Context
The Prime Minister addressed the Global Fintech Fest (GFF) 2024 at the Jio World Convention Centre in Mumbai.
About
- GFF is collectively organized by the Payments Council of India, the National Payments Corporation of India and the Fintech Convergence Council.
- It aims to showcase India’s strides in Fintech and bring together key stakeholders of the world.
- 800 industry specialists, including policymakers, regulators, senior bankers, and academicians from India and different countries, will take part within the GFF.
What is Fintech?
- The fintech sector in India refers to using technology to enhance, innovate, and streamline financial services.
- This quarter incorporates a wide range of economic products and services, which includes digital payments, lending, coverage, wealth management, and personal finance, all powered by technology.
Fintech Sector in India
- The Indian fintech industry is anticipated to be around USD 110 billion in 2024 and is projected to reach about USD 420 billion by 2029.
- Indian fintechs were the second most funded startup sector in India in 2022.
- From only 1 Mn transactions in 2016, UPI has for the reason that crossed the landmark 10 Bn transactions.
Growth Drivers
- Digital Infrastructure: Open Application Programming Interface (API) Platforms i.e. Aadhar, UPI, Bharat Bill Payments, GSTN.
- Technological Innovation: Implementation of latest business models pushed by technologies including Artificial Intelligence and Machine Learning
- Increasing internet & smartphone penetration: India already has the 2nd highest number of smartphone users globally and is the 2nd largest Internet consumer market.
- Favourable Demographics: 68% of India’s population is young and 55% of its population is in the age group of 20-59 (working population) in the year 2020 and is estimated to attain 56% of the total population by 2025.
- By 2030, India will upload 140 Mn middle-income and 21 Mn high-income households so that they can power the demand and increase of the Indian FinTech sector.
- Financial Inclusion Initiatives: Financial inclusion programmes including PMJDY, DAY-NRLM, Direct Benefit Transfer, Atal Pension Yojana amongst others have extended the digital revolution and taken more citizens, mainly in rural regions, in the ambit of digital financial services.
Challenges
- Regulation Complexity: The fintech region is regulated by a couple of groups (e.G., RBI, SEBI), leading to a complex regulatory environment.
- Cybersecurity Risks: The growing use of digital structures increases concern about statistics breaches and cyberattacks.
- Ensuring strong safety features to protect sensitive financial data is critical.
- Lack of Digital Literacy: A wide portion of the population nonetheless lacks digital literacy and access to generation, which restrict the reach and effectiveness of fintech answers.
- Customer Trust: Building trust within digital financial services, especially among older demographics and people new to technology is difficult.
- Policy Changes: Changes in financial or economic regulations, together with taxation and interest prices majorly affect the fintech environment.
- Innovation and Scalability: Keeping tempo with rapid technological improvements and ensuring that systems can scale successfully as person demand grows is a difficult project.
Government Initiatives for Fintech Sector in India
- Pradhan Mantri Jan Dhan Yojana (PMJDY): Aims to increase financial inclusion by facilitating the enrollment of recent financial institution debts for direct benefit transfers and access to financial services.
- India Stack: A societal initiative to build public digital infrastructure that supports each public and personal digital projects, especially in the finance sector.
- Aadhaar Enabled Payment System (AePS): Allows individuals to conduct economic transactions using their Aadhaar range and biometric verification (fingerprint or iris experiment) on Micro-ATMs.
- Central KYC (Know Your Customer): A principal repository designed to lessen the need for a couple of KYCs across specific financial institutions.
- Unified Payments Interface (UPI): A scalable platform that supports digital payments across India.
- Bharat Bill Payment System (BBPS): Enhances customer convenience through enabling bill bills throughout diverse utilities and sectors, covering all routine billers except prepaid recharges.
- National Digital Health Mission (NDHM) and Related Initiatives: Government-led efforts, which includes NDHM and DISHA, purpose to convert the insurance and healthcare sectors through digital infrastructure.
- Fintech Hub at IFSC, GIFT City: A international-magnificence fintech hub in Gandhinagar, Gujarat, to sell India as a global fintech leader.
Conclusion
The fintech sector in India is vibrant and unexpectedly evolving, gambling a wide role in the country’s economic atmosphere by enhancing accessibility, efficiency, and inclusion.
Source: Indian Express