India overtook China in financial activities with 33 deals valued at around USD 647.5 million. 

In recent years, India has become one of the leading fintech service providers and fintech adopters in the world. According to an Economic Times report, India’s fintech startups raised USD 2.6 billion in 2019 with 180 rounds of capital raising despite the slowing consumption economy and ailing financial sector. 

The Covid-19 pandemic had an adverse effect on the global economy and we witnessed a drastic dip in the GDP of the country. Although the Indian fintech sector fought the pandemic by initiating innovations and introducing policies by understanding the digital shift taking over consumers and businesses across the country. A Business Insider report says how a Bangalore-based payment gateway Instamojo introduced an initiative priority KYC for essential businesses to go online instantly, within 5 minutes. 

The Indian digital payment sector is growing fast with the increasingly mobile consumers and internet users. According to Research and Markets, the Indian digital payments industry will grow at 27% CAGR to reach INR 7,092 trillion by FY25. Both government and private financial service providers are embracing disruptive technologies like artificial intelligence and machine learning to enhance customer experience, support digital consumers, detect and prevent frauds. 

India has been at the helm of driving its fintech sector to commendable growth by encouraging fintech startups. The government has also extended the accessibility of its digital platforms like UPI, IMPS, Digilocker, etc., to private fintech companies and banks. 

With the revolutionary innovations and penetration into the digital ecosystem, India has emerged as the fastest-growing fintech market in the world. The recently released report by RBSA Advisors reveals that India overtook China in becoming Asia’s biggest destination for the highest fintech activities with 33 deals valued around USD 647.5 million compared to China’s USD 284.9 million during the quarter ended June 30, 2020. The report says that the availability of a technically skilled workforce and the presence of most parts of the financial services and technology ecosystem make Bengaluru and Mumbai the top cities for fintech companies. 

Technology has a great role to play in this transformation of the fintech sector in India. With the advent of the pandemic, there was a visible increase in the adoption of cutting-edge technologies and automation across the sector. The popularisation of digital wallets gave rise to cashless payments from anywhere. The developing venture capitalist culture has promoted many startups that quickly established their place among the consumers. The MEDICI report mentions that the number of fintech startups in India is almost 2200 with Mumbai and Bengaluru home to most of them. 

The RBSA report reveals that India is home to 21 Unicorns, collectively valued at USD 73.2 billion, and fintech company Paytm is India’s highest valued Unicorn at USD 16 billion. As the report states, “While the FinTech industry is still in its early adoption stage, we believe it is well-positioned to witness long-term growth in the coming years. The changes will be more focused on digital lending (alternative finance) and open banking. FinTech growth will ultimately create outsized opportunities for firms and help empower them in the digital age.”

India’s fintech industry is going to excel in the global market along with providing convenient and flexible financial services to consumers. The increased digitization of the sector will lead to its growth and extensive structural change. 

Meta: The fintech market in India is leading with the best financial services. The digital payment sector in India has evolved commendably. There is a huge role of technology in driving the Fintech industry. The fintech startups in India also contribute to the growth.