Banks and FinTech – An Opportunity for Collaboration
India’s technology absorption rate is one of the fastest in the world, which provides great scope for India-UK collaboration, not least as the UK has well-established and world-leading financial services expertise. To examine the issues, the UK India Business Council and YES Bank hosted a roundtable on 24th August in Mumbai.
Where are the opportunities?
The UK plays an important role in providing mentoring services to FinTech companies along with access to global capital (60% of funding for European FinTech firms comes from the UK). This makes the UK-India corridor a strategic link to key states, such as Maharashtra, choosing to focus on the digitalisation of the economy.
The roundtable highlighted immediate opportunities for start-ups developing active platforms of engagement to enable citizens to access public financial services, with longer term opportunities emerging in the skills and education sectors.
Drives to digitalise the Indian economy through the implementation of Aadhaar and GST, and developing e-commerce business and social media platforms, are generating impressive caches of big data. India’s data richness not only opens the door for big leaps in effective service delivery, but allows for the introduction of next-generation technologies such as artificial intelligence across sectors.
Despite ongoing formalisation of the Indian economy, penetration of financial products in India at a social level is still low, which means there is much space for growth. This offers a huge opportunity for innovative UK companies.
What steps need to be taken?
The UK has an evolving role with the FinTech sector which is morphing and maturing as the Indian economy further formalises and links to emerging big-data infrastructure. Our roundtable members brought up two key steps necessary to making real strides.
Learning from the UK’s FinTech journey to date, there is a distinct need to bring about change in approaches to innovation in India – changing mind sets will be critical to developing this sector.
YES Bank are working to tackle this head-on, developing their own accelerator program for FinTech start-ups, launching their second-phase soon. Private initiatives like this encourage an experimentation spirit that drives the FinTech sector. However, this needs to be promoted by Government to develop a broader effective ecosystem for natural start-up proliferation.
The other compelling need is for governments to adopt Data Protection (DP) regulations that address the issue of Data localisation and data privacy. With the implementation of the GDRP, UK businesses are increasingly familiar with gold standard data protection. This is yet to emerge in India but is necessary for establishing trusted rules of engagement between business and citizen data.
Large corporates have successful systems which have evolved over many years. Making changes to their systems is expensive and time consuming, regardless of whether you are a UK or India business, and it is here they look towards FinTech start-ups to solve these problems. FinTech offers a unique opportunity to make huge strides in the business and public services outcomes and it is this agenda that will form the centrepiece of the upcoming India-UK FutureTech Festival in December (tickets now available here).
