The origins of this digital revolution are traced back to the financial turmoil of 2008, when the global crisis ignited a wave of technological advancements in the finance sector. This upheaval gave birth to a FinTech revolution that promised more than just survival; it promised transformation. In India, a nation brimming with potential yet riddled with economic challenges, FinTech’s integration became a lifeline. It offered innovative solutions to age-old problems like inefficient resource allocation and widespread information gaps between banks and businesses. Given the enormity of these challenges, there was an urgent need to investigate FinTech’s potential in bridging these gaps and powering India’s digital transition deeply.
Published (DOI: 10.1016/j.tncr.2024.200091) in Transnational Corporations Review on 16 August 2024, this review comes from the research team at Maulana Azad National Institute of Technology, Bhopal. Their work is a testament to how far FinTech has come—and how much further it can take India. Drawing from 12 years of rich, state-wise data, the study vividly illustrates how financial technology is reshaping growth trajectories, particularly in regions that have embraced digital transformation. The findings tell a compelling story: FinTech doesn’t just modernize financial systems; it drives technological innovation, centralizes critical financial oversight, and cultivates robust regulatory frameworks, all essential for India's economic leap forward.
The research paints a fascinating picture of FinTech’s dual impact. By using the CRITIC method to analyze state-specific metrics, the study explains how FinTech has fundamentally changed the way financial markets operate. It reduces the distance between knowledge and action by narrowing information asymmetry, enhancing risk management, and reducing transaction costs. In states where regulatory mechanisms are well-developed, these benefits multiply, making way for unprecedented financial efficiencies. Perhaps most intriguing is how FinTech emboldens banks to invest in high-risk, tech-driven projects, which catalyzes digital industrialization. This centralization of financial power not only accelerates tech adoption but also gives governments the agility to channel resources more strategically, crafting a cohesive digital ecosystem.
Dr. Nenavath Sreenu, the study’s lead researcher, puts it best: “Our findings underscore the pivotal role of FinTech in advancing India’s digital economy. By enhancing transparency and risk management, FinTech fosters an environment where financial and technological innovation can thrive. The data also show that, when combined with strong regulatory support, FinTech has the potential to lead India’s economy into a new era of digital-driven growth, particularly in states with more established financial infrastructures.”
The implications of this research are far-reaching. FinTech’s expansion could spark a wave of economic resilience and innovation, especially if supported by strategic policy adjustments that embrace financial centralization and regulatory oversight. With thoughtful integration into state and national frameworks, FinTech could unlock the next chapter of India’s economic story: one where financial inclusivity and technological advancement are not just goals but realities. As the nation navigates the complexities of modern finance and technology, this study serves as a roadmap for a future where India stands as a global leader in digital economic transformation.
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References
DOI
10.1016/j.tncr.2024.200091
Original Source URL
https://doi.org/10.1016/j.tncr.2024.200091
About Transnational Corporations Review (TNCR)
Transnational Corporations Review (TNCR) is an interdisciplinary journal that focuses on the economic analysis of transnational corporations (TNCs). It publishes refereed articles on foreign direct investment, international trade and finance, global supply chain, digital trade, sustainability, diffusion of innovation, innovation and policies associated with TNCs, which cover the economic, institutional, social, and environmental impacts of TNCs. The journal also encourages submissions on international development related to TNCs in the digital economy era and issues involving emerging-market multinationals, especially how TNCs from emerging markets take advantage of the digital economy to leapfrog.