Sir Ron Kalifa
For decades, much of the value in financial services has been assumed to sit with whoever owns the customer relationship. But a growing share of the value sits further down the stack: in the software, ledgers, payment rails and data layers on which the customer-facing businesses depend. That is where an increasingly important investment theme is emerging: financial infrastructure.
By financial infrastructure, I mean the companies that move money, store records, verify identity, process payments, manage compliance, reconcile transactions and keep systems running when things go wrong. In India, the point is almost impossible to miss. The Reserve Bank of India (RBI) reports that India's payment systems grew 35% in volume in 2024-25, digital transactions accounted for 99.9% of non-cash retail payments, and UPI alone had an 84% share of retail payment volume. UPI is no longer a feature; it is the operating environment.
That matters because finance is getting more complex, not less. Ask any bank, insurer or wealth manager what keeps them awake and the answer is rarely "growth" in the abstract. It is the grind: legacy core systems that do not talk to each other, KYC and AML checks that eat time, fragmented data, failed reconciliations, vendor lock-in, cyber risk, and a customer base that now expects the speed of a consumer app with the control of a regulated institution. The RBI has itself flagged that business-to-business payments and invoicing systems are often not interoperable, which makes payment and invoice reconciliation difficult. These may look like operational problems, but collectively they determine how quickly and safely a financial institution can grow.
This is why financial infrastructure is a frontier, not a niche. The World Bank says account ownership has reached 76% of adults globally, up from 51% in 2011. That is a huge step forward, but it also means the next wave of value will not come only from getting more people into the system. It will come from making the system faster, safer and more useful. And the market is already telling us where the energy is going: digital wallets accounted for an estimated $13.9 trillion in transaction value in 2023, with that figure projected to exceed $25 trillion by 2027. Payments have moved from the periphery of financial services to the centre of commerce.
Scale is only part of the investment case. Resilience matters just as much. The IMF has warned that cyber incidents can threaten financial stability by disrupting critical services and eroding confidence. That is precisely why infrastructure-like businesses in finance matter: the market will keep paying for trust, uptime, compliance and settlement certainty, even when the glossy product layer changes. Meanwhile, the OECD notes that AI is already being used in finance for fraud detection, credit decisions, risk management, customer service, compliance and portfolio management. The more interesting application of AI may therefore be less about replacing financial activity than removing the friction embedded within it.
For India, the opportunity is especially rich because the country has already shown what happens when public digital infrastructure is built well: adoption explodes, innovation follows, and private enterprise builds on top. The next prize is not just another app. It is the unglamorous, deeply valuable layer underneath, the systems that help banks modernise, insurers automate claims, wealth managers clean up data, and lenders move with less drag and more intelligence.
That is what makes financial infrastructure so compelling. It is not flashy. It does not need to be. The best infrastructure never does. It simply becomes the thing everyone else stands on. And in finance, the future will belong to those who own the floorboards, not just the furniture.
(The author is vice chair, Brookfield Asset Management. He will be speaking at The Economic Times World Leaders Forum in New Delhi)
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