Dissertation Synopsis

On
The Impact of Fintech and Digital Financial Services
on Financial Inclusion in India

Dissertation Guide: Submitted by:

Dr. Ajay Patel Bharat Varshney
(Dean Research) BM-022069
(2022-24)
Purpose of the study

This study's main goal was to evaluate how people's behavioral intentions affect
their use of fintech services. Human behavior is motivated by social influence,
usability, and trust. Because of this, the influence of these three elements was
also evaluated in this study as a crucial aspect of using fintech services to
promote financial inclusion.
India is a rapidly developing nation with a large population base worldwide.
Nonetheless, a sizable section of tribal and rural area is isolated from official
banking services, which impedes economic growth and exacerbates the region's
pervasive poverty. Due to their frequently erratic income, the poor have a harder
time managing their finances than anyone else.
Since its inception during the 2007–2008 financial crisis, financial technology,
or fintech, has brought new technologies to the market and transformed the
financial services industry. The two pillars around which the expansion of
contemporary banking has been constructed are technology-based banking.
Over the past ten years, fast mobile network growth in underserved areas and
communities in India has also been a major driving force behind this cause. As
an extra option to online and mobile banking, payment banks have grown in
popularity. This has helped to lower operating costs and improve operational
efficiency for businesses serving customers in rural and semiurban locations.
The creation of an inclusive financial industry offers two benefits that enhance
each other. First, financial inclusion may provide a means of connecting
individuals who are shut out of the market with economic development. Second,
economic expansion attracts new participants to the financial and economic
spheres. By supporting growth components including raising people's access to
opportunities for entrepreneurship and savings mobilization, reducing their
vulnerability to risk, and raising their standard of living, inclusive financial
advancements can reduce poverty.
In an effort to increase access to financial services, new bank types have
emerged, including payment banks, small banks, and mobile money services for
people without bank accounts.
New nonbank fintech companies that are competing for a larger piece of the
banking value chain are another example of how financial inclusion has
progressed.
This indicates the extent of the industry's advancement. This study looked at
how people's social influence, behavioral intention, trust in fintech services, and
usability of those services affected their use of such services for financial
inclusion.
Literature Review

Kandpal, Vinay and Mehrotra, Rajat, Financial Inclusion: The Role of Fintech
and Digital Financial Services in India (March 13, 2019)
The evolution of cashless transactions reflects a globalized market and
expanding banking sector. Despite strides in financial inclusion in India,
challenges persist in driving broader formal financial service adoption.
Government initiatives, including demonetization, incentivize cashless
transactions, fostering innovation. Amendments to banking regulations signal
intent for a robust BFSI sector. Trust-building is pivotal for India's growth, amid
cybersecurity concerns. Government support facilitates access to financial
products for the non-banking population. Payment organizations showcase
mobile-led solutions, with technology firms engaging rural India in financial
education and investment avenues.
Nanduri S. Digital Finance: Fintech for Financial Inclusion and Sustainability.
Turkish Online Journal of Qualitative Inquiry. 2021
This literature review focuses on the prominence of "Fintech" in the evolving
financial landscape, emphasizing its pivotal role in achieving cost-effective,
cashless, and branchless systems. The research explores recent Fintech
developments, its application in microfinance delivery, and key distribution
technologies for financial inclusion. Drawing on secondary data from diverse
sources, including books, journals, and websites, the paper underscores the
transformative impact of technologies like MIS, POS, ATMs, IVR systems, and
smart cards on microfinance. While acknowledging the challenges, the study
emphasizes the need for addressing them in tandem with the evolving financial
trends. The conclusion, though based on secondary data, contributes valuable
insights for policymakers, shedding light on Fintech's effectiveness in inclusive
financial programs.
Goswami, Shubham, Raj Bahadur Sharma, and Vineet Chouhan. "Impact of
financial technology (Fintech) on financial inclusion (FI) in Rural India."
Universal Journal of Accounting and Finance 10.2 (2022):
This research delves into the transformative impact of financial technology
(FinTech) on various sectors of the economy, particularly in emerging
developing economies experiencing rapid expansion in FinTech and mobile
money services. The study focuses on critical success factors influencing the
adoption of disruptive FinTech for financial inclusion in rural India. Employing
a quantitative approach with inferential statistics, exploratory factor analysis,
and structural equation modeling, the research empirically measures the impact
of technology on promoting entrepreneurship in underdeveloped regions.
Results reveal the positive influence of social factors on behavioral intention to
use managerial technology in rural India, emphasizing the significance of end-
user habits and perceived ease of use. The findings offer valuable insights for
policymakers, regulators, investors, and the mobile service industry, guiding the
development of cost-effective FinTech services with maximum social benefits
and facilitating cross-border transactions for low-income customers in remote
areas.
Agrawal, Gaurav, and Pooja Jain. "Digital financial inclusion in India: a
review." Behavioral Finance and Decision-Making Models (2019):
This chapter emphasizes the multidimensional nature of financial inclusion and
highlights the transformative role of technology in rural India. The integration
of electronic banking activities is shown to positively impact the use of financial
services and elevate living standards. Despite widespread mobile phone usage,
there remains an untapped market for commercial banks, especially in the
nascent stag
es of mobile banking development in India. The primary goal is to uncover the
drivers influencing the adoption of mobile financial services and examine
individuals' intentions to adopt and use mobile banking. This, in turn, is
expected to enhance accessibility to financial products in rural areas,
contributing to an overall improvement in living standards and the nation's
development. The study relies on secondary sources related to financial
inclusion, exploring new banking technologies and understanding people's
behaviors in the adoption and utilization of banking services.
Bala, Shashi, and Puja Singhal. "Digital Financial Inclusion Through FinTech."
Gender Perspectives on Industry 4.0 and the Impact of Technology on
Mainstreaming Female Employment (2022):
The strength of a nation's financial condition is crucial for its economic growth.
This chapter underscores the pivotal role of digital financial inclusion in
achieving inclusive growth, particularly by providing cost-effective and timely
financial services to marginalized groups, such as women and girls in rural
areas. The exploration of new digital financial technologies, including FinTech,
is a central theme, aiming to illuminate the transformative impact on women's
lives. G20 financial inclusion indicators serve as a lens to analyze gender
dimensions and issues related to digital financial accessibility. The chapter also
delves into the initiatives by the Indian government, banks, and FinTech start-
ups, highlighting their efforts in bridging the financial gender gap and
contributing to sustainable growth in India.
Research Gap

The presented research articles collectively contribute to the understanding of

the evolving landscape of financial inclusion in India, particularly emphasizing
the role of FinTech and digital financial services. Despite the valuable insights
provided by these studies, there exists a notable research gap that warrants
further exploration.
One evident gap is the limited focus on the specific challenges faced by
vulnerable groups, such as women and those in rural areas, in adopting and
benefiting from FinTech solutions. While the literature acknowledges the
transformative potential of digital financial inclusion for marginalized
populations, there is a need for in-depth analysis of the barriers and facilitators
unique to these demographic segments. Understanding the nuanced factors
influencing the adoption and impact of FinTech on women's financial inclusion
and the rural population could provide actionable insights for policymakers and
practitioners.
Furthermore, the existing literature lacks a comprehensive examination of the
socio-cultural factors influencing the adoption of FinTech in diverse regions of
India. Cultural nuances, trust-building mechanisms, and perceptions of
technology may vary significantly across different states and communities,
influencing the acceptance and effectiveness of digital financial services. A
more granular analysis considering regional variations could enhance the
applicability and effectiveness of FinTech interventions.
Additionally, while some articles touch upon the regulatory landscape and
government initiatives, there is a research gap in assessing the long-term
sustainability and scalability of these interventions. An exploration of the
regulatory challenges faced by FinTech companies, the adaptability of existing
regulations to evolving technologies, and the effectiveness of policy measures in
fostering a conducive environment for financial inclusion would offer valuable
insights for policymakers, regulators, and industry stakeholders.
Addressing these research gaps would contribute to a more nuanced and
comprehensive understanding of the dynamics and challenges associated with
digital financial inclusion in India, ultimately informing evidence-based
strategies for achieving sustainable and inclusive economic growth.
References

Kandpal, Vinay, and Rajat Mehrotra. "Financial inclusion: The role of fintech
and digital financial services in India." Indian Journal of Economics & Business
19.1 (2019): 85-93.

Nanduri S. Digital Finance: Fintech for Financial Inclusion and Sustainability.

Turkish Online Journal of Qualitative Inquiry. 2021 Jul 1;12(6):5135-42.

Goswami, Shubham, Raj Bahadur Sharma, and Vineet Chouhan. "Impact of

financial technology (Fintech) on financial inclusion (FI) in Rural India."
Universal Journal of Accounting and Finance 10.2 (2022): 483-497.

Agrawal, Gaurav, and Pooja Jain. "Digital financial inclusion in India: a

review." Behavioral Finance and Decision-Making Models (2019): 195-203.

Bala, Shashi, and Puja Singhal. "Digital Financial Inclusion Through FinTech."
Gender Perspectives on Industry 4.0 and the Impact of Technology on
Mainstreaming Female Employment. IGI Global, 2022. 77-90.