The Indian Fintech industry is expected to double from $1.2 billion to $2.4 billion by 2020, according to a KPMG-Nasscom 2016 report.
The traditionally cash-driven Indian economy seems to be slowly but surely transforming into one where Fintech start-ups are growing into billion dollar organisations. The levers of this growth seem to be a rise in consumer expectations, a burgeoning e-commerce market and rapidly increasing smart phone penetration.
Indeed, a collaborative ecosystem for Fintech start-ups, where they are engaging in partnerships with financial institutions, universities and research agencies, VCs, techno enthusiasts and government agencies, is also a key catalyst spurring things along.
Investments have augmented well for the sector in India, with the country witnessing an increasing investor inclination in start-up funding, which is evident in the swelling number of angel deals from 370 in 2014 to 691 in 2015 and investments increasing multi-fold, from $247 million in 2014 to more than $1.5 billion in 2015.
Investor attention was concentrated to hi-tech cities in 2015, with Bengaluru witnessing 11 VC-backed investment deals of $57 million, followed by Mumbai and Gurgaon with nine and six deals, respectively.
Indian customers too have shown an unexpectedly fast adoption rate towards fintech offerings. The significant growth in both mobile and internet coverage and digital payments processing in public services have been key enablers. This penetration offers Fintech firms an opportunity to address the legacy issues of low penetration (53%) and dormancy (43%) in the banking sector.