India's fintech sector set to grow at 31 pc CAGR in next four years: Report

New Delhi, Oct 8 (IANS) The Indian fintech sector is expected to grow at an impressive 31 per cent compound annual growth rate over the next four years, a report said on Wednesday.

The report from KPMG India said that the country's fintech ecosystem is transitioning from rapid expansion to a phase characterised by resilience, governance, and profitable scale.

This shift is supported by robust digital public infrastructure, including UPI, Aadhaar, and the Account Aggregator framework, the report said.

Approximately 60 per cent of total fintech funding in the first half of 2025 was directed toward lending and payments segments, underscoring investor confidence in mature, stable sub-sectors, the report said.

After the peak in funding seen in 2021, the deal activity has rebounded in H1 2025 with 12 deals exceeding $50 million, compared to just 1 in H1 2024. This recovery signals strategic investor focus on scale and quality, KPMG India said.

"India’s fintech evolution is entering a new phase—one where embedded finance, powered by responsible AI, redefines how financial services integrate into daily life. Innovation must now be paired with governance, resilience and ethical safeguards. Talent will be the true differentiator, shaping a workforce ready to navigate advanced technologies and regulatory complexity," said Akhilesh Tuteja, Partner and Head, Clients and Markets, KPMG in India.

"This is the moment to build future-ready models that are compliant, customer-centric and scalable—where innovation thrives responsibly, and India emerges as a global benchmark for financial transformation," he added.

Sanjay Doshi, Partner and Head Transaction Services and Head, Financial Services, Advisory, KPMG in India, said that the transformative power of digital public infrastructure has unlocked immense opportunity—but lasting success will depend on institutionalising trust, embedding rigorous governance, and pursuing transparent, profitable growth

--IANS

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