Nathan’s India office recently analyzed the financial technology sector in India for the British High Commission in New Delhi. Financial technology, called fintech, is relatively new in India but has already attracted an investment of over $2.5 billion.

The report examines the demand, supply, policy and regulatory environment, and other support functions and enablers of the fintech market in India. Indian fintech has primarily supplied digital payment services, as well as personal finance, wealth management, alternative lending, and data analytics services. However, fintech firms in India have access to a unique demand opportunity, because the potential consumer market for fintech is so large and its financial needs so diverse. A large part of this potential market is the portion of the Indian population with little to no access to financial services, who have the most to gain from fintech as the industry advances.

The January 2017 report, titled Fintech in India: An analysis of the market, and of the UK’s role in supporting its development, also recognizes the United Kingdom (UK) as a world leader in this rapidly growing sector and examines the ability of the UK to support fintech development in India. Indian fintech can particularly draw support from UK counterparts in building and strengthening industry coordination and developing a regulatory framework that supports innovation while protecting the interests of investors and consumers.

One lesson from the UK’s fintech journey is that partnerships between fintech startups and traditional financial institutions in the UK, like Barclays, HSBC, and Aviva, have helped create an “ecosystem” of financial services. Also, London has long been a financial center, providing networks, support, and expertise. Noting that Indian fintech “is not a simple case of catching up,” the report lists 10 areas of focus where UK and India fintech regulators and firms can collaborate. These areas include establishment of a cross-government fintech committee, exploration of a possible fintech “challenge fund” to encourage startups, and development of a business case for a fintech incubator.