Chief Economic Advisor (CEA) V Anantha Nageswaran stated on Thursday that the development of fintech solutions can have a revolutionary effect on income, savings, and wealth creation in India, hence contributing to social stability in the nation. He went on to say that the fintech sector ought to be conscious of the potential risks that fintechs could bring to society.
"The industry players in the course of their businesses must highlight the benefits and be aware of the threats that a powerful combination of technology and finance can pose to low- and middle-class people's fortunes and social stability," Nageswaran continued. He also took part in the Mumbai-based Global Economic Summit on Fintech.
He went on to say that advancements in India's fintech field have positioned the country as a role model for other countries in terms of using technology to promote financial inclusion, streamline government services, and foster financial sector innovation. Furthermore, globally, and not just in India, financial literacy is something that is understood in theory for its usefulness but is set up by market participants.
"India's digital lending sector was estimated at USD 270 billion in 2022 and is projected to reach USD 350 billion by 2023. Similarly, the wealth-tech sector is expected to reach $237 billion by 2030, fueled by a growing pool of retail investors facilitated by fintech breakthroughs such as robo-advisors and micro-investing platforms," he said. The focus on fintechs comes as the sector expands in India.
According to statistics from market intelligence platform Tracxn, funding for fintech startups was estimated at USD 795 million in the first half of 2024, down from $1.93 billion in the same period the previous year. It also comes in the context of heightened regulatory scrutiny of the sector.
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