How India’s telecom-fintech ecosystem keeps money flowing

The word currency must have something to do with current. The value of both water and money lies in how they flow—swiftly, seamlessly, and everywhere. Without motion, both lose their worth. And like water, money needs a sturdy system of wells, tanks, pipes, and taps to do what it is meant to do—flow freely and reach far.

This has never been truer than now, when transactions have shrunk to the swipe and speed of a thumb. The invisible plumbing beneath must work harder than ever to keep pace—and India’s telcos are doing precisely that.

Telcos Write India’s New Digital Blueprint

Communication costs have dropped by about 33% annually, while processing and storage costs have each fallen around 30%. This has made India one of the most affordable data markets in the world—thanks mainly to the telecom sector’s relentless expansion and innovation.

“Telecom networks have driven more than 120% mobile penetration and over 60% smartphone penetration in India,” observes Rajashekara V Maiya, VP and Global Head of Business Consulting, Infosys Finacle. “The Jan Dhan initiative has brought over 450 million customers into the formal banking system. Meanwhile, the India Stack—with its faceless, paperless, and cashless framework—has catalysed open banking and UPI payments. Add to those initiatives like the Unified Lending Interface (ULI), Open Credit Enablement Network (OCEN), and ONDC, and we are witnessing one of the largest financial inclusion programmes globally—underpinned by telecom and digital infrastructure.”

A recent IMF note echoes this view, stating that mobile networks are the backbone of India’s digital payments revolution, led by UPI. Shikhar Aggarwal, Chairman, BLS E-Services, reinforces the point: “India has become a global leader in real-time payments, shifting from cash and card to digital-first systems. UPI has made payments quick, secure, and accessible, driving inclusion across individuals and small businesses.”

Every tap, transfer, and scan depends on telecom’s physical backbone—towers, fibre cables, and data centres. Without the pipes of connectivity, the promise of a cashless economy would remain dry ink on paper.

Connectivity Drives Inclusion and Innovation

The country’s communication backbone has not only powered fintech innovation but also expanded the boundaries of financial access. “India’s financial services revolution is being powered by telecom and digital infrastructure,” says Anil Chawla, Managing Director, Customer Engagement Solutions, Verint India.

“UPI crossed 14 billion monthly transactions in 2024, and digital lending is projected to reach USD 350 billion by 2030. With 4G, 5G, cloud, and secure connectivity, telcos have become critical enablers of UPI, mobile money, and rural inclusion in partnership with banks, fintechs, and payment players,” he added.

Maiya further explains that India’s Digital Public Infrastructure model has unlocked “planet-scale inclusion,” with ULI disbursing over USD 5 billion and reaching more than a million clients. “This ecosystem of banks, IT providers, telcos, and startups has helped lift more than 300 million people from below the poverty line to the middle class. All this has been achieved at a fraction of global costs, thanks to real-time, round-the-clock payments and technology-led innovation,” he notes.

In rural areas, telecoms’ reach has allowed even small merchants to accept QR payments, farmers to receive subsidies directly, and self-help groups to access micro-credit. Fibre connectivity and affordable smartphones have democratised not just communication but opportunity.

Banking the Unbanked through Networks

The collaboration between telcos and financial institutions has proven vital to expanding reach and redefining customer experience.

Sharing an example, Chawla says, “Bank of Baroda partnered with Tech Mahindra and Verint to transform its contact centre operations using our Quality Bots and Speech Analytics. By automating the evaluation of 100% of customer calls, the bank improved quality scores to 92%, NPS to 50+, sales conversions by 5%, and compliance to 97%.”

For Kaushik Chatterjee, Founder and CEO of Lendingplate, the equation is simple: “Compared to limited bank branch coverage, mobile networks reach the remotest regions, offering a broader gateway to financial access. Telecom infrastructure ensures fast authentication, reliable transactions, and shared systems that reduce costs—enabling fintechs to serve rural populations sustainably.”

From rural to urban areas, this shift has created an inclusive financial system. Aggarwal adds, “Bank accounts, credit, pensions, and insurance—once a luxury—are now accessible to all. RBI data shows continuous growth in financial literacy and availability of services, enabled by telecom networks and digital infrastructure.”

Fintechs Thrive on the Telecom Backbone

With 4G, the rollout of 5G, affordable smartphones, and API-driven integration, financial services are no longer confined to cities.

“Mobile-first users can now open bank accounts, make UPI payments, apply for loans, and access insurance on their phones,” says Chatterjee. “Telecom infrastructure provides the scale, real-time transaction processing, and secure connectivity needed to serve remote districts. It is not just enabling financial services—it is redefining them for a digital-first India.”

Aggarwal points out that the collaboration between telcos, banks, and fintechs benefits all parties. “Payment platforms gain from network effects, higher transaction volumes, and data insights to personalise services. APIs allow financial offerings to be embedded into non-financial platforms like e-commerce or social media—creating an interconnected digital economy.”

This convergence has blurred industry boundaries. Fintechs today run on telecom bandwidth, while telcos monetise fintech data insights, forming a new cycle of shared growth.

Balancing Regulation and Innovation

As this convergence deepens, regulatory frameworks from the RBI, TRAI, and the Data Protection Board become essential to sustain momentum and trust.

“The regulators are ensuring transparency, fairness, and consumer protection,” says Chatterjee. “Fintech players welcome these guardrails—they build confidence in the system.”

Aggarwal, however, cautions against overregulation: “While minimising systemic risk and ensuring consumer safety is vital, it must not stifle innovation or competition. Regulators need to strike a balance between nurturing creativity and safeguarding stability.”

Chatterjee adds that interoperability—exemplified by UPI—will be key to the next phase. “Seamless, interoperable frameworks can accelerate digital lending, credit scoring, and cross-platform payments.”

Telecom’s role in compliance is equally critical. Secure networks, lawful interception systems, and verifiable user identity through KYC ensure that financial data remains protected even as volumes surge.

Technology Transforms Financial Services

The entry of emerging technologies such as AI, IoT, and blockchain promises to elevate scale and efficiency—but also introduces new risks.

Maiya notes, “Each new technology amplifies the delivery of financial services by reducing friction. AI and blockchain will cut fraud, improve customer experience, and make transactions faster and cheaper.”

Chawla adds, “Customer interactions across mobile, IVR, and digital channels are surging, creating demand for AI-powered chatbots, contextual call routing, and multilingual self-service. At the same time, compliance pressures and fraud risks are rising. For telcos and BFSI firms alike, Customer Experience (CX) is the new frontier—but legacy systems struggle to keep up with its scale and speed.”

Aggarwal highlights a recent milestone, “The RBI’s Framework for Responsible and Ethical Enablement of Artificial Intelligence introduces seven guiding principles—the Seven Sutras—for the governance, development, and deployment of AI in finance. As fintech expands, the credibility and ethics of AI-driven systems will be under sharper focus.”

Blockchain-based smart contracts, predictive analytics for credit scoring, and IoT-enabled asset monitoring are already reshaping how loans, insurance, and payments operate. As data volumes multiply, telecom’s low-latency networks and edge computing nodes will be indispensable for real-time financial intelligence.

The Rise of Telco-Fintech Partnerships

India’s telcos are no longer mere connectivity providers—they have evolved into integral ecosystem partners. By collaborating with banks and fintechs, they now power mobile wallets, UPI-linked services, and digital lending products that reach deep into Tier-3 and Tier-4 markets.

“As India races towards 2030, it is expected to rank third globally in digitalisation, with the digital economy contributing nearly one-fifth of GDP,” notes Aggarwal. “In 2022–23, digital infrastructure, AI, and cloud computing contributed 11.74% to national income—a figure expected to rise to 13.42% by 2024–25. These achievements reflect India’s progress towards inclusive, technology-driven growth.”

The next stage will demand deeper cross-industry interoperability. Fintech APIs that talk directly to telco billing systems and 5G slicing for secure banking zones could redefine the digital finance experience. For consumers, that means frictionless services; for telcos, new revenue models built on trust.

Keeping the Current Flowing

As India’s financial ecosystem continues to expand, telcos will find themselves forging deeper alliances—be it with banks, fintechs, or government platforms. They are the arteries carrying the lifeblood of the digital economy. Trust, reliability, and resilience will decide how far the current flows. As infrastructure becomes smarter and transactions more invisible, the need for continuous security, redundancy, and collaboration will intensify.

If the flow continues unimpeded—without leaks, bottlenecks, or barriers—finance may soon evolve into what we imagine it to be: not bottled water, but a freely flowing current, accessible to all.