India's fintech sector is heavily investing in AI, but meaningful revenue from these products is expected only from FY28 onwards, says an Emkay Research report. While AI was a key theme at the Global Fintech Fest, adoption remains in its early stages.
India's fintech industry is rapidly building artificial intelligence (AI)-based products across payments, lending, customer service and merchant operations, but meaningful revenue from these capabilities is likely to emerge only from FY28 onwards, according to Emkay Research.
The brokerage, in a report following the Global Fintech Fest 2026, said AI had become the dominant theme at the event, with 144 of 452 sessions, or 32 per cent, explicitly focused on AI or agentic AI. However, adoption and monetisation remain at an early stage, with none of the companies covered by the report disclosing revenue from their new AI products. "We expect AI-led revenue to be an FY28 and beyond story, with servicing and insight work showing up sooner," the report said.
AI Development Across Key Areas
The report further found that fintech companies are developing AI across four broad areas — products for banks and other financial institutions, consumer and merchant applications, internal operations, and agentic payments that can execute transactions with limited or no human involvement.
Major Players Showcase AI Innovations
Several products showcased at the fest reflected this shift. Paytm demonstrated an AI platform for banks, lenders, insurers and small merchants, including tools for customer service, sales, fraud assessment and marketing. Pine Labs showcased technology that allows AI agents to make purchases when preset conditions are met, while also exploring ways to generate revenue from UPI transactions. Eternal showcased its conversational AI platform for sales, customer support, recovery and onboarding, while PhonePe demonstrated AI-based search, transaction insights and merchant tools. Razorpay showcased an AI account manager for small businesses and a proprietary payments model trained on roughly 3 trillion data points across 4 billion payments.
Operational Gains Precede Revenue Growth
The report said the immediate gains from AI are mainly operational, including lower cost of service, improved customer support and faster technology integration. Whether these gains translate into higher usage and revenue "should become clearer over the near-to-medium term".
Expanding Digital Infrastructure
The brokerage also highlighted the expanding digital infrastructure supporting the sector. UPI recorded 24.51 billion transactions worth Rs 29.82 trillion in August 2026, while the Unified Lending Interface had more than 64 lenders and 136 data services.
Regulatory Hurdles for Agentic Payments
For agentic payments, however, regulation remains a key constraint. The report noted that the Unified Agent Protocol for small autonomous debits was still pending at the close of the fest and that human checkpoints remain necessary.
Future Outlook: Data and Distribution as Key Differentiators
The report further said product launches should be viewed as "a leading indicator of ambition rather than of earnings", with proprietary data and distribution likely to determine which AI capabilities eventually translate into meaningful business growth. (ANI)
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