Hello everyone  

Welcome to the 185th edition of The Pattern, a weekly where we dive into the latest from the world of finance, technology and the economy. Let’s dive in.  

In a few days, the calendar will shift, the clocks will quietly reset, and we’ll step into a new year. It seems arbitrary, almost trivial. And yet, this simple act—of noticing time as it passes—has shaped everything we call progress. 

By marking time, we learned to pause, to look back, to imagine forward. We turned the invisible flow of days into moments that could be named, remembered, and re-chosen. History doesn’t move because time passes; it moves because we notice it has, and decide to act differently when it does. 

If the observed difference is a unit of progress, India’s financial system did something remarkable in 2025: it crossed the chasm between ambition and reality. The industry not just matured but evolved. We graduated quietly from pioneering innovation to excellence and polished solutions that just work.  

“It just works” is a sentence often associated with the iPhone (thank you, advertising). Most people associate the idea of effortless smoothness and reliability with Apple’s flagship phone. But now that it applies to India’s financial story too, let’s see just exactly how 2025 unfolded in terms of the big shifts that will continue to exert influence in 2026 and beyond.  

The quiet confidence of maturity in banking  

India’s banking sector has been an enigma. It seems like on odd days, we hear about the imminent collapse of the banking sector due to NPAs, stressed assets, fire sales and scams. Meanwhile, on even days, we hear about the resilience of the financial system, its continued reliability amid shaky international markets and its robust growth story. Where’s the truth?  

If 2025 is the yardstick, India’s banking sector is firmly the latter. We saw not only increased reach, accessibility and digitization across the ecosystem but also witnessed this translate into active investor interest — even internationally! Money is a vote of confidence like no other.  

Most recently, Japan’s Mitsubishi UFJ Financial Group announced it’s picking up a 20% stack in Shriram Finance for about $4.4 billion underscoring international investor confidence in the Indian financial story. This is not a one-off.  

We also saw Emirates NBD acquire a controlling 60% stake in RBL Bank. It’s as rare as it gets – a foreign entity taking a controlling stake in an Indian bank. This is both a watershed from a regulatory point of view but also from an international investment perspective as it opens doors for potentially other entities to enter India’s ecosystem and feel secure the host will be receptive and warm (or hospitable).  

This is not all. We saw Bajaj Finserv buying Allianz’s stake in the insurance venture. And there was also Sumitomo Mitsui Banking Corporation’s investment in Yes Bank to acquire a near-25% stake.  

All these stories tell us something clear and concrete — global entities love Indian financial system enough to prioritise a meaningful and strategic presence here.  
 
Credit without forms, payments without thought 

One of the clearest signals of irreversibility in 2025 was how invisible financial decision-making became. 

Small merchants accessed credit without actively applying for it. Repayment behavior mattered more than collateral narratives. Payment histories doubled as underwriting inputs. Lending became less about persuasion and more about observation. 

There’s a new story reported by the Economic Times which charts the rise of payment-history driven lending, being powered through QR code terminal data for merchants – many of whom otherwise could not access formal credit.  

At FinBox, we’ve done the same thing with many of our partners, including a large NBFC that’s now doing hundreds of crores in disbursals every month through this model powered by our rails.   

This wasn’t just efficiency—it was a structural shift. When credit becomes ambient, the system can’t go back to manual gates without breaking user expectations. Friction, once removed at scale, is politically and commercially impossible to reintroduce. 

The same held true for payments. Real-time settlement wasn’t a feature anymore; it was assumed. Any delay now felt like failure, not inconvenience. 

Regulation as architecture, not policing  

One of the more meaningful shifts this year was the way the banking and financial system regulation works. India’s regulatory framework has always been robust and proactive – be it the government, the Reserve Bank of India or the Securities and Exchange Board of India. 

However, the year 2025 saw a distinct shift. Regulations moved towards tightening up the system design rather than policing individual actors. This means that regulations became more broad-based, specific, and principle-based than being activity-based.  

Some key standouts include the digital lending guidelines that set up the entire lending and FinTech industry for success by laying out clear guardrails and definitions. Regulations do more than just keep actors in check; they also provide legitimacy, security and comfort to participants.  

Overall, there was also the Data Protection Act and multiple other guidelines that seek to lay out how information is processed, how often someone can access your financial data, prevention of mis-selling, and where accountability ultimately rests.  

We must not under-emphasize the importance of building regulations on the rails rather than trying to govern things post-facto. This signals that the system is slipping into permanence and stability.  

The trade-offs that could make 2026 thorny  

Every shift carries a cost. In 2025, we saw these costs materialize more than just sporadic bursts but a constant tax on the system – as if speed and convenience must be paid for through scams, frauds and malicious activity that threatens users’ trust, brand image and business continuity.  

India’s largest lender – the State Bank of India – saw a whopping ~16,000 cases of cyber-related financial fraud in a 22-month period ending October 2025. And this is just one bank.  

As digitization improves, fraud vectors rise in orders of magnitude. As onboarding becomes smoother, chokepoints increase – faster rails often lead to faster failure propagation too.  

Margins thinned. Speed commoditized advantage. Compliance costs rose even as customer patience shrank. AI improved efficiency while amplifying error surfaces. When systems operate at scale and speed, small flaws no longer stay small. 

The uncomfortable truth of 2025 was this: digital finance didn’t reduce risk. It redistributed it—often invisibly. 

Banks discovered they could no longer slow innovation without losing relevance. FinTechs discovered they couldn’t scale without inheriting bank-grade risk.  

Regulators shaped interfaces and incentives, not just balance sheets. 

This is what maturity looks like. Less celebration. More consequences. 

In 2026, lenders will have to battle an even more perilous fraud landscape where data integrity and customer trust will become paramount. The only way, however, is through. So, the entities that invest disproportionately in continuous monitoring, real-time fraud signals and proactive risk management through intelligent decisioning are the ones that will see business compound while their competitors face a meltdown.  

The 2026 view  

The significance of 2025 isn’t about what launched. It’s about what became impossible to undo. 

Banks can no longer choose whether to modernize—only how intelligently they do it. Fintechs can no longer choose whether to take on risk—only whether they understand it. Platforms can no longer claim neutrality once they mediate financial outcomes at scale. 

Most importantly, trust has become the scarcest asset in digital finance. Not technology. Not capital. Trust. 

And trust, once lost in a system that moves this fast, doesn’t come back slowly. 

The point of no return isn’t about innovation. 
It’s about expectations. 

As we close out 2025, those expectations have already changed. 

This is all from me this week. I will see you next week (in the new year!) 

Happy New Year!  

Cheers,  

Mayank