The world has evolved and so are the ways to Bank. Traditional banking is no more a cure for the increasing hunger for financial products and services.
To cope with this, NeoBanks came into existence. Many of the financial services that the traditional banks were not able to provide were outsourced. This was done using API(Application Programming Interface).
But with modern solutions arrive modern challenges. And to tackle these challenges, a constructive discussion is always a prerequisite.
In a chain of events that happened to create new solutions for modern problems, Global Fintech Fest was organized recently. Let’s have a look at the highlights.
Global Fintech Fest 2022
The third Global Fintech Fest (GFF2022) was recently organized. The Payment Council of India, Fintech Convergence Council, and National Payments Corporation of India were its organizing partners. The event took place between September 19th,2022, and September 22nd,2022. It was organized at the Jio World Convention Centre, Mumbai. The theme for the event was kept as “Creating A Sustainable Financial World – Global | Inclusive | Green.”
The special Partners of GFF 2022 included big names like the World Bank Group, United Nations Capital Development Fund, and IFC.
GFF 2022 was a four-day event with particular themes revolving around fintech solutions. The Global Fintech Fest is in its third year and this year marks the first time both in-person and online participation from subject matter experts from around the world.
Arrangements were made to live stream the entire event. The thought was to let the world introduce itself to the advancements in the fintech industry. Another goal was to present India’s uniquely inexpensive, sustainable, equitable, and inclusive global fintech leadership model. Shared learning is something seen as the biggest factor for innovative development.
GFF 2022 will present India as a preeminent fintech leader and showcase India’s fintech ecosystem to the globe. A major component of debates and discussion was the four pillars that are in line with the SDGs(Sustainable Development Goals).
Experts discussed ways to advance these four pillars in detail. These were Planet, Prosperity, People & Governance Principles.
SEBI chief Madhabi Puri Buch spoke at the Global Fintech Fest 2022 and stated that the regulator intended to close the regulatory gap in the startup environment.
Buch focused on a few factors that would persuade the regulator to support a corporation. She claimed that the regulator utterly disapproved of anonymity in the financial sector. She continued by saying that the regulator’s main responsibility is to guarantee that investors make informed decisions, which calls for openness.
Apart from the profoundly thought-provoking discussions held across more than 200 sessions over four days, the GFF 2022 was a hive of activity.
This included a variety of other events like the publication of in-depth thought leadership reports. Product demonstrations by a few select start-ups, and special awards in several categories, “Finsharks,” and “Start-up Battleground.” also formed a part of it.
Speaking at the Global Fintech Fest 2022, the Governor of the Reserve Bank of India and the Indian Finance Minister reaffirmed their commitment to sustainable development.
The presence-less layer, the paperless layer, the cashless layer, and the consent layer have all been pioneered by India, according to Smt. Nirmala Sitharaman, Minister of Finance and corporate affairs.
The attention of the entire globe is focused on these four inclusion layers. The main goal is to build a sustainable, environmentally friendly, and inclusive financial system.
The first day of the conference also featured a session titled “Fostering Fintech-Innovation – The Way Forward Between India and Germany.”
Chief Economic Advisor V Anantha Nageswaran stated that India is one of the fastest growing fintech marketplaces in the world, with a market size of $31 billion in 2021 and projected growth to $1 trillion by 2030.
A very important panel discussion titled “Will Kirana Tech Evolve Into Bharat’s Elusive Future” was put up. Founder & CEO of FidyPay, Mr. Manan Dixit gave detailed insights on how Kiranas has been playing a major role in moving the wheels of the Indian economy.
Some Key Takeaways from GFF 2022
* An open foundation for the future of fintech has already been laid: The Fintech industry has started getting mature since the development OF PSD2 in Europe.
Now, open banking has become something most people are familiar with. Advancement through technology can enable great leaps towards a fully equipped Fintech ecosystem.
* A lot of focus has shifted to Gen-Z: The millennials are the guiding light to any revolution when it comes to transforming physical as well as virtual landscapes across all sectors. With that noted, Gen-Z which is already on an advanced stage in terms of the payments ecosystem, the future of digital payments, and fintech appear to be on the brighter side.
* Localization and the vernacularization of fintech services can help in financial inclusion when it comes to rural India: Language is the biggest barrier when initiating any new feature in a deficit area.
Similarly, unbanked rural areas are in dire need of vernacularization and localization of the fintech ecosystem. This will enable a rapid transformation for the banking system in terms of service accessibility in Rural unbanked areas.
* Financial Education is a must for fintech to prosper: According to an LSE Professor-a Country like India has about $ 2000 per capita GDP, just has around 5-7% penetration for most financial products.
So, financial education backed by technology is a must for Fintechs to prosper in a wholesome atmosphere.
* Widgetifying smaller retailers can be something fintech can work on.
* Digital to Phygital marketing: Fintechs initially focussed on digital channels only but this has resulted in the exclusion of the majority from availing credit facilities. So, physical channeling is also a must and this thus paves the way for PhyGital Marketing.
Challenges & Solutions:
* Banks are giving strong competition to fintech which earlier wasn’t the case when fintech became a reality because of their traditional approach. In-house modernization of banks has challenged fintech today.
* Post-covid-there is a clear realization that technology and digitalization are something all must move towards. Banks will take time because of the lag but eventually will lead there. Of Course, fintech will get there faster because they don’t have legacy systems.
Asia has been reported as the biggest user of Fintech Services. China and India have the biggest Fintech usage with 87% of people regularly using Fintech Solutions according to Ernst & Young.
Open Banking, today, has evolved to an extent that is clearly visible in all spheres of the financial ecosystem. Open Banking lowers the barriers to entry and innovation in financial services. It can help businesses switch to higher-paying accounts.
Open banking frameworks that get implemented in Europe need to be replicated in India.PSD2 kind of compliance will be helpful towards innovation. Fintech is today mainstream and not an experiment. Data compliance and data governance need to be at the forefront while allowing innovation.
Today Non-banks are not regulated directly but through partner banks. That needs to be changed. At Least some direct regulation is needed for streamlining innovation and development to a constant-yet-evolving pace.