The BFSI sector has risen by leaps and bounds over the last two decades, transforming India from a cash-driven economy to one that is now heavily digital. When fintech first appeared as a budding phenomenon in early 2009, several questioned if it would take off in a place like India. Today, it has entered the mainstream and has begun its middle phase, which focuses on boosting profitability and reducing risk.
As India accelerates toward becoming a $5trillion economy, fintech companies will play a defining role in the dynamics, with over $400 billion in new businesses to be created over the next seven years, a fourfold increase from current levels, in addition to tapping into a revenue pool of $70 billion out of a total of $620 billion in 2030. The rise of fintech in India, like other digital phenomena such as e-commerce, is partly due to increased smartphone usage and lower data pricing. Fintech would not be where it is today if not for growing internet penetration. The majority of Indians (759 million) are currently active internet users, and this figure is expected to increase to 900 million.
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In addition, the diversity of consumer demographics would hasten the acceptance and spread of digital financial services in India. According to Pew Research Center data, persons under the age of 25 account for more than 40% of India’s population. We will see a boom in Generation Z consumers entering the labor market, who will invest their earnings mostly through digital platforms.