New Delhi, Jan. 7 -- India's fintech sector is entering a new consolidation phase, with deal activity expected to accelerate in 2026, senior executives at Kotak Investment Banking said.

Speaking at the firm's annual press conference on Wednesday, top executives said that fragmented markets and weak profitability are pushing venture-backed fintech players to combine rather than compete.

"(Fintech) companies have been competing aggressively, and yet it's not as if they are swimming in profits. It makes more sense to build together than fight for the same market one-on-one," said Rajat Rajan, managing director, digital and robotics.

Many startups, he added, are now under pressure to demonstrate exits or liquidity as investor expectations ...