With increasing awareness and acknowledgment of the Internet in Indian people, a high growth of e-commerce is expected over a couple of years. E-commerce is doing good in various sectors in India including the travel industry, e-tailing industry, digital downloads, financial services and others. Online financial services have got a lot of importance in India. Various financial transactions such as money transfer form one bank to other, insurance payments and renewals can be easily done over the Internet.
Growth of online financial services
As of 2009, the online financial services contributed about 8% of the total market size of e-commerce in India. The online financial services in India were considered to have an annual average growth of 30%. The overall market size of the online financial services in 2008 was Rs.1,200 crores and it was increased with 28% growth rate to Rs.1,540 crores in 2009. It was further estimated to reach Rs.2,000 crores in 2010 with 30% growth.
Components of online financial services and their share
Online financial services in India include insurance and related services, fund-based transactions like paying utility bills, and online transactions for financial services. In 2009, out of total online financial market size (Rs.1,540 crores), insurance and related services was in the first position contributing 38% (Rs.586 crores). Fund-based transactions and online transactions contributed 34% (Rs.527 crores) and 28% (Rs. 426 crores) respectively.
The growth of online financial services is expected to increase further. By the end of 2011, the market size of the online financial services was estimated to reach Rs. 2,680 crores with 34% growth.