Boom In Indian Fintech Industry: $1 Trillion Assets & $200 Billion Revenues Expected By 2030

By 2030 the Indian financial technology sector is expected to reach $1 trillion in assets under management (AUM) and $200 billion in revenue.

Indian Fintech Sector to Reach $1 trillion

This, as per the “$1 Trillion India Fintech Opportunity” report, can be attributed to the fact that companies are offering segment-specific solutions, there is gained momentum in the fintech adoption as well as the greater penetration of the Unified Payments Interface (UPI).

In a report released on August 9, the capital firm Chiratae Ventures and Ernst & Young said that “The market has seen high valuations on the back of large untapped market opportunities…and historical fintech growth has been driven by an organic and collaborative ecosystem while being supported by key government initiatives”. 

The report said that as of 2021, the fintechs’ AUM was around $100 billion and revenue around $20 billion. The report has included payments, lending, neo-bank, insurtech and wealthtech in the fintech ecosystem.

TC Meenakshi Sundaram, cofounder and vice chairman of Chiratae Ventures said that fintech will be an integral part for every sector that is growing in a big way. Payments is going to be very big and monetization is going to take place in other areas through other activities. 

Spectacular Investments in Digital Lending

As per the report, in 2021 more than $1 billion in investments were made in digital lending alone. By 2030, this market is expected to grow to $515 billion in book size. It said that by offering lending products, e-marketplaces are shaping customer behavior. 

The adoption of fintech has increased every time there has been a regulatory intervention in terms of regulation and norms around digital lending. He said that in the segment the regulatory support, approval and oversight is necessary.

As per the report, the Buy Now Pay Later (BNPL) model is widely used today in the business-to-consumer (B2C) segment, but down the line it is expected to gain more traction in the business-to-business (B2B) space.

Speaking of retail digital lending by banks by volume in FY20, BNPL contributed to around 37%. He added that “BNPL used as a payment product is something that looks attractive but in the medium term, it won’t be very attractive. Why would someone pay more than the merchant discount rates (MDR) unless it increases sales in a big way”.

It is sooner that the much-awaited norms for the BNPL and digital lending ecosystem are expected. It will be a matter of few weeks that the digital lending norms will be released, said that Governor of RBI, Shaktikanta Das.