India's FinTech Revolution: Understanding the Impact

Published Date : 12/10/2025 

India's FinTech revolution is transforming how financial services are delivered, from personal loans to digital payments. Discover how AI and data science are shaping the future. 

By now, you are aware of the impact that artificial intelligence and data science have on your money. Everyone looking to sell a product or a service to you anticipates your actions. They do it with the help of your digital footprint. The choices you make when buying anything online provide them with adequate information about your spending and investing patterns. For example, if you use credit cards and manage to make payments on time, you build a credit history. When you take out a personal or home loan, your timely repayments help lenders understand your repayment habits. The offers you get are tailored accordingly.

All of that was happening even before the so-called FinTech revolution. However, the intensity with which the information is gathered is changing rapidly. Your information is available to those interested in selling anything to you in almost real-time. Through AI and machine learning, information about multiple potential borrowers is analysed instantly. The voluminous data can now be used to predict your future actions by combining your repayment history with your latest banking activity.

Additionally, India's digital public infrastructure is reaching new heights. Last week’s Global FinTech Festival in Mumbai, organised by institutions such as the National Payment Corporation of India (NPCI) and other quasi-government bodies, showcased biometric ID usage for payments on the Unified Payment Interface (UPI). Until now, to make UPI payments, you used a secret PIN. Now, you can use your face ID or fingerprint to authorise transactions on your smartphone. This is all set to create efficiencies and enhance productivity.

The term ‘India Stack’ was mentioned in keynote speeches and reports released during the event. The message from the government authorities was standard. Use the digital public infrastructure for inclusion. Sanjay Malhotra, the Reserve Bank of India governor, mentioned the account aggregators’ (AA) ecosystem that empowers individuals to share their financial data safely with regulated entities. “This ecosystem has seen notable progress with 17 AAs, 650 Financial Information Users (FIUs), 150 Financial Information Providers (FIPs), 160 million accounts being served, and 3.66 billion data requests from FIUs processed by AAs,” he highlighted.

The rapid evolution of new technology creates opportunities and challenges. Businesses are looking to solve market problems with the help of technology. They are incorporating AI, machine learning, and data science to further enhance their ability to help customers. Some of them are threatened or directly affected by the evolving technology. Such a situation creates anxiety in the markets. Investors are using discretion while buying into companies. Not everything in technology or finance is interesting. Share prices of the traditional IT services companies have witnessed a sharp decline in 2025. The Nifty 50 gained 7% while the Nifty IT index fell by over 16%. That shows investor concerns about the future of IT services companies. During the same period, share prices of consumer tech companies like Eternal (owner of Zomato) and One97 Communications (Paytm) jumped 25%.

Foreign portfolio investors are selling fewer Indian shares after selling record quantities so far. Both foreigners and domestic institutional investors and high networth investors are investing in initial public offerings. The issue of LG Electronics India, the subsidiary of Korean consumer giant, received an overwhelming response. The selling shareholders sought about Rs 11,600 crore but received bids for over Rs 4,40,000 crore. Many more companies are lining up to go public. Tata Capital, Pine Labs, and many others are expected to raise record amounts of capital. For you, businesses that cater to underserved markets are good for future growth. You must carefully read public offer documents and understand how companies plan to use your money. The new age businesses require you to learn. You can discuss these potential investments with your financial advisor. Investing regularly is the best way to create wealth in the long-term. 

Frequently Asked Questions (FAQS): 

Q: What is the impact of AI and data science on financial services?

A: AI and data science are transforming financial services by analyzing vast amounts of data to predict consumer behavior, tailor financial offers, and enhance risk management.

Q: How does the Unified Payment Interface (UPI) work in India?

A: The Unified Payment Interface (UPI) allows users to make instant money transfers between bank accounts using a smartphone. It now supports biometric authentication, such as face ID or fingerprint, for added security.

Q: What is India Stack and how does it support financial inclusion?

A: India Stack is a set of digital infrastructure services that include biometric authentication and account aggregation. It helps in financial inclusion by allowing secure and efficient sharing of financial data between regulated entities.

Q: What are the benefits of account aggregators (AAs) in the FinTech ecosystem?

A: Account aggregators (AAs) enable individuals to share their financial data safely with regulated entities, facilitating better financial services and product offerings while ensuring data privacy and security.

Q: How are investor sentiments affected by the FinTech revolution?

A: Investor sentiments are mixed. While there is excitement about the potential of new FinTech companies, there are also concerns about the future of traditional IT services companies, leading to cautious investment strategies. 

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