The landscape of the Indian fintech industry is undergoing significant transformation. In this State of the Economy podcast, KPMG Transaction Advisory Partner Sanjay Doshi and 3one4 Capital Founding Partner and CIO Pranav Pai discuss the growth of fintech in India with the practice’s Jyoti Banthia.
India’s fintech ecosystem can be broadly divided into three segments. The initial phase of fintech was primarily driven by payments, with innovative companies pioneering digital payment solutions. Subsequently, fintech companies expanded their horizons into lending, wealth management, and insurance, whether as distributors or product manufacturers. The third part deals with FinTech as an enabler and service provider to established financial institutions such as banks and non-bank financial institutions.
Investment has been an important factor driving the development of fintech in India. The industry has attracted significant investment over the years, with more than $25.8 billion pouring into fintech companies since 2014. While the pace of investment may have slowed in the near term, this is seen as a temporary phase while investors readjust their strategies.
Additionally, the regulatory environment will be critical in shaping the trajectory of fintech in India. The Reserve Bank of India has introduced guidelines to ensure responsible growth of the industry. These regulations aim to strike a balance between encouraging innovation and safeguarding the interests of consumers and the financial system.
One notable development is the concept of self-regulatory organizations. SROs can provide a collaborative platform for fintech companies to jointly address challenges and establish industry standards, thereby cultivating a more mature and responsible ecosystem.
India’s fintech industry is poised for continued growth, driven by innovation, investment and a collaborative regulatory approach. It remains a beacon of opportunity for start-ups and established financial institutions alike, heralding a future in which technology will revolutionize financial services to the benefit of all stakeholders.
Listen to the podcast!
(Host: Jyoti Bantia; Producers: Anjana PV, Nabodita Ganguly)
Podcast about the state of the economy
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