Fintech sector is nudged by the government and accepted by the people, says Choudhary
The Indian Fintech sector is expected to grow with a cumulative annual growth rate of around 22% over the next five years, and is rated as the third largest market in the world, just behind US and China.
This assessment was given by RBI Executive Director Ajay Kumar Choudhary at ‘PICUP Fintech Conference & Awards’, organized by FICCI, jointly with IBA, on 20 July 2022.
“Today, the world is looking up to India, as we continue to innovate and lead the way seamlessly imbibing the new age technology without compromising on the safety and security aspects,” he said.
The rapid growth of Fintech in India is also a resonance of the accelerated digitization with the emergence of technologies like AI, cloud computing, big data, ML, etc., he pointed out.
This is coupled with the demographic dividend, easier access to mobile, higher internet speed and bandwidth as well as reduced cost of technological products, he noted.
“Fintech sector in India is nudged by the government, fostered by the regulators, acknowledged by the industry and accepted by the people.
“Fintech growth in India has been huge with a very high adoption rate as compared with other jurisdictions,” he underlined.
Choudhary also emphasized that as regulator, it is also important for RBI to identify the risks and challenges associated with all innovations.
The Central Bank has taken several measures to foster innovation in the fintech sector which includes regulatory sandbox, Reserve Bank Innovation hub.
“Sustainability is the most critical aspect in fintech sector. RBI has constituted a committee to both examine and suggest measures to address the risks and challenges associated with the fintech eco-system while continue to foster innovation,” he informed.
Speaking on the opportunities in the fintech sector, Choudhary said that the sector will continue to have responsible innovations which will transform the financial landscape of the country.
The growth does not have to be only swift but a sustainable growth and inclusive of all, he asserted.
Enumerating on the 4 success pillars for Fintech, Choudhary said it is imperative to implement responsible innovations which serves the under privileged, corporate governance; make technological advancements that are scalable and interoperable; giving importance to policy on data privacy, consumer protection, cyber security and prevention of financial crime.
He also announced at the gathering that necessary amendment to the relevant section of the RBI Act 1934 had been made. This will enable RBI to conduct pilot and subsequent issuance of Central Bank Digital Currency (CBDC).
“RBI is also working on phased implementation of a Central Bank Digital Currency in both wholesale and retail segment,” he shared.
AK Goel, Chairman, IBA and MD & CEO, Punjab National Bank, pointed out that Fintech has the potential to fundamentally transform the financial landscape and provide consumers with a great variety of financial products at competitive price along with improved efficiency.
“The landscape of fintech is changing at lightning speed and this transformation is essential as it impacts everything related to payment, money and banking,” he said.
Amitabh Chaudhry, Chairman, FICCI Banking Committee and MD & CEO, Axis Bank, said that banks have experience brand recall, legacy and customers’ trust, while Fintech bring in the new age expertise and nimbleness needed to make the leap into the digital space.
“Many banks are joining Fintech start-ups to upgrade their existing systems and enable smoother operations to deliver a better experience to their customers,” he said.
Saurabh Tripathi, Chairman, FICCI Fintech Committee as well as MD & Senior Partner, BCG, highlighted, “We are on the verge of data protection becoming a real issue. The open banking construct can’t work without a very strong data protection framework.
“Geopolitical risks are here to stay, and they are going to force even more localization,” he added.
Regulators have created the regulatory sandbox for giving the scope to Fintech and new innovators to share ideas and come up with cost-effective solutions, noted Sunil Mehta, Chief Executive, IBA. fiinews.com
