TheNFAPost Podcast
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Bengluru, NFAPost: Nandan Nilekani – Co-founder and Non-Executive Chairman of the Board Infosys stated that democratising credit in India is the need of the hour and it should be distributed to deserving people through an Open Credit Enablement Network (OCEN).

Speaking at the first day of Global Fintech Fest 2020, a two-day virtual fintech meet-up, Nandan Nilekani said India needs to go that extra mile in offering credit to the most deserving, smallest businesses and individuals.

“Open Credit Enablement Network (OCEN) which enables to connect lenders to marketplaces and thereby to borrowers is a technology system, currently under discussion. If implemented, the technology can democratise lending to micro-enterprises and street vendors in a big way,” said Nandan Nilkani.

Fintech and BFSI ecosystem

The two-day fest is organised by National Payments Corporation of India (NPCI), Fintech Convergence Council (FCC) and Payments Council of India (PCI) is witnessing the grand confluence of industry veterans and thought leaders in the Fintech & BFSI ecosystems across the globe.

Nandan Nilakeni, who led India’s digitisation programme through its flagship Aadhar, stated that democratising credit in India is the need of the hour as he captured the remarkable journey of the Indian fintech industry which had now become a global hot bed for innovation.

“Reviving the economy India needs to kick-start consumption, offer credit a larger role whilst lubricating small businesses with capital. India needs to go that extra mile in offering credit to the most deserving, smallest businesses and individuals,” said Nandan Nilakeni.

Access to credit

With most credit directed to large companies in large volumes, Nandan Nilakeni pointed out that smaller companies and micro enterprises are left in the lurch with little or no access to credit at all which is a huge concern for the next growth phase of the industry.

Indian IT services veteran also pointed out that with the cost of lending being too high, small value loans become unfeasible.

“Therefore, account aggregator service protocols developed and backed by RBI can be the game changer. While it can be implemented across fintech firms like wealth management, broking and banking. Most importantly and immediately, it needs to be implemented in lending so the well-deserving smaller and micro businesses are able to opt for loans,” said Nandan Nilakeni.

Citing the examples of home-grown innovations such as – UPI and AEPS, he highlighted the fact that there is a need to realise that public systems need to be designed keeping in mind not just the top 50 million users but the 1 billion users, the masses. 

Phygital

Speaking at the Global Fintech Fest 2020 meet-up NITI Aayog CEO Amitabh Kant said the future of lending will be Phygital.

“Betting big on digital lending he stated the latter will be the next big driver in fintech, driven by retail loans. Digital lending will constitute 50% of total lending by 2023,” said NITI Aayog CEO Amitabh Kant.

NITI Aayog CEO Amitabh Kant said that the financial technology sector has been the shining star of India’s startup and technology ecosystem, enabling seamless transition from physically connected to a physically distant but socially connected environment. 

Speaking at the event, State Bank of India (SBI) chairman Rajnish Kumar said mobile banking may become the most preferred banking channel, even more than internet banking, in the days to come.

Mobile banking

“Out of 100 transactions at SBI, only 9 transactions are being made in branches. While transactions at ATMs at the time of demonetisation were around 55%, now they are down to around 30 per cent and digital, mobile banking has seen a rise from 25-30 to 55% now,” said State Bank of India (SBI) chairman Rajnish Kumar.

Going ahead it is going to be internet banking and mobile banking that will flourish, State Bank of India (SBI) chairman Rajnish Kumar said delivering a key note address at the Global Fintech Fest.

In his opening address, NPCI Managing Director and CEO Dilip Asbe observed that phenomenal success of home-grown platform of UPI and the global recognition it received is a testimony in itself as to how far we have come as a nation – from being followers to innovators and pioneers in the industry.

“The pandemic has been a great catalyst for the industry and we aim to develop an eco-system where digital transactions are executed remotely, possibly by majority of our population. We appreciate the concerted efforts of the government authorities in offering the necessary tailwinds in promoting the industry,” said NPCI Managing Director and CEO Dilip Asbe.

Digital lending

Earlier in the day, Fintech Convergence Council Chairman Navez said the growth of nascent sectors like – neo-banking and digital lending. The role of non-banks in growth of UPI, BBPS and PPI has been sizeable.

“The phenomenal funding and global attention attracted by sectors like – payments, lending and wealth-tech speaks volumes of the kind of impact the Indian fintech has had on the society and the world at large,” said Fintech Convergence Council Chairman Navez.

With low-cost, high-volume transactions across payment technology, Fintech Convergence Council Chairman Navez said digital banking and lending, fintech have helped serve millions in a way that the legacy systems couldn’t.

“Aadhaar kyc and video kyc is the future and will pick up pace extensively in the near term,” said Fintech Convergence Council Chairman Navez.

Global Fintech Fest

The Global Fintech Fest has witnessed a participation from 50+ countries, 100+ speakers and 10000+ registered delegates in attendance. Significantly, 45% are international speakers and 30% women speaker participation. Of the total delegate participation, around 30% are from international community.

In addition, there are 75 Indian and international 75 exhibitors showcasing their products and services in the two-day fest. Global Fintech Festival has brought together representatives of banking, financial technology and investment industries from across the globe to host impactful dialogues, public discussions and a curated exhibition of the latest disruptive technologies.

FCC is formed under Internet and Mobile Association of India (IAMAI) and represents the FinTech industry and traditional companies in the BFSI space. The purpose of the council is to encourage collaboration, seek complementarities and build synergy between leading BFSI companies and the emerging FinTech start-ups.

The council has worked towards interpreting the regulatory and legal framework, aggregating the concerns and feedback of the various players within the larger FinTech community, communicating it to regulators and lawmakers, and organizing events and gatherings for the industry participants to meet, share ideas and work together in the interest of creating a safer, more open and more collaborative operating environment through a transparent forum.

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