Posted by Mumbai: Indian Enterprise Fintech market is projected to expand to the tune of approximately $20 billion by 2030, as per a new report by Chiratae Ventures in collaboration with The Digital Fifth.
The report titled ‘Unlocking Indian Enterprise Fintech Market’ revealed that the Indian Enterprise Fintech market is projected to reach $20 billion by 2030.
Indian Enterprise Fintech Market
This new comprehensive report focuses on Enterprise Fintechs that play a pivotal role in streamlining product, sales and service delivery as well as enhancing efficiency within the BFSI segment in six essential sectors: BankingTech, LendingTech, PayTech, RegTech, InsurTech and WealthTech.
“Chiratae projects the Enterprise FinTech industry to be over $20 billion opportunity by 2030, and with FinTech being a focus area, we are keen to work with founders transforming India’s Financial Services,” Sudhir Sethi, Founder and Chairman of Chiratae Ventures said on the launch of the report.
“Chiratae has a successful history of investing in innovative category builders in FinTech, such as Fibe in Consumer Credit, Vayana Network in Supply Chain Financing, GetVantage in Revenue Based Financing, PolicyBazaar in Insurance distribution, to name a few,” added Sethi.
The Enterprise FinTech Opportunity
The BFSI industry is undergoing a rapid transformation amidst demand for lower costs, scale, innovation, and agility. Instead of banks viewing technology as a cost centre, the thought process has started to realign, and it is now being seen as a driver to manage profit and loss as well as reduce the cost-to-income ratio.
Investment in technology across financial segments is expected to witness high growth over the coming decade. The backbone of this digital innovation is revolutionary with public infrastructure like the India Stack, Account Aggregator, ONDC, KYC and DBU regulations. The recent Digital Personal Data Protection Act (DPDP) of 2023 will also push financial institutions and their partners to reorient their architecture and business for better data governance.
This digitisation has led to the growth of Embedded Finance platforms and increased investments in API-enabled infrastructure. This shift towards Embedded Finance providers is creating an opportunity for Anything As A Service i.e. XaaS. Banking (BaaS), Lending (LaaS) and Payments (PaaS), have already emerged as key areas of investment for VCs.
Digitisation is underway in the retail business for Saving Accounts, Credit Cards and Personal Loans and has just begun for the MSME and Corporate segments. According to the report, banks and NBFCs will evolve to become fully digital for the Retail and MSME segments in the next 10 years.
Changing technology landscape across Enterprise FinTech
Large banks have started investing heavily in technology and are focusing on scaling their digital business which is being replicated by small and mid-sized banks. FinTechs and Embedded Finance players are driving customer engagement in partnership with banks, and this digital push is gradually expanding to complex business banking, including Trade Finance and Treasury.
Meanwhile, regulatory frameworks around Digital Lending have continued to evolve and are positively influencing technology spend by lenders. Lenders are experimenting with innovations like Pre-Approved Loans, B2B BNPL, Supply Chain Finance, Secured Credit, etc.
India is swiftly transforming into a less cash economy and will aim to eliminate it over the next decade. Payments innovations have been driven by regulatory initiatives and there will be a demand for an agile Payment as a Service (PaaS) platform to orchestrate transactions with multiple bank payment infrastructures.
Factors like the government’s Digital India initiative, India Stack APIs and the regulator’s focus on consumer protection have driven demand for RegTech solutions, ensuring compliance, data security and seamless transactions across the FinTech ecosystem. India’s Wealth Management sector is experiencing growth with increasing asset classes, new entrants, and tech investments.
The country has shifted to an investment mindset, with a declining focus on traditional physical assets. India is ranked as the 9th largest Life Insurance market globally and is expected to reach $200 billion by 2027. Technological advancements such IoT, telematics, and surveyors boost trust in insurance, reduce fraud, realign workloads, and improve decision-making in claims and underwriting.
(Image source – Chiratae Ventures)