Global Fintech Fest 2022 showcased India at its best
The Global Fintech Fest 2022 (GFF2022) in Mumbai last month showcased the key to India’s innovative and strong digital payments ecosystem – collaboration. Organized by the NPCI, Payment Council of India, and Fintech Convergence Council, the event brought together government, regulators, industry leaders, startups, and researchers. There was lots of action over four days; Priyanka Iyer and Mansi Verma have an excellent overview.
Of the slew of research reports released, our pick is the fascinating report "Financial Inclusion of Bharat: Insights into People, Markets and Startups" released by CIIE. CO is a must-read for all who are interested in meaningful financial inclusion. The report has consumer stories, results of research projects, insights into startups building inclusive fintech solutions; and inputs on UI/UX design.
At GFF2022, the Financial Alliance for Women released, “Fintechs serving the female economy", a report in collaboration with FinStep Asia. The study gives data showing that female customers are a profitable segment, which is currently being ignored. Evidence is presented from 25 startups that have created successful value propositions tailored to women customers.
Arundhathi Ramanathan however, went behind the scenes to note that despite all the excitement at GFF2022, off the record, fintechs were less than happy, given high levels of uncertainty on regulatory compliance. Balancing the tightrope between enabling innovation and customer protection calls for honest dialogue between the financial sector regulators and industry.
Meanwhile, the battle over the MDR and transaction charges is yet to be resolved, as players in the ecosystem, banks, payment platforms, etc. are pushing for a market-driven approach with graded charges. NPCI has gone ahead with a circular stating that there will be no charge for RuPay credit card use on UPI for transactions up to ₹2,000.
The latest innovation in India’s fast-changing digital payments and inclusion ecosystem is the Open Network For Digital Commerce (ONDC) platform going live in 16 pin codes in Bengaluru. Interestingly, ONDC has come out with a consultation paper on building trust, acknowledging that the experience for buyers and sellers on this digital architecture is dramatically different from both the brick-and-mortar model and the platform model. The fundamental question is, “If control is decentralized, what serves as the foundation for trust, which is essential for a thriving market?”. Feedback can be given through an online form for submitting responses by 31st October 2022.
Some data coming out from Paisabazaar shows that a formal credit culture is slowly growing throughout the country. More than 30 million consumers from 823 cities and towns have checked their credit scores on the platform in the last six odd years. 67% of consumers are from outside the top metros (Ahmedabad, Bengaluru, Chennai, Delhi NCR, Hyderabad, Kolkata, Mumbai, and Pune) and 37% of these are from Tier 3 cities and towns. Also, over 45% of consumers, who checked their credit score took at least one credit product within 6 months. We hope that more financial service providers bring out such data insights to understand how financial inclusion is spreading across India.
Even as penetration of financial products and services grows, the Finance Ministry has announced a special campaign from 15 October to 26 November to deepen the financial inclusion framework. The campaign that will be rolled out first at the Gram Panchayat level in seven districts of India aims at plugging the gaps by ensuring bank accounts to all unbanked, expanding coverage of Mudra and KCC to newer segments, etc. Given the size and heterogeneity of the country, there will always be micro-gaps to fill, and this targeted and granular approach by the Department of Financial Services is appreciated as the right direction forward.
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"The winds of change - trends shaping India's FinTech sector, 2022" a report providing an overview of the Indian FinTech landscape, was launched at the Global Fintech Fest. The report was brought out by the Payments Council of India, Fintech Convergence Council, and EY.
"How digital payments drive financial inclusion in India"- a report released at the Global Fintech Fest is authored by MSC, in collaboration with NPCI, with support from Bill & Melinda Gates Foundation, India, and is a comprehensive account of where we stand today.
Shehnaz Ahmed writes for Financial Express on the key regulatory measures that must supplement the Reserve Bank of India (RBI)'s digital lending guidelines to empower vulnerable consumers and for better enforcement of these guidelines.
Anand Kumar Bajaj, Founder MD CEO PayNearby has a blog post in the Times of India on how AePS has been revolutionizing financial inclusion.
Raghu Mohan does a deep dive in Business Standard on whether financial services can be made bite-sized to deepen credit penetration.
The Reserve Bank of India issued detailed guidelines for digital lending for immediate implementation.
Graham Wright, Akshat Pathak, Disha Bhavnani, Shweta Menon, and Diya Chatterjee of MSC have two blog posts on India’s digital payments – The evolution of payments in India—the state of play and The evolution of payments in India—looking ahead.
Anil Padmanabhan interviews Hrushikesh Mehta, CredAll on the latest moves to democratize credit for small businesses, solving the problem of access to liquidity to all at low rates.
LocalCircles conducted a nationwide survey to understand the consumer pulse on convenience fees charged by digital service providers that facilitate online services. The majority of respondents were not in favour of convenience fees and expected transparency upfront at the very least. 93% of respondents wanted the government and PSUs to stop charging convenience or service charges.
At The India Advantage Summit, Nandan Nilekani spoke on how India's UPI and Aadhaar-enabled payment system has brought in a "dramatic shift" in consumer behavior and consumer usage as around 400 million people tap into these digital technologies."
Sharad Sharma has a blog post on Sahamati transitioning out of ProductNation/iSPIRT incubation to fly as an independent entity and writes on the early learnings.
In an interview, Akhil Handa, Chief Digital Officer, Bank of Baroda laid out the issues at stake in India's digital financial inclusion landscape.
Mitali, Diya Chatterjee. and Aanchal Aggarwal write a detailed blog post on how India Post Payments Bank has improved financial inclusion through a differentiated banking approach.
Emilio Hernandez and Christopher Blackburn, CGAP, have a reading deck out - “Agent Networks at the Last Mile: Implications for Policy Makers”.
Aishwarya Narayan, Dvara Research, writes on how banking infrastructure impacts citizens’ withdrawal of social protection benefits.