Indian Enterprise Fintech Sector Set to Surge to $20 Billion by 2030, Indicates Study

In a dynamic shift, the BFSI (banking, financial services, and insurance) sector is undergoing rapid transformation, driven by the pursuit of lower costs, scalability, innovation, and agility. A recent report forecasts substantial growth in the enterprise fintech industry, projecting it to reach approximately $20 billion by the year 2030. This marks a significant leap from its estimated size of around $2.7 billion in 2022.

The Fintech Evolution: Insights from 'Unlocking Indian Enterprise Fintech' Report

The report, titled 'Unlocking Indian Enterprise Fintech,' conducted in collaboration with Chiratae Ventures and The Digital Fifth, sheds light on the industry's trajectory. It emphasizes the shift of banks and financial institutions toward a 100% digital landscape for the Retail and MSME segments in the next decade. Major innovations in the Indian BFSI industry have been catalyzed by regulatory initiatives and public infrastructure such as IndiaStack, Account Aggregator, and ONDC.

Enterprise fintech start-ups are expected to seize this burgeoning opportunity, playing a pivotal role in streamlining product, sales, and service delivery. The report focuses on six crucial sectors within the BFSI segment: BankingTech, LendingTech, PayTech, RegTech, InsurTech, and WealthTech.

Driving Factors and Digital Innovations

Investments in technology across financial segments are anticipated to experience substantial growth over the next decade. The foundation for this digital revolution is built on public infrastructure like India Stack, Account Aggregator, ONDC, KYC, and DBU regulations. The recently introduced Digital Personal Data Protection Act (DPDP) of 2023 is set to further drive financial institutions and their partners to reorient their architecture and business practices for improved data governance.

Large banks are leading the charge by heavily investing in technology, focusing on scaling their digital business—a trend mirrored by small and mid-sized banks. Fintechs and Embedded Finance players are collaborating with banks to enhance customer engagement, extending the digital push to complex business banking, including trade finance and treasury.

Regulatory Frameworks and Digital Lending

Evolutionary changes in regulatory frameworks around digital lending are positively impacting technology spending by lenders. Experimentations with innovations like pre-approved loans, B2B BNPL, supply chain finance, and secured credit are contributing to the sector's growth.

"The last decade witnessed a continuous influx of funds into enterprise fintechs. This, coupled with the entry of new-age players in various Enterprise segments, is shedding light on the previously untapped potential of this market," remarked Sameer Singh Jaini, Co-Founder and CEO of The Digital Fifth, a fintech and digital finance consulting & advisory firm.

Sector-Specific Growth:

The report identifies six key sectors within enterprise fintech that are expected to witness significant growth:

• BankingTech: Streamlining product, sales, and service delivery for banks.

• LendingTech: Facilitating innovative lending solutions for various segments.

• PayTech: Revolutionizing payment processing and transactions.

• RegTech: Optimizing compliance and regulatory processes.

• InsurTech: Transforming the insurance sector with digital solutions.

• WealthTech: Modernizing wealth management and investment platforms.