KPMG India


With extensive changes being introduced by fintech startups, there exists a big opportunity for them to have an impact that extends beyond the confines of the traditional financial services industry, finds the ‘Fintech in India – Powering a digital economy’ report.

To this effect, a collaborative and cohesive approach should be the way forward if fintech startups are to cater to the varying demands of customers. Also, the government’s proactive stance, will go a long way in ensuring and building an open and lively digital economy.

KPMG in India, in collaboration with Nasscom, released the report at the Nasscom India Fintech Day. It offers insights into how the fintech ecosystem has evolved significantly with proactive effort from financial institutions, start-ups, the government, venture capitalists and regulators.

Important highlights and insights from the report:

  • Financial institutions are undergoing a dramatic transformation in the digital age – from their roles and responsibilities, service offerings, products to the distribution channels.
  • Fintech VC deal volume in India rose to 31 deals in Q2’18 – a new high
  • China & India dominated the top 10 deals with 6 & 4 massive deals, respectively
  • Global Fintech sector investments for H1 2018 to reach USD 57.9 Billion. In India we have witnessed 31 deals in H1 itself
  • Key themes from the report – Open Banking, Artificial Intelligence and Blockchain, will be important in the innovation ecosystem going forward

Open Banking

  • Across the globe open banking conversations today center around how many countries have taken the sandbox approach
  • UK and Europe has progressed most. In UK open banking mainly covers two areas account aggregation and payments
  • In India, though we have had a very progressive journey on payments leading up to UPI 2.0 it’s  a highway for innovation in this regard with NBFC AA directive and guidelines being in place on account aggregation
  • India’s giant leap towards the open digital economy with APIs
  • With all the progressive initiatives by the government, the regulators and the industry,it is safe to say that while taking steps towards open banking, India is striding towards an ‘open digital economy

Artificial Intelligence (AI)

  • In the past few years we have seen Artificial Intelligence progressing well in automating operational tasks
  • Allocation of INR 3,703 crore for the Digital India program by the government. Focus on research, training, and skill development in robotics, artificial intelligence, big data intelligence and quantum communications
  • Setting up of an Artificial Intelligence task force to harness the potential of AI in various sectors, including Fintech’s. The task force has identified data availability, open application programming interfaces and smart analytics as key enablers for AI development
  • RBI’s inter-regulatory working group on Fintechs and digital banking recognizing the use of AI and robotics in data analytics and risk management as a major Fintech innovation has been key
  • Securities and Exchange Board of India (SEBI) has set up a Committee on Financial and Regulatory Technologies (CFRT) to facilitate the application of AI in securities and trading and for SEBI’s other regulatory functions
  • Insurance regulatory and development authority of India (IRDA) is closely examining innovation having impact on product design and the efficacy of inclusive insurance delivery
  • These ecosystem players are working both collaboratively and individually to ensure a legal, safe and adequately funded environment for the development of AI-based use case in BFSI in India


  • USD 1.7 billion annual spend on blockchain
  • 67% increase in blockchain budget globally
  • 2018 onwards we shall see that the consortia will drive the adoption, protocol definition and common standards across.
  • Convergence of IOT, blockchain and AI will be the next driver for adoption and use cases
  • The 3 C’s to successful Fintech adoption- Consolidation, Collaboration and Convergence

Commenting on the report Gayathri Parthasarathy, Head, Financial Services-Advisory, KPMG in India said “To be relevant in the current world around the customers, institutions need to leverage emerging technologies and re-look at the customer experience, while lowering their barriers to accept innovation. In today’s world, advisors play an important role in providing the agility required to support the innovation. From customer mobility experience to risk management, emerging technologies are adding immense value to business processes in financial services”

“Connecting the dots is a beloved childhood game, but what if the dots are constantly moving? The new wave of emerging technologies and changing business models is forcing businesses to create images with moving dots. We focus more on the design, but it is the raw need of the customer that needs a highlight. Instead of treating a customer as a transactional segment in the digital world, understanding of behavioural patterns is more important as each user is different”, said Manish Jain, Partner, Digital and Fintech, Management Consulting, KPMG in India

For a more detailed perspective please refer to the attached report.