The BFSI (banking, financial services and insurance) segment is undergoing a rapid transformation amidst demand for lower costs, scale, innovation, and agility with a latest report projecting the enterprise fintech industry to grow to approximately $20 billion by 2030.
This assumes significance as the industry size was estimated to be only around $2.7 billion in 2022.
A report titled ‘Unlocking Indian Enterprise Fintech’ by Chiratae Ventures, in collaboration with The Digital Fifth, has highlighted the fact that banks and financial institutions are moving towards 100% digital for the Retail and MSME segments over the next decade even as major innovations in the Indian BFSI industry have been propelled by the regulators and public infrastructure such as IndiaStack, Account Aggregator, and ONDC.
More importantly, enterprise fintech start-ups are expected to leverage this burgeoning opportunity over the coming decades.
The 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.
“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,” stated the release.
Further, 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.
Meanwhile, 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.
Regulatory frameworks around digital lending have continued to evolve and are positively influencing technology spend by lenders who are experimenting with innovations like pre-approved loans, B2B BNPL, supply chain finance, and secured credit among other things, said the release.
“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,” said Sameer Singh Jaini, Co-Founder and CEO, The Digital Fifth, a fintech and digital finance consulting & advisory firm.
