Indian fintech startups have various opportunities across different user segements according to a report by early-stage venture capital firm Elevation Capital.
The report has marked four key areas for fintechs to solve across expansion and experience. It highlighted the large opportunities for fintechs to revolutionise how users across segments experience and access financial services.
The report titled ‘Mapping A Billion – Understanding The Indian Fintech User’, with McKinsey & Company presents four large opportunities for fintechs to leverage by building with users as the core focus.
The research identifies nearly ten customer segments with around $1Bn each in addressable revenue pools. The customer segments — teens or young adults, NRIs, importers or exporters, self-employed professionals, and international travelers, among others.
The report showed that India’s top 1% of the population drives disproportionate value as they account for 70% of retail deposits, 30% of retail lending assets, 55% of retail investable assets and 50-60% of online spending.
In 2022, serving the affluent presented a $50-55Bn revenue opportunity, which is expected to reach $80-100Bn by 2030.
The report identifies two key levers for fintech to serve: building delightful experiences catered to the nuanced needs of affluent users and enabling access to products reserved for the ultra-rich.
The report showed that lending as a sector can drive growth. With a lendable base of nearly 300 million customers in India, formal credit has only been extended to about 120 million customers to date, presenting a significant opportunity to target the next 200 million. With consumers’ growing digital adoption of products s and the shift from cash to digital payments, the sector is identified as a $25-30 billion opportunity by 2030.
“India is a large country with 1Bn+ addressable fintech users – these are heterogenous users with nuanced needs and contexts. Serving a segment successfully needs understanding where they are in their adoption curve and building towards their specific pain points. Through this report, we outline opportunities for fintechs to create value across different affluence segments – across payments, credit and wealth & protection,” said Mridul Arora, Partner, Elevation Capital.
In August, Elevation released the first part of the report that estimated India’s fintech ecosystem would create $400 billion in value by FY30.