India’s Fintech Sector Enters Maturity Phase: KPMG Says Long-Term Value Creation Now Trumps Rapid Scaling

India’s fintech industry is undergoing a strategic transformation, shifting its focus from hyper-growth and aggressive user acquisition to long-term value creation, operational resilience, and sustainable innovation, according to KPMG’s latest report titled “India’s Fintech Evolution: From Growth to Resilience.” The report, released on October 9, 2025, outlines how fintechs are recalibrating their business models to align with evolving investor expectations, regulatory frameworks, and market dynamics.

“India’s fintech sector is entering a decisive phase marked by trust, governance, and durability,” KPMG stated, adding that the industry is projected to grow at a robust 31% CAGR through 2029, supported by deepening Digital Public Infrastructure (DPI), widespread UPI adoption, and expanding financial access across Tier-II and Tier-III cities.

📊 Fintech Industry Evolution: Key Phases

The report highlights that while India’s fintechs have expanded rapidly—especially in payments, lending, and wealthtech—the next wave of growth will be driven by differentiation, compliance readiness, and customer retention.

🧠 Strategic Shifts in Fintech Business Models

KPMG notes that fintechs are now investing in risk management, data security, and AI-driven personalization, moving away from one-size-fits-all solutions.

🏦 Sectoral Outlook: Fintech Sub-Sectors in Transition

The report also highlights the rise of RegTech and InsurTech as high-potential areas, especially as regulators tighten norms around digital lending and data privacy.

🧭 Investor Sentiment and Funding Trends

India’s fintech funding saw a 23% decline YoY in 2024, but KPMG expects a rebound in 2026 as companies demonstrate unit economics and governance maturity. Investors are now prioritizing ESG compliance, board independence, and sustainable growth metrics.

🧾 Policy and Infrastructure Enablers

KPMG credits India’s Digital Public Infrastructure (DPI)—including Aadhaar, UPI, Account Aggregator, and ONDC—as foundational to fintech’s resilience. The report recommends:

• Tax incentives for compliance tech
• Sandbox expansion for RegTech pilots
• Tier-II city incubation hubs
• Cross-border fintech corridors

🗣️ Industry Voices

• Sanjay Doshi (KPMG India): “Fintechs must now build for permanence, not just performance.”
• Nirmala Sitharaman (Finance Minister): “India’s DPI is a global benchmark. Fintechs must leverage it responsibly.”
• Rajan Anandan (Peak XV Partners): “We’re backing founders who prioritize governance and long-term vision.”

Disclaimer

This news content is based on verified industry reports, public statements, and financial data as of October 11, 2025. It is intended for editorial use and public awareness. The information does not constitute investment advice, regulatory guidance, or financial endorsement and adheres to ethical journalism standards.