Case Study | 29 July 2025
How a Fintech Platform Recovered from a Major Data Breach and Reclaimed Market Leadership
Posted by : Preeti Wani
This case study demonstrates how a rapidly growing fintech platform experienced a major downfall due to a data leak, regulatory barriers, and structural issues. Despite financial losses and customer distrust, the company collaborated with Research Nester to reconstruct its digital security, compliance framework, and market strategy, ultimately growing stronger and reclaiming its position in the competitive fintech market.
An overview:
The fintech company experienced a huge data leak in early 2020 that affected millions of users’ financial data. This resulted in the loss of over INR 3,200 crore and a 60% drop in customer trust. Due to inadequate cybersecurity infrastructure, the platform was suspended temporarily by regulatory authorities, which damaged its partnerships with nationalized banks. A significant portion of the budget was being diverted toward influencer-driven digital marketing, but customer conversion remained stagnant. A heavy tax penalty of INR 6,500 crore was levied due to flawed data protection protocols during its expansion into Europe.
Moreover, the mobile application experienced frequent server crashes and delays in processing payments, especially during peak hours, which triggered mass uninstalls and negative publicity across social media platforms. To restore operations and rebuild public trust, the company approached Research Nester in late 2020 to recognize sustainable, secure, and regulatory-compliant strategies.
The Story
Launched in 2015, the company quickly became a leading Indian fintech startup, known for its user-friendly digital banking, instant loan approvals, and peer-to-peer money transfers. Within a year, the app was downloaded more than 4 crore times, and by 2019, it was processing INR 4,000 crore in monthly transactions. The company’s major revenue came from:
- Transaction commissions from partner banks
- Data-driven targeted advertising
- Financial products such as microloans, credit-score tracking, and budgeting tools
Due to its huge success, the firm expanded internationally in 2020 by setting up a new operational base in Dublin, Ireland. However, during this expansion phase, a series of unexpected setbacks took place. Between Q2 2020 and Q1 2021, a series of crises shook the company:
- Massive data breach exposed sensitive user data of over 3.2 crore customers, prompting RBI and EU investigations and partner bank disengagement.
- Weak security infrastructure and outdated encryption resulted to app crashes and peak-hour failures.
- Overspending on celebrity promotions yielded no real user engagement, with declining daily active users despite growing installs.
- Tax non-compliance during its Ireland-to-India transition triggered a retroactive liability of INR 6,500 crore.
- Rising competition from advanced fintech companies providing AI, crypto integration, and biometric features further degraded the company’s market share.
As a result, the company faced an extensive financial crisis of over INR 3,200 crore, lost customer trust, and risked complete market exit, forcing the company to seek targeted intervention from Research Nester.
Our Solution:
In mid-2021, the company reached out to Research Nester Private Limited with an aim to revamp its digital infrastructure, comply with global regulations, and build back user trust. RNPL used a multidisciplinary team of fintech analysts, cybersecurity experts, and product strategists to audit and reboot the system across six key areas:
Security System Upgrade
The RNPL team reported key gaps in security rules and implemented:
- Multi-Factor Authentication (MFA) for all user actions
- End-to-End Encryption of financial and KYC information
- Role-based access controls (RBAC) to prevent internal misuse
- Real-time AI-driven threat detection software
Regulatory Upgrade
RNPL supported the company in achieving compliance with RBI guidelines, GDPR, and India’s Personal Data Protection Bill (PDPB), such as:
- Setting up a Data Protection Office (DPO)
- Creating an integrated global data policy framework
- Optimizing compliance reporting via automated audit logs
Smart Upgrading with Microservices
To fix latency and crash issues, RNPL changed the backend to a cloud-native microservices architecture. This ensured that even under 10 million concurrent users, the system remained stable.
Shifting Marketing to ROI-Based Models
Instead of mass promotions, RNPL introduced a programmatic ad strategy:
- Real-time targeting based on user transaction behavior
- Affiliate partnerships with e-commerce platforms for contextual finance offers
- Community-based referral campaigns with 3X conversion results
Increasing Transaction Limits
With regulatory clearance, RNPL supported FinNova in raising its per-transaction ceiling. This supported users to make higher-value payments directly via the app, increasing commission earnings.
Trust Building Campaigns
To overcome negative publicity, RNPL introduced a Your Money, Your Shield campaign, highlighting:
- Clear and transparent user data policies
- Partnerships with international cybersecurity leaders
- Real testimonials of successful issue resolution
Results
The company demonstrated significant recovery by Q3 2022, as outlined in the table below.
|
Metric |
2021 (Pre-RNPL) |
2023 (Post-RNPL) |
|
Monthly Active Users |
1.1 crore |
3.8 crore |
|
App Crash Rate |
19.3% |
< 0.3% |
|
Revenue |
INR 900 crore |
INR 15,400 crore |
|
Net Profit |
-INR 3,200 crore |
+INR 4,100 crore |
|
Market Share (India) |
17% |
42% |
- The company re-established collaborations with four key public-sector banks and secured five new agreements with NBFCs.
- By March 2023, its finance app got back its spot among the top five most commonly downloaded finance apps in the country.
- Over 88% of users indicated an improvement in the app and cited it being a safe platform, resulting in 3 million app reinstallations by 2023.
Conclusion
The journey illustrates that rapid growth in the digital space must be matched with a strong commitment to security, regulatory alignment, and user confidence. While bold expansion strategies can result in momentum, true longevity in fintech comes from building resilience at the core. With strategic support from Research Nester, the company was able to boost its IT framework, solve critical vulnerabilities, and evolve its offerings. By adopting global compliance frameworks and prioritizing customer trust, the company repositioned itself as a secure, innovative, and future-ready leader in India’s digital banking environment.
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