Innovation Amidst Regulatory Changes, The Next Frontier For Entrepreneur
The year 2023 has been an extraordinary one for startups and founders. Just as the world was seen to be recovering well from the massive shock of Covid-19, there was big disruption caused by two wars, thwarting the progress, global supply chains, geo-political order, and flow of money.
As money flowing into startups became scarce, founders and teams found themselves suddenly addressing a different question, where “Growth at any cost” was being fast replaced by “sustainable growth” and “profitability.”
Along with this, there was another sweeping change that has been in the works across the world, which is the fast-evolving regulatory landscape to set guard rails for how startups should operate in sectors that have deep impact of involvement with a critical mass of users.
In the context of India, industries like fintech, gaming and healthcare have seen successive regulatory and statutory changes, significantly altering the operating environment, product innovation, business models and customer engagement frameworks.
As for fintech, Indian startups have made rapid strides in the field of payments & personal loans making money accessible & frictionless
Healthcare and financial services, the two pillars of growth
It is no secret that personal finance, healthcare, and wellness are topics that have a high need, applicability, and demand, both at an individual as well household levels for any society.
As for fintech, Indian startups have made rapid strides in the field of payments and personal loans making money accessible and frictionless. As on end of the year 2022, fintechs accounted for over 70% in disbursal volume of personal loans in India, representing the critical reach of this industry.
The Reserve Bank of India introduced Digital Lending guidelines that came into effect in late 2022 necessitating a complete operational revamp in how fintech companies delivered their services to the digitally savvy Indian populace, in partnership with regulated entities like banks and non-bank finance companies. The year 2023 also saw further tightening of this relationship by means of introduction of a cap on default guarantees and risk weightage allotted to personal loans, thereby further controlling the scale and operating models to ensure sustainable, customer centric operations. Fintech companies have spent the bulk of the year 2023 towards finetuning their models and recalibrating plans to remain in line with these regulatory changes.
Similarly, in the case of healthcare, post Covid-19, tele-medicine, and personal healthcare solutions became mainstream. Growth in teleconsultation peaked after the lockdown induced by the pandemic; the online doctor consultation market in India is expected to reach $1 Bn by end of the year 2024.
The National Telemedicine Service, eSanjeevani, a digital healthcare initiative by The Government of India under the Ayushman Bharat Health and Wellness programme. As of earlier this year, this telemedicine service has clocked over 10 cr consultations already covering the most vulnerable sections of the society.
Fusion of healthcare and finance set to disrupt personal health
Given the low penetration of private health insurance in India with less than 10 percent of population have access to adequate coverage, out of pocket expenses towards healthcare remain over 75 percent, making receiving timely care an extremely frictional experience for most.
This is where there have been advancements by startups who are creating high impact products, to facilitate on-demand finance and easy payment solutions, at point of healthcare, and empower people to prioritize personal health without breaking the bank.
Such models require technology platforms to stitch deep and well-regulated partnerships with Banks and non- bank finance companies to assess credit worthiness of customers in real time using highly digitized and transparent workflows, making it easy for people to unlock and access responsible credit for their specific healthcare needs.
Healthcare continues to be an underpenetrated domain and such models find favour with regulated entities like banks since they meet a specific purpose of furthering the reach of personal healthcare in a responsible, transparent, and controlled manner in coordination with healthcare facilities to closely monitor the end use of money.
Transparent and need-based solutions to drive the future
As startups mature and focus on sustainable growth, the focus will increasingly be on creating sustainable and specific solutions that have a real and tangible impact, beyond the easy strategy of discounting and me-too solutions. The introduction of Digital Personal Data Protection Act will place further emphasis on creating consent based and compliant workflows, empowering customers to make informed decisions.
All these evolving business requirements will force founders to put customers at the front and centre of building their product and engagement strategies and this can only benefit all stakeholders, leading to a more mature startup environment in India.