Demonetisation, GST And Digital Economy Are Building Blocks For India’s Fintech Revolution: Pat Patel
Money20/20, owned Ascential Events, is the world’s premier market-leading payments and financial services innovation congress. This year Singapore hosted the inaugural Money20/20 Asia, which connected companies and individuals that build, disrupt and challenge how consumers and businesses manage, spend and borrow money. On the sidelines of the event, Pat Patel, Content Director, Money20/20 Europe & Asia, tells BW Businessworld that demonetisation, GST and digital economy are the building blocks for India’s fintech revolution.
This is the first time that Money20/20 conference is happening in Singapore. What are the key takeaways?
One of the key things is about the rise of tech platforms. This is a massive trend in the industry right now. Companies such as Ant Financial, Tencent with WeChat, are creating products and services that are beginning to blur the lines between a consumer’s social life, retail life and financial life. And when these three things come together, it is quite a powerful thing and has massive implications for the banks, payments companies, and pretty much the whole ecosystem that is supported around this traditional kind of incumbent ways of delivering products and services. So retail banking is been impacted massively. This is because if you think one app can enable you to do your banking, communicate with your friends socially. And it enables you to purchase goods and services whether it is online, in app, or in many multiple locations. So that is something which we are seeing and is driving greater frequency and customer interactions. That we feel is the biggest trend of this event and we have covered it from tech perspective, payment perspective and the bank perspective and are trying to shake up what the implications are.
So these trends are disrupting the whole process?
Pretty much! And this whole thing is happening mainly in Asia with a little bit in India, a lot in China and bits in South East Asia.
AI, Blockchain, Cryptocurrency, and Decentralization have clearly become a buzzword. These are not only the crucial elements of the future of finance but also anything we do that is digital and requires record keeping. This shift encompasses literally in whatever humans do in modern civilization. So this year do we see the largest escalation of blockchain projects worldwide?
So one thing I would say that we are going to see more of these initiatives taking shape but the scale would still (be) some way from the actual scale. You would see quite a few live implementations. But looking at least three to five years before you see massive traction scale, you will see some outliers. You will see companies like WePost starting to build banking communities around their products. But it is going to take quite a bit of time before this high of blockchain lives up to its potential.
What is the Future of Banking vis-à-vis Fintech? Can Fintech industry create jobs?
Since the industrial revolution, there has always been this change that has massive implications for the traditional workforce or the workforce that is required. For years, you had horses prior to cars and so the industry was built around horses essentially to travel from one place to another. As soon as the automobile came, there was less of a need for horses. It just meant for people to fix cars and for petrol stations and the like. All we are seeing is a shift and that means a fundamental shift in the talent required. So long gone are the days when the banks are recruiting kind of a financial or kind of an accountant related people. They are now started recruiting data scientists, AI specialists and coders and developers. So it is just a shift in terms of the workforce and talent that is required. So (are) the skillsets. So the fintech industry will definitely create jobs but there will be a different demand for the types of skills that are required. There will be a lot more automation going on (which) I am sure you are aware. Whether that is the back end or the front end process, it would just mean there is a slight change in the skillsets required.
Do you think measures like demonetization, GST and digital economy were critical enables for a push towards Fintech boom in India?
Yes, Absolutely. These are the building blocks for (India’s) fintech revolution. It is the foundation required for you (India) to be able to develop new services. And if you think, the play for India, it is moving from a data poor to data rich country because of India’s stack. And so once you can gather this data from multiple resources or industry sectors as well government-based data, then you can start looking at interesting products and services that just takes the friction out of everyday life services that you want. At the moment, there are too many friction points. So if the data travels freely from maybe insurance to financial services to healthcare, you start to see a massive increase in productivity. A new (suite of) products and services can be built on that.
You must be aware that our current government under Prime Minister Modi is working for the upliftment of those who are at the bottom of the pyramid. Does your conference dwell on serving those who are have-nots?
I am his big fan. The way I see fintech is an overused word and if you look at what fintech really is, it should be about financial inclusion. It is about providing products and services to people who are unable to get these financial service products and whether they can get credit scoring which has not been to be done before or the identity layer. But it is essentially trying to mix the two of the physical or the digital service offerings. A lot of people in the villages do not necessarily want to be digital only. It is trying to look at how we can create a great winning proposition that relies on physical wallet maybe and digital-based service. You can blur the two together.
Can India replicate the fintech boom in China?
It can but what needs to happen is raise capital. The investments (that are) coming in is one of the areas. Also, there needs to be (to) create an environment that is conducive to startups to be able to get past that stage. They can go from data and life. If you look at what Singapore has done very well is creating a home for startups. It is a small country (but) punches above its weight. But if you look at (large country) India, I think it still punches way below its weight. I think we need to create these hotspots.
What are your views on digital security? Shouldn’t there be an equal emphasis on that?
It is fundamental, otherwise, initiatives like this can lose credibility very quickly. I think we need to understand where the points of failure are and try to address those whether that is the distribution or whether that is inherently in the tech stack. People say if you are going to build that India’s stack of Aadhaar again, you might build it on a decentralised blockchain. These are things that should be addressed.
Being an Indian, do you envision hosting a Money20/20 conference in India?
I would love to do this in India. We have done roadshows India, in Bangalore and Mumbai. At the moment, we are focussing on building the successful Asia show. So next year, we will have year 2 show and we have Hangzhou (in China) at the end of this year. Let’s see what happens over the coming years. For me, it would be a proud moment of doing something special in India.
