Zijmr3jan21 13817

ZENITH International Journal of Multidisciplinary Research ____________ISSN 2231-5780
Vol.11 (1) January (2021), Impact Factor: 7.188

Online available at www.zenithresearch.org.in Email: editor@zenithresearch.org.in
Drivers of FinTech in India - A Study of Customers’ Attitude and

Adoption
1) Dr. Disha Mehta (Corresponding Author)
Assistant Professor, Amity Global Business School,
B-Block, Hyderabad Next Express Centre, Beside L & T Metro Station, Punjagutta,
Hyderabad-500 082, Telangana State
2) Dr. Sweta Kumari

Assistant Professor, Amity Global Business School,
B-Block, Hyderabad Next Express Centre, Beside L & T Metro Station, Punjagutta,
Hyderabad-500 082, Telangana State
Abstract
New financial technologies (FinTech) have exploded around the world. Consequently, there has
been a considerable surge in literature on FinTech over the last few years however primary study
on customer’s adoption and inclination to use FinTech technology are very limited There is
abundant research to be done before this area becomes an recognised academic discipline. This
paper focusses on customer’s responses with respect to adoption, inclination and attitude towards
FinTech technologies. Research has been supported by survey from wide variety of retail
customers of financial products and services, and also based on a thorough assessment of the
literature.Key research gaps have been covered with questions that could form the basis of
academic study. Itcould have implications for regulators, policy makers, banks, FinTech start-
ups and other financial institutions along with retail customer. As per analysis, FinTech will be
disruptive to payment and investment management sectors majorly. Variables like ease of use,
cheaper service, easy accessibility and enhanced customer experiencesignificantly impact
customers’ interest of adoptingFinTech in next five years.
Keywords: FinTech,, financial products, technology, financial services
A Monthly Double-Blind Peer Reviewed Refereed Open Access International Journal - Included in the International Serial Directories.
Page | 29
Introduction
FinTech is the widespread abbreviation for Financial Technology, which is the recent buzz-word
and considered as one among the trending fields in the prevailing digital age. This is largely
because of the fact that financial technology has the potential to transform and bring about
substantial changes in the way of life as well as in the ways that business is conducted.
FinTech can be defined asa new financial industry that applies technology to improve financial
activities. The primary medium of work is the internet and areas found would be insurance
trading and risk management. An increase in investment for both development and expansion of
this area lately.
The word “FinTech” actually made its way into the Oxford dictionary and is defined as
“Computer programs and other technology used to support or enable banking and financial
services”. Defining FinTech is easy as well as a difficult task.
The companies that operate in the FinTech arena usually offer products and services that the
financial institutions offer. But the difference lies in offering the same services by leveraging
technology, making them a lot more innovative and reasonably priced. The core cause for
FinTech to emerge was the massive amounts of currency pumped into the economy in the last
few decades. This results in manifold growth in individual purchasing power and disposable
cash. The same was also the reason behind rapid increase in venture funding and capital
investments at that time.
FinTech is an arena with a long history. When people hear “FinTech”, most of them think of the
recent mobile applications through which they pay for their morning coffee without having to
use a card or cash. But technology has constantly played an important role in the financial sector
in such ways that a lot of people treat as granted and might never be able to see.
The 1950s brought credit cards which eased the burden of having cash. ATMs replaced tellers
and branches in the following decade. Electronic trading of shares on exchange trading floors
began in the 1970s. There was a rise in the bank mainframe computers and sophisticated and
record-keeping systems in the 1980s. Internet and e-commerce business models were on the rise
in 1990s. Banking was mostly already totally digitized in the decade that followed.
Now, in the early 21st century, retail financial services are being further digitized via mobile
wallets, payment apps, robo-advisors for wealth and retirement planning, equity crowdfunding
platforms for access to private and alternative investment opportunities and online lending
platforms. These FinTech services are not just enhancements to banking services, but replacing
them completely.
Page | 30
In the last couple of years, many FinTech sector commentators and watchers have pointed to the
upcoming demise of banks. Quite a lot have questioned the existence of banks in the future.
Retail banking has flourished up until now. But this most recent evolution in FinTech may
change the banking landscape in some markets.
Apart from making banking more accessible and rapid, the technological innovations influence
reach is very diverse. It allows small businesses, entrepreneurs, charities and artists to receive
support without raising money from conventional investors.
Literature Review
Dipinder S Randhawa, Chan Jia Hao & Vani Swarupa Murali, 2018, Singapore: “India-
Singapore FinTech Cooperation: Opportunities and Challenges” – Singapore and India lead
developments in the use of FinTech. India offers the highest global returns on investment in
FinTech. Singapore has developed cutting-edge sandbox for testing new FinTech products, it has
a world-class digital and physical infrastructure. The potential for mutually beneficial
collaboration is vast. Key recommendations include: On collaboration between governments,
there is a need for information sharing on policies, consultations on data privacy, cyber security
and more. Interoperability allows for seamless fund transfers across geographical zones via a
single account..
Siddhanth Gurung, 2018. India: “FinTech: A Messiah for the ailing Banking Industry in India” –
FinTech is the latest buzzword in the area of banking and financial services. FinTech has
emerged as a potential disrupter in the financial sector with products and services that has well
managed to challenge the domination of traditional financial institutions. With the traditional
financial institutions, especially in India, undergoing a period of turbulence, which has in the last
few years witnessed the growth of bad loans, dissatisfaction among the customers regarding
several financial products and services, and growing loss of confidence among the public with an
imminent fear of a financial crisis, the opportunity seems ripe for the emerging but FinTech is
still a nascent player in the Indian financial sector. Hence, a collaboration with the ailing
traditional financial institutions would help provide a new direction to India’s financial sector.
This paper, thus, focuses on putting into perspective the role FinTech could play in helping the
country’s banking industry regain its lost footing in a highly dynamic sector.
Vivek Dubey, 2019, India: “FinTech Innovations in Digital Banking” – This paper discusses the
role of Artificial Intelligence, Augmented Reality and Blockchain in Digital Banking. Currently,
AR technology is having a vibrational impact in numerous industry sectors. From being
deployed in healthcare, oil and gas construction, and retail as well as manufacturing, AR
technologies are currently deployed to increase process efficiency, reduce costs and bring about a
broad range of commercial benefits. Artificial intelligence is the rising star in the world of
technology.
Page | 31
Varun Mittal, 2019, USA: “India FinTech Landscape” – This document describes the India
FinTech landscape, approaching the analysis from a FinTech, regulatory, Investment and talent
standpoint. This document serves as a snapshot of the key pillars of a FinTech ecosystem in a
country and provides a good overall view of the state of FinTech at a glance. India’s FinTech
sector is growing rapidly, fuelled by a large consumer base, unmet financial needs, SME credit
gap and a conducive environment supported by regulatory initiatives and policies. Much of
FinTech adoption in the country is driven by digital payments, which has got impetus from
recent innovations like United Payments Interface (UPI) platform. India has experienced a huge
shift from cash towards digitization, primarily due to Government initiatives and increasing
mobile and internet penetration. Banks and financial services industry is working in close
partnership with FinTechs which has resulted in strong B2B FinTech presence in the country.
Sunil Kapadia, 2020, India: “How Digitization Is Impacting Banking Transactions and Financial
Markets in India?” – The process of digitisation of our private and working lives cannot be
suspended. The progress in interconnection is paving the way for a new element of globalisation:
the globalisation of ideas, perspectives, possibilities, etc. Digital technologies entitle and
empower new framework and customer engagement turns progressively important for many
service providers. The digital economy is the latest manifesto to convert and reshape India into a
digitally entitled society and knowledgeable economy. Digitisation mechanizes both product and
process through which standard and productivity increases. This digitization has contributed to
advances like online banking, ATMs, and credit cards. Information and Communication
Technology can have a levelling effect. Microfinance institutions and new age FinTech
companies in India are working on technology advancement which has benefitted poor and
underprivileged by providing access to capital.
Research Methodology
Objectives of the Study
1. To understand the drivers of FinTech in India
2. To understand customer awareness and inclination towards FinTech products
Approach of the Study:
The current study used descriptive research design. For that primary data has been collected
through a structured questionnaire.
Data Collection Instrument:

For data collection, a structured questionnaire was used. It is employed to ensure uniformity in
data collection and a total of 150 respondents were selected using simple random sampling
method from Hyderabad city.
Page | 32
Hypotheses
H0: There is no influence of customers’ perception regarding various factors contributing
towards using FinTech services on respondents’ interest of using FinTech in next 5 years.
H1: There is influence of customers’ perception regarding various factors contributing towards
using FinTech services on respondents’ interest of using FinTech in next 5 years.
Data Analysis Method

In order to study which are the major drivers contributing to FinTech spread, different analysis
tools of Excel and SPSS has been used. Binary logistic regression has been used to test
hypothesis.
Findings and Conclusions

Respondents:
Table-1 : Demographic variables of respondents
No. of Respondents
Particulars (total respondents 150) Percentage
Gender
Male 84 56.00%
Female 66 44.00%
Age
< 20 years 18 12.00%
20 - 30 years 88 58.67%
30 -40 years 20 13.33%
40 - 50 years 14 9.33%
> 50 years 10 6.67%
Occupation
Student 35 23.33%
Employee 67 44.67%
Self-employed/Freelancer 35 23.33%
Home maker 13 8.67%
Household Monthly Income (Rs)
Less than Rs 30,000 5 3.33%
Rs. 30,000-60,000 25 16.67%
Rs. 60,000-90,000 56 37.33%
Rs. 90,000-1,20,000 42 28.00%
Above Rs. 1,20,000 22 14.67%
The demographic status of respondents was studied and reported in Table-1. 150 respondents for
this study are from different gender, age group, occupations and monthly income. Study group
Page | 33
consists of 66 (44%) females and 84 (56%) males. Considering the different age group, 18 (12%)
of the samples are below 20 years of age, 88 (58.67%) of the samples are between 20-30 age, 20
(13.33%) of the samples are between 30-40 age, 14 (9.33%) of the samples are between 40-50
age and 10 (6.67%) of the samples are age above 50. Study group consists of 67 (44.67%)
samples from Employee category, 35 (23.33%) samples from self-employed/ freelancer
category, 13 (8.67%) samples from home maker category and 35 (23.33%) samples from
student category. Looking at household monthly income, highest observations 56 (37.33%)
samples having monthly income 60,000 – Rs.90,000 followed by Rs. 90,000- Rs. 1,20,000
(28%), Rs. 30,000 – Rs. 60,000 (37.33%), above Rs.1,20,000(14.67 per cent) and less than
Rs.30,000(3.33%).
A. Contact with Financial Institutions- Public banks, Private banks, NBFCs &FinTech start
ups
Table-2 Financial institution contacts
Particulars Respondents Percentage

Public banks 55 36.67%
Private banks 99 66.00%
NBFI 41 27.33%
FinTech Start-ups 43 28.67%
When it was asked to respondents for their contact with which type of financial institutions for
availing different financial services and reported in table-1. Major 66% respondents confirmed
that they use financial services of private banks followed by 36.67% claimed to use financials
services through public banks, 28.67% of respondents confirmed to use financial services
through FinTech start up and 27.33% of respondents supported to use financial services through
NBFCs.
B. Primarily access of financial services- Mobile, Online & Physical branches

Table-3 Primary access of financial services

Mobile 68 45.33%
Online 64 42.67%
Physical
Branch 18 12.00%
Total 150 100.00%
It was asked that how the respondents primarily accessing financial services and reported in
table-3. Out of all the respondents, 45.33% said that they access financial services through
Page | 34
mobile. 42.67% of the respondents confirmed of accessing financial services through online
banking. Only 12.00% of respondents told that they access financial services through physical
branch. This result is showing that people shifting to digitalization for availing even financial
services.
C. Awareness, Usage and Willingness to use of Different Financial Services of FinTech

Table-4 Awareness, Usage and Willingness to use of Different Financial Services of
FinTech
Aware Using Interested in using
Respond Percent Respond Percent Respond Percent
ents age ents age ents age
Peer to Peer lending 96 64% 20 13% 12 8%
Crowd Funding 102 68% 14 9% 6 4%
Online lending by NBFCs 96 64% 20 13% 39 26%
M-wallets 140 93% 72 48% 14 9%
Merchant payments & PoS
services 118 79% 52 35% 14 9%
Crypto currencies 120 80% 16 11% 16 11%
Robo advisors 100 67% 14 9% 49 33%
Online financial advisors 130 87% 22 15% 18 12%
Online Wealth
Management services 123 82% 22 15% 16 11%
This study also tried to check respondents awareness, usage and willingness to use different
financial services of FinTech and recorded in Table- 4. Maximum 93% of respondents confirmed
that they are aware about M-wallet followed by 87% aware about online financial advisors, 82%
aware about online wealth management services and as mentioned in Table. If we look at usage
of those services, 48% respondents claimed to use M-wallet followed by 35% respondents were
using merchant payment. Only 9% respondents claimed to use crowd funding and robo advisors.
Maximum respondents 33% interested in using robo advisors followed by 26% interested in
using online lending by NBFCs. Only 4% respondents had shown interest in using crowd
funding.
D. Factor contributing towards using FinTech

When questioned what factors are contributing the customers to move towards FinTech and
recorded in Table-5. Respondents were asked to giving their response on 1(Very Unlikely) to
5(Very likely) scale and results were recorded in Table. Faster service with mean score of 4.47
on scale was found to be main factor for the customers to use FinTech services followed by Easy
accessibility (mean score 4.40) and ease of use (mean score 4.33). Least mean score 4.13 was
reported for cheaper service and access to advice.
Page | 35
Table-5 Factor contributing towards using FinTech
Very
Very Likely Somewhat Unlik Unlikely Mean
(5) Likely (4) Likely (3) ely (2) (1) Score
Ease of use 68 68 12 0 2 4.33
Faster service 82 60 6 0 2 4.47
Wider availability of
services 64 68 16 2 0 4.29
Cheaper service 54 66 28 0 2 4.13
Access to advice 50 72 26 2 0 4.13
Easy accessibility 78 58 10 4 0 4.40
Enhanced customer
experience 68 60 20 2 0 4.29
Minimum regulatory
concerns 54 64 24 6 2 4.08
Innovation in
existing products 56 70 22 2 0 4.2
E. Existing Institution rating on FinTech parameters
Table-6Existing Institution rating on FinTech parameters
Highest (High (Average (Low (Lowest Mean
Score(5) Score) 4 Score) 3 Score) 2 Score) 1 Score
Digital identity 32 48 38 20 12 3.45
Use of vernacular
languages 14 40 54 34 8 3.12
Online banking 32 44 38 20 16 3.37
Robo advisors 2 28 66 32 22 2.71
Precise lending (ex- agri
lending) 8 24 70 24 24 2.79
Micro insurance (ex- theft
insurance of your house for
three days if you are
travelling) 12 40 44 32 22 2.92
Social media usage for
communication 20 44 38 22 26 3.07
Mobile banking 54 34 30 18 14 3.64
This study also concentrated to find out respondents’ rating of existing institution on FinTech
parameters and recorded in Table-6. Respondents were asked to giving their response on
1(Lowest score) to 5(Highest score) scale and results were recorded in Table. Robo advisors
Page | 36
withlowest mean score of 2.71 on scale for existing financial institution followed by precise
lending (mean score 2.79) and micro insurance (mean score 2.92). Highest mean score 3.64 was
reported for mobile banking for existing financial institutions.
F. People perceptions towards FinTech

Table-7 Inclination towards FinTech
Yes No
More inclined towards 124 (82.66%) 26 (17.33%)

FinTech in the next 5 years
It was asked that whether you will be more inclined towards using FinTech in the next 5 years
and recorded in Table 7. Data shows that about 124 (83%) of the participants confirmed that they
will be more inclined to FinTech in 5 years time.
This study also tried to find out according to customers’ perception at what extent FinTech is
disruptive. Respondents’ data is tabulated in Table-8. 38 respondents believed that FinTech will
be disruptive followed by 37 believed that FinTech will be highly distruptive. The mean score of
this is 4.33.
Table-8 FinTech distruptive scale
Highly Not Not at all

Distruptive Distrupt Moderat Distruptive Distruptiv Mean
(5) ive (4) e (3) (2) e (1) score
FinTech is
distruptive
(no. of
respondents) 37 38 44 20 11 4.33
Table-9 FinTech disruptive to different sector
No. of Percenta
Particular Respondents ge
Credit Service 32 21.33%
Payment 62 41.33%
Investment Management 62 41.33%
Personal Finance Management 51 34.00%
Bank tech 40 26.67%
Insurtech 40 26.67%
Page | 37
It was asked to respondent about which sector is more disruptive due to FinTech and results
reported in Table-9. According to the survey, 41.33% respondents believed Investment
management and payment sectors are the most disruptive as far as FinTech is concerned. 34%
respondents believed investment management is next sector which is disruptive considering
FinTech services. 26.67% respondents claimed FinTech is disruptive in Banks and Insurance
tech sectors. Only 21.33% respondents believed credit service sector is disruptive considering
FinTech services.
Table-10 FinTech and Banks in future
No. of
Banks will continue to dominate 22 14.67%
A mix- Banks and FinTech companies each dominating
distinct products 102 68.00%
Banks will become minor players 26 17.33%
Total 150 100%
One question was asked specifically from the perspective of banks status in future and results
were reported in Table 10. Majority 68% respondents believe that Banks ans FinTech companies
each will dominate in different products.
G. Concerns for FinTech Products

Table-11Concerns for FinTech Products
No. of
Security of your money/investment 30 20.00%
Protection of your personal data 28 18.67%
Cyber attacks 62 41.33%
Lack of expertise/experience 24 16.00%
No concerns 6 4.00%
Total 150 100%
It was asked the respondents for their concern for using FinTech products and results are
recorded in Table-11. Major concern of respondents (41%) was regarding cyber attack followed
by 20% respondents concerned about security of their investment. 18.66% respondents had
doubt about protection of their personal data. 16% respondents had doubt about of lack of
expertise in this field. Only 2.66% respondents did not have any concerns for using FinTech
products.
Page | 38
H. Hypothesis Testing
H0: There is no influence of customers’ perception regarding various factors contributing
towards using FinTech services on respondents’ interest of using FinTech in next 5 years.
H1: There is influence of customers’ perception regarding various factors contributing towards
using FinTech services on respondents’ interest of using FinTech in next 5 years.
To check above mentioned hypothesis binary logistic was used. As discussed in section F, it was
asked that customers’ perception regarding inclination to FinTech in next five years or not. As
per data, 124 respondents believed to be more inclined. This variable was considered as
dependent variable for Binary Logistic analysis. As discussed in section D, respondents’ scores
were recorded for 9 various factors contributing towards moving to FinTech which all
considered as independent variables for Binary logistic. Results of Binary Logistic are recorded
in Table 12. As per analysis, four variables named ease of use, cheaper service, easy accessibility
and enhanced customer experience significantly impact the customers’ interest of usingFinTech
in next five years. Remaining five variables did not reflect significant influence on dependent
variable. Binary logistic regression provided chi-sqaure value 35.715 that is statistically
significant. That value suggests that a good fit model and the data. Furthermore, the Pseudo R
squared is equal to 0.352 which suggest that this overall this model can explain 35.2% variation
in dependent variable. In addition, analysis also suggests that overall 85.3% this model would be
give correct result.
Table-12 Binary logistic regression results
Particulars Coefficient Sig.

Ease of use 1.996* .004
Faster service .256 .683
Wider availability of services -.071 .880
Cheaper service .264* .004
Access to advice -2.064 .631
Easy accessibility .258* .004
Enhanced customer experience .862** .036
Minimum regulatory concerns -.083 .841
Innovation in existing products .023 .969
Constant -4.377** .036
Chi- square : 35.715*(sig: .000)
Pseudo R squared : .352
Overall percentage of model: 85.3%
Note: Values marked with * and ** indicate significance at the 1% and 5% level.
Based on the results of the binary logistic regression, the following equation can be derived:
Page | 39
Inclination towards FinTech in 5 years= -4.377+ 1.996 (Ease of use) + .264 (Cheaper
service) + .258 (Easy accessibility) + .862 (Enhanced customer experience) + 𝜀
𝜀= random error
Conclusions
From the above findings, it is concluded that there is huge scope of FinTech in India as less
number of users of FinTech are there as of now and people like to access financial service
through mobile. Customers are interested in using FinTech services like robo advisors and online
lending.FinTech should work on these services where other financial services are not up to the
mark. Fast services, easy accessibility and cheap service are the major factors contributing to use
of FinTech by customers. FinTech will distruptive to payment and investment management
sectors majorly. Major concern for using FinTech is cyber-attack. For that reason FinTech
companies should focus on cyber security for giving safe experience to their customers.
Variables like ease of use, cheaper service, easy accessibility and enhanced customer experience
significantly impact customers’ interest of usingFinTech in next five years.
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FinTech250
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ZENITH International Journal of Multidisciplinary Research ____________ISSN 2231-5780

Vol.11 (1) January (2021), Impact Factor: 7.188

Drivers of FinTech in India - A Study of Customers’ Attitude and

2) Dr. Sweta Kumari

Data Collection Instrument:

Data Analysis Method

Findings and Conclusions

Particulars Respondents Percentage

B. Primarily access of financial services- Mobile, Online & Physical branches

Particulars Respondents Percentage

C. Awareness, Usage and Willingness to use of Different Financial Services of FinTech

D. Factor contributing towards using FinTech

Table-5 Factor contributing towards using FinTech

F. People perceptions towards FinTech

More inclined towards 124 (82.66%) 26 (17.33%)

Table-8 FinTech distruptive scale

Highly Not Not at all

Table-10 FinTech and Banks in future

G. Concerns for FinTech Products

Particulars Coefficient Sig.

Beck, T. – Demirgüç-Kunt, A. – Levine, R. (2000): A new database on the structure and

CB Insights (2017): The CB Insights FinTech 250. https://www.cbinsights.com/research-

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