Disruptions in the Fintech ecosystem reveal the future of Finance sector in India at the roundtable

Disruptions in the Fintech ecosystem reveal the future of Finance sector in India[/b]



Technology is bringing new changes across sectors such as Telecom, Retail and Finance. With emerging technology, Finance technology firms popularly known as FinTech is a new extension for BFSI sector in India. Undoubtedly, the Fintech landscape is charting new waters with introduction of digitized formats such as e wallets, Blockchain for settlement of contracts and mobile payments. Deliberating a dialogue on the new challenges, opportunities and potential growth in the BFSI sector in relation to FinTech were esteemed panelists: Rambhushan Kannumuri, Ex- MD Barclays; Bharat Panchal, Senior VP, NPCI; R Balaji, Senior VP, Mahindra Finance; Joseph Joshy, Senior VP, Reserve Bank Information Technology (ReBIT); Anurag Nigam, COO Tata Payments Solution and Shailesh Dhuri, Executive Director Decimal Point Analytics at a roundtable organized by S.P. Mandali’s Prin. L. N. Welingkar Institute of Management Development & Research (WeSchool). The theme of the roundtable was ‘Emerging trends in Fintech ecosystem’.

Prof Dr Uday Salunkhe, Group Director, WeSchool shared his thoughts on the inititative, “WeSchool has pioneered art of knowledge creation and dissemination by collaborating with Industry. Fintech Round Table Conference 2017, apart from enlightening students via thought provoking panel discussion is an endeavor to bridge the Industry Academia gap. BFSI sector is highly regulated sector and maximum disruptions are witnessed in this sector. A landmark change witnessed by this sector is the JAM Trinity : Jan Dhan -Adhar-Mobile linkage , which has unlocked access to financial services to begin with to a billion plus population. Chatbots & Robo advisors have disrupted the wealth management segment. A tectonic shift in BFSI which has changed the paradigms of the sector is India Stacks that has empowered cashless, paperless, non-brick mortar business and services to grow. The BFSI sector is at a cusp of revolution and while the eminent industry panel would touch base upon this area; we direct our students to take a lead in understanding these new age concepts and become industry ready”.

The opening session defined the introduction of Fintech as a concept that is enabling new age initiatives for existing and new markets in finance. A further discussion on Artificial Intelligence and Machine Learning highlighted the future impact on investment banking industry with large firms shrinking the desk size by Ninety percent post implementation of Smart Contracts, Robo Advisors and other emerging technologies. Artificial Intelligence has a power to solve many complex problems that individuals are facing. While technology is reducing time and addressing predictable changes through algorithms, it certainly needs human intervention. There are many jobs which would seize to exist but then there will be new jobs created. Academicians took note that with evolving pace of technology, B-School students should be trained more on Ability to Learn-Unlearn-Relearn rather than focusing on specializing a single technology. Adaptability is the key trait to be developed for future CEOs.

Another topic that was elaborately discussed was Blockchain. This new technology has many applications and companies are taking a lead through Smart Contracts using Blockchain. Select Indian companies are working extensively on new technologies to bring customer delight.

The existing trend of cash and online transactions in other countries was also analyzed. Sweden has more than 90% digital transaction in comparison to Germany which has 80% cash based transactions. The concluding remarks defined digital and cash holding a unique significance.

An elated WeSchool Student, Priya Desai, PGDM 2016-18, (Finance) said, “It was an enriching experience to interact with noted finance gurus about the developments in Fintech. It gave me insights into the practicalities of the various technologies, which otherwise would be knowledge in text.”

Another WeSchool student, Sanat Paralkar, PGDM Ebiz (2016 18), said that “The Fintech roundtable conference gave me a great opportunity to get acquainted with disruptive changes that the BFSI vertical will witness in near future. It briefly discussed technologies such as Blockchain, Artificial Intelligence, Robo Advisory etc. and also threw light on transformation of roles and skill sets one needs to possess to have a flourishing career in Fintech.”

The conference concluded on a note that BSFI has a potential growth with technology playing a key role. However, trust and transparency which form the crux of the BSFI sectors needs to be consistent even with launch of new technology enabled products and processes.

 

[Swaswati Borpuzari]

Disruptions in the Fintech Ecosystem Reveal the Future of the Finance Sector in India​

In a recent roundtable discussion, industry leaders and experts delved into the rapid and transformative changes occurring within the fintech ecosystem in India. The conversation, which spanned a wide range of topics from digital payments to regulatory frameworks, highlighted several key disruptions that are not only reshaping the current landscape but also pointing towards the future of the finance sector in the country.

The Rise of Digital Payments​

India's journey towards a cashless economy has been marked by significant milestones. The introduction of the Unified Payments Interface (UPI) by the National Payments Corporation of India (NPCI) has been a game-changer, enabling instant and secure transactions across various platforms. The explosive growth of digital payment apps such as Paytm, PhonePe, and Google Pay has further catalyzed this shift, making it easier for millions of Indians to transact online.

However, the rise of digital payments has also brought about challenges. Security concerns, digital literacy, and the need for robust infrastructure to support these transactions were prominent topics of discussion. Experts agreed that while the adoption of digital payments is inevitable, addressing these issues is crucial to ensure a smooth and inclusive transition.

Regulatory Frameworks and Compliance​

Regulatory bodies like the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) have been instrumental in fostering the growth of fintech in India. The roundtable emphasized the importance of a balanced regulatory approach that promotes innovation while ensuring consumer protection and financial stability.

One of the key points raised was the need for more flexible regulations that can adapt to the fast-paced nature of technological advancements. Participants called for greater collaboration between fintech startups, traditional financial institutions, and regulatory bodies to create a regulatory sandbox environment. This would allow for the testing and refining of new financial products and services without immediate stringent oversight, thereby accelerating innovation.

Inclusion and Accessibility​

Fintech has the potential to bridge the financial inclusion gap in India, a country where a significant portion of the population remains unbanked or underbanked. The roundtable discussed how fintech solutions, such as microloans, digital wallets, and mobile banking, are making financial services more accessible to the rural and underserved segments of the population.

However, the challenge lies in ensuring that these services are not only available but also user-friendly and affordable. The experts stressed the importance of educating users about the benefits and risks of fintech, as well as providing them with the necessary skills to navigate digital financial tools. Moreover, there was a consensus on the need for more localized and culturally relevant fintech solutions to cater to diverse user needs.

Blockchain and Cryptocurrencies​

The emergence of blockchain technology and cryptocurrencies was another major topic of discussion. While the RBI has taken a cautious stance on cryptocurrencies, the roundtable highlighted the potential of blockchain to revolutionize various aspects of the finance sector, including remittances, supply chain financing, and identity verification.

Participants also explored the regulatory and legal hurdles that need to be overcome to fully realize the benefits of blockchain and cryptocurrencies. They suggested the creation of a clear and comprehensive legal framework that balances innovation with the need to protect consumers and maintain financial integrity.

Artificial Intelligence and Machine Learning​

Artificial Intelligence (AI) and Machine Learning (ML) are poised to play a pivotal role in the future of finance in India. These technologies can enhance risk assessment, fraud detection, and customer service, among other areas. The roundtable discussed how AI and ML can help fintech companies offer more personalized and efficient services, thereby improving user experience and satisfaction.

However, the deployment of AI and ML in finance also raises ethical and privacy concerns. Experts called for the establishment of guidelines and standards to ensure the responsible use of these technologies, protecting user data and ensuring transparency in algorithmic decision-making.

Collaborative Ecosystem​

The future of the finance sector in India lies in the creation of a collaborative ecosystem where fintech startups, traditional banks, and other financial institutions work together. The roundtable emphasized that partnerships between these entities can lead to the development of innovative solutions that address the unique needs of the Indian market.

For example, traditional banks can leverage the technological expertise of fintech startups to enhance their digital offerings, while fintech companies can benefit from the established customer base and regulatory compliance of banks. This symbiotic relationship is essential for the sustainable growth of the finance sector.

Conclusion​

The disruptions in the fintech ecosystem are a clear indicator of the dynamic and exciting future of the finance sector in India. As digital payments continue to grow, regulatory frameworks evolve, and technologies like blockchain and AI become more prevalent, the landscape is set to transform significantly. However, these changes come with their own set of challenges, which require concerted efforts from all stakeholders to address.

The roundtable concluded that a collaborative and inclusive approach, coupled with a balanced regulatory environment, is the key to harnessing the full potential of fintech in India. By embracing innovation and addressing the needs of the underserved, the finance sector can pave the way for a more prosperous and financially inclusive future for all Indians.