Indian fintechs have the potential to reach a valuation of $150 billion by 2025

In the recently concluded Future of Finnovation event by Google Cloud India, experts outlined how Indian fintechs can build models of scale by leveraging the power of cloud, technologies like AI and focussing on building trust and financial inclusion.

Indian fintechs have the potential to reach a valuation of $150 billion by 2025

Wednesday May 17, 2023,

6 min Read

To capture the dynamically changing landscape of financial services today, Google Cloud India in association with YourStory held the Future of Finnovation 2023, an initiative that brought leading fintechs from across the country on a common platform, to discuss innovations and propose industry-first thought leadership ideas.

Future of Finnovation 2023, is a part of the Digital Pioneers Club (DPC), a YourStory Media and Google Cloud India collaboration that launched an exclusive, invite-only forum for technocrats, industry experts, CXOs, CIOs, founders, and decision makers in 2021 with the aim of ‘Solving for tomorrow.’

This year, Future of Finnovation was held in April 2023 to discuss pertinent topics related to the banking and fintech industry.

The event opened with a keynote address on ‘Decoding the growth opportunity for fintechs’ in India by Kiran Kumar Kesavarapu, Head of Customer Engineering (Industry Solutions & Architecture) at Google Cloud India. Kesavarapu outlined the business models and trends around fintech, decoding the opportunities in the sector and how Google has been instrumental in helping fintechs build products and solutions for the next billion users.

Kesavarapu shared that the pandemic had pushed a generational shift in consumer traction towards fintechs in India. This has led Google Cloud to have about 14% share of the global fintech funding, being ranked number two by deal volume and number four in terms of unicorn strength. He also pointed out that traditional financial services are pivoting to digital finance and fintechs today are focussing on getting their business models right, simplifying user journeys, focusing on building tech for scale and ensuring that trust is the pillar for customer engagement.

Kesavarapu outlined that while the growth of the sector has been led by UPI, Pradhan Mantri Jan Dhan Yojana and Aadhaar enabled eKYC, fintechs today have the opportunity to go beyond 250 million Indians, who are serviced by traditional channels. “Fintech businesses can drive financial inclusion and make services available to half a billion users that are spread across various segments like wealth, sanitised insurance, digital lending, and payments,” he said. Fintech today could be sized at a $50 billion valuation on the back of customer centric innovation, open networks, that has prioritized efficiency and simplicity and can be expected to grow further and reach a valuation above about $150-160 billion by 2025, he added.

He summarised the discussion by sharing how technology choices made in the initial stages can have a lasting impact on the efficiency and profitability of business models.

Future of Finnovation 2023 also featured a panel discussion on ‘Cloud security best practices and risk management for fintech DNBs’ that covered points on how businesses are constantly looking for best practices and security measures that can set them apart from competitors and build a risk mitigation pipeline.

The panel was led by Deepak Dimri, Customer Engineering Manager, Networking and Security at Google Cloud India and also featured Rajat Deshpande, Co-founder and CEO, FinBox; Araveinth Gopinath, Chief Information Security Officer - VP, Information Security & Compliance, Yubi; and Vidya Sridharan, CTO, Riskcovry.

“Today every organisation needs to consider the security perspective and understand what their threat landscape looks like. When it comes to cloud adoption a security-led strategy is very important that includes cybersecurity frameworks, recovery processes and building resilience,” said Dimri.

Panellists also shared their views on best security practices that had helped their businesses stay resilient. Deshpande spoke about the different practices being followed by FinBox to keep threats at bay. “Encryption at rest and in motion, access control to cloud environments, data masking at multiple levels, frameworks for access controls come together in our security framework and are customized for our requirements in the fintech space. We built a robust infrastructure and continue to improve and invest in our security posture,” he added.

Gopinath added how data governance, data cataloguing, AI for fraud detection and identity verification are being played out for both compliance monitoring, risk management towards keeping cybersecurity intact on Yubi’s platforms.

“Encryption and decrypting at every level and at every transaction affect performance. However, Riskcovry works with agents who need access to data and so we use technology to enable masking systems that can be de-masked without affecting performance,” said Sridharan.

The panel discussion concluded with panellists summarising that businesses needed to invest in building appropriate security defences, assessing internal and external threats, encrypting data and following a zero-trust architecture to cut back on threats.

The event also featured a round table discussion ‘Driving financial inclusion’ led by Rohit Verma, Head of Industry, Financial Services at Google Cloud India along with panellists Yashoraj Tyagi, CTO and CBO, CASHe; Ashwin Sekar, Chief Product and Technology Officer, lnCred; and Krithika Muthukrishnan, Chief Data Science Officer, Scripbox. The discussion addressed how financial inclusion can be driven by technology to develop affordable and appropriate products, promote digital financial services, and build a trust pipeline between under-banked segments of the population and formal financial institutions.

“Despite the short-term headwinds that we are seeing of late, there are industry estimates that almost $100 billion in value will be created by fintechs in the next couple of years. In this context, three things apply to driving financial inclusion. The first is leveraging AI for different tasks like segment creation, alternate scoring and vernacular interaction. The second would be connecting the ecosystem that can be accessed to deliver financial products to the remotest corner of the country through a proper and secure platform and the third pillar of success would be for fintechs to invest in security,” said Verma.

Other conversations included ‘Using AI across the value chain’ that featured Prasenjit Datta, CTO, Vivriti Capital; Mohit Gupta, Co-founder and CTO,; and Kapil Kapoor, CTO, CredAble, which discussed new ways in which technologies like AI are being used across financial services to drive new business segments, enhance customer journeys, and scale seamlessly to enable profitable growth. 

The event also featured engaging fireside chat on open application development, scaling and management on cloud for fintech digital native businesses, featuring Sanjeev Singh, Data engineer and architect, BharatPe and Seema Ramachandra, Customer Engg. Leader - Fintech & Digital Natives, Google Cloud India

Neeraj Singh, Co-founder and CTO, Groww also participated in a fireside chat on how fintechs can understand the value of data collection, analysis so that they can leverage this invaluable tool for their future.

There were also solutions tracks led by Prasanna Keny, Customer Engineer, Google Cloud India, on ‘Platform to fuel data-driven innovation’ and ‘Enhanced customer acquisition and experiences’. While the former outlined how for fintechs to pursue new ideas and business models in a dynamic ecosystem, it has become crucial to have a platform that can fuel data-driven innovation with speed, scale and security; the latter covered insights on capabilities in the context of customer lifecycle, the power of data and AI to drive customer acquisitions and experience and intelligent automation and fraud detection.

The closing note of the event was delivered by Kiran Kesavarapu who reiterated how crucial it was for fintechs to fuel innovation through technology for speed, scale and security so that they can build new solutions and outcomes by simplifying data and analytics.