In a report titled "Unlocking Indian Enterprise Fintech," Chiratae Ventures and The Digital Fifth collaborated to highlight how banks and other financial institutions are heading towards a 100% digital future for the Retail and MSME segments over the course of the next ten years. Meanwhile, significant advancements in the Indian BFSI sector have been driven by public infrastructure, including IndiaStack, Account Aggregator, and ONDC, as well as regulatory actions.
More significantly, over the next few decades, enterprise fintech start-ups are anticipated to take use of this growing potential. The study focuses on enterprise fintechs, which are critical to the BFSI segment's six key sectors - BankingTech, LendingTech, PayTech, RegTech, InsurTech, and WealthTech - because they streamline the supply of products, sales, and services and increase efficiency.
Over the next ten years, it is anticipated that investments in technology across all financial industries would expand significantly. With public infrastructure like the India Stack, Account Aggregator, ONDC, KYC, and DBU rules, the foundation of this digital innovation is revolutionary. According to the release, financial institutions and their partners will be compelled to realign their architecture and operations in order to improve data governance by the recently passed Digital Personal Data Protection Act (DPDP) of 2023.
Furthermore, small and mid-sized banks are copying the large banks' heavy technological investments and focus on growing their digital businesses. In the meantime, fintechs and embedded finance companies are working with banks to increase client involvement, and this digital push is progressively spreading to sophisticated business banking services like trade finance and treasury.
According to the release, regulatory frameworks surrounding digital lending have continued to develop and are having a beneficial impact on lenders' technology expenditures as they test new products including supply chain finance, B2B BNPL, pre-approved loans, and secured credit, among other things.
Over the past ten years, corporate fintechs have been receiving a steady stream of funding. The market's previously unrealized potential is becoming more apparent as a result of this and the arrival of new competitors in a number of Enterprise areas, according to Sameer Singh Jaini, Co-Founder and CEO of The Digital Fifth, a fintech and digital finance consultancy and advising organization.
