The Indian enterprise fintech market is expected to touch the approximately $20 billion mark by 2024, as projected in a recent report titled ‘Unlocking The Indian Enterprise Fintech Market’.
The report conducted by tech-VC fund advisor Chiratae Ventures, in collaboration with The Digital Fifth, a fintech and digital finance consulting and advisory firm noted that the BFSI industry is undergoing a rapid transformation amidst demand for lower costs, scale, innovation, and agility.
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 report highlighted.
Sudhir Sethi, founder and chairman, of Chiratae Ventures on the launch of the report, shared, “Chiratae projects the Enterprise FinTech industry to be over $20 bn opportunity by 2030, and with FinTech being a focus area, we are keen to work with founders transforming India’s Financial Services.”
The report further added that 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.
Sameer Singh Jaini, co-founder and CEO, The Digital Fifth said, “The tide of change is upon us, and it's happening right now. The last decade witnessed a continuous influx of funds into Enterprise FinTechs. This, coupled with the entry of new-age players in various Enterprise segments, is shedding light on the previously untapped potential of this market.”
The report also throws light on the effect of changes in technology adding that 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.
Lenders are experimenting with innovations like Pre-Approved Loans, B2B BNPL, Supply Chain Finance, Secured Credit, etc, it noted.
India is swiftly transforming into a less cash economy and will aim to eliminate it over the next decade due to the fast innovations and regulatory drives, the report observed.