a dissertation report on “The
Emerging Reforms in FinTech: Financial inclusion or Banking
disruption”. Subject to the limitation of time, efforts and resources
every possible attempt has been made to study the matter deeply.
The whole project is measured through the questionnaire, the data
further analyzed and interpreted and the result was obtained.

The objectives of preparing this report are as follows:

 CONTENT

TITLE PAGE NO.

Introduction 7-8

Evolution of FinTech 9

FinTech in India 10-11

FinTech and Financial Inclusion 12

FinTech and Banking disruption 13

Objective of the Study 14

SWOC Analysis 15-16

Product and Major Players 17-19

Major Fundings 20

Conclusion 21
 INTRODUCTION

Financial technology, it is better known as FinTech, can be define as the

new technology that seeks to improve and automate the delivery
and use of financial services. It is a union of financial services and
information technology. In simple terms, it can be explained as the
industry that uses technology to make financial system and delivery
of financial services more efficient. The relation of finance and
technology is quite old; however, the word has gained relevance in past
decade after the 2008 financial crisis.

It is working efficiently for the agenda of financial inclusion by

providing financial services in cost effective, accessible, speedy,
transparent to those who were neglected by banks due to constrains of
resources and geography. Present demographic conditions of India
with young and tech savvy population are providing prepared ground
for FinTech to evolve. India is one of the fastest growing FinTech market
in world with six thousand plus FinTech startups.

It has challenged the business model of conventional banking and has

blurred the boundaries between conventional banking and other
financial technology industries. It has raised the concern for the
financial regulators and law enforcement. The rise of digitalization
of financial system is also raising the concern for public fund and
data.
Financial fraud, cybercrime, issues related to data piracy and
unregulated financial agent have also increased along with
developments in FinTech landscape.

This article explains the historical background of FinTech followed

by emergence of FinTech in India, relevance of FinTech for financial
inclusion and the disruption caused by FinTech in conventional banking
business model. This article is trying to establish a tradeoff between
financial technology and banking with the suggestions as way forward.
 Evolution of FinTech

Date 1866-1967 1967-2008 2008 - current

Era FinTech 1.0 FinTech 2.0 FinTech 3.0 FinTech 3.5
Geography Global/Developed Global/Developed Developed Emerging/
Developing
Key Infrastructure/ Traditional/ internet Mobile/start-ups/new entrants
elements computerization
Shift origin Linkage Digitalization 2008- financial Last mover
crisis/smart phone advantage
Remarks Telegraph, railroad Shifting from analog to Distrust of the Globalization
and steamship were digital traditional banking of digital
utilized for cross border and emergence of banking
financial transactions new player
Examples 1866- Transatlantic NASDAQ-digital stock 2009- Bitcoin Acceptanc
cable 1918- Fedwire in exchange 1973 - SWIFT and boom in e of
USA 1950-Credit card Bank Mainframe cryptocurrencies, FinTech by
computers, e-commerce smartphone, India and
business model introduction of China
payment apps

In the recent years, key enabling technologies that FinTech have adopted are
Application Programming Interface (API) that is used for communication
between two or more softwares, Cloud computing for increasing scale and
flexibility, Biometric for human identification, Distributed Ledger
Technology (DLT), that is a digital system to record transactions, Big data for
information gathering and Artificial Intelligence (AI) & Machine Learning
(ML) to perform complicated tasks without intervention of human
 FinTech in India

The evolution of the FinTech in India is due to the mixed efforts of

technological enabler, regulatory intervention and business
opportunities including some unique characteristics in India. India
has witnessed many growth drivers that has given favorable
conditions for the growth of FinTech

(a) Massive internet and smartphone penetration

(b) High volume of funds invested in the form of venture

capital and institutional investor to drive innovation in this
sector

(c) Technological innovation in the form of machine learning and

artificial intelligence

(d) Favorable demographic of young and tech savvy population that

has shown trust on FinTech

(e) India stack (digital infrastructure) in form of Application Programme

Interface (API) like Aadhar, UPI, Bharat Bill Payment GSTN

(f) Massive financial inclusion initiative accelerated digital evolution.

India is the third largest FinTech ecosystem globally and has the
highest FinTech adoption rate of 87 percent, significantly higher
than the global average of 64 percent. India is among the fastest
growing FinTech market with 6636 FinTech startups in India with
expected market size of $150 bn in 2025 and has witnessed an
investment of $8 bn
in 2021 alone. These companies are also operating as InsurTech and Wealth
Techs. Twenty-three FinTechs have gained the status of unicorn
registering the share of one fifth of total unicorns. FinTech like
Zerodha, Zestmoney, Lendingkart, Policy Baazar, Money Tap, etc. are
some of FinTech working in India.

FinTech has entered in every aspect of the banking territory which was
earlier the sole area of banking and financial sector. The developing
countries like India and China have witnessed a leap frogging in
financial technology beyond brick-and-mortar banking and has
reached to the people and area that were financially excluded.
 FinTech and Financial Inclusion
It has been claimed by many literatures that there is a positive and
significant relation between FinTech and financial inclusion. There are
many corners in the world where traditional banking has not been
able to put its footprint due to resource and geographical constraints,
preventing financial inclusion to be universally affordable. This
is where FinTech can democratize access to financial products and
world will move closer to achieve financial inclusion. FinTech
has the ability to spread in all dimensions of financial inclusion,
let it be access, usage and quality as it has lowered cost, increased
speed and has improved accessibility through tailored financial services
to the financially excluded people so far. Financial technology has
helped the Government and financial companies to reach out to the
financially and geographically excluded masses and educate them
about the various financial products ensuring that their hard-earned money
be invested as per their choice, (Kandpal & Mehrotra, 2019). In the
report of Alliance for Financial Inclusion (AFI), it has been explained
that framework for FinTech for financial inclusion

Empowering

Expanding Enabling
 FinTech and Banking disruption

In last few years, financial technologies have developed rapidly as

compared to technologies in other sectors. Financial technologies have become the
backbone of present financial system and it even managed to establish as a
separate segment as “FinTech” and have influenced the conduct of
traditional way of financial service sector.
The traditional banking has seen major disruption in its operation in last couple
of years starting with financial crisis of 2008 followed by advancement of in financial
technology. In fact, it was the joint effort of IT professionals and sacked bank
professional during 2008 financial crisis that gave rise to FinTech startups for resolving
customer problems . Financial crisis has resulted in loss of trust of customers on
2

traditional banking and heavy regulatory and compliance requirements by

financial institutions impacting their image and profit. This gave an opportunity to
digital finance and user centric financial services to evolve.

Disruption in banking is not new, financial institutions have faced

many disruptions earlier like introduction of internet banking resulting in fewer
visit of customers to bank, emergence of smart phone applications made
banking transactions on move. This made ATMs, plastic cards and
physical interactions with bank irrelevant. (Abdullah, 2017). In the
current disruption, banking has fragmented into distribution business
and credit provisioning.
 OBJECTIVE OF THE STUDY
The objective of a study on "The Emerging Reform in Fintech:
Financial Inclusion or Banking Disruption" could be structured along
the following lines:

1. Understand the Evolution of Fintech: Analyze the growth and

transformation of the fintech sector over time and identify key factors
driving its evolution.

2. Assess Financial Inclusion Efforts: Examine how fintech

solutions are addressing gaps in financial inclusion, especially in
underserved or unbanked populations, by providing easier access to
financial services.

3. Evaluate Banking Disruption: Investigate the extent to which

fintech innovations are challenging traditional banking models,
reshaping customer expectations, and altering competitive dynamics in
the financial industry.

4. Identify the Balance Between Inclusion and Disruption:

Explore whether fintech reforms predominantly support financial
inclusion or cause banking system disruption, while highlighting
examples where these goals coexist.

5. Study Policy and Regulation: Analyze how government

regulations and policies shape the fintech landscape, ensuring equitable
financial access without compromising the stability of the financial
system.

6. Explore Socio-Economic Impacts: Evaluate the broader socio-

economic effects of fintech advancements on users, businesses, and
the economy, including potential risks and opportunities.
 SWOC ANALYSIS
Strength Weakness
1. Enhanced Financial Inclusion: 1. Lack of Regulation: Rapid
Fintech innovations, such as digital development often outpaces
wallets, microloans, and online the creation of robust
banking platforms, have regulatory frameworks, leading
empowered unbanked and to risks such as fraud, data
underbanked populations globally. breaches, and non-compliance.
2. Technological Efficiency: 2. Digital Divide: While fintech
Automation, AI, and blockchain promotes inclusion, those
have revolutionized financial without internet access or
operations, enabling faster digital literacy may remain
transactions, reduced costs, and excluded, potentially
improved security and widening existing inequalities.
transparency. 3. Operational Challenges:
3. User Experience: Fintech has Fintech firms may face issues
brought customer-centric like scalability, integration
solutions with intuitive interfaces, with traditional banks, or
tailored recommendations, and infrastructure limitations.
24/7 accessibility

Opportunities Challenges
1. Global Market Expansion: The 1. Banking Disruption: Fintech
untapped markets in developing threatens the traditional
economies provide immense banking system by
growth potential for fintech disintermediating banks,
companies. 2. Data Privacy Concerns:
2. Partnerships with Banks: Increased reliance on
Collaboration between fintech technology raises
firms and traditional banks can lead concerns about the ethical
to innovative hybrid models use and security of
3. Evolving Consumer Needs: Rising consumer data.
demand for personalized financial 3. Technological Risks:
solutions creates opportunities for Dependence on digital
innovation platforms makes fintech
vulnerable to cyberattacks
and system failures.
Determination Of SWOT Analysis
 PRODUCT AND MAJOR PLAYERS
PRODUCT ON FINTECH: FINANCIAL INCLUSION OR
BANKING DISRUPTION

1. Digital Payments: Apps like Paytm, Google Pay, and

PhonePe enable seamless cashless transactions.

2. Personal Finance Management: Tools like Mint or YNAB

help users budget, track expenses, and manage their finances.

3. Wealth Management: Platforms like Zerodha and Groww allow

users to invest in stocks, mutual funds, and other assets.

4. Lending Services: Companies like LendingClub and Cred

offer peer-to-peer lending or credit management solutions.

5. Cryptocurrency Platforms: Apps like Coinbase and Binance

facilitate buying, selling, and managing cryptocurrencies.

6. Insurtech: Platforms like Policybazaar simplify the process

of comparing and purchasing insurance policies
MAJOR PLAYERS OF FINTECH: FINANCIAL INCLUSION
OR BANKING DISRUPTION

GLOBAL PLAYERS

1. Stripe: A leading platform for online payments, offering

infrastructure for businesses to process payments and manage
their financial operations.

2. Revolut: A fintech company offering a range of financial

services, including banking, currency exchange, and investing.

3. Ant Group (formerly Ant Financial): A Chinese fintech giant,

operating Alipay, the largest payment platform in China.

4. Chime: chime A digital-only bank that primarily serves U.S.

retail consumers, offering a range of banking services..

5. Adyen: Adyen is a Dutch financial technology company and a

global acquiring bank that provides a platform for accepting
payments online, in-app, and at the point of sale.
INDIAN PLAYERS

1. : A leading digital payments and financial services platform in

India, offering a wide range of services including payments,
banking, and insurance.

2. PhonePe: Another prominent Indian fintech company, offering

digital payments, wealth management, and insurance services.

3. Razorpay: A fintech company that provides payment solutions

for businesses of all sizes.

4. CRED: A fintech platform that rewards users for paying their

credit card bills on time.

5. Lendingkart: A fintech company focused on providing loans to

small and medium-sized enterprises (SMEs).
 MAJOR FUNDINGS
Fintech has attracted significant funding globally, with investments
aimed at both promoting financial inclusion and driving banking
disruption. Here are some key insights:

1. Financial Inclusion Initiatives:

o India has seen substantial investments in digital lending and

payment platforms, with initiatives like the Pradhan Mantri Jan-
Dhan Yojana (PMJDY) and UPI driving financial inclusion.
o Private equity funds, such as TVS Capital Fund, have
allocated billions to fintech companies focusing on financial
services delivery.

2. Banking Disruption:

o Blockchain-based platforms and decentralized finance (DeFi)

solutions have received major funding to challenge traditional
banking models.
o Crowdfunding and peer-to-peer lending platforms continue
to attract investments, reshaping the lending landscape.

3. Collaborations and Innovations:

o Bank-fintech collaborations are being funded to enhance

technology infrastructure and improve operational
efficiency.
o Investments in AI-driven solutions and digital infrastructure
are enabling fintechs to offer innovative services.
 CONCLUSION

To conclude the discussion on "Fintech: Financial Inclusion or Banking

Disruption," it is evident that fintech holds a transformative power
capable of shaping the future of the financial industry. While the
sector has made significant strides in promoting financial inclusion—
bridging gaps and empowering underserved populations with
accessible financial services—it has simultaneously posed challenges
to traditional banking systems through its disruptive innovations.

Fintech has revolutionized financial accessibility by leveraging digital

tools, such as mobile banking, digital wallets, and microfinance
platforms. These advancements have brought millions of previously
unbanked individuals into the financial ecosystem, fostering
economic growth and creating new opportunities.

On the flip side, fintech's disruptive nature has forced traditional banks
to adapt to changing consumer demands and innovate to remain
competitive. Blockchain, decentralized finance (DeFi), peer-to-peer
lending, and neobanks have challenged conventional systems,
reshaping customer expectations and introducing agile, tech-driven
alternatives.

The intersection of financial inclusion and banking disruption highlights

the need for balanced growth. Regulators and policymakers must
ensure that fintech's innovations do not compromise financial stability
or widen economic inequalities. Collaborations between fintechs and
traditional banks can enable a harmonious ecosystem that promotes
accessibility while driving innovation.

Ultimately, fintech's emergence has demonstrated that financial

inclusion and disruption are not mutually exclusive; rather, they
coexist as pillars of a dynamic and evolving financial landscape. The
focus should be on ensuring equitable access to services while
embracing the potential for innovation to reshape the future of
finance.