India’s thriving fintech landscape now boasts 26 unicorns valued over $90 billion and UPI transactions soaring over 14 billion in July 2025 alone. Amid this dynamic growth, the stakes are high. Founders must not just move fast, but also build wisely.
Expert Voices You Should Hear
Shilpa Mankar Ahluwalia (Partner & Head, FinTech, Shardul Amarchand Mangaldas)
“Regulations need to find a balance between protecting consumers and allowing for innovation.”
Sachin Bansal (Founder, Navi Technologies)
“For a fintech, the regulator is its most important stakeholder… fintechs should prioritise regulations even if it is detrimental to the interests of its consumers.”
Harshil Mathur (CEO & Co-Founder, Razorpay) at a global summit:
“If you’re operating in the fintech space, regulation should not come as a surprise… We don’t just comply with regulations—we actively try to anticipate them.”
Siddarth Pai (Founding Partner & CFO, 3one4 Capital):
“We’ve seen entrepreneurs masquerading circumvention as innovation… That may work in software, but when you’re dealing with people’s savings and capital, it’s not a risk the nation can bear.”
Vivek Deep (Executive Director, RBI):
“India is where it is today because of the FinTech sector… Regulation and innovation can coexist… No regulation is cast in stone.”
Avoid These 10 Critical Missteps
- Downplaying Compliance : Regulatory frameworks are not just rules, they are the blueprint. Build with them from day one.
- Misreading Digital Lending Rules: RBI-issued norms on lending guarantees and data protocols can evolve quickly. Stay ahead or risk stoppage.
- Ignoring Data Localization : Government mandates require all payment-related data to reside in India. Make this non-negotiable in your architecture.
- Weak KYC and AML Processes : Compromised systems strike at trust. Automation, auditability, and alerts are must-haves.
- Poor Outsourcing Oversight : Delegating doesn’t equal abdicating. RBI holds you accountable, even if the vendor slipped up.
- Over-Reliance on UPI : UPI drives volume but offers tight margins and is policy-sensitive. Diversify your payment rails.
- Chasing Growth, Not Unit Economics : Investors now demand profitability. Know your CAC, margins, and LTV before scaling.
- Trading Off Security for UX : Customers want sleek experiences but not at the cost of safety. Secure, smooth flows win trust and users.
- Ignoring Policy Engagement : Leaders, regulators, NPCI, legal bodies, drive the rulebook. Stay plugged in, not just reactive.
- Lacking Contingency Planning : Circulars and clauses can shift suddenly. Plan with modular architecture, capital buffers, and rollback knobs.
The Strategic Imperative
As Vivek Deep puts it: “Regulation and innovation can coexist… No regulation is cast in stone.”
Fintech leaders like Sachin Bansal call regulators the ecosystem’s central stakeholders.
And Razorpay’s Harshil Mathur reminds us that compliance isn’t reactive, it must be anticipatory.
Safeguarding the Future
India’s fintech journey is entering a more mature phase. Regulation is becoming sharper, consumer protection is under the spotlight, and profitability not just growth is the metric investors care about.
Finance Minister Nirmala Sitharaman recently urged fintech players to “look for solutions to prevent cyber frauds”, a reminder that customer trust is the ultimate currency in this sector.
For founders, this means embedding compliance into innovation, prioritising security in product design, and preparing for regulatory shifts before they arrive. The companies that succeed won’t just navigate India’s fintech transformation, they’ll safeguard its credibility and set global benchmarks.
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