There was a stark difference in the atmosphere this year at the Global Fintech Fest, a three-day mela, which blocked the streets leading to Mumbai’s Bandra Kurla complex. Last year’s conversations were about who will survive the tough regulatory framework and who would make it for the long haul. There was a strong undercurrent of hesitation and apprehension over the future of fintechs in India. GFF 2023 was pretty much the opposite. The stalls were bigger and the theme was a lot grander, and the good part is that many of the fintechs did survive, and some of them have even found different purposes for businesses.

There are three takeaways from this – one, that fintechs are not fly-by-night models. They are here to stay, do serious business and make the dent in a space densely populated by the young blood rearing to make a difference in the routine way of doing things. Second, as opposed to the popular notion that many may not be adaptable to changes in regulations, fintechs have not just worked backwards on their business models, but are also carving out their niche. That they take up a tab on RBI ‘s home page and on the regulator’s mind space suggest their growing acceptability in the financial ecosystem. It’s likely that lending-related regulations could be further tightened. The good part is that increasingly, fintechs are okay with higher compliance, though we don’t know how they will deal with this, and what could be the cost implication of stricter rules. The third critical aspects of their association with banks. is even last year, banks saw fintechs with an air of doubts. Today, both fintechs and banks are willing to acknowledge the presence, role and importance. There is greater acceptance towards coexistence, rather than competition. This is the biggest mindset change. So, how should all this transpire till we meet next year?

GFF may have been a mega-scale shark tank, but multiples, premiums and big-ticket capital infusions were less spoken words. Clearly, the funding winter hasn’t gone away. Money is chasing far fewer names and down rounds have become today’s reality. Therefore, the next 12 months will be about execution. Can fintechs judiciously choose between growth and qualitative growth? The latter could involve tangible and intangible costs, while the former won’t. But investors will keep a hawk eye on companies with the ability to choose the latter over former. Can investments return net profits and do so keeping compliance and governance as the goal posts? We will know in the coming months. May the best businesses win.