Indian fintech industry to become $190 billion sector by 2030
Boston Consulting Group forecasts that Indian fintech companies, propelled by the expanding market demand driven by financial inclusion, will likely generate aggregate revenues of up to $190 billion by 2030.
India has established itself as a leader in fintech innovation, ranking as the third-largest in the segment and one of the fastest-growing markets globally, with the United States as the largest and China as the second-largest players in the global fintech landscape.
In a survey of over 70 fintech founders and investors, including those in insurtech, wealthtech, payments, and lending, the Boston Consulting Group report highlights the industry’s focus on grwoth and profitability, with over 40% of respondents exploring cost reductions in customer acquisition and marketing to achieve profitability while sustaining growth.
The fintech sector is showing a remarkable 30% increase in capital momentum during the first half of this year compared to the second half of 2022. Experts have promising expectations of continued large company creation and a surge in fintech IPOs across various segments, including payments, lending, and insurance.
Furthermore, the report underscores the growing importance of compliance as the fintech sector matures. Regulators have intensified their scrutiny of fintech firms, leading many digital credit businesses to apply for non-banking finance company licenses and payment fintechs to seek payment aggregator status.
Yashraj Erande, a partner at Boston Consulting Group, emphasizes the critical role of compliance as fintechs’ revenue contribution to the overall financial services industry continues to grow.
“If you need to grow from 5% to 20%, then you need to grow up. Which means there needs to be a certain maturity around compliance, governance and wanting to be good actors in the ecosystem,” said Erande.
India's position as a frontrunner in the fintech landscape within the Asia Pacific region over the coming decade is beyond doubt, suggests the report. Revenues are anticipated to exhibit annual growth of over 35%, ultimately reaching revenues exceeding $190 billion by 2030.
The outlook for fintech profitability has experienced a substantial improvement, rising from between 20% and 30% in 2022 to currently a more robust 40% to 60%.
India's prowess in tech sectors is evident in its vibrant fintech ecosystem, where companies harness digital solutions to address financial inclusion challenges and deliver services efficiently across diverse demographics.
Some specific areas of growth in Indian tech in recent years have been Software as a Service (SaaS), where India has groomed multiple unicorns, and video games, where huge growth in the subcontinent is linked to increased internet access and smartphone usage.
