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The Rise of FinTech in India's Financial Ecosystem

In: Trends and Challenges of Electronic Finance

Author

Listed:
  • Kavitha Desai

    (SVKM’s Narsee Monjee Institute of Management Studies)

  • Narayani Ramachandran

    (SVKM’s Narsee Monjee Institute of Management Studies)

  • Mahalakshmi S.

    (JAIN (Deemed-to-be University))

Abstract

India’s FinTech industry is rapidly evolving and ranks among the fastest-growing markets globally. It has emerged as a formidable entity, integrating diverse sub-sectors into the international financial landscape. The Indian financial services sector is undergoing a digital transformation, narrowing the technological gap with its global counterparts. According to a report by PricewaterhouseCoopers, the market was valued at INR 3.70 trillion in FY 2023 and is projected to reach INR 11.36 trillion by FY 2028, representing a robust CAGR of approximately 24.95%. India hosts over 9000 FinTech companies, making it the third-largest FinTech ecosystem globally, with an adoption rate of 87%, significantly higher than the global average of 64%.This growth is driven by government initiatives, a thriving funding environment, and the integration of emerging technologies. Key areas of impact include SME lending, retail lending, FinTech SaaS, and wealth management, with digital payments leading the sector post-demonetization. Challenges such as data security risks, demographic disparities in digital service adoption, and financial literacy must be addressed to sustain this growth. Developments in digital lending, payments, wealth management, insurance technology, and regulatory technology illustrate the sector’s transformative impact. The Indian government’s supportive policies, initiatives like India Stack, and increased collaboration between banks and FinTech startups further reinforce this growth. Despite challenges, the Indian FinTech sector’s potential remains immense, with projections suggesting significant contributions to financial inclusion, economic development, and ESG considerations. The sector’s future success hinges on overcoming these challenges through innovation, regulatory clarity, and enhanced digital infrastructure.

Suggested Citation

  • Kavitha Desai & Narayani Ramachandran & Mahalakshmi S., 2025. "The Rise of FinTech in India's Financial Ecosystem," Springer Books, in: Ananda S. & Tamanna Dalwai & Dharmendra Singh (ed.), Trends and Challenges of Electronic Finance, pages 217-234, Springer.
    • Handle: RePEc:spr:sprchp:978-981-96-3304-3_12
    DOI: 10.1007/978-981-96-3304-3_12
    as

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