India’s fintech ecosystem, the third-largest globally, is expected to reach a scale of $70 billion in annual revenue by FY30, accounting for 18–20 per cent of the addressable financial services revenue pool, according to Elevation Capital and McKinsey India.

With more than 9,000 fintechs, India is home to the third-highest number of fintechs globally and holds a 14 per cent share of Indian start-up funding. Furthermore, the report forecasts that the fintech sector is poised to generate $400 billion in value creation by 2030, indicating a 4X increase from its current level.

Moreover, there has been a threefold increase in funding between 2018 and 2022. At present, fintech companies account for 70 per cent of digital payment transactions, marking a 2.3-fold rise in their share during FY22 compared to FY19. Notably, fintechs now possess 50 per cent of the active broking accounts on NSE, underscoring a fourfold expansion in their share from FY19 to FY22.

The share of insurtechs, specifically in sectors such as motor insurance, has grown 5x from FY19 to FY22, and fintechs are capturing 5 per cent of the share of gross written premium underwritten. This share is expected to increase significantly over the next decade, noted the report.

Key tailwinds

“India is today setting the template for the rest of the world with its innovative models in fintech and financial services. Our fast-growing digital population, world-class digital public infrastructure (DPI), and proactive regulators are three key tailwinds underpinning fintech growth, which will expand into a $400 billion opportunity by 2030,” said Mridul Arora, Partner, Elevation Capital.

Amidst the storm of disruption in the financial services landscape, fintechs have emerged to play a significant role by capturing material share in key categories such as payment gateways, small-ticket personal loans, and BNPL lending. The sector is also rapidly growing share in otherareas including card issuing, wealth management, and insurance distribution and, as a result, already drives 3-5 per cent of the financial services revenue pools.

Around 84 per cent of survey respondents expect fintechs to play a significant or dominant role going forward, with SME lending, retail lending, fintech SaaS, and wealth (advisory and brokerage) being categories that will see the most fintech growth and innovation, according to the respondents.

However, industry participants believe that for continued growth, fintechs will need to overcome a few challenges, such as achieving sustainable profitability, ensuring a regulatory-compliant business model, and adhering to risk and security standards.

4ES of fintech

“Fintechs are capturing a sizable market share of 3-5 per cent of India’s large and growing financial services revenue pools. They are creating and will continue to create value across the 4Es of expansion, efficiency, experience, and enablement. Over the next decade, we expect this value creation to accelerate, catalyzed by India’s Digital Public Infra, allowing them to capture 12-15 per cent of the financial services revenue pool by 2030,” said Vaas Bhaskar, Principal, Elevation Capital.

With insights from a comprehensive survey of more than 70 industry experts and conversations with over 20 industry leaders from fintechs and financial services, including Ajay Rajan (Head of Digital and Transaction Banking, Yes Bank), Anup Agarwal (Co-founder & CEO, Mintifi), and Vijay Shekar Sharma (CEO, Paytm), among others.

Early-stage venture capital firm Elevation Capital unveiled its report on the Indian Fintech sector, titled ‘The Bottomline: Elevation Fintech Report 2023’, with the support of McKinsey India as the knowledge partner. The report can be viewed and accessed at from 12 noon on August 31.