The digital economy is quickly getting converted into a data driven economy. The past decade has seen a surge of disrupting internet startups, and the main weapon of these disruptors has been “data”. The disruptors in the financial services sector are being officially labelled ‘Fintech’ startups, and the same terminology is being extended to other sectors namely insurtech, edutech and so on..

Following on the success path of huge e-Commerce giants, these fintech startup companies are leveraging data to identify and understand their customers and sell them better products. They are providing the transparency and education required to get the confidence of their customers. They are reducing the middleman commissions, removing manual frictions, bringing down transaction costs and reaching out to sections of the society that were unbanked or underbanked.

As more data of consumers is available publicly, these startups are leveraging it to understand their credit potential, thereby providing loans and insurances to the markets that traditionally remained untapped. However, the same techniques are lacking when banks are trying to woo the retail investors to invest their money in stocks, mutual funds and ULIPs. There is hardly any data exchange, and customers are still being targeted via traditional means of selling techniques, with a huge dependency on financial advisors and brokers.

Fund houses are not leveraging the power of data to its potential, which can actually help boost the investor confidence. In-fact, they are obliged by the regulators to make all their data public. If this data is leveraged appropriately by their marketing departments, there is a huge potential of improving the investor footprint in growing economies like India. Needless to say, there still lies a huge opportunity for new startups to build products that can leverage data to attract new potential retail investors, thereby further boosting the economy of the country.