Of the many countries that have begun to adopt the use of fintech, India has the highest rate of adoption globally. It is the second largest fintech hub after the United States, with 65% of the current 2100+ fintech companies being set up in the last five years. The United Payments Interface and other APIs, like Aadhaar, have created an enabling environment for the rapid increase in both supply and uptake of fintech innovations in India. The two dominant segments within the interfaces are payments and lending, with the portfolio also slowly diversifying to include Wealth Technology (WealthTech), Personal Finance Management, Insurance Technology (InsurTech), and Regulation Technology (RegTech). Given the current growth rate and the potential benefits of adopting fintech solutions, the end-user should be at the heart of the development process of future solutions.


What does the consumer consider important in health-tech and fintech solutions?

In a 2020 survey by DataLabs, the top three deciding factors when determining which solution provider to select and whether or not the consumer plans to use a tech-based solution in the first place, is customer service, quality of the application, and value for money. The feedback was nuanced based on the type of product used by the consumer: users of e-pharmacies rated customer service aspects such as staff behavior and return policies as the highest differentiator, while telemedicine and mHealth users valued app experience and cost-effectiveness as the most important factors in selecting these products.


Value for money was not a significant determinant in ePharmacy choices. This can be attributed to the inherent asymmetry in information in the healthcare market, i.e., the customer does not have the competence to determine the quality of a product, unlike say, the apparels market. For example, a patient is likely to choose the branded medicine prescribed by their cardiologist, rather than choose a cheaper generic alternative since they cannot ascertain if they are of the same quality or not.


While market surveys often collect feedback from existing or potential users, the needs and preferences of those yet to adopt tech-based solutions also need to be understood. Such insight is needed to increase the uptake of these promising solutions by slower-to-adopt populations like the rural and disadvantaged sections of society, those of whom could benefit greatly from such solutions.


What are the cultural factors in India that drive customer preferences?

The spending, saving, and investing behavior of most Indians are fairly affected by the culture of the community in which they live. Researchers Cristian Badarinza, Vimal Balasubramaniam, and Tarun Ramadorai, describe three characteristic economic behaviors of Indians in their study, The Indian Household Finance Landscape. In their study they found that Indians apportion an atypical amount of wealth to physical assets like real estate and gold (77% compared to 35% in developed countries), their major sources of borrowing are non-institutional, such as moneylenders or relatives, and they tend to invest less in insurance and retirement savings.


A preference for non-institutional sources of credit, especially in lower-income areas, is because these are perceived as better suited for their unstable economic situation. They also correlate cumbersome processes and the jargon of traditional financial institutions like banks to be ‘not for them’. User-friendly fintech lending options that can carry out alternate ways of credit scoring and simplify the loan disbursement process aptly cater to this requirement of the Indian consumer.


According to the World Bank, the unbanked population in India had dropped to 20% in 2017, from 55% in 2011, a significant achievement. However, this means 191 million people (over 15 years of age) still do not have a bank account with a traditional financial institution or with a mobile-money service provider – a large gap that fintech can close. The delayed healthcare seeking behavior and the inability for lower-income households to bear the inordinate healthcare expenses they incur, only emphasizes the need for fintech as a viable and accessible healthcare solution.


The use of fintech varies greatly by age and occupation. A study in Assam suggests over 60% of respondents belonging to the age group of 18 to 40 years repeatedly use fintech services, whereas only 34% and 30% of those aged 40 to 50 years and above 50 years, respectively, were regular users of these services. The extent of usage also varied by occupation, the highest category being professionals (80%), followed by businessmen (76%), government/public sector service holders (46%), and students (45%).


How to ensure user-centric development of evolving solutions?

Current and future fintech solutions should focus greatly on adding value and ensuring a positive customer experience. Health Technology Assessments (HTA), impact evaluations, and independent platforms that rate cost-effectiveness and user-benefit of technology solutions,are some of the levers that drive the rapidly advancing fintech and health-tech space to best serve the user. Whether it is a consumer, an institution, or the public sector, the target users of the tech products must be consulted before and after the design stage in order to ensure supply matches, and exceeds, the expectations of the demand.

Authors: Prashanthi Krishnakumar, Consultant, ACCESS Health International India