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Mid-sized financial institutions are driving the fastest adoption of B2B SaaS (Software as a Service) in India's BFSI sector, while MSMEs are emerging as the next growth engine, according to a new report by Multi-Act Equity Consultancy Private Limited.
"61% of the respondents believe that rapid adoption is taking place at the mid-sized level," the study found, with only 26% pointing to large institutions. "For mid-sized institutions, the play is obvious - they need to scale fast and tech acts as a key catalyst in their growth journey," said Niranjan Ananth, Vice President Marketing, Profinch, quoted in the report. Large banks and insurers are burdened by legacy platforms, yet are beginning to see value. "Competitors with foresight are raising the bar, making it imperative for other large-sized institutions to follow suit," the report noted. At the same time, "user experiences are getting shaped by the way they engage and interact across e-commerce and social media platforms," making seamless digital journeys "almost table stakes." For MSMEs, B2B SaaS is becoming a critical enabler. "57% of the respondents believe that B2B SaaS solutions will play a significant role in catalysing growth in medium and small businesses." These platforms help "automate invoicing, managing payments, and ensuring regulatory compliance," while also "improving access to credit" through digital invoice financing and embedded lending. The report highlighted that "80% of the respondents said that increased automation can help add value to customer servicing" and "60% of the respondents said that increased automation can help add value to customer acquisition." Data security remains the top challenge, with "40% of the respondents said that their biggest technology challenges stem from data security, privacy, and cybersecurity." "Five or six years ago, building SaaS for India was almost unheard of, but that has definitely changed. I believe we are somewhere between nascent and accelerating," said Ausang Shukla, Founder and CEO, CapHive. The top value propositions cited by institutions were "Scalability - 70%, Boosting operational efficiency - 57%, Accelerated innovation - 57%." The report pointed to AI, blockchain and data residency as critical. "Incorporating AI/ML is crucial, but these services and models must also be deployed within India to ensure data security." It concludes: "India's B2B SaaS in the finance sector must embrace innovation to cater to the diverse needs of billions, prioritise security, and leverage data-driven insights. By doing so, we can empower businesses, foster financial inclusion, and drive sustainable growth." (ANI)
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