The fintech market size of India is expected to lead the ladder soon in the global market, if the conditions remain favorable and the fintech companies remain strong on innovation and quality of services.

Growth of Fintech companies in India

Being the third-largest market size of Fintech, this year India stands at $31 billion. Let’s get into the segments, possibilities for the growth of fintech companies in India.<br />Considering the worldwide position of the <a target="_blank" href="https://scoreme.in/fintech-companies-in-india"><b>fintech companies</b></a> existing in one of the most powerful economies of the world, such as the US and China, India strongly holds on to the third-largest fintech market size. Moving ahead, the market size of India is expected to face decent growth as the economic conditions are improving and promising as well.<br /><h2></h2><br /><h2><b>Current scenario of Fintech companies in India</b></h2><br />Due to the introduction of digitalization, the <a target="_blank" href="https://scoreme.in/major-growth-trends-that-drive-fintech-companies-in-india"><b>fintech market</b></a> size of India is expected to lead the ladder soon in the global market, if the conditions remain favorable and the fintech companies remain strong on innovation and quality of services. In the next five years, fintech companies in India are expected to grow at a compound rate of 24.5%. This estimation is an outcome from the constant enhancement of fitch companies and increasing dependency on digitalization and software development. As more and more businesses are relying on the services and competency of the fintech companies, hence, the demand and supply side seems to find its growth graph.<br />Being among one of the fastest-growing economies, India seems to lead the game further. With paperless lending, mobile banking, secure payment gateways, and other online banking methods offer a promising future for fintech companies.<br /><h2></h2><br /><h2><b>Key drivers of Fintech companies in India</b></h2><br /><ul><li>Start-up India: With flagship government initiative the startup ecosystem of the nation has been strengthened and mobilized.</li><li>Aadhaar: With this biometric identification, the citizens of India got a digitalized validation which has upgraded the system of digital payments.</li><li>Jan Dhan Aadhaar: Under this government plan, all the Jan Dhan banks accounts are directly linked with the Aadhaar and mobile numbers of the people of India, which is a step ahead towards making digital India a reality even in the rural regions of the nation</li><li>India Stack: This is an ambitious software plan by the government, which will use an application programming interface (API) to connect the start-ups with the government under a unique digital infrastructure that will promote paperless and cashless delivery of financial services.</li><li>Blockchain market: A new dimension of the financial market and is expected to grow at a compound annual growth rate (CAGR) by 37 percent till 2024.</li></ul>

<h2><b>Major Challenges of fintech companies in India</b></h2><br />Fintech adoption in India is unprecedented and hence, faces multiple challenges. Here are the key issues and challenges for the fintech companies:<br /><ul><li>Risk of data security and privacy– Data leaks, and information theft are a few dark traits that come along with the financial services space, technology being the forefront leader. Hence, data being the backbone of FinTech's, to develop a strong mechanism of data protection is important, and players need to invest in those mechanisms to control this risk. Therefore, it is not easy to comply with regulatory requirements towards data security.</li><li>Multiple adoptions – For many companies, traditional methods are dependable and adopting to such an advanced adoption of Fintech remains a challenge.</li><li>Fast-changing regulations – There are so many fast upgrading regulations for investment exits, cryptocurrency, payment regulations, data, infrastructure security, and consumer protection. Hence, it becomes a challenge for the businesses to sync in what the fintech dynamism.</li><li>Financial literacy and awareness are lacking – A large part of India remains rural and FinTech business is largely focussed in the urban segment. Hence, to reach out to the smaller cities and towns, it is still a challenge to implement financial literacy.</li></ul><br /><h2><b>Future of fintech companies in India</b></h2><br />Though the country is diversified and populated, still a huge portion of India remains underbanked, and yet to comply with the constantly changing regulatory environment. These are the reasons, to overcome the financial challenges is not easy. This is where Fintech companies enter and with its ability to transform the financial and banking sector of the country.

Due to factors like an innovation-driven startup, a favorable market, penetration of smartphones, the young population, and government-led attempts to promote the industry, there is a huge scope for FinTech companies to grow. More importantly, with increasing awareness of financial technology also gives the FinTech industry of India a strong boost.<br />With the growing <a target="_blank" href="https://scoreme.in/how-are-fintech-companies-evolving-the-lending-process-in-india"><b>FinTech companies</b></a>, partnerships with traditional banking, insurance, and retail sectors, where the customer needs are evolving and so are the solutions. Hence, there is no doubt that there is a blocker in the acceleration of FinTech companies.