Fintech & Financial Services
India has a diversified financial sector undergoing rapid expansion both in terms of strong growth of existing financial services firms and new entities entering the market. The sector comprises commercial banks, insurance companies, non-banking financial companies, co-operatives, pension funds, mutual funds and other smaller financial entities.
The banking regulator has allowed new entities such as payment banks to be created recently, thereby adding to the type of entities operating in the sector. However, the financial sector in India is predominantly a banking sector with commercial banks accounting for more than 64% of the total assets held by the financial system.
The Government of India has introduced several reforms to liberalise, regulate and enhance this industry. The Government and Reserve Bank of India (RBI) have taken various measures to facilitate easy access to finance for Micro, Small and Medium Enterprises (MSMEs). These measures include launching Credit Guarantee Fund Scheme for MSMEs, issuing guidelines to banks regarding collateral requirements and setting up a Micro Units Development and Refinance Agency (MUDRA). With a combined push by Government and private sector, India is undoubtedly one of the world's most vibrant capital markets.
The Indian Fintech industry’s Total Addressable Market is estimated to be US$ 1.3 trillion by 2025 and Assets Under Management & Revenue to be US$ 1 trillion and US$ 200 billion by 2030, respectively.
The Payments landscape in India is expected to reach US$ 100 trillion in transaction volume and US$ 50 billion in terms of revenue by 2030.
India is the 2nd largest Insurtech market in Asia-Pacific and is expected to grow by ~15X to reach US$ 88.4 billion by 2030; India is poised to emerge as one of the fastest growing insurance markets in the world.
The Indian WealthTech market is expected to grow to US$ 237 billion by 2030 on the back of a growing base of retail investors.
India will become the 3rd largest consumer economy by 2030, driven by a young population comprising 65% population below the age of 35 years
Digital adoption continues to be propelled by rural India – clocking an 8% YoY growth to 333 million internet users (37% of rural population). Rural consumption accounts for 45% of all data consumption in India. Now there are 7 Rural Internet Subscriber, for every 10 Urban Internet Subscribers.
India already has the 2nd highest number of smartphone users globally, and is the 2nd largest Internet user market
Mobile banking internet banking, neo-banking and rise in digital products and solutions by private and Government of India support: 93% digital payments (by volume) done via mobile (2021) and over 1 billion cards are in circulation
The growing importance of the NBFC sector in the Indian financial system is reflected in the consistent rise of NBFCs’ credit as a proportion to GDP
NBFCs continued to deploy the largest quantum of credit from their balance sheets to the industrial sector, followed by retail, services, and agriculture.
- India-Gulf:
The Gulf Cooperation Council (GCC) nations, including the UAE, Saudi Arabia, and Qatar, continue to be significant players in India’s fintech and financial services sector. In 2024, India’s fintech exports to the Gulf region were valued at approximately USD 1.5 billion. The growing demand for digital financial services and solutions in these countries has created opportunities for Indian fintech companies to expand their presence. India’s digital payment platforms, such as Paytm and PhonePe, are gaining popularity in the Gulf, especially with the rising number of expatriates from India. Additionally, Indian neobanks and fintech startups have found success in providing cross-border payment solutions and financial products tailored to the needs of the Indian diaspora in the Gulf. - India-CIS:
The Commonwealth of Independent States (CIS) countries, especially Russia and Kazakhstan, are increasingly engaging with India’s fintech and financial services sector. In 2024, the fintech trade between India and CIS countries amounted to nearly USD 500 million, driven by the adoption of digital banking and payment solutions. India’s fintech firms are expanding their footprint in the region, offering solutions for digital payments, remittances, and blockchain technology. The Indian government’s initiatives to promote fintech exports and partnerships with CIS nations are expected to strengthen these ties. The rise of digital wallets and mobile payment solutions is becoming increasingly popular in Russia and Kazakhstan, contributing to the growing demand for Indian fintech expertise. - India-Europe:
India's fintech and financial services sector has made significant strides in Europe, with countries like the UK, Germany, and France leading the way. The export value of fintech products and services from India to Europe in 2024 was approximately USD 2.3 billion. India’s expertise in payment solutions, digital banking, and blockchain technology has attracted substantial interest from European investors and businesses. The rise of digital-first banking and the adoption of AI-driven financial services in Europe have created opportunities for Indian fintech startups to partner with European firms. India’s deep expertise in artificial intelligence and machine learning for financial services is expected to drive continued growth in the region, with more collaborations and technology transfers anticipated in the coming years. - India-America:
The United States remains one of India’s largest markets for fintech and financial services. In 2024, India’s fintech exports to the US were valued at approximately USD 3.7 billion. The demand for digital payments, AI-driven solutions, and blockchain technology is increasing, with Indian fintech companies providing innovative solutions for banking, insurance, and lending. Additionally, Indian firms are expanding into the US market by offering remittance services, cross-border payments, and digital wallets. The large Indian diaspora in the US further contributes to this growth, as they seek out Indian fintech solutions for sending remittances and managing financial services. India’s fintech ecosystem is expected to continue thriving in the US, with rising opportunities for collaboration in areas such as AI and cloud computing. - India-Asia Pacific:
India’s fintech industry has seen rapid growth in the Asia-Pacific region, with countries like Singapore, Australia, and Japan showing significant interest in India’s financial services and solutions. In 2024, India’s fintech exports to the region totaled USD 2.1 billion, driven by the increasing adoption of mobile payments and digital wallets. The rise of e-commerce, cross-border trade, and digital lending has opened up vast opportunities for Indian fintech firms. India’s expertise in blockchain and AI for financial services is highly valued in the Asia-Pacific region, with growing collaborations between Indian startups and regional businesses. As financial markets in countries like Singapore and Australia continue to evolve, Indian fintech companies are well-positioned to offer innovative solutions that cater to regional demands. - India-Africa:
In Africa, India’s fintech sector is witnessing significant growth, with fintech exports reaching approximately USD 1 billion in 2024. Countries like Kenya, Nigeria, and South Africa are driving demand for digital payment platforms, mobile banking, and remittance services. India’s fintech solutions are helping address the financial inclusion gap in Africa, with mobile wallets and digital lending platforms offering banking services to the unbanked population. The success of companies like M-Pesa in Kenya has inspired Indian fintech firms to develop similar solutions, which are gaining traction across the continent. The Indian government’s focus on digital financial inclusion through initiatives like the PMGDISHA campaign has supported the growth of fintech exports to Africa. - Looking towards 2025, the future vision for India’s fintech and financial services sector includes further integration of AI, blockchain, and big data analytics to drive innovation in banking, insurance, and investment solutions. The Indian government is also working to strengthen regulatory frameworks to support fintech growth, with an emphasis on cybersecurity and data privacy. India’s fintech exports are expected to continue expanding across all regions, with increased collaboration with global partners and a focus on financial inclusion in emerging markets. The rise of neobanks, digital lending platforms, and insurtech in India will play a crucial role in shaping the global financial landscape in the coming years.