Snapshot

India - A global FinTech Superpower

India has the highest FinTech adoption rate globally

India is amongst the fastest growing Fintech markets in the world. Of the 2,100+ FinTechs existing in India today, over 67% have been setup in the last 5 years. 

The Indian Fintech market is currently valued at $31 Bn and is expected to grow to $84 Bn by 2025, at a CAGR of 22%. 

The Fintech transaction value size is set to grow from US$ 66 Bn in 2019 to US$ 138 Bn in 2023, at a CAGR of 20%. 

The Indian Fintech ecosystem sees a wide range of subsegments including Payments, Lending, Wealth Technology (WealthTech), Personal Finance Management, Insurance Technology (InsurTech), Regulation Technology (RegTech) etc.  

The industry has seen cumulative investments into domestic FinTechs of more than $10 Bn since 2016. 

As of May 2021, India’s United Payments Interface (UPI) has seen participation of 224 banks and recorded 2.6 billion transactions worth ~$68 Bn representing a jump of 15x from just 3 years ago for the same period in 2018. 

 

  • %

    CAGR of Fintech market size in 2025

  • %

    Growth in number of deals from 2019-2020H1 compared to 2018

  • %

    CAGR in growth in digital payments transactions from FY18-20

  • %

    Highest expected RoI on Fintech projects globally

More than $10 Billion in funding from in the last 5 years 

Highest Fintech adoption rate globally (87%)

3rd largest FinTech ecosystem globally

Industry Scenario

It is expected that the Indian Fintech market, currently valued at $31 Bn, will grow to $84 Bn by 2025, at a CAGR of 22%. 

While Payments and Alternative Finance segments constituted more than 90 percent of the sector’s investment flows in 2015, there has been a major shift towards a more equitable distribution of investment across sectors since. In 2020, FinTech SaaS and InsurTechs saw total investments of $145 Mn and $215 Mn respectively, representing a 4-5X growth over their 2015 funding flow.  

Amongst India’s 50+ FinTechs with more than $100 Mn valuation, there are 4 Wealth and Broking FinTechs, 5 InsurTechs and 8 SaaS FinTechs.  

UPI is expected to grow significantly with the participation of domestic and international players (Paytm, Walmart and Google) continuing to dominate the segment, with a heavy focus on development the payments infrastructure through investments. 

Neo-banks in India are emerging as a key segment for growth in the space – with over 15 Neo-banks currently in India, several of them under development or in beta stages. The segment has been growing steadily, with several private banks partnering with these Fintechs to explore synergies and better means of service-delivery.  

 

GROWTH DRIVERS

  • Volume of Funds

    High volume of funding from venture capital, private equity and institutional investors driving innovation in the sector.

  • India stack

    Open API platforms i.e. Aadhar, UPI, Bharat Bill Payments, GSTN

  • New business models

    Implementation of new business models driven by technologies such as Artificial Intelligence and Machine Learning

  • Indian population’s digital behaviour patterns

    As of 2020, India has 550-600 million smartphones (60% higher than the corresponding number in 2016) and the number of internet users has also risen sharply in the past 4 years (Primarily driven by lower data tariffs)

  • India’s strong STEM

    India’s strong STEM (Science, Technology, Engineering and Mathematics) orientation and education institutes have enabled growth in the talent pool for the sector.

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What is an Account Aggregator?

An Account Aggregator (AA) is a type of RBI regulated entity (with an NBFC-AA license) that helps an individual securely and digitally access and share information from one financial institution they have an account with to any other regulated financial institution in the AA network. Data will not be shared without the consent of the individual.

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