In this State of the Economy podcast, businessline’s Sanjana B talks to Neha Singh, Co-Founder, Tracxn and Rishi Batra, Chief Operating Officer & Co-founder, TWID, about the future of India’s fintech industry. The podcast explores the rapid growth and emerging trends within the Indian fintech sector, which had a market size of $584 billion in 2022 and is projected to reach $1.5 trillion by 2025.
The conversation begins with an overview of the funding landscape, noting that while the industry saw a significant downturn from the peak of 2021, the momentum has picked up in recent months. Funding for fintech startups in India dropped more than 60% from 2021, with about $1.5 billion raised in 2023, but the latest quarter (Q3 2024) has seen some recovery. Fintech continues to be one of the top three sectors for investment in the Indian tech landscape, alongside retail and e-commerce.
Singh discusses the regulatory environment, highlighting the role of the Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI) in ensuring compliance. The RBI’s actions, such as licensing payment aggregators, aim to enhance consumer protection, a critical focus for the sector. Batra adds that the regulatory steps, though seemingly stringent, are well-researched and provide a necessary framework for a rapidly growing industry. He stresses the importance of a company-wide approach to compliance and the changing dynamics of data handling, product building, and customer protection.
The conversation concludes by considering how fintech startups can coexist with traditional financial institutions. Both Batra and Singh agree that the lines between fintechs, banks, and non-banking financial companies (NBFCs) are blurring. Banks are becoming more tech-savvy and are forming partnerships with fintechs, while some fintechs are moving into more traditional banking roles. This collaboration, alongside the evolving regulatory framework, is expected to shape the future of India’s financial ecosystem.
(Host: Sanjana B; Producers: Amitha Rajkumar)
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.
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