Fintech India – Large Opportunities in a Gigantic Indian Market for Nordic Startups
The Indian financial technology sector (fintech) is growing fast, and the total market by 2020 is about 2,4 billion USD. The shift for the financial sector has been massive, and the use of AI, ML, Blockchain and data-driven analytics are increasingly a central factor for most financial institutions. The fintech consists of sectors; robotic advisors and personal finance, regtech, digital/open banks, payments and remittances, insurtech and alternative finance.
Mobile wallets, smart devices, quick response (QR) and near-field communication (NFC) is becoming a part of normal life, and India is forecasted to see the fastest growth in digital payments transaction value between 2019 and 2023, with an annual growth rate of 20.2%, ahead of China and the US. With over 560 million Indians online this leads to large opportunities for the right startup/scaleup.
With Indian government lifting ban on Crypto trade, this area has become a hotspot for global businesses looking to expand in the world’s second largest market (India). Investors believe peer to peer (P2P) companies will see inflow of capital, similar to what has been happening globally. Crypto founders, investors and industry bodies speculate that the order would open up more avenues for a cryptocurrency ecosystem to be built in India.The overall transaction volume in the Indian Fintech market is estimated to jump from approximately 65 billion USD in 2019 to 140 billion USD in 2023. India’s fintech startups raised 2.6 billion USD in 2019, compared to 1,25 billion USD in 2018.
For startups, India has introduced a number of solutions which brings the markets to the startups:
- Digital India which was a plan set up by the Modi Government in 2015, to develop secure and stable digital infrastructure, deliver government services digitally and improve the ease of digital access
- India Stack which is the largest open API in the world, and the goal of the project states “allow governments, businesses, startups and developers to utilize a unique digital Infrastructure to solve India’s hard problems towards presence-less, paperless, and cashless service delivery”
- Aadhaar which is the Indian social security number solution, where all of the country’s 1,35 billion people have a unique identity number with biometric data included. All digital solutions is connected to this ID-number and have made the possibilities for fintech-startups enormous.
In addition, the overall improvements in the regulatory environment in India the last 5-6 years, in terms of ease of doing business, credit availability and taxation policies have given a large boost to the thriving fintech start-up ecosystem of India.