AI is Both Threat and Opportunity for Fintech in India

New Delhi, India | April 23, 2026

Artificial Intelligence (AI) is emerging as both a threat and an opportunity for the fintech sector, according to M Nagaraju, Secretary of the Department of Financial Services (DFS). He stated that India’s fintech ecosystem is now transitioning “from scale to complexity,” where risks are sharper and expectations are significantly higher.

Fintech Sector Entering a Complex Growth Phase

Speaking at the PICUP Fintech Conference and Awards hosted by FICCI, Nagaraju emphasized that the fintech industry must adapt to evolving technological challenges.

He highlighted that as digital finance grows, systems will face greater scrutiny and testing. Therefore, fintech companies must focus on building secure, scalable, and reliable solutions.

AI: A Double-Edged Sword for Fintech

Nagaraju described AI as a double-edged sword. On one hand, it introduces new risks; however, on the other, it creates opportunities for innovation.

He urged fintech players to explore AI responsibly and leverage its capabilities to improve financial services. Moreover, he stressed that AI should be seen as an enabler rather than a disruptor.

AI to Drive Financial Inclusion

Looking ahead to Vision 2030, Nagaraju highlighted AI’s potential in enhancing financial inclusion.

AI-powered systems can:

Assess creditworthiness using alternative data
Analyze digital transactions, GST records, and telecom data
Improve lending decisions for first-time borrowers and small businesses

As a result, AI can make financial inclusion not only socially beneficial but also commercially sustainable.

Strong Growth in India’s Financial Sector

India’s financial sector continues to show strong performance. According to official estimates:

GDP growth for 2025–26 is projected at 7.6%
Private consumption grew by 7%
Capital investment increased by 7.8%

Therefore, both consumption and investment remain on a steady growth path.

Banking Sector Shows Significant Improvement

The banking system has also witnessed major improvements:

Gross NPAs reduced to 2.2%
Net NPAs dropped to 0.5% (record low)
Credit growth increased to 14.5%

Consequently, the sector is now more stable and resilient than before.

Financial Inclusion Reaches New Milestones

India’s financial inclusion initiatives have achieved remarkable success:

Under Pradhan Mantri Jan Dhan Yojana:
- Nearly 58 crore bank accounts opened
- Deposits exceed ₹3 lakh crore
Under Pradhan Mantri Mudra Yojana:
- Over 50 crore loans sanctioned
- Total value: ₹39 lakh crore
Under Stand Up India Scheme:
- Over ₹41,000 crore disbursed

Additionally, schemes like PM SVANidhi Scheme and Atal Pension Yojana continue to support small businesses and citizens.

UPI Leads Digital Payment Revolution

India’s digital payment infrastructure has become a global benchmark. The Unified Payments Interface (UPI) processed:

Over 22 billion transactions in one month
Total value exceeding ₹29 trillion
81% share of retail digital payments in India

Moreover, UPI is now expanding internationally, strengthening India’s global fintech leadership.

Overall, AI is set to reshape the fintech landscape in India. While it introduces new risks, it also offers powerful tools for innovation and inclusion.

Therefore, by adopting AI responsibly and strengthening digital infrastructure, India can continue to lead the global fintech revolution.