New Delhi: To shape India’s continued ascendancy in FinTech, build the narrative for future strategy and policy efforts, and to deliberate steps for comprehensive financial inclusion, NITI Aayog organized a day-long FinTech Conclave in New Delhi. The Conclave featured representatives from across the financial space – central ministries, regulators, bankers, startups, investors, service providers and entrepreneurs.
Shaktikanta Das, Governor of RBI inaugurated the Conclave in the presence of Amitabh Kant, CEO, NITI Aayog and Subhash Chandra Garg, Secretary, Department of Economic Affairs, Ministry of Finance.
Giving the keynote address on ‘Opportunities and Challenges of FinTech’, Das noted that FinTech has the potential to reshape the financial services and financial inclusion landscape in India in fundamental ways. He said, “We have to strike a subtle balance between effectively utilising FinTech while minimising its systemic impacts. By enabling technologies and managing risks, we can help create a new financial system which is more inclusive, cost-effective and resilient.”
Kant noted the need to evolve regulatory and policy paradigms keeping in mind the need of nearly 450 million millennials of India to access institutional credit and charting out the future of fintech in India in light of digital technologies such as block chain and artificial intelligence.
Government of India’s efforts focused on Digital India and developing India Stack including Voluntary Aadhaar for financial inclusion have evoked significant interest from various stakeholders in the area of Financial Technology (FinTech).
India is one of the fastest growing FinTech markets globally and industry research has projected that USD 1 Trillion or 60% of retail and SME credit, will be digitally disbursed by 2029. The Indian FinTech ecosystem is the third largest in the globe.
The Indian FinTech industry is creating cutting edge intellectual property assets in advanced risk management and artificial intelligence that will propel India forward in the global digital economy while simultaneously enabling paperless access to finance for every Indian.
The Conclave constituted parallel tracks, which looked into various dimensions of the future of the FinTech, particularly the areas of:
Digital Onboarding of Customers and Merchants for Financial Inclusion
Building Financial Products for Bharat
Emerging Areas of FinTech
Fast tracking investment in FinTech industry
Financial Inclusion of MSMEs
The group on fast tracking investment in FinTech sector outlined the need for open banking to be introduced in India and data aggregation utilities be facilitated within innovative frameworks such as regulatory sandboxes. The group also sought to explore introduction of a new sub-class of Non-banking Finance Companies (NBFCs) exclusively for fintech-centric companies to encourage innovation and targeted policy, while also increasing avenues for investor capital.
Looking at the emerging areas of FinTech, the group considered opening up access to data within a larger framework of informed consent and adequate privacy safeguards. The group discussed the need for India to lead the digital asset revolution, which shall boost India’s technical competitiveness and also create cutting-edge jobs. Expanding the roles of business correspondents to supply financial services rather than just banking services and establishing a single source of aggregated, anonymised, consent-governed data was recommended as crucial towards ensuring proper data governance.
Going forward, the above recommendations shall be fleshed out and further detailed for feasibility of implementation through cross-sectoral consultations by the NITI Aayog, who has been mandated with expanding digital literacy and promoting financial inclusion.