Contributors:
Amol Ghemud Published: December 30, 2025
Summary
Fintech adoption in India is normalising after pandemic-era surges. Growth rates have stabilised, funding has contracted, and traditional banks have closed the digital experience gap. The challenge for growth teams is no longer about riding market momentum. It is about understanding buyer psychology, addressing structural adoption barriers, and controlling the variables that actually drive sustained engagement. This shift requires growth teams to move from volume-focused strategies to trust-building approaches that generate durable adoption.
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A fintech founder recently told us their acquisition costs had doubled in eighteen months, whilst activation rates halved. They were spending more to acquire users who engaged less and churned faster. The problem wasn’t their product. It was the market. The easy growth phase is over.
India’s fintech story has been extraordinary. Digital payments exploded. Neobanking emerged. Investment platforms democratised wealth management. Yet beneath these headlines, a more complex reality is emerging. Buyers are more cautious. Competition has intensified. Growth teams that understood how to scale during hypergrowth must now understand how to compete when adoption normalises, and buyers evaluate fintech products with the same scrutiny they apply to traditional banks.
Let us explore why fintech adoption is slowing across key segments, what psychological and structural barriers are holding buyers back, and most importantly, what growth teams can actually control to drive sustained adoption in this environment.
Why is fintech adoption normalising after pandemic-era surges?
The pandemic created artificial adoption spikes that masked underlying friction. As digital necessity fades, structural barriers re-emerge.
Growth teams mistook pandemic-era growth rates as sustainable baselines. They built infrastructure, hired teams, and committed capital, assuming fifty-plus per cent annual growth would continue indefinitely. When growth normalised to fifteen to twenty-five per cent, organisations experienced it as failure rather than recognising it as market maturation.
2. Traditional banks have closed the experience gap
JPMorgan Chase grew its digital customer base from 34 million to 62 million between 2019 and 2024. Bank of America’s digital banking platform serves over forty-one million active users. These are not legacy institutions struggling with innovation. They are scaled competitors with better unit economics, stronger trust signals, and comparable user experiences.
3. Funding constraints force sustainable growth models
This capital scarcity forces discipline. Fintechs can no longer burn capital acquiring low-quality users and deferring monetisation. Growth teams must demonstrate unit economics that work, retention rates that compound, and clear paths to profitability.
What psychological barriers are holding back fintech adoption?
Buyer psychology, not product features, determines adoption velocity. Understanding these barriers is essential for growth teams seeking sustained engagement.
This trust deficit manifests in several ways. Intangibility anxiety creates discomfort with the intangible nature of digital transactions. Data privacy concerns emerge around personal and financial data security. Provider credibility comes into question when comparing fintech startups to regulated banks.
2. Perceived risk outweighs actual technical risks
Research identifies six consumer-perceived risk dimensions: security, performance, financial, time, social, and psychological risk. Significantly, the psychological impact of perceived risk often outweighs actual technical risks.
This creates a paradox. Fintechs may have robust security infrastructure, yet buyers perceive them as riskier than traditional banks with objectively weaker security. Perception, not reality, drives behaviour.
3. Financial literacy gaps limit engagement depth
Digital financial literacy significantly influences financial inclusion. Users with greater literacy make informed financial decisions, reduce risk, and engage more deeply with fintech services. Yet literacy gaps remain substantial. Only 24% of Indians use credit or debit cards, with the majority relying on informal channels.
Regulatory frameworks in India continue evolving. Kotak Mahindra Bank’s RBI restrictions highlighted serious data security concerns and a flawed IT infrastructure, forcing the bank to halt online customer onboarding.
Such regulatory actions create buyer uncertainty. If established banks face restrictions, buyers question whether smaller fintechs can maintain operational stability and regulatory compliance. This uncertainty slows adoption, particularly for products involving savings, investments, or lending.
Case studies show that FinTech companies that focus on trust-building content, education, and visibility during research phases experience slower adoption declines and more stable growth during market slowdowns.
What can growth teams actually control?
While macroeconomic conditions and buyer psychology shape overall demand, FinTech growth teams still control several levers that directly influence confidence and adoption outcomes.
1. Build trust through strategic content, not promotion.
Traditional marketing highlights features and benefits. Trust-building content focuses on education first. Buyers gain confidence when brands explain how products work, acknowledge risks and limitations honestly, and clarify trade-offs before asking for commitment.
2. Reduce decision friction through education.
Financial products feel risky when buyers do not fully understand them. Growth teams can lower hesitation by creating explainers that simplify complex concepts, comparison frameworks that support objective evaluation, regulatory clarity content written in plain language, and FAQ resources that address unspoken concerns around security and risk.
3. Leverage social proof to transfer trust.
Buyers often look to others before committing. Growth teams can reinforce confidence by showcasing case studies from similar customer segments, testimonials that address common adoption fears, third-party media mentions, and credible reviews.
4. Ensure visibility during research, not just conversion.
Most FinTech decisions are preceded by extensive research. Growth teams must focus on SEO and generative engine optimisation to ensure the brand appears early in discovery. This includes high-intent educational content, AI-citable resources, thought leadership, and original insights that earn references. Brands absent during research rarely influence final decisions.
5. Strengthen retention through ongoing engagement.
In confidence-sensitive markets, long-term growth depends on retention, not acquisition volume. Content that supports product education, feature adoption, community learning, and ongoing communication helps users feel secure after onboarding. Sustained engagement reinforces trust and reduces post-adoption anxiety.
The path forward for fintech growth
The fintech market is transitioning from hypergrowth to sustainable scaling. Growth teams must shift strategy accordingly.
Move from volume to value. Acquiring millions of low-engagement users no longer creates enterprise value. Growth teams must prioritise user quality over user quantity, measuring success through engagement depth, monetisation potential, and retention probability.
Shift from features to trust. Product differentiation through features has diminishing returns, as competitors rapidly copy innovations. Sustainable differentiation comes from trust, which cannot be easily replicated and compounds over time.
Transition from marketing to education. Traditional marketing emphasises persuasion. In trust-constrained markets, education that helps buyers make informed decisions, even if they choose competitors, builds long-term credibility that eventually converts to sustainable adoption.
Conclusion: control what matters
FinTech adoption is slowing because the market is maturing, not failing. The pandemic created an artificial sense of urgency that masked underlying friction. As that urgency fades, structural barriers reassert themselves. Trust deficits persist. Literacy gaps limit engagement. Regulatory uncertainty creates hesitancy. Incumbent competition strengthens.
The fintechs that succeed in this next phase will be those that stop chasing vanity metrics and start building genuine trust, delivering measurable value, and creating experiences that warrant sustained engagement. Growth will be slower but more durable. Adoption will be harder-won but more meaningful.
At upGrowth, we help fintech growth teams build sustainable adoption strategies grounded in buyer psychology, trust-building, and retention-first growth. Let’s talk about how your team can thrive as fintech markets mature.
Slowing Fintech Adoption
Strategies for growth teams to regain control for upGrowth.in
The Chasm in Growth Adoption
Fintech growth is slowing as we move past the “early adopter” phase. To capture the mass market, growth teams must shift from incentive-driven acquisition to solving deep-seated friction. Success now depends on understanding why the late majority is hesitant—often due to a lack of perceived utility or complex onboarding journeys.
Efficient Acquisition Control
Rising Customer Acquisition Costs (CAC) are no longer sustainable. Growth teams can regain control by focusing on organic discovery and high-intent SEO rather than expensive paid channels. Optimizing for long-tail financial queries ensures you attract users who are actively seeking a solution, rather than just chasing a cashback offer.
Prioritizing LTV over Volume
When adoption slows, the focus must pivot to maximizing Customer Lifetime Value (LTV). By implementing hyper-personalization and feedback loops, Fintechs can increase product stickiness. Control what you can: improve the post-signup experience to ensure that the users you do acquire stay longer and use more features.
FAQs
1. Why is fintech adoption slowing in India?
Adoption is normalising after pandemic-era surges. Growth rates have stabilised from 55% to 37% as markets mature. Funding has declined by 33% year on year as investors demand sustainable unit economics. Traditional banks have closed the digital experience gap.
2. What are the most significant psychological barriers to fintech adoption?
Trust remains the primary barrier, with 62% of Indians preferring physical transactions. Perceived risk often outweighs actual technical risks. Financial literacy gaps limit engagement depth. Regulatory uncertainty creates adoption hesitancy.
3. How can growth teams build trust with fintech buyers?
Build trust by being transparent about risks, limitations, and trade-offs. Make security measures, fee structures, and regulatory status explicitly visible. Design products that reinforce trust through clear transaction confirmations, activity visibility, and responsive support.
4. What onboarding friction can growth teams control?
Growth teams can reduce friction through progressive disclosure, OCR and auto-fill from existing documents, instant verification for small initial deposits, guided onboarding with contextual help, and progressive feature introduction based on user behaviour.
5. Why does retention matter more than acquisition in mature fintech markets?
Existing customers cost five to twenty-five times less to serve than new customers, spend significantly more over time, and generate referrals that reduce acquisition costs. In normalising markets, retention economics determine profitability.
6. What market signals should fintech growth teams monitor?
Track cohort retention curves showing engagement and monetisation over time. Monitor channel-level trust indicators, including support inquiry rates and activation timelines. Watch competitive movement patterns from incumbents. Proactively monitor regulatory environment signals.
For Curious Minds
Growth normalization refers to the fintech market's transition from artificially high, pandemic-driven adoption rates to a more sustainable and mature growth trajectory. Mistaking this shift for failure leads to poor strategic decisions, as it misrepresents the health of the market and creates flawed performance benchmarks for growth teams. The key is to shift focus from hypergrowth to durable, profitable expansion.
The pandemic created an unnatural surge, with customer growth rates peaking at 55 percent before stabilizing. Viewing the subsequent return to a 15-25 percent growth channel as a failure causes significant issues:
Capital Misallocation: Companies that built infrastructure assuming 50 percent growth now face inefficiencies.
Flawed KPIs: Growth teams are measured against impossible, pandemic-era benchmarks, leading to morale issues and flawed strategies.
Strategic Myopia: It distracts from the real challenges, such as the need to build trust and improve unit economics.
Instead of chasing unsustainable numbers, your focus should be on *adapting to the mature market's realities*. Understanding this distinction is the first step toward building a resilient fintech business in the current environment.
The trust deficit is a significant psychological barrier rooted in deep-seated anxieties about digital financial systems, making it a more formidable challenge than feature development. Unlike product gaps, trust issues are not solved with technical updates; they require addressing user emotions and perceptions of security. This is why 62 percent of Indians still prefer physical transactions, even with advanced digital options available.
Key psychological factors contributing to this deficit include:
Intangibility Anxiety: Users feel discomfort with digital transactions that lack the physical feedback of cash or paper receipts.
Data Privacy Concerns: Widespread apprehension about how personal and financial data is collected, stored, and protected by fintech startups.
Provider Credibility: Startups are often perceived as less stable or regulated compared to established institutions like JPMorgan Chase.
Your growth strategy must therefore prioritize *building and signaling credibility* over simply adding more features. Overcoming these emotional barriers is crucial for converting cautious users in a maturing market.
Traditional banks have significantly closed the experience gap by investing heavily in their digital platforms, transforming from legacy institutions into formidable digital competitors. They now offer user experiences comparable to fintechs while retaining their inherent advantages in trust and scale. This shift requires your fintech to re-evaluate its value proposition beyond just a slicker interface.
Consider how banks have evolved. JPMorgan Chase expanded its digital customer base to 62 million by 2024, while Bank of America serves over 41 million active digital users. When comparing your approach, weigh these factors:
Unit Economics: Banks have a lower cost of capital and existing infrastructure, giving them an economic advantage.
Trust Signals: Their long-standing reputation and regulatory oversight are powerful assets that startups lack.
Integrated Services: They offer a bundled ecosystem of services that fintechs often cannot match.
Your strategy can no longer rely on *disrupting slow-moving incumbents*. Instead, you must identify a defensible niche where you can offer superior value that goes beyond the digital user experience.
The sharp decline in funding signals a fundamental shift in investor sentiment from 'growth-at-all-costs' to a demand for sustainable business models. This capital scarcity forces discipline, making strong unit economics and a clear path to profitability non-negotiable for survival. Companies can no longer burn capital acquiring low-quality users and defer monetization indefinitely.
The evidence is clear in the funding data. While India remains a top market, the 33 percent year-over-year decline in funding, especially in late-stage rounds, shows that investors are no longer underwriting perpetual losses. This forces growth teams to demonstrate:
Positive Unit Economics: Proof that the lifetime value of a customer exceeds the cost to acquire them.
High Retention Rates: An ability to not just acquire but retain users, as this is the foundation of compounding revenue.
A Tangible Path to Profitability: A clear, data-backed plan to achieve profitability without relying on future funding rounds.
Your growth model must now be *predicated on financial viability from the start*. This new reality is separating the enduring companies from those built on the now-outdated hypergrowth playbook.
This data point directly challenges the narrative that traditional banks are stagnant, technically inept incumbents ripe for disruption. It proves that major financial institutions have successfully executed digital transformations, becoming scaled competitors with modern user experiences. A bank like Bank of America serving over forty-one million active digital users is not a legacy player; it is a digital powerhouse.
This evidence reshapes the competitive dynamic in several ways. It demonstrates that traditional banks have effectively neutralized one of the fintechs' primary initial advantages, a superior digital interface. They now compete on a more level playing field while retaining their core strengths:
Massive, existing customer bases.
Deeply entrenched brand trust and recognition.
Superior regulatory and capital advantages.
For your fintech, this means the strategy must evolve from *simple disruption to sophisticated differentiation*. The competitive moat can no longer be just a better app; it must be a fundamentally different or superior value proposition that large banks cannot easily replicate.
When acquisition costs rise and activation falls, it signals a disconnect with user psychology, not a product failure. To fix this, your growth team must shift from feature-led marketing to trust-based communication. The goal is to systematically reduce the six dimensions of perceived risk, including security, performance, and privacy.
A focused plan to rebuild trust should include the following steps:
Audit and Amplify Trust Signals: Scrutinize your website, app, and marketing materials. Prominently display security certifications, regulatory compliance, positive user testimonials, and transparent privacy policies.
Educate Proactively on Security: Create simple, accessible content that explains how you protect user data and funds. Address common fears like data privacy and intangibility anxiety directly.
Leverage Social Proof: Partner with credible influencers or publications. Highlight case studies of satisfied customers, especially those who were initially skeptical.
De-risk the Onboarding Process: Offer free trials, money-back guarantees, or a feature-limited version that allows users to experience your platform with minimal commitment.
By *systematically dismantling perceived risks and building tangible credibility*, you can re-engage hesitant users and improve both acquisition efficiency and activation.
In this normalized growth environment, leadership must pivot from a 'blitzscaling' mindset to one focused on building a resilient, profitable business. This requires a fundamental shift in strategic planning, moving away from vanity metrics like user count toward indicators of business health like retention, engagement, and unit profitability. Capital allocation must become more disciplined and ROI-driven.
Your strategic adjustments should center on long-term value creation. Since the market no longer rewards growth at any cost, demonstrated by the 33 percent drop in funding, you must:
Prioritize Retention Over Acquisition: Allocate more resources to improving the existing customer experience to maximize lifetime value.
Invest in Trust-Building Initiatives: Earmark capital for security enhancements, transparent communication, and partnerships that bolster credibility.
Link Spending to Profitability: Ensure every major investment, from marketing campaigns to hiring, has a clear and measurable link to improving unit economics.
This new era demands a focus on *building a fundamentally sound business*, not just an app with a large but disengaged user base. Explore how this strategic recalibration can fortify your position for the years ahead.
The increased focus on unit economics will favor fintech models that demonstrate clear, near-term paths to profitability and strong customer retention. Business models reliant on network effects that require massive, prolonged cash burn to succeed will face immense difficulty securing funding. Investors now prioritize substance over speculative scale.
The implications for product and business model viability are significant. Successful fintechs will likely exhibit these traits:
Embedded Finance: Solutions integrated into existing platforms with established user bases, reducing acquisition costs.
Niche B2B Solutions: Products solving specific, high-value problems for businesses, which often have clearer monetization paths.
Wealth and Investment Tech: Platforms that manage assets and can generate revenue through fees and commissions, showing direct value.
Conversely, 'super-app' ambitions and models that acquire users with heavy subsidies before a monetization plan is proven will struggle. The future belongs to fintechs that *build profitable customer relationships from the outset*, a key theme for navigating the new funding climate.
Assuming pandemic-level growth was sustainable has led to critical strategic errors, including bloated cost structures and unrealistic expectations. This miscalculation results in companies being built for a market that no longer exists, causing them to burn through capital inefficiently. The pivot requires a shift from chasing growth to building a resilient operational foundation.
Common mistakes born from this assumption include:
Over-hiring and Infrastructure Overbuild: Building teams and systems for 50 percent annual growth when the reality is closer to 20 percent creates immense operational drag.
Inefficient Marketing Spend: Continuing to pour money into acquisition channels that worked during the pandemic but are now too expensive for lower-intent users.
Ignoring Monetization: Deferring profitability in the belief that market share alone would eventually create value.
To pivot successfully, you must *re-forecast based on normalized growth rates* (15-25 percent) and realign your budget, team structure, and KPIs accordingly. Discover how to recalibrate your growth engine for the current market.
This preference for physical transactions is a direct result of deep-seated psychological barriers, where the perceived risks of digital finance outweigh its conveniences. Specific anxieties around data privacy, the intangibility of digital money, and the credibility of new providers are central to this problem. Overcoming it requires a deliberate strategy focused on building and communicating trust.
To counter these fears, your product and messaging must directly address them:
Tackle Intangibility: Provide instant confirmations, clear digital receipts, and detailed transaction histories to make digital money feel more tangible and controllable.
Champion Data Privacy: Use clear, simple language to explain your security measures. Go beyond generic statements and detail your encryption, fraud detection, and compliance standards.
Borrow Credibility: Associate your brand with established, trusted institutions. This can be through banking partnerships, displaying certifications, or securing positive press in reputable outlets.
Your growth team's primary job is no longer just to market features but to *act as educators and trust-builders*. This approach is essential to convert the large segment of the population that remains on the sidelines.
This data provides clear quantitative evidence that the fintech industry is not in crisis but is simply maturing after an unprecedented and unsustainable growth spurt. The surge to 55 percent growth was an anomaly driven by global lockdowns, forcing rapid digital adoption. The subsequent stabilization at a still-robust 37 percent, and a more recent 15-25 percent, represents a return to a healthy, organic growth pattern.
This evidence is crucial for setting correct internal and external expectations. It proves that:
The pandemic created a temporary pull-forward of demand, not a permanent new baseline for growth.
A double-digit growth rate in a maturing market is a sign of strength, not weakness.
Strategic decisions should be based on the normalized trendline, not the outlier peak.
By understanding this data, your team can avoid the morale-damaging trap of viewing market normalization as failure. Instead, you can focus on *competing effectively within this new, more predictable landscape* by building a sustainable model.
The root cause of this problem is a strategic mismatch between a company's growth tactics and the market's matured psychology. Spending more to acquire users who engage less indicates that marketing is reaching a less receptive audience, one held back by trust issues and perceived risk, not a lack of features. Continuing to push product-centric messages to this group yields diminishing returns.
To solve this, your growth team must pivot from a feature-first to a trust-first approach. This means reallocating resources from performance marketing that highlights 'what' the product does to content and brand marketing that explains 'why' it is safe and credible. Key actions include:
Mapping the Trust Journey: Identify points in the funnel where users drop off due to uncertainty and address those fears directly.
Investing in Educational Content: Create guides, webinars, and articles that demystify digital finance and your platform's security.
Prioritizing Social Proof: Amplify testimonials and case studies from real users to build peer-to-peer credibility.
By *solving for trust before selling features*, you can attract higher-quality users who are more likely to activate and remain engaged. This shift is essential for restoring healthy unit economics.
Amol has helped catalyse business growth with his strategic & data-driven methodologies. With a decade of experience in the field of marketing, he has donned multiple hats, from channel optimization, data analytics and creative brand positioning to growth engineering and sales.
Growth Strategy and Planning
