Price Waterhouse and Coopers & Lybrand (PwC) India has released a report titled Mapping the FinTech innovation landscape in India. According to the report, 90% of Indian financial institutions are focusing on artificial intelligence (AI) and GenAI (Generative Artificial Intelligence). 31 financial institutions, including banks, insurance firms, and fintechs, participated in the survey.

The report states that “the continuous pace of technological evolution, particularly in areas such as AI, blockchain, and data analytics, has been creating new opportunities for re-imagining traditional financial services and processes.” AI and LLMs have typically enabled better customer service through interactive chatbots and personalisation, while blockchain is helping enable secure, transparent, and efficient transactions.

Enablers of Innovation

The responses analysed on critical emerging technologies within the FinTech sector in India reveal a strong focus on AI and GenAI, with 90% of the respondents citing them as the primary technology enablers of innovation. Data analytics also continues to emerge prominently across nearly 74% of responses, underscoring its integral role in driving insights and decision-making within FS. Open banking and API solutions are highlighted by 58% of the respondents, reflecting efforts to enhance connectivity and interoperability across platforms.

Additionally, some respondents recognised technologies such as RPA and intelligent automation for their potential in streamlining operations and optimising workflows, while a few of the respondents mentioned blockchain and DeFi, thereby highlighting a growing interest in secure and transparent transaction frameworks that could transform the FS landscape.

Challenges of innovation

According to the report, the primary challenges most companies encountered while running their innovation initiatives were resource constraints – particularly in terms of talent and the technological complexity associated with new technologies, with approximately 35% of the respondents mentioning them as significant challenges and 52% and 35% of the respondents naming the same factors (resource constraints and technology complexity respectively) to be moderate challenges respectively. Additional challenges included measuring the impact of innovation initiatives, the absence of a clear strategy before initiating innovation, and, in some cases, a siloed organisational structure, which posed moderate difficulty. Notably, over half (52%) of the respondents did not identify cultural resistance as a significant challenge, indicating that innovation is adopted and promoted within the organisations surveyed. 

A few other challenges included managing the shift between established and innovative business models, engaging multiple departments towards a common innovation goal, balancing capital allocation for various innovation projects, fostering a culture of experimentation, and adapting to disruptive technologies.

PwC Report