In this episode of the State of the Economy podcast, businessline’s Jyoti Banthia speaks to Sanjay Jain, Partner, Bharat Innovation Fund, and Shilpa Mankar Ahluwalia, Partner, Head-Fintech, Shardul Amarchand Mangaldas & Co., about the trends in the fintech sector in India.

The industry has witnessed a staggering 168 per cent surge in funding during the third quarter of 2023, a significant leap compared to the previous year.

India ranked as the world’s third-largest start-up ecosystem with almost 1,00,000 startups, stands as a robust contender in the global arena, trailing only behind the United States and China.

Read: makes strategic investment in fintech lending start-up Easiloan

A prevailing trend highlighted in the podcast is the extensive use of sophisticated tools incorporating data analytics and artificial intelligence. Fintech companies are harnessing customer behaviour data to tailor financial solutions, ultimately fueling the growth of digital lending and alternative credit options, which are increasing access to credit for traditionally underserved segments.

Furthermore, the adoption of Central Bank Digital Currency (CBDCs) is a pivotal development. India has taken the lead in this sphere, announcing plans to adopt wholesale and retail digital currencies, paving the way for their wide-scale utilisation in payment systems.

The growing importance of regulatory technology is also evident, aiding fintech players in navigating the evolving regulatory landscape.

The discussion extends to the transformation of fintech platforms into comprehensive financial service providers, to become one-stop solutions for a broad range of financial needs.

This strategic approach leverages the synergy of offering multiple products to the same customer base.

As the fintech sector matures, the focus is shifting towards profitability, enhanced corporate governance, and regulatory compliance. Investors are paying closer attention to these factors, leading to more judicious funding strategies. Notably, there is an increasing emphasis on data protection and the enhancement of consumer safeguards, with the anticipation of an upcoming data protection bill.

Despite the escalating regulatory landscape, the fintech sector continues to be a hotbed of innovation, with the introduction of novel products, technologies, and business models constantly shaping the industry.

Read: RBI issues norms to regulate fintechs in cross-border payments space

The conversation also touches on the challenges of coordinating across regulatory boundaries. It underscores the need for proportional regulation that can accommodate the diverse requirements of startups and established players in the sector. Listen in.

(Host: Jyoti Banthia, Producer: Amitha Rajkumar & Nabodita Ganguly)


About the State of the Economy podcast

India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups