In this year's Union Budget, Finance Minister Nirmala Sitharaman unveiled a series of measures to strengthen digital banking and the fintech ecosystem in India. The government has proposed setting up 75 Digital Banking Units and has said that it will continue financial support for the digital payment ecosystem.

However, for digital banking to truly succeed, there is one big piece in the puzzle that is still missing. India lags much behind developed countries when it comes to financial literacy. While the government has taken several steps to address this need, India’s startups in particular are very well equipped to meet this challenge.

In India, 80% of the population is literate, but only 27% of India's population is financially literate.

In 2013, this figure stood at 15% and matters have improved since then. But it's still not enough for a country of approximately 1.4 billion people, of which 250 million are students.

India is a country of savers, but saving is not the same as investing. Government institutions such as the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) have taken steps to improve financial literacy.

The Reserve Bank of India also came up with the National Strategy of Financial Education 2020-25. According to the RBI, the program’s vision is to empower the population to develop adequate knowledge, skills, attitude and behaviours which are needed to manage their money better and plan for their future.

How can this be done? For starters, financial literacy should be made a compulsory part of every Indian school student’s curriculum, in both schools and colleges.

However, changing the curriculum is not an easy task. This is where startups can step in by giving students access to digital modes of learning.

Fintech companies and digital learning start-ups are already equipped with access to millions of people, and have easy-to-use interfaces, which is very necessary for getting through to today's generation of students.

Any student anywhere can access quizzes, video lectures, articles and more about investing, insurance and stock markets at the click of a button. In fact, fintech apps can also be used to manage spending, access loans and even make investments.

This will help inculcate the habit of financial discipline right from a young age. If students are in control of their finances at an early age, it also makes them independent and helps them reach their financial goals at an earlier age. This frees up their time and energy and lets them focus on what’s important – building a successful career or start a business and thereby help unlock the potential of the Indian economy.

Fin-tech apps can help students from all economic classes and backgrounds to access the right kind of financial learning and level the playing field.

The banking sector has undergone tremendous digital transformation in the last few years. However, there is a dark side to this growth. Each year, millions of Indians suffer from phishing, data breaches, malware attacks et cetera.

Each year, hackers and criminals get more and more sophisticated in their ways to target innocent people. Making people aware about the threats from such scams needs to be a big part of the financial literacy curriculum.

Fin-tech apps can educate people, especially students, about the pitfalls of digital banking through bite-sized learning.

There are other unexpected effects of financial literacy that can benefit the economy as a whole. Ashish Garg, president of ICSI (Institute of Company Secretaries of India), had said that when students are exposed to the fundamentals of capital markets and different areas of investments, they can even make a decision about whether to make this a career or not. As more and more fintech companies take India by storm, this will act as an important feeder of talent to these companies, creating a virtuous cycle.

Making the country financially literate can unlock huge potential in terms of promoting investments and accessing formal credit, which will indirectly lead to the growth of business and the economy. If India wants to achieve its goal of a $5 trillion economy by 2025, then financial literacy should be one of its first priorities and fintech apps can be at the forefront of this.