Indian FinTech industry projected to reach $420 billion by 2029: Independent Director, NPCI

India's FIntech Sector: Highlighting the Indian FinTech industry's impressive growth trajectory, Ajay Kumar Choudhary, Non-Executive Chairman and Independent Director of NPCI said that as of 2024, the industry is valued at approximately $110 billion and is projected to reach $420 billion by 2029, growing at a cumulative annual rate of 31 per cent.

Addressing the inaugural session The ASSOCHAM 2nd India International Fintech Festival, Choudhary said with over 9,000 FinTech entities, India ranks third globally in terms of the number of FinTech firms, commanding 14 per cent of the country's start-up funding.  The FinTech adoption rate in India stands at 87 per cent, significantly higher than the global average of 67 per cent, Choudhary said.

Choudhary emphasised that the Indian fintech ecosystem's rapid growth is fueled by favorable policies, development of enabling digital public infrastructures (DPIs), institutional support, and technological innovations. The government's push towards a digital economy, coupled with a young and tech-savvy population, is expected to propel the sector to new heights. NPCI aims to achieve one billion UPI transactions per day in the coming years.

"The advent of the FinTech ecosystem has revolutionised traditional financial services, enhancing the efficiency of financial product and service delivery. However, these innovations bring new risks and vulnerabilities. The sector must focus on customer centricity and governance to maintain a balance and ensure sustainability. The role of Self-Regulatory Organizations (SROs) in the FinTech sector is crucial," said Choudhary. He also stressed the need for adequate IT investments by banks and FinTech entities to meet the challenges of digitalization.

In her keynote address, Archana Vohra, Managing Director of Google, praised UPI as a transformative tool for digital payments in India. "UPI is not just a set of tech rails; it involves extensive work to ensure digital payments are easily accessible. Interoperability is essential for true ecosystem enablement," Vohra stated. She highlighted the importance of building FinTech products for scale and catering to diverse user needs, emphasising persistence and resilience in advancing the sector over the next decade.

Critical role of Fintechs

Vikas Verma, COO of Mastercard, discussed the critical role of FinTechs in providing access to credit, particularly for underserved segments. "Only 14% of MSMEs and one in four farmers have access to formal credit. The fintech sector has a significant opportunity to drive commercial success and contribute to nation-building by focusing on key sectors like agriculture, MSMEs, and women empowerment," Verma noted.

Aman Jain, Director of Public Policy at Amazon India, pointed out that smartphone penetration, growing internet access, and the government's commitment to financial inclusion are driving digital payments in India. "By 2026, digital payments volume in India is expected to reach $10 trillion. With 60% of millennials and GenZ preferring digital payments, there's immense potential for growth and inclusion," Jain added. He emphasized the need for collaboration between the government, regulators, and the FinTech industry to strengthen India’s position as a global leader in FinTech and digital payments.

Anand Vijay Jha, Chairman of ASSOCHAM Fintech Council, concluded by emphasizing the importance of stakeholder innovation in sector growth. "Raising funds is a global challenge, but focusing on delivering value can attract investors to the ecosystem. India's strong position in digital public infrastructure stems from public-private partnerships. Policymakers and regulators play a significant role in this ecosystem," Jha said.

The festival underscores the transformative potential of FinTech in driving India's economic growth and the collaborative efforts needed to achieve sustainable development in the sector.

(Source: Republicbiz)