The Disruptive Story of FinTech – Prof. Ankit Sharma

29th January 2026

Medium Link: https://medium.com/@ankitpolistya/the-disruptive-story-of-fintech-a874af15bd34

Course Relevance 

This blog is designed for the following PGDM / UG courses: 

• PGDM T5 RegTech and Financial Compliance: 

• Explores the evolution, scope, and business models of financial technology. 

• Discusses the regulatory challenges posed by rapid technological innovation. 

• PGDM T4 Introduction to FinTech: 

• Explores the evolution, scope, and business models of financial technology. 

• Examines how FinTech has disrupted traditional banking and payment systems. 

• Analyzes how technology firms and startups challenge incumbent banks. 

• Focuses on how FinTech expands access to financial services in emerging markets. 

• BBA Sem 3 Indian Financial System (IFS): 

• Examines how FinTech has disrupted traditional banking and payment systems. 

Academic Concepts 

This blog draws on multiple interdisciplinary concepts: 

• Financial Innovation Theory: 
  Explains how technology transforms financial products, processes, and institutions. 

• Disruptive Innovation (Christensen): 
  Demonstrates how FinTech startups and BigTech firms disrupt incumbent banks. 

• Platform Economics: 
  Examines digital platforms such as UPI, GPay, and PayTM as two-sided markets. 

• Financial Inclusion Theory: 
  Emphasizes access, affordability, and availability of financial services. 

• Regulatory Arbitrage: 
  Explores how FinTech firms operate in spaces with evolving regulation. 

• Data-Driven Finance & Algorithmic Underwriting: 
  Uses analytics and machine learning to assess creditworthiness of NTC customers. 

Background 

FinTech—short for Financial Technology—is often perceived as a recent phenomenon. In reality, it has evolved over more than a century, driven by continuous technological advancement. 

The roots of FinTech date back to 1866, with the successful deployment of the transatlantic cable, enabling the first wave of financial globalization. Over time, innovations such as ATMs, electronic trading platforms, payment networks, and mobile banking reshaped how financial services are delivered. 

By 2024, the global FinTech market was valued at approximately USD 340.1 billion, reflecting its central role in modern financial systems. 

Evolution of FinTech: From 1.0 to 3.5 

FinTech 1.0 (1866–1967): Infrastructure Era 

• Telegraph and transatlantic cable 

• Enabled cross-border financial communication 

• Foundation of global finance 

FinTech 2.0 (1967–2008): Digitalization of Traditional Finance 

• Introduction of ATMs (Barclays, 1967) 

• NASDAQ, SWIFT, debit and credit cards 

• Banks remained the dominant players 

FinTech 3.0 (Post-2008): Disruption Era 

• Triggered by the Global Financial Crisis (GFC) 2007–08 

• Decline in blind trust in banks 

• Entry of startups and BigTech firms into finance 

• Basel III regulations tightened banking norms 

• Rise of mobile-first financial solutions 

FinTech 3.5: Emerging Market Leapfrogging 

• Countries like India advanced faster due to mobile penetration 

• Focus shifted from convenience to financial inclusion 

• India emerged as a global FinTech leader 

Situation: The Indian FinTech Transformation 

India’s FinTech journey accelerated post-1991 with liberalization (LPG reforms). However, real momentum came after 2010, driven by: 

• Rapid smartphone adoption 

• Affordable internet access 

• Rise of payment wallets (PayTM, MobiKwik, Oxigen) 

• Government-led Digital Public Infrastructure (DPI) 

Today, India hosts 600+ FinTech startups across domains such as: 
BankTech, PayTech, WealthTech, InsurTech, RegTech, and SupTech. 

Key Driver: The DELTA Framework 

India’s FinTech success is best explained through the DELTA framework: 

• D – Demographics: 
  India has the world’s largest millennial population (440 million). Along with Gen Z, they will form 50% of the population by 2030. 

• E – Enabling Ecosystem: 
  Jan Dhan Yojana added 240+ million bank accounts. Aadhaar-enabled eKYC reduced onboarding costs by 85%. 

• L – Lenders’ Shift: 
  Banks collaborate with FinTechs through co-lending and digital partnerships. 

• T – Technology: 
  Cheap internet and the “Jio Effect” made India a mobile-first economy. 

• A – Analytics: 
  Big Data and ML enabled credit access for New-To-Credit (NTC) customers. 

Impact and Evidence: The Numbers Speak 

Key statistics highlight the depth of FinTech penetration in India: 

• 36% of FinTech users are NTC customers (vs 22% in banks) 

• 32% of small-ticket loans (<₹10,000) originate from Tier-4 towns 

• BNPL adoption surged, with 29% of sanctions exceeding ₹20,000 

• Zerodha’s zero-brokerage model disrupted capital markets with daily turnover of USD 1.5–1.8 billion 

• 52% of Indian adults are active FinTech users 

• FinTech revenue growth: 40% globally (2023) 

• Inclusion: 57% MSMEs, 47% low-income users 

• Investment: USD 4.2 billion in H1 2022 (25% in digital lending) 

UPI: The Game Changer 

The launch of UPI by NPCI transformed India’s payment ecosystem: 

• Enabled instant, interoperable payments 

• Reduced dependence on cash 

• Democratized digital transactions 

In November 2025 alone, UPI processed 20.47 billion transactions, with transaction value running into multiple lakh crore INR, making it the backbone of India’s digital economy. 

Outcome 

FinTech has evolved from a support function for banks to a primary engine of financial inclusion, efficiency, and innovation. 

India’s combination of: 

• IndiaStack (Aadhaar, UPI) 

• Digital-native population 

• Startup ecosystem 

• Progressive regulators 

has positioned it at the global forefront of FinTech innovation. 

Epilogue: The Road Ahead 

While FinTech’s future in India is bright, challenges remain: 

1. Regulatory frameworks must evolve alongside innovation 

2. Data privacy and cybersecurity risks need strong governance 

3. Balance is required between innovation and consumer protection 

4. The shift from FinTech to TechFin signals deeper integration of technology and finance 

The FinTech story ultimately reflects a larger truth: 
Technology does not merely support finance—it now defines it. 

Teaching Note 

Learning Objectives 

After engaging with this blog, students will be able to: 

• Trace the historical evolution of FinTech 

• Analyze the impact of GFC 2008 on financial innovation 

• Understand India’s leadership in FinTech adoption 

• Evaluate the role of DPI in financial inclusion 

• Critically assess regulatory challenges in FinTech ecosystems 

Key Discussion Points 

• Why did emerging markets leapfrog developed economies in FinTech adoption? 

• Is FinTech a complement or a competitor to traditional banks? 

• Should BigTech firms be regulated like banks? 

• How sustainable is FinTech-driven inclusion? 

Suggested Classroom Activities 

1. Case Mapping: 
   Trace FinTech evolution from 1.0 to 3.5 with examples. 

2. Debate: 
   “FinTech improves financial inclusion more effectively than traditional banks.” 

3. Group Assignment: 
   Analyze UPI as a platform business model. 

Discussion Questions 

1. How did the Global Financial Crisis accelerate FinTech innovation? 

2. Why is India uniquely positioned as a FinTech leader? 

3. What risks arise when technology firms dominate financial services? 

4. How should regulators balance innovation with stability?