# Finance: banking, insurance, markets: Value chain, from upstream to the customer Banks, insurers, markets and payment rails that lend, insure and invest money Source page: https://www.materialinsights.org/industries/finance/value-chain/ #### Value chain, from upstream to the customer **Criticality to the chain:** 5 · Chokepoint 4 · Critical 3 · Important 2 · Supporting 1 · Commodity service Stage 1 **Rules and moneyCentral banks and financial regulators**5 · Chokepoint Issue currency, set interest rates, supervise banks, insurers and markets, and act as lender of last resort; the chain cannot operate without their licences.^[1](https://www.mckinsey.com/~/media/mckinsey/industries/financial%20services/our%20insights/global%20banking%20annual%20review/global-banking-annual-review-2026-precision-with-speed_final.pdf) **Why chokepoint:** One central bank and a few regulators per country, with no substitute; their rules and liquidity decide what every other player can do. Technologies Real-time gross settlement (RTGS) Supervisory data platforms Central bank digital currency pilots Stress-testing models Depends on Commodities [Au Gold](https://www.materialinsights.org/commodities/gold/)[Ct Cotton](https://www.materialinsights.org/commodities/cotton/) Chemicals [Pig Organic pigments](https://www.materialinsights.org/chemicals/pigments/) Energy [DC Data centres](https://www.materialinsights.org/energy/e_data_centres/)[ICE Internal combustion engines and gensets](https://www.materialinsights.org/energy/e_engines/) Industries [Software and IT services](https://www.materialinsights.org/industries/software_it/)[Paper and packaging](https://www.materialinsights.org/industries/paper_packaging/)**Examples:** Reserve Bank of India, SEBI, IRDAI, US Federal Reserve Stage 2 **Financial infrastructurePayment system operators and card networks**5 · Chokepoint Run the switches that route and settle retail and interbank payments (UPI, cards, SWIFT messaging), charging per-transaction or membership fees.^[4](https://newsonair.gov.in/government-says-nearly-55-49-crore-users-onboarded-on-upi-as-of-june/) **Why chokepoint:** Each rail has one operator: UPI runs through NPCI and averaged about 20 billion transactions a month in 2025-26 (calculated), and cross-border bank messaging relies on SWIFT. Technologies Real-time payment switches Card networks and tokenisation ISO 20022 messaging Fraud scoring Depends on Chemicals [PVC PVC](https://www.materialinsights.org/chemicals/pvc/) Energy [DC Data centres](https://www.materialinsights.org/energy/e_data_centres/)[Dist Distribution grids, mini-grids and interconnectors](https://www.materialinsights.org/energy/e_distribution/) Industries [Software and IT services](https://www.materialinsights.org/industries/software_it/)[Data centres and cloud](https://www.materialinsights.org/industries/data_centres/)[Telecommunications](https://www.materialinsights.org/industries/telecom/)**Examples:** NPCI, Visa, Mastercard, SWIFT **Exchanges, clearing houses and depositories**4 · Critical Run trading venues, clear and guarantee trades, and hold securities electronically for investors, earning trading, clearing and custody fees.^[1](https://www.mckinsey.com/~/media/mckinsey/industries/financial%20services/our%20insights/global%20banking%20annual%20review/global-banking-annual-review-2026-precision-with-speed_final.pdf) **Why critical:** Liquidity concentrates on one or two venues per market and a single clearing house; an outage halts trading for the whole market. Technologies Matching engines Central counterparty risk models Dematerialised securities registers Co-location data centres Depends on Energy [DC Data centres](https://www.materialinsights.org/energy/e_data_centres/)[ICE Internal combustion engines and gensets](https://www.materialinsights.org/energy/e_engines/) Industries [Software and IT services](https://www.materialinsights.org/industries/software_it/)[Telecommunications](https://www.materialinsights.org/industries/telecom/)**Examples:** National Stock Exchange of India, BSE, CDSL, CME Group **Core banking and financial software vendors**4 · Critical License and run the ledgers, loan, card, policy and trading systems that banks and insurers use, often as managed or cloud services.^[1](https://www.mckinsey.com/~/media/mckinsey/industries/financial%20services/our%20insights/global%20banking%20annual%20review/global-banking-annual-review-2026-precision-with-speed_final.pdf) **Why critical:** A handful of vendors serve most large banks, and replacing a core system takes years and carries real failure risk. Technologies Core banking ledgers Policy administration systems Cloud-native microservices API banking platforms Depends on Energy [DC Data centres](https://www.materialinsights.org/energy/e_data_centres/) Industries [Software and IT services](https://www.materialinsights.org/industries/software_it/)[Data centres and cloud](https://www.materialinsights.org/industries/data_centres/)**Examples:** Infosys Finacle, TCS BaNCS, Temenos, Fiserv **Credit bureaus, rating agencies and market-data providers**4 · Critical Supply credit scores, bond ratings, prices and indices that lenders and investors use to price risk.^[1](https://www.mckinsey.com/~/media/mckinsey/industries/financial%20services/our%20insights/global%20banking%20annual%20review/global-banking-annual-review-2026-precision-with-speed_final.pdf)^,^[6](https://www.sec.gov/files/2019-annual-report-nrsros.pdf) **Why critical:** Few providers per function: S&P, Moody's and Fitch held 95.4% of ratings outstanding with US-registered agencies at end-2018, India's big raters are tied to them, and ratings are written into regulation. Technologies Credit scoring models Real-time market data feeds Index calculation Alternative data analytics Depends on Energy [DC Data centres](https://www.materialinsights.org/energy/e_data_centres/) Industries [Software and IT services](https://www.materialinsights.org/industries/software_it/)**Examples:** TransUnion CIBIL, CRISIL (S&P Global), ICRA (Moody's affiliate), Moody's, LSEG Stage 3 **Balance-sheet intermediariesCommercial banks**3 · Important Take deposits and lend to households and firms, earning a spread, plus fees from payments, cards and wealth services.^[1](https://www.mckinsey.com/~/media/mckinsey/industries/financial%20services/our%20insights/global%20banking%20annual%20review/global-banking-annual-review-2026-precision-with-speed_final.pdf) **Why important:** Many banks compete, but large banks are systemically important and customers face real switching costs on loans and accounts. Technologies Core banking systems Mobile banking apps Credit-risk models Anti-money-laundering monitoring Depends on Commodities [Au Gold](https://www.materialinsights.org/commodities/gold/) Energy [Bld Energy in buildings](https://www.materialinsights.org/energy/e_buildings/)[DC Data centres](https://www.materialinsights.org/energy/e_data_centres/) Industries [Software and IT services](https://www.materialinsights.org/industries/software_it/)[Real estate](https://www.materialinsights.org/industries/real_estate/)**Examples:** State Bank of India, HDFC Bank, JPMorgan Chase, ICBC **Non-bank lenders (NBFCs and microfinance)**2 · Supporting Lend for vehicles, gold, consumer goods and small businesses, often to borrowers banks underserve, funded by bank loans and bonds.^[1](https://www.mckinsey.com/~/media/mckinsey/industries/financial%20services/our%20insights/global%20banking%20annual%20review/global-banking-annual-review-2026-precision-with-speed_final.pdf) **Why supporting:** A crowded field; borrowers and funders can move between lenders, though niche rural lenders are hard to replace locally. Technologies Digital loan origination Account Aggregator data sharing Collections analytics Co-lending platforms Depends on Commodities [Au Gold](https://www.materialinsights.org/commodities/gold/) Energy [Bld Energy in buildings](https://www.materialinsights.org/energy/e_buildings/) Industries [Software and IT services](https://www.materialinsights.org/industries/software_it/)[Vehicles, ships, rail, aircraft](https://www.materialinsights.org/industries/vehicles/)**Examples:** Bajaj Finance, Shriram Finance, Muthoot Finance, Cholamandalam Investment and Finance **Life and general insurers**3 · Important Pool and price risks to life, health, property and motor, collecting premiums and investing reserves until claims are paid.^[2](https://atlas-mag.net/en/articles/global-insurance-market-2024-turnover-0)^,^[3](https://www.business-standard.com/amp/finance/insurance/india-s-insurance-penetration-needle-remains-flat-at-3-7-in-2024-25-126010900679_1.html) **Why important:** Many insurers compete; India's 3.7% penetration shows the product is under-used rather than scarce. Technologies Actuarial and pricing models Policy administration systems Claims automation Telematics and health data Depends on Energy [Bld Energy in buildings](https://www.materialinsights.org/energy/e_buildings/) Industries [Software and IT services](https://www.materialinsights.org/industries/software_it/)[Real estate](https://www.materialinsights.org/industries/real_estate/)**Examples:** Life Insurance Corporation of India, ICICI Lombard, Allianz, Ping An **Reinsurers**4 · Critical Insure the insurers, taking on catastrophe and large risks across the world in exchange for a share of premiums.^[2](https://atlas-mag.net/en/articles/global-insurance-market-2024-turnover-0) **Why critical:** A few global reinsurers carry most catastrophe risk, and capacity shrinks sharply after big loss years. Technologies Catastrophe models Climate risk analytics Insurance-linked securities Depends on Energy [DC Data centres](https://www.materialinsights.org/energy/e_data_centres/) Industries [Software and IT services](https://www.materialinsights.org/industries/software_it/)**Examples:** Munich Re, Swiss Re, Hannover Re, GIC Re Stage 4 **Capital markets and asset managementAsset managers, mutual funds and pension funds**2 · Supporting Pool savings and invest them in shares, bonds and property, earning a management fee on assets.^[1](https://www.mckinsey.com/~/media/mckinsey/industries/financial%20services/our%20insights/global%20banking%20annual%20review/global-banking-annual-review-2026-precision-with-speed_final.pdf) **Why supporting:** Many managers compete and investors can redeem and move funds within days. Technologies Portfolio management systems Index and ETF products Risk analytics Systematic investment plan (SIP) platforms Depends on Commodities [Au Gold](https://www.materialinsights.org/commodities/gold/) Energy [Bld Energy in buildings](https://www.materialinsights.org/energy/e_buildings/) Industries [Software and IT services](https://www.materialinsights.org/industries/software_it/)[Real estate](https://www.materialinsights.org/industries/real_estate/)**Examples:** BlackRock, SBI Funds Management, HDFC Asset Management, Employees' Provident Fund Organisation **Investment banks and brokers**2 · Supporting Underwrite share and bond issues, advise on deals, and execute trades for institutions and retail investors.^[1](https://www.mckinsey.com/~/media/mckinsey/industries/financial%20services/our%20insights/global%20banking%20annual%20review/global-banking-annual-review-2026-precision-with-speed_final.pdf) **Why supporting:** Competitive; clients can move broking accounts and mandates within weeks. Technologies Electronic and algorithmic trading Discount broking apps Deal and research platforms Depends on Energy [DC Data centres](https://www.materialinsights.org/energy/e_data_centres/) Industries [Software and IT services](https://www.materialinsights.org/industries/software_it/)[Telecommunications](https://www.materialinsights.org/industries/telecom/)**Examples:** Goldman Sachs, Kotak Mahindra Capital, Zerodha, Groww Stage 5 **Distribution to customersFintech payment and investment apps**3 · Important Give consumers and merchants app-based payments, lending, broking and insurance, often on top of bank and NPCI rails.^[1](https://www.mckinsey.com/~/media/mckinsey/industries/financial%20services/our%20insights/global%20banking%20annual%20review/global-banking-annual-review-2026-precision-with-speed_final.pdf)^,^[5](https://www.outlookbusiness.com/economy-and-policy/phonepe-google-pay-combined-upi-market-share-drops-below-80-for-first-time) **Why important:** PhonePe and Google Pay together handled 79% of UPI volume in May 2026, so an outage at either is felt widely, though users can switch apps quickly. Technologies UPI third-party app integration QR codes and soundboxes Account Aggregator Embedded finance APIs Depends on Energy [DC Data centres](https://www.materialinsights.org/energy/e_data_centres/) Industries [Software and IT services](https://www.materialinsights.org/industries/software_it/)[Data centres and cloud](https://www.materialinsights.org/industries/data_centres/)[Computers and electronics](https://www.materialinsights.org/industries/computers_electronics/)**Examples:** PhonePe, Google Pay, Paytm, Policybazaar **Agents, brokers and business correspondents**1 · Commodity service Sell insurance, loans and accounts face to face, and provide cash-in, cash-out and basic banking in villages on behalf of banks.^[3](https://www.business-standard.com/amp/finance/insurance/india-s-insurance-penetration-needle-remains-flat-at-3-7-in-2024-25-126010900679_1.html) **Why commodity service:** Agents are numerous and individually easy to replace. Technologies Micro-ATMs and biometric (Aadhaar) authentication Agent apps Point-of-sale terminals Depends on Energy [Dist Distribution grids, mini-grids and interconnectors](https://www.materialinsights.org/energy/e_distribution/) Industries [Computers and electronics](https://www.materialinsights.org/industries/computers_electronics/)[Telecommunications](https://www.materialinsights.org/industries/telecom/)**Examples:** Fino Payments Bank, Spice Money, Marsh McLennan ## Other sections - [Overview](https://www.materialinsights.org/industries/finance/index.md) - [Where ₹100 goes](https://www.materialinsights.org/industries/finance/cost-mix/index.md) - [Price links with suppliers](https://www.materialinsights.org/industries/finance/price-links/index.md) - [Example story](https://www.materialinsights.org/industries/finance/story/index.md) - [Linked industries](https://www.materialinsights.org/industries/finance/linked-industries/index.md) - [Materials drawn on](https://www.materialinsights.org/industries/finance/materials/index.md) - [Chokepoints and risks](https://www.materialinsights.org/industries/finance/risks/index.md) - [Sources](https://www.materialinsights.org/industries/finance/sources/index.md)