Fintech (Financial Technology) refers to technology-enabled innovation in financial services. The Financial Stability Board (FSB) defines FinTech as technologically enabled innovation in financial services that could result in new business models, applications, processes or products with an associated material effect on financial markets and institutions and the provision of financial services.
FinTech leverages technology, multiple product and distribution channel collaborations, and creative approaches to provide customised and seamless financial solutions to meet customer needs. The Fintech sector has multiple dimensions, including deployed technologies, data, functions (“how consumers store, save, borrow, invest, move, pay, and protect money”), delivery models, partnerships with traditional financial institutions, and different roles as providers and enablers of financial services.
Focus on consumer needs, preferences, and convenience. Offer services to fit the needs of individuals and businesses.
Priority to unserved and underserved market and product segments.
Use of alternative data to serve individuals and businesses.
Collaboration between regulated entities and fintech to innovate new models, products and market segments.
Technology to give seamless digital experience to consumers. Operationally, the model works on the paper-less, person-less, friction-less process facilitated through the India stack and built around consumers’ information and transactions shared, processed, and verified digitally.
FinTech contribution to the modern financial sector is well recognised and documented through various channels, including cost optimisation, innovative products, customer service, and financial inclusion. According to the International Monetary Fund (IMF) research, increased digital financial inclusion in payments leads to a 2.2 per cent rise in average economic growth, likely driven through the consumption channel and higher formalisation.
The fintech sector in India stands out for its technology-enabled, consumer-centric approach to promoting financial inclusion and serving unaddressed customer and product segments in partnership with regulated entities. India is among the fastest-growing fintech markets in the World, hailing as the third-largest growing fintech economy. The Economic Survey 2024-25 details the policy objective of India emerging as a fintech nation and riding on DPIs such as Aadhaar, e-KYC, Aadhaar-enabled Payment System, UPI, Bharat QR, DigiLocker, e-sign, Account Aggregator, Open Network for Digital Commerce, and marching ahead with the highest number of fintech firms and the highest fintech adoption rate by incumbents. The fintech sector in India is growing rapidly. It is seizing opportunities offered by digital public infrastructure, conducive policy and regulatory environment, availability of capital and technology and insatiable demand for digital financial services. The last decade has seen an acceleration in the adoption of fintech, with digital financial services becoming the preferred choice for consumers.
Regulated entities, Fintechs, and adjacent sectors are collaborating to offer a wide range of digital financial services to a vast consumer base.
Refer to our resources section for industry reports and regulatory framework.