The Indian Fintech landscape has reached a scale to establish a strong position in the Global financial services market and be benchmarked for

its speed of innovation, customer inclusion and growth. Clocking over $800 Bn+ annual payments transaction value, Fintechs
have made a strong contribution to Indian economy, and play a powerful role in the provision of full-fledged financial services to all Indians. We see this collective segment to be mission critical for the $5 trillion Indian economy
We have a game changing 5 years ahead
of us - the financial services landscape is expected to have many strong actors on the stage – large Incumbents, niche as
well as diversified Non-Banks, new-age
and mature Fintechs, Aggregators and Financial Service Providers, integrated multi-industry Ecosystems and Technology & Data partners. COVID has pressure tested the business models and balance sheet strength of Indian Fintechs. While some businesses went through closure, a sizeable number of Fintechs have survived and demonstrated their “immunity” to withstand such adverse events. Funding inflows
went through a plunge of nearly 40-50% when COVID hit, driven by weaker Foreign investor funding, but the rebound post that (70-80%+) has given some runway to Fintechs. As we see a ‘funding winter’ coming, Fintechs will need to re-evaluate
their financials and enable cost controls as needed, to be able to continue innovative investments and scale
Our survey with 125+ Founders/CXOs of
top Fintechs and Incumbents revealed that product expansion, ARPU and monetization are the key priorities and biggest challenges for the industry today. More than 70% of respondents believe most Fintechs may not be profitable in the next 2-3 years. While scale is an important driver of profitability, early stage focus on ‘unit economics’ is a critical orientation needed. With the race for customer acquisition, and surging funding over the last 5 years, profitability and compliance has been an after thought for many players. As the industry matures and regulatory controls strengthen, “Fin” in Fintech will become big and bold.
As we move ahead, there are a few key imperatives for our Fintech founders:
• Profitability from Day 2: “Fin” as important as “Tech” – While customer acquisition and growth is important, deeper understanding of banking revenue pools and designing for profitable operations from the get-go will be critical to success
• Embrace compliance by design, not as an afterthought! – While profitability will give runway, compliance will help in creating sustainable growth models.
Communicate early & proactively with regulators to shape enabling provisions for new business model
• Win your customer’s trust – Be known for taking hard decisions because they are right
• Tap domestic capital markets – Debt investor contribution, corporate treasury, hedge funds, etc. 👇👇👇
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