Fasanara Fintech Weekly

UK fintech turns to India, NLP provides an edge, India overtakes China, NatWest overhaul & More



Happy Thursday!



In this edition:


  • A passage to India? British fintech firms turn to the sub-continent

  • Indian Fintech start-ups overtake Chinese firms in raising funds

  • How NLP helps fintech pros get an edge

  • UK fintech suffered *only* a 23% drop in VC funding last year

  • NatWest to overhaul retail business as it tackles fintech rivals




A passage to India? British fintech firms turn to the sub-continent



India represents arguably the greatest market opportunity in the world, particularly for FinTech start-ups. It has the third largest number of start-ups in the world, and there were over six billion financial transactions conducted on mobile banking apps in 2019, up from under two billion in 2018.


This is not only a colossal amount; it is also an exponential increase showing no signs of slowing down. However, this transformation isn’t uniform. When such a diverse nation is thrust into the process of globalisation and economic modernity, not everyone arrives at the same pace.


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FinTech startups overtake Chinese firms in raising funds



In the month of February 2021 alone, fundraising by the Indian FinTech sector saw an increase of 46% to the tune of $200 million


Indian start-ups in the financial technology (FinTech) sector have overtaken their Chinese counterparts in raising funds. The fundraising has gone up 60 per cent to $647.5 million from 33 deals for the quarter ended June 30, 2020, according to a latest report by the Reserve Bank of India (RBI). In contrast, startups in the same space in China have raised $284.9 million during the same period.


Amid the Covid-19 pandemic, India has seen a 60 per cent year-on-year increase in FinTech investments to $1.5 billion in the first half of 2020. Indian FinTech firms raised around $3.2 billion in equity funding in 2019-20 but the fundraising activity slowed after the spread of Covid-19, according to India Trendbook Report 2021.


The size of the Indian FinTech market in 2019 was estimated at Rs 1.9 lakh crore. The growth of the FinTech sector is estimated at 22.7 CAGR during 2020-25.

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How NLP helps fintech pros get an edge



Historically, the financial services industry has been one that approaches technology with caution.


Feasibility, regulation, and privacy have all been barriers to tech adoption over the years. But that’s changing—a move brought on not only by choice but necessity. Financial institutions are drowning in text data, from compliance reports and contracts to news stories and even social media musings. The pace of information has accelerated exponentially over the past decade, and traditional processes just can’t keep up.


As a result, organizations are turning to automation solutions to help them cut through the noise and gain important insights more quickly and accurately than humans are capable of. This is why fintech is turning to Natural Language Processing (NLP): a subset of AI that has the power to help make fast, better-informed decisions, giving users a competitive edge. And with the ability to parse textual data, while understanding the nuances of industry jargon, numbers, different currencies, and company names and products, it might just be one of the most significant technologies to hit the industry.


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UK fintech suffered *only* a 23% drop in VC funding last year



Venture capital funding for UK fintechs in 2020 fell off a cliff, unsurprisingly, yet the overall decline was only around $1.5bn in actual capital raised.


Last year around $4.5bn worth of VC cash went into supporting the UK fintech sector, according to data in Tech Nation’s Annual Report.


That was led by some mammoth rounds from the likes of Revolut ($580m), Checkout.com ($150m), Monzo (£125m) and Starling Bank (£100m).


Despite the funding successes, the overall amount raised by UK fintechs fell by 23 per cent compared to the nearly $6bn that was raised in 2019.


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NatWest to overhaul retail business as it tackles fintech rivals



NatWest is planning an overhaul of its core retail banking business to fight back against fintech rivals and increase revenues in an era of low interest rates.


Changes will include making staff available for longer hours, introducing new investment products for less affluent savers, and boosting the size of its credit card business, according to people briefed on the plans.


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