FinTech is a disruptive sunrise industry with the potential to make financial services accessible, simple and cost-effective. The Indian FinTech ecosystem is the third largest in the world, with the market size expected to reach US$ 150 billion by 2025. The 3,000+ FinTechs registered with the DPIIT are taking advantage of the highest FinTech adoption rate (87%) in the world.
The sector has given the underbanked and unbanked sections access to banking solutions. Digital lending had already become a US$ 270 billion market in 2022.
However, financial misbehaviour and irregularities have tainted the potential improvements in the FinTech space in recent years. According to the Reserve Bank of India’s (RBI) Annual Report for 2021–2022, there were 3,596 frauds involving cards and online banking in 2021–2022, a 34% y-o-y increase.
Financial fraud complaints to the government come in at an average of 83 per hour. There is a lack of trust in the sector as a result of numerous instances of fraudulent UPI transactions, e-wallet thefts, KYC leaks, and lending app fraud, among other incidents. The RBI oversees the industry and has given these worries the attention they deserve.