Amidst global slowdown of economy, constant push for accelerated digitization and keeping up with regulatory ups and down, the Global FinTech Fest held last week in Mumbai was a much-needed platform for FinTechs and Regulators to gather at a single forum to display how vital the role of FinTech is for a strong growth trajectory of the Indian financial landscape
“India is at the cusp of achieving Digital Brilliance. All we need to do is trickle down technology to remote India as well instead of focusing majorly on the urban population.” Golden words spoken by a FinTech executive leader at the Third Edition of the Global Fintech Fest (GFF) 2022, held at Jio World Drive in Mumbai last week.
And there were many such leaders echoing the same, wanting a cumulative, wholesome digital progress for the country.
A four-day hybrid track event spanning 125+ countries, 200+ sessions that held more than 600 speakers and an audience upward of 9200, GFF transcended to becoming a mega platform where ideas, innovations, learnings, experiences, and opportunities were deliberated, discussed, and shared amongst all FinTechs and Financial Institutions (FIs) possible.
If FIs needed to bridge the digital gap between their customers or recalibrate their business models, there were FinTechs aplenty, ready to accept the challenge and present their solutions. Likewise, FinTechs had come prepared with their Avant Garde AI and Machine Learning based product offerings for every requirement and beyond for FIs.
The main motive of GFF was to drive home the Sustainability factor within the Financial World, priming businesses to think actively about the planet and create synergies that are consistent with the environment. GFF spearheaded this theme and was inaugurated by Smt. Nirmala Sitharaman, Minister of Finance and Corporate Affairs and played host to prominent dignitaries as Shri Shaktikanta Das, Governor, Reserve Bank of India, Shri Ashwini Vaishnaw, Minister of Railways; Communications; and Electronics and Information Technology, Shri Devendra Fadnavis, Deputy Chief Minister, Maharashtra, amongst many illustrious panels of speakers.
GFF played host to Chairman of National Payments Corporation of India (NPCI), Biswamohan Mahapatra and Nandan Nilekani, Chairman Infosys and Advisor to NPCI who are pivotal players in launching the 3 key initiatives, announced by RBI Governor, Shri Shaktikanta Das.
First launch was dedicated to linking the RuPay Credit Card to UPI via digital assets such as a QR code, making it easier and more transparent for transactions within the Agri sector as well.
Second launch was the UPI LITE that allows low-amount transactions to go through swiftly even at a near offline mode, which is expected to reduce the debt burden on the core banking sector and see a massive growth in successful transactions.
Lastly, the Governor introduced Bharat BillPay Cross-Border Bill Payments that allows a resident staying abroad to pay their bills seamlessly if they own a property in India. This means unlike earlier, an NRI can now pay for utility bills instead of burdening relatives with such chores. These changes are done to highlight and better the extent to which our digital payments ecosystem can reach in a short span of time.
Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch made a prominent statement aimed at FinTechs at the GFF event, “If your business model is woven around a black box that is not capable of being audited, it cannot be permitted”. She was very clear in listing down several Do’s and Don’ts for the FinTech surrounding regulatory compliance.
First of her checklist was focused on the innovations that FinTechs come up with that do not fall under the ambit of regulation since the regulators are in the dark of what is new in the market. SEBI has put up an Access Denied board for FinTechs if they continue with anonymous innovations. Going forward, all innovations will be subject to credible data.
Second was narrowed down to transparency where the regulators will hold FinTechs to stead if they have proclaimed a particular percent as returns to their investor in a year. FinTechs will have to verify their claim and give an appropriate response to regulators as and when they are audited.
Thirdly, regulators will be in 100% support of FinTechs that have their business models enable financial inclusion.
And fourthly, regulators will not allow FinTechs to just crowd up the market without giving relevant returns in terms of innovative offerings and revenues.
Amidst many talks surrounding Payments, Chatbots, UPI, Customizing FinTech, Digital Identity and more, Perfios CEO Sabyasachi Goswami stepped into the shoes of a moderator with bigwigs from HDFC, YesBank and BNP Paribas to converse over how digital banking of today can go beyond their customer journeys.
Majority of the sentiment leaned towards banks not having uni-directional elements contributing to their growth trajectory. FinTechs must investigate poignant factors that are catalysts in banking transformation such as recalibrating business strategies based on the current and short term upcoming BFSI & Fintech market trends, thorough compliances with regulations and keeping up with new updates from the regulatory bodies, factoring in risk metrics in the business model and developing contingencies based on the scale of the operation.
Another angle that was touched upon was regarding the viability of the presence of physical banks in this era of digitized banking service. 80% of India is yet at the ‘Assisted Journey’ platform where customers demand personal interaction with banks for their requirements. Banks in India even today continue to open several branches despite heavy digitization because the core principle of banking is yet ingrained with the Indian market of building a relationship with your bank.
As digitization integrates deeper with big data, in the near future, branches will move from customer acquisition & servicing to financial advisory. Fundamentally the nature of physical aspect of banks will change but there will always continue to be a face for banks as customer relationship value will have to be upheld as prime.
The Global FinTech Fest held an intriguing discussion focusing on the future of financial services was deliberated by Perfios CSO, Ramgopal Subramani, alongside market leaders from banks, FinTechs and Big 4.
With a significant push from government initiatives over investments & financing in small to medium sized businesses, the point of financing has moved from institutional to consumption. Investors today focus more on the tech consumption requirement of a FinTech rather than its legacy, harboring a competitive sentiment within the market for innovative products that are parallel to customer journeys.
The quality of credit, transactions and payments is statistically better through physical channels than digital due to the strong Indian mindset of wanting a personal touch. Yet as distribution channels expand both physically and digital, Fintechs must rely predominantly on collaborations such as ecommerce platforms, payment gateways etc.
As open banking layers such as account aggregators come into shape, regulators are going to play an active role in, minimizing risks generated from such unchartered digital territories and FinTechs along with their integrations with the BFSI sector will need to shift focus towards compliance and staying within the regulator boundaries as well.
Taking forward the data delivery step a notch higher in our country, Shri Rajeev Chandrasekhar, Minister of State for Electronics and Information Technology, Skill Development and Entrepreneurship, Government of India, said, "India is creating one of the largest datasets programs where anonymized non-personal data will be available on a platform for the entire AI ecosystem. The use of these data sets will be allowed only to Indian startups and companies."
Founders and leadership board from FIs and FinTechs hung on to every new insight and announcement that was made at the GFF 2022 forum and will definitely augment these learnings into their business workstream and be in step with both, the rapid dynamics of Indian & global markets and the evolving regulatory decisions.