India has emerged as one of the most dynamic fintech markets globally, driven by a potent combination of digital public infrastructure (UPI, Aadhaar, Account Aggregator), a mobile-first population, and regulatory clarity, a report showed on Monday.

Fintech-led digital lending grew at 35 per cent CAGR in 2024, driven by rising credit demand, according to the report by QED Investors and Boston Consulting Group (BCG).

Tools like UPI have enabled a wave of fintech innovation from digital lending to payments to wealth particularly benefitting underserved and unbanked populations. These enablers have accelerated innovation and financial inclusion at scale, making India a key focus for both global investors and domestic fintech players, said the report.

India features among the top geographies poised for future fintech investment. Investors are encouraged to diversify capital into high-growth regions like India, with an emphasis on AI integration and disciplined scale, it added.

India's affluent middle class, currently 31 per cent of the population, is projected to grow to 40 per cent (nearly 600 million) by 2031. This demographic shift is fuelling a surge in consumer demand for credit across retail, consumption, and SME sectors.

"India stands at a unique inflection point in the global fintech landscape. With a strong foundation in digital infrastructure like UPI, Aadhar, Account Aggregator, and tech-savvy mobile-first population, the country has already shown how innovation can drive financial inclusion at scale,” said Sandeep Patil, Partner and Head of Asia at QED Investors.

To win the next chapter, fintechs must pair innovation with disciplined execution.

“That means building trust, demonstrating profitability, and navigating an evolving regulatory landscape with maturity. The Indian market is large, dynamic and underpenetrated — well-positioned to be one of the defining arenas for global fintech over the next decade,” Patil mentioned.

Globally, in 2024, fintech revenues grew by 21 per cent — up from 13 per cent in 2023 — marking a threefold acceleration over the financial services industry at large.

“A class of scaled fintechs is coming of age. Investors are demanding greater maturity, and regulators want more accountability,” said Deepak Goyal, a managing director and senior partner at BCG.

“Meanwhile, emerging disruptors are harnessing next-generation technologies like agentic AI and pioneering new business models, pushing established players to continuously innovate,” he added.