5 Big Ideas that will change finance in 2025

India’s finance sector is adapting to a new paradigm.

Just in the last year, we’ve seen high benchmark interest rates, even higher inflation, geopolitical tensions that continue to simmer, and a heightened urgency to enforce regulations. And all of this while a once-in-a-generation technology grows at an almost incomprehensible scale.

The stakes are high — but the race to innovate shows no signs of slowing. What will the next year bring?

From biometric payments to virtual CFOs, we bring you five Big Ideas that will open a new frontier for India’s financial landscape in 2025.

Look into your crystal ball and let us know — what Big Ideas will shape the next year? Share your thoughts in the comments or publish a post, article or video on LinkedIn with #BigIdeas2025.

Perhaps nothing is more ubiquitous in India than QR codes, the most popular form of digital payments. But these black and white, matrix-y boards will become passé — as biometrics will take over how Indians transact.

“Who needs to remember card details or look through OTPs when your face or fingertip can do the trick?” says Paroma Chatterjee , CEO of Revolut India, adding that biometric payments are about to change the game for financial services.

The National Payments Corporation of India is reportedly in discussions with startups to introduce biometric authentication for UPI payments. At the 2024 Global Fintech Festival, Federal Bank offered a sneak peek of SmilePay, a system that lets customers make payments by simply smiling at the camera.

However, there is a growing need for robust security measures. UPI fraud cases surged by 85% in FY24, data from the Ministry of Finance shows. Apart from Multi-Factor Authentication and secure data storage, companies must make the most out of encryption techniques, says Vijay Rajagopal , Head, Amazon Pay. “ Encryption plays a critical role in securing biometric payments. Advanced encryption techniques, such as homomorphic encryption and secure multi-party computation further enhance security by allowing computations on encrypted data,” he says.  

Customers will also need to be educated about using biometrics for payments, Chatterjee adds. “Transparency is key,” she says.

How do you think payments will evolve in 2025? Share your thoughts here.

Wealth managers will get busy with a new clientele — non-resident Indians (NRIs) looking to return to India. From changing account statuses to transferring assets, NRIs coming back to India are most likely to encounter a labyrinth of complex financial choices. And they will need a trusted advisor to lead them through it.  

“They are also used to working with certified planners in the West and will find it easy to transition working with a planner in India,” says Monika Halan , Author and Financial Educator. “In the coming decades, the returned NRI is going to be a large niche market for Indian planners.”

Indeed, a recent survey by SBNRI reveals that 60-80% of NRIs from the U.S., the U.K., Canada, Australia, and Singapore want to return to India. Reasons? The country’s evolving financial landscape and more attractive investment opportunities.

But this opportunity comes with its own challenges. “Advisors must navigate both international and Indian financial regulations to provide comprehensive guidance,” says Sonam Srivastava , founder and CEO, Wright Research. “With NRIs transitioning to resident status, advisors need to manage complex tax implications, including potential double taxation.”

In fact, double taxation is the biggest challenge when it comes to filing tax returns as an NRI, another survey found.

What should financial advisors keep in mind when targeting this group? “Tailoring investment portfolios to align with India's financial markets and the client's global financial background is crucial,” Srivastava says.

How can financial advisors cater to NRIs returning to India? Share your thoughts here.

More startups will work on giving a tech spin to India’s cash-driven informal credit market — now a $500 billion opportunity.

And their focus will be on rural India. Among the total outstanding loans of rural households, 31% is sourced from informal lenders, says a recent report by the RBI. Most avoid engaging with formal financial institutions and prefer to participate in informal arrangements like chit funds, due to a host of reasons, including lack of trust and complicated processes.

“Startups can modernise informal credit providers by offering simple, user-friendly digital platforms,” says Rajesh Badgeri , CEO & co-founder, Zopnote. “These platforms can enable seamless transactions, real-time tracking, and better communication between lenders and borrowers.”

Many underserved individuals require small, short-term loans rather than large sums. “Tech can enable micro-loan disbursements with minimal friction, ensuring that credit is accessible when needed most,” Badgeri adds.

India is home to over 1,000 agritech startups, but only a handful operate in the financing space, Inc42 reports. This segment is also the least funded due to multiple challenges involved in achieving scale such as repayments in cash and non-availability of customer data.

What does it take to develop financial solutions for those who have been underbanked? “It can’t just be tech-driven,” says Smita Ram Ram, founder of Rang De, a P2P lending platform. “It needs to focus on the three As: Access, Affordability, and Agency.” 

How can startups work towards improving credit access? Share your thoughts here.

More small businesses will employ virtual Chief Financial Officers (CFO) to get the right advice and direction to manage and grow their companies.

“A virtual CFO brings expertise, efficiency, and cost-effectiveness to the table,” says Rajnikant Patel , founder of RMPS Accountants, a private auditing firm.

There are over 63 million micro, small and medium enterprises (MSMEs) in India, contributing around 30% of the country’s GDP and employing over 110 million people. Staying on top of finances and forecasts can be tricky, especially for those businesses who may not be able to afford a full-time CFO. A flexible, part-time or virtual solution will give them much-needed advice at a fraction of the cost.

These CFOs will double up as Chief Regulation Officers too, as India’s regulatory landscape evolves in many ways.  

What’s important to remember for anyone stepping into this? “The job is less about crunching numbers in spreadsheets or financial statements. Nor is it about complex modeling,” says Abhay Tulsian , a virtual CFO. “It's all about spotting patterns in chaos before others do, translating financial insights into actionable strategy and being the calm voice of reason in crucial moments.” 

How can virtual CFOs help small businesses? Share your thoughts here.

The Reserve Bank of India (RBI) has maintained steady interest rates for nearly two years, but that is set to change in 2025. 

In fact, a February rate cut is forthcoming, according to Rachita Daga , Economist. “A bumper monsoon in 2025 and good harvest season will lead to a reduction in food prices,” she says. 

In October, the RBI’s newly constituted monetary policy committee kept the repo rate unchanged at 6.5%, but shifted its stance from “withdrawal of accommodation” to “neutral”.

But the calls for lower interest rates have been getting louder. In the first week of November, the U.S. Federal Reserve cut its benchmark interest rate by 25 basis points to 4.5-4.75%, its lowest since March 2023. The Bank of England and European Central Bank followed suit, reducing rates anywhere between two to three times this year.

The country's GDP growth for Q2 FY25 slowed to 5.4% year-on-year, down from 6.7% in Q1. Inflation rates remain a concern too. In October, it touched 6.2%, breaching the RBI tolerance band for the first time since Aug 2023.

But the importance of a rate cut cannot be understated. “Lower interest rate translates to more loans, more capital expenditure and investment and an overall boost to the economy,” says CA Rachana Ranade , founder, Rachana Ranade Associates. 

What will be the impact of an interest rate cut in 2025? Share your thoughts here.

What Big Ideas do you think will emerge in finance in the year ahead? Share your thoughts with #BigIdeas2025.

Reported by: Preethi Ramamoorthy

Community Manager: Priyanka Rathod

Graphics: Kyle Ranson-Walsh