As per the State of Indian Fintech Report Q2, 2022, the Indian fintech market is one of the fastest-growing globally, estimated to reach $1.3 Tn by 2025, growing at a CAGR of 31%. While most of the heavy lifting is being done by fintech, the government also plays a crucial role by way of nurturing the ecosystem.
Coordination between multiple regulators in the government and Fintech to ensure financial inclusion is the need of the hour. This partnership between government and fintech has also given a boost to the entrepreneurs and start-up culture.
Among its key sub-sectors, lendingtech is likely to account for 47%, or $616 Bn, followed by insurtech at 26% ($339 Bn) and digital payments at 16% ($208 Bn). With the government launching the Open Credit Enablement Network and Account Aggregator framework, the loan journey of a consumer has improved significantly.
There are many initiatives taken by the government for improving the Fintech industry, including:
· Fintech-related regulations: RBI created a working group on Digital lending to ensure tech neutrality, principle-based regulation, and addressing regulatory arbitrage to ensure a level playing field.
· Easing data authentication: Solutions such as Video-based consumer identification process, Account Aggregator, E-Nach, Central-KYC, and Udyam makes for a hassle-free expansion of financial services to consumers.
· Data Security and privacy policies: Building of infosec and robust cyber security measures by RBI working groups as well as Sahamati (Niti Aayog), IRDA etc.
· Robust Digital Infrastructure: Initiatives under Digital India and India stack have been successful for consumers adopting digitization.
