AI, Blockchain, VR, More: Here’s How India’s Fintech Sector Might Look Like In 2047

India’s fintech market has witnessed exponential growth over the past few decades. In 2023, the market size reached $689 billion, and it is projected to cross $2 trillion before 2030 as per PWC.

By Dipal Dutta

As India approaches its centenary of independence in 2047, the Indian fintech industry is expected to become a global leader, characterised by advanced technologies, inclusive financial services, and robust regulatory frameworks. The next 23 years will see India’s fintech ecosystem evolve into a multi-trillion-dollar industry, deeply integrated with emerging technologies such as augmented reality (AR), virtual reality (VR), artificial intelligence (AI), blockchain, and the Internet of Things (IoT). These innovations will transform the way financial services are delivered, making them more accessible, efficient, and secure.

India’s fintech market has witnessed exponential growth over the past few decades. In 2023, the market size reached $689 billion, and it is projected to cross $2 trillion before 2030 as per PWC. This rapid growth trajectory suggests that by 2047, the fintech sector will evolve into a $25 trillion-dollar industry. One of the most significant contributors to this growth will be the digital payments sector, where India has already established a dominant position. 

In 2022, India accounted for 46 per cent of global real-time digital transactions as per the report published by Lowy Institute, and by 2047, digital payments are expected to dominate the financial landscape. The shift towards cashless transactions will be nearly complete, with digital wallets, mobile banking, and other digital payment platforms becoming the norm.

The Unified Payments Interface (UPI), which revolutionised digital transactions in India, will continue to be a critical driver of this transformation, evolving with new features and capabilities to meet the demands of a growing digital economy.

So far, government initiatives like Digital India, Jan Dhan Yojna and Startup India have been instrumental in enhancing financial inclusion across the country. By 2047, these efforts are likely to achieve near-universal access to financial services, bringing more people into the formal banking system.

The development and adoption of universal frameworks such as the Open Credit Enablement Network (OCEN) and Account Aggregator (AA) will further boost financial inclusion by providing quick credit access. These initiatives will empower millions of individuals and small businesses, allowing them to participate more fully in the economy.

Integration Of Emerging Technologies

2047’s Indian fintech sector will be deeply intertwined with the advancement and adoption of emerging technologies like blockchain, AI, IOT and AR&VR.

These emerging technologies will have matured by then, and integrated into everyday banking. For instance, blockchain technology will offer decentralised, transparent, and secure financial transactions, reducing the need for traditional intermediaries like banks. Decentralised Finance (DeFi), which is built on blockchain, will democratise access to financial services, allowing anyone with an internet connection to participate in activities such as lending, borrowing, and trading by peer-to-peer system.

By eliminating middlemen, DeFi will reduce transaction costs and increase transparency. It will also provide a faster and more efficient system of cross-border transactions and remittances.

Artificial Intelligence (AI) and Machine Learning will play a strong role in the fintech sector like in all other industries. It will enhance fraud detection, risk management, and regulatory compliance. This technology will enable financial institutions to analyze vast amounts of data in real-time, identifying patterns and anomalies that could indicate fraudulent activity. AI-powered chatbots and virtual assistants will also improve customer service by providing instant support and personalised financial advice.

The IoT will enable the provision of personalised financial services by collecting and analyzing data from connected devices. IoT will improve customer support through smart security systems and digital wearables, providing real-time assistance and insights. Additionally, mobile point-of-sale systems enabled by IoT will allow payments to be made from anywhere, enhancing the convenience and speed of transactions.

Finally, AR and VR will play a significant role in enhancing customer experiences and financial education. These technologies could be used to create virtual branches, allowing customers to engage with financial institutions from the comfort of their homes. This would not only enhance convenience but also enable financial institutions to reach customers in remote or underserved areas.

Role Of Fintech In Sustainable Development

As India strives towards its developed economy goal, fintech will play a crucial role in supporting sustainable development in the country. The sector will also contribute to climate adaptation and mitigation efforts through innovative financial products and services that promote sustainability.

Climate Risk Assessment and Mitigation will be enhanced by fintech companies leveraging extensive datasets and advanced analytics. These tools will provide lenders with detailed insights into borrowers' environmental vulnerabilities, allowing for more informed lending decisions that account for climate risks. Fintech platforms will also facilitate green investments by connecting investors with sustainable projects and promoting financial support for initiatives aimed at combating climate change.

As a result, Impact investing will become increasingly prevalent, with fintech enabling the alignment of investments with social and environmental goals. Blockchain technology, for example, could be used to create impact tokens that convert non-financial value into digital assets, increasing transparency and trust in investment projects aimed at achieving Sustainable Development Goals (SDGs).

India’s fintech sector will have matured into a global powerhouse by 2047, driving economic growth and financial inclusion. The integration of advanced technologies will revolutionise financial services, making them more accessible, efficient, and secure. Government initiatives and regulatory frameworks will ensure that this growth is sustainable, fostering a dynamic and resilient fintech ecosystem.

(The author is the CEO & Founder, RedoQ)

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