Beyond Transactions: Decoding User Behaviour in Indian Fintech Ecosystem

Editor’s note: In the lead-up to QUAL360 APAC 2025, we are spotlighting cutting-edge approaches reshaping industry. In this feature, our partner IRB explores how human-centered design and behavioral insights are redefining India’s fintech landscape—showing why trust, accessibility, and empathy are just as critical as technology in driving financial inclusion and long-term engagement.

Introduction: The New Frontier of Financial Inclusion

Explosive growth and transformative potential are how the Indian fintech landscape is being defined of late. There are millions of new users entering the digital finance ecosystem. Hence, the conversations and focus are shifting from adoption to long-term engagement. There is enough data available on the transaction volume and user signups, but true sustainability hinges on understanding behaviour – the motivation, anxieties and desires – that drive every tap, swipe and login.

It is imperative that the discussions move away from the ‘what’ to the ‘why’ behind the ‘what’. It is important to understand the user’s needs, psyche, and their ‘ideal’ for businesses to be able to maximize their impact. 

Let’s Look at Things Beyond Features and Functions

The usual is never true in India. The same is true when we talk about FinTech applications. It is not the ‘best’ that wins because the definition of the ‘best’ is very subjective. Just like relations, everything in India is deeply personal. 

Another thing that sets the Indian user aside is the diversity of needs, approach and thoughts. You will find a sophisticated urban multitasker and a simple, function-first ‘Bharat user’ with more focus on ease in the same fold. But every user has two things in common that they are looking for – trust and accessibility.

For the millions of first-time digital adopters, trust is the currency they are looking for when engaging with any FinTech application, with accessibility being the gateway to being included in the ‘Digital India’ fold. Trust is a fragile asset, easily shattered by the slightest of inconvenience and confusion – or a difficult-to-reach customer service. Accessibility is a speed bump which shakes up this trust more than anything. An app with an easy-to-use interface, clear communication, and intuitive flow, finds more takers than an app which has the potential to be a ‘Super App’. If local language is integrated into the application, the financial literacy gap feels a little less daunting for users across the spectrum. 

The paradox lies in the desire for a simple, one-click and done interface for tasks that are complex. In such a scenario, the brands that succeed are the ones that understand this conflict and are offering a turbocharged engine under a user-centric machine. Thus, driving the product strategy by asking ‘What do the users truly need to feel secure and empowered?’ and not ‘What features to add next?’.

The Psychology of Engagement

Brands measure their app engagement by daily active users, or transaction frequency. These are good metrics, but they merely scratch the surface. The deeper analysis reveals three distinct ‘pull’ behaviours:

• Functional Pull: This is the utilitarian ‘pull’ where the user completes a necessary task like making payments – a transactional relationship driven by convenience and efficiency.
• Aspirational Pull: This is more of a ‘goal-oriented pull’ where the user interacts with the app to achieve financial aspirations – tracking savings, monitoring investment portfolio, setting long-term goals, etc. this relationship is driven by hope, desire and ambition towards financial progress.
• Habitual Pull: This is a ‘routine pull’ where the user checks their balance every morning, reviews spending patterns or checks credit updates – actions which are driven by the need for better financial control and security.

Once these ‘pulls’ are understood by the brands, it allows them to move beyond generic or ‘flirty’ push notifications and create a meaningful and personalised interaction for the user. By identifying the specific triggers that drive these ‘pulls’ – be it through personalized insights, gamified rewards, or timely reminders – fintech companies can transform a user’s journey from a series of tasks into a purposeful, value-driven experience.

Designing for the Human

Every digital interaction for the human is an emotion in play. The flow in Fintech apps, often has elements with the potential to frustrate the user. An unexpected error message here or a confusing form field there, can lead to abandonment due to erosion of trust. Conversely, a smooth, intuitive flow, with clear indicators, can create moments of delight, building loyalty towards the app and thus the brand.

When designing for human, the app flow should be looked from an empathetic lens. Meticulous identification and elimination of friction points all the while amplifying moments of delight is the way forward. A simple change in the messaging from ‘Payment Failed’ to ‘Oops! Seems like that did not go through. Let’s try again.’ Along with clear steps to follow next, could go a long way in calming the already on-edge nerves of the users. 

Emotional design cues – color, sound, animation – could also be used to influence a user’s state of mind. A celebratory animation upon a successful payment, a calming color palette for a budgeting screen, or a simple “ding” sound for a completed transaction can all reinforce positive emotions and make the financial experience feel less intimidating. Brands who have mastered this emotional language are able to forge a bond with the users that is built on emotional trust, turning functional utility into lasting business impact. 

Translating Behaviour to Business Growth

Understanding the Indian user at a behavioural level, is not just about ethnographic segmentation but also about landing the best solution. It helps in delivering a business impact that transcends all estimations. Quantitative insights do come close to unlocking the ‘what’ but the real magic happens when the ‘what’ from the quantitative studies marries the ‘why’ from the qualitative insights. The product so built engages the users on an emotional level. This engagement, then gives birth to a loyal and trusted user who, however many options there might be in the market, will stick with you until something really horrifying happens.

We suggest a simple formula for this synergy to be infused: 

Emotion + Trust + Engagement = Business Impact

• Human Centered Design reduces user friction, lowering the churn rate, increasing satisfaction scores and enabling the explorer in every user.
• Understanding the user needs and tailoring the functionality and features around it, thus lowering the cost of customer acquisition (CAC) and naturally attracting the right audience.
• Engagement fuelled by psychological triggers instead of simple metrics leading to increased lifetime value (LTV) and revenue per user (RPU) as users interact with the app because they want to and not because they are forced to.

This journey from getting to know the customer to converting them to a core user is a continuous loop – a loop that listens, innovates and iterates. You listen to the customer through rigorous research, innovate through user centric designing and intuitive development, and iterate using feedback, thus refining the user’s experience.

By embracing this cycle, fintech brands can move beyond the competitive race of features and instead build a foundation of trust, engagement and empathy that guarantees long-term success in the dynamic Indian market. 

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