Indian Fintech to Enter 2026 as AI and Compliance Take Center Stage

India's fintech ecosystem is entering 2026 at a point where scale is no longer the sole marker of success, but compliance and sustainable unit economics are increasingly becoming decisive.

According to data from the Reserve Bank of India (RBI), digital payment volumes surpassed 180 billion transactions in FY25, driven largely by UPI and the integration of embedded payment rails into commerce, mobility, and lending platforms. At the same time, RBI supervisory disclosures and BIS working papers have highlighted the rising operational and fraud-related risks as fintechs continue to expand into credit, wealth, and banking-related services.

Ramki Gaddapati, Co-Founder, APAC CEO and Global CTO, Zeta, said that 2025 has been a strong year for India's fintech ecosystem, and 2026 is set to be a defining phase of evolution.

"We're already seeing traditional boundaries blur- payments, lending, embedded finance, and banking capabilities are coming closer together as players look to build more integrated and efficient models. While payments continue to be powerful for driving access and engagement, long-term value will come from combining scale with operational efficiency across the financial stack," said Gaddapati.

Regulation is also emerging as a structural force rather than a cyclical hurdle. The Digital Personal Data Protection (DPDP) Act, mobilized through sector-specific guidelines and with rules by the Ministry of Electronics and Information Technology and regulators such as RBI, SEBI, and IRDAI, is looking to shape how financial institutions architect data flows, consent, and vendor relationships.

Neha Abbad, co-founder, CyberSigma Consulting, said, "The DPDP Act is important because it protects personal data and builds trust. Without compliance, organisations face penalties, data breaches, customer loss, and reputational damage. Following the law improves credibility, strengthens security, and ensures responsible data handling for sustained business growth.

Gaddapati added, "Regulatory clarity will be central to how this next phase plays out. With the DPDP Act coming into effect and the RBI's move toward stronger, multi-factor authentication for digital payments, the industry will spend a lot of time strengthening governance, data responsibility, and security. This shouldn't be seen as a constraint; it's an opportunity to build deeper trust and resilience across the ecosystem."

This recent push by RBI towards stronger authentication norms and tighter third-party risk oversight also reflects global standards articulated by global bodies such as the Financial Stability Board and the Bank for International Settlements.

Going into 2026, technology is also undergoing recalibration, with industry surveys from institutions like NASSCOM and the World Economic Forum showing that over 60 per cent of financial services firms in the APAC region are prioritising AI-led automation in services support, and fraud prevention to protect margins amid slowing funding cycles.

"AI will act as a major catalyst, especially across servicing, collections, underwriting support, and operational efficiency. Customer-facing adoption will follow with the right safeguards in place. At the same time, improvements in KYC, authentication, and fraud prevention will continue to expand access and confidence in digital financial services," said Gaddapati.

"2026 will also bring a sharper focus on where profitability truly lies, along with more thoughtful platform strategies and disciplined technology choices. Not everything needs to be built in-house, and collaboration between banks, fintechs, and technology providers will matter more than ever."