Juni Khyat ISSN: 2278-4632

(UGC Care Group I Listed Journal) Vol-13, Issue-08, No.04, August: 2023
A STUDY ON FINTECH-A PATH WAY TO DEVELOPMENT IN INDIA WITH RESPECT
TO PERFORMANCE AND PROGRESS

Dr. C. Paramasivan, Assistant Professor of Commerce, PG & Research Department of Commerce,

Thanthai Periyar Government Arts and Science College (Autonomous), Tiruchirappalli – 620023
G. Ravichandiran. M.Com., M.Phil, Ph.D. Full Time Research Scholar ,PG & Research
Department of Commerce, Thanthai Periyar Government Arts and Science College (Autonomous) ,
Tiruchirappalli – 620023. (Affiliated to Bharathidasan University, Tiruchirappalli -620 024)

Abstract
Finance is considered as a powerful instrument that transforms socio-economic status of the
people and country. Financial become highly technology based with the help of modern devices and
application. Fintech is the merging of finance and technology which has developed as a
transformative way to development in various aspects of the universal economy. By leveraging
technology, fintech has the possible to drive financial inclusion, promote economic growth, enhance
efficiency, and improve access to financial services. Therefore, financial technology is a major
instrument for meeting financial demand of the people. Fintech in India looks auspicious in future
with enormous potential for further growth and innovation. As technology continues to advance,
emerging areas such as blockchain, artificial intelligence, and machine learning are predictable to
play a important role in determining the fintech environment. Adoption of open banking structures
and integration of fintech solutions across sectors such as insurance, wealth management and lending
will spur further development. Collaboration between fintech companies, traditional financial
institutions and regulators is serious to unlocking the full potential of fintech and addressing
developing challenges. With this view, this paper made an attempt on Fintech and its progress in
India with respect to secondary sources.

Key Words: Fintech, Financial services, Financial Inclusion, Financial innovation, financial
empowerment, financial education

Introduction
Finance is needed to make the demand of the people and country with respects to
infrastructure, establishment, maintenance and day to day expenditure. Financial world has
experienced a notable transformation in recent periods. We should thanks to the speedy emergence
and explosion of financial technology, popularly known as fintech. Fintech integrates a variety of
technological innovations that have transformed the way we manage, invest, and transact in the
financial monarchy. From mobile payments and online lending to robot-advisory services and
blockchain technology, hence fintech has become a powerful force behind the democratization and
digitalization of financial amenities. India is one of the fast growing financial technologies adopting
country in the world which have very good financial infrastructure and technological network.
Demand for financial products such as money transfer, loans, capital formation and other services are
also consistently increasing in India. With this view, this paper is mainly concerned with Fintech
industry, features of Fintech in India and also offer suitable suggestions based on the available data.

Literature Review
The following are the major review of literature which represents the trend and progress of
Fintech industry in India during the previous period. Vijai C (2019), Fintech is a novel concept in the
financial industry. Indian fintech services are safer and easier to use, which gives the Indian
economy a bigger advantage. The fintech services lower their financial service expenses. Dwivedi,
R. K. (2020). The discussion of Fin Tech in the Indian Financial Ecosystem (IFES) in this study
focused on the social, economic, technical, and regulatory factors that have made Fin Tech one of the
essential elements of the Indian financial framework. Additionally, the author emphasised the phrase
"financial inclusion". Ray, T. (2020). The breadth of available research and literary sources

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Juni Khyat ISSN: 2278-4632
(UGC Care Group I Listed Journal) Vol-13, Issue-08, No.04, August: 2023
demonstrates the expanding amount of study and interest in methods pertaining to Fintech and its
function in the Indian financial sector. The relationship between the financial effectiveness of Fin
Tech and the COVID-19 epidemic in India is also crucial. Mohanasundaram et al (2021) thought
about the 5G wave's impact on the financial technology scene in India. They found evidence that the
5G, or fifth-generation mobile network, has altered the whole financial technology perspective and is
expected to create a new FinTech biological system in India. Rajeswari P, & Vijai C (2021), Fintech
is the newest catchword in the financial sector, and its most recent evolution, driven by startups,
poses challenges for both market participants and regulators, particularly in balancing the potential
benefits of innovation with the potential risks of new financial sector techniques. Sumeet Gupta1 &
Adarsh Agrawal (2021), This study offers helpful details to comprehend the scope of FinTech from
the perspective of the present financial crisis. The research and discoveries might be useful and
relevant to various ideas and disciplines. Although financial technology has long been researched by
academics, the term "FinTech" is nevertheless novel and intriguing. Rohit Jain & Mercia Selva
Malar (2023), The banking and financial services sector has undergone significant change as a result
of the development and application of financial technology. By utilising technology, fostering
partnerships between businesses and consumers, and tackling the issue of financial inclusion, fintech
has the potential to completely transform the financial sector. The above reviews have given clear
understanding about the trend and progress of Fintech industry in India.

Fintech Industry in India

India is one of the fast growing economic country in the world with respect to industrial and
service sector, particularly financial services in India. Is one of the emerging sector which complete
with global standard. During 2020, Fintech industry in India is achieving a remarkable contribution
to GDP of the country. The Fintech sector in India has witnessed funding accounting to 14 percent
share of Global Funding. India ranks second in terms of trading volume. The fintech market
opportunity is estimated at $2.1 trillion by 2030. Indian fintech was the second most funded startup
sector in India in 2022. Indian fintech startup raised US$5.65 billion in 2022. The total number of
unique institutional investors in Indian fin techs has nearly doubled. It increases from 535 to 1019
between 2021 and 2022, respectively.
Table No – 1 Financial Market Size (USD Billion)
Sl.No Year Financial Market Size CAGR
1 2022 133.84
2 2025 228.40
19.5%
3 2026 272.93
4 2030 556.58
Source: Mordor Intelligence
In the year 2022, Fintech market size was 133.84 USD Billion which will increased to 228.40
USD Billion in 2025 and also it will increase to 556.58 in 2030. GAGR will be 19.5% during the
year 2025 to 2030.
Chart No – 1 Financial Market Size
3000
2022 2025 2026 2030
2000

1000 556.58
133.84 228.4 272.93
0
1 2 3 4

Year Financial Market Size

Fintech has facilitates individuals and businesses with greater accessibility, convenience, and
efficiency in the financial dominion. While challenges remain in terms of regulation and
cybersecurity, the potential of fintech to redesign the future of finance is undeniable. As technology

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(UGC Care Group I Listed Journal) Vol-13, Issue-08, No.04, August: 2023
remains to advance, the transformative influence of fintech will increase further and carrying about a
more inclusive, efficient, and secure financial environment for all.
Figure No – 1 Market summary

Source: Mordor Intelligence

CAGR of market summary of Fintech industry will be expected to 10% during the year 2023-
28. Paytm, Mobilekwik, Policy bazaar, Kissht and U are the major player in Fintech market.
Fintech has developed as a transformative energy in the financial sector through encouraging
financial inclusion, restructuring payment systems, troublemaking lending practices, and
democratizing investment and wealth management.
Figure No – 2 Fintech Market Leader

Source: Mordor Intelligence

Paytm and Mobilekwik are the major market leader in Indian market followed by Policy
bazaar, PayU and Kissht.

Features of Fintech in India

Indian financial system is one of the well organized and systematically regulated which able
to complete global market. Financial service industries in India are playing significant role in
economic development of the company.
Fintech industry in India has experienced exponential development, fuelled by factors such as
increasing smartphone dissemination, digital literacy, sympathetic government policies, and a large
unbanked people. Unified Payments Interface (UPI) introducedby the National Payments
Corporation of India (NPCI) in 2016 has been a crucial development, empoweringcontinuous and
instant peer-to-peer payments. UPI is the mainstay of various fintech applications, allowing users to
simply make payments, transfer funds and comportment transactions through mobile phones.
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(UGC Care Group I Listed Journal) Vol-13, Issue-08, No.04, August: 2023
Figure No – 3 Fintech in India

Financial
Education and
Inclusion

Digital
Economic
Payments and
growth and
Mobile
innovation
Wallets

FINTECH IN INDIA

Fintech
Financial
Lending and
Inclusion and
Personal
Empowerment
Finance
Regulatory
Environment
and
Challenges

Source: Mordor Intelligence

Digital Payments and Mobile Wallets

The growth of fintech in India has reformed digital payments, making them extra accessible
and convenient. Mobile wallets have developed a favoured mode of payment for lots of Indians,
offering a protected and hassle-free alternative to cash transactions. Paytm is a leading mobile wallet
in India which has expanded its services to include bill payments, online shopping, and wealth
management. Moreover, UPI-based payment apps like Google Pay and PhonePe have gained
significant market share, allowing users to transact digitally, split bills, and make payments to
merchants seamlessly.
Table No – 2 Digital Payments
Sl.No Financial Year 2017-18 2018-19 2019-20 2020-21 2021-22 2021-22
Digital Transaction
1 2,071 3,134 4,572 5,554 8840 13,462
Volume (in crore)
Digital Transaction
2 1,962 2,482 2,953 3,000 3,021 3,344
Value (in lakh crore)
(Source: RBI, DigiDhan Dashboard)
Digital transformation volume in 2022-23 amounted to 13,462 crore as against 2071 crore in
2017-18. Digital transaction value in 2022-23 amounted to Rs. 3344 Lakh crore as against Rs. 1962
Lakh Crore.
Figure No – 4 Digital Payment Methods

Source: Mordor Intelligence

Fintech Lending and Personal Finance

Fintech lending has disrupted the traditional lending landscape in India, providing easier
access to credit for individuals and businesses. Digital lending platforms utilize advanced algorithms
and alternative data sources to assess creditworthiness, enabling quick loan approvals and
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(UGC Care Group I Listed Journal) Vol-13, Issue-08, No.04, August: 2023
disbursements. This has been particularly beneficial for individuals with limited credit history or no
collateral.
Table No 3 Digital lending landscape
S.No Sector Lenders/ co lenders %
Indusland Bank, IDBI, HDFC ,Standard& Chartered 32
1 ICICI, HDFC, Kotak banks 16
Private sector
Yes Bank, Axis Bank, IDFC, Indusland Bank 6
Axia, newgrowth , Zest, money view, Patm, Pinelab 17
2 IIFL,UGRO,Indelmone, of business 9
NFC
Indifi,kredx, paisabazar 6
Yono SBI, UBI, BoB 8
3 PNB, SBI, Bank of Baroda, CentralBnak of India 3
PNB Indian Bank, Bank of Baroda , Indian Overseas Bnak, UCO
Bank

Figure No – 5 Customer tends to Fintech companies

Source: https://smartadvisors.in/2023/01/20/who-regulates-fintech-companies-in-india/

Regulatory Environment and Challenges

Government of India has recognized the possible of fintech and has taken numerous
initiatives to foster its development. The Reserve Bank of India has introduced regulations and rules
to safeguard the security and integrity of digital transactions and alsoencouraging innovation and
competition. Regulatory frameworks need to evolve continuously to retain pace with the dynamic
fintech landscape while protecting the interests of all stakeholders.
Figure No – 6 Regulatory Environment

Source: https://smartadvisors.in/2023/01/20/who-regulates-fintech-companies-in-india/
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Financial Inclusion and Empowerment
Important advantages of fintech are its ability to encourage financial inclusion. Traditional
banking services frequently exclude underserved populations, such as those living in rural or remote
areas, low-income individuals, and small businesses deficient collateral or credit history. Fintech
solutions like mobile banking and digital wallets are provide these populations with access to
elementary financial services such as payments, savings, and credit.
Table No – 4 Progress in Financial Inclusion in India
Sl.No Particulars March December
2018 2021$
1 Banking outlets in villages – Total 5,69,547 19,00,523
2 Banking outlets in villages – Branches 50,805 53,249
3 Banking outlets in villages – BCs (Branchless Mode) 5,18,742 18,44,732
4 Banking outlets in villages – Other 0 2,542
5 Urban locations covered through BCs 1,42,959 14,12,529
6 BSBDAs – Opened Total (No. in. Millions) 536 663
7 BSBDA through Branches (No in Millions) 247 271
8 Number of BSBDA per Branch 4,862 5,93
9 BSBDA through BCs (No in Millions) 289 392
10 Number of BSBDA per BC 557 212
11 BSBDAs – Deposits mobilisation – Total (Amt. In Billion) 1,121 2,136
12 BSBD through Branches (Amount in Billions) 731 1,186
13 BSBD through BCs (Amount in Billions) 391 950
14 Average balance per BSBDA (Rs.) 2,091 3,222
15 Average balance per BSBDA - BC (Rs.) 1,352 2,425
16 OD Facility Availed in BSBDAs (No in Millions) 5.8 6.4
17 % of BSBD account holder availed OD facility 1.08 0.97
18 OD Facility Availed in BSBDAs (No in Billions) 4.08 5.56
19 KCC – Total (No. in Millions) 46 47
20 KCC – Total (Amt. in Billion) 6,096 6,936
Source: RBI: Trend and Progress report in Banking in India: 2016-19, RBI: Annual Report: 2019-20
S: Provisional data available till Dec 2021

Economic growth and innovation

Fintech is an initiative foreconomic growth by promoting innovation, efficiency and
entrepreneurship. By restructuring processes and reducing costs, Fin techs permit businesses to
operate more efficiently, increasing productivity. Digital payment solutions and online banking
platforms simplify financial transactions by reducing the need for physical infrastructure and manual
processes. These competences mean time and cost savings for individuals and businesses.
Figure No 7 Highlights of Fintech

https://inc42.com/reports/state-of-indian-fintech-report-q1-2023

Access to Capital and Investment

Fintech has transformed contact to capital and investment opportunities for small and
medium-sized enterprises and individual investors. Traditional funding optionslike bank loans and
venture capital, may be limited and unwieldly for small and medium-sized enterprises. Fintech
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(UGC Care Group I Listed Journal) Vol-13, Issue-08, No.04, August: 2023
lending stages, such as peer-to-peer lending and online lending marketplaces, connect borrowers
directly with investors, eliminating intermediaries and dropping transaction costs.
Figure No 8 Fintech in 2021

Source: https://www.moneycontrol.com/

Financial Education and Inclusion

Fintech promotes financial education and literacy, thereby facilitating informed decision-
making and responsible financial behaviour. Through user-friendly interfaces, instructive resources,
and financial management tools, fintech platforms authorize individuals to improved understand and
accomplish their finances. Budget apps, expense trackers, and financial planning tools help people
track spending, set financial goals, and make informed investment decisions.
Figure No - 9 Financial Education

Source: https://www.rbi.org.in/Scripts/PublicationReportDetails

Suggestions
Financial services are essential need of the people which help to meet their basic and
economic requirements during their livelihood. Financial services should be affordable and easy
accessible in their places itself. Fin tech platforms have also introduced digital wealth management
solutions, offering robo-advisory services and customized investment portfolios to retail investors.
Now a day’s Fintech services are quite common to all the places by all the people.
Fintech lending platforms, like KredX and Lendingkart, have extended credit facilities to
small and medium-sized enterprises (SMEs) that were earlier excluded from traditional banking
channels. These initiatives have played a vital role in encouraging financial inclusion and powerful
economic progress. Therefore, many platforms should create to explore more convenient and
affordable to all people.
Fintech lending platforms utilize alternative data sources and advanced algorithms to assess
creditworthiness, extending credit to previously underserved borrowers. By providing these services,
fin techs enable individuals and businesses to participate in the formal financial system, create assets,
and seize economic opportunities. Therefore, future Fintech will be more specific and digital base
with the help of technology.
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Fintech also encourages innovation by providing a stage for startups and entrepreneurs to
develop and organize financial products and services. The comfort of access to digital platforms and
Application Programming Interfaces permits developers to create innovative solutions that address
specific market needs, such as peer-to-peer lending, crowdfunding, and robot-advisory services.
Therefore, Fintech is one of the emerging concepts not only delivered of financial services but also it
provides business opportunities.
Fintech companies often prioritize user education by providing resources, articles, and
interactive content that simplifies complex financial concepts. By providing people with financial
knowledge and tools, fintech promotes financial inclusion, reduces inequality, and enables people to
make informed choices for their economic well-being. Therefore, Fintech is one of the powerful
instruments to implement financial inclusion and sustainable development
Financial inclusion has been an important motivation of the fintech revolution in India. The
country has an important portion of the population that are not banking, especially in rural areas.
Fintech companies have leveraged mobile technology and innovative business models to bridge this
gap. Mobile wallets like Paytm and PhonePe have become prevalent, giving individuals without a
bank account access to digital transactions, bill payments, and e-commerce. Fintech enable and
simplify financial inclusion process with the help of technology.

Conclusion
Financial services is one of the major component of financial system of the country which
facilities flow of money from one hand to another, with the help of technology financial services are
diversified and transformed into innovation based. Fintech is one of the emerging developments in
financial service sector. fintech in India has transformed financial services, promoting financial
inclusion, digital payments, and converting lending practices. The growth of fintech has been
determined by technological advancements, sympathetic government policies, and changing
consumer favourites. While the sector faces regulatory challenges, the future holds enormous
opportunities for innovation, collaboration, and inclusive progress in India's fintech landscape.
Fintech characterizes a transformative pathway to development, offering solutions that drive
financial inclusion, promote economic growth, improve efficiency, and access to financial services.
Hence it is concluded that fintech is one of the emerging innovations in financial service sector
which facilitate digitalised, simplified cost effective and speedy delivery of financial products to
targeted population in the country. It broken all boundaries and hidden philosophy in finance and its
relevance.

References
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Financial Ecosystem. Journal of Critical Reviews, 7(11), 3797-3805.
Mohanasundaram, T., Sathyanarayana, S., &Rizwana, M. (2021). Disruptions on India’s
FinTech landscape: The 5G wave. In ITM Web of Conferences (Vol. 37, p. 01008). EDP Sciences.
Rajeswari P, &Vijai C (2021) Fintech Industry In India: The Revolutionized Finance Sector,
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Ray, T. (2020). Scopes and Impact of Cloud Computing on Banking & FinTech.
Rohit Jain & Mercia Selva Malar (2023), Growth Of Fintech In Banking Industry In India,
International Research Journal of Modernization in Engineering Technology and Science,
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Sumeet Gupta1 & Adarsh Agrawal (2021), Analytical Study of Fintech in India: Pre & Post
Pandemic COVID-19, Indian Journal of Economics and Business Vol. 20 No. 3 (December, 2021)
Vijai .C (2019). Fintech in India – Opportunities and Challenges, South Asian Academic
Research Journals, Vol 8, Issue 1, January 2019
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market

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