Fintech Open Summit: Relevance
- GS 3: Achievements of Indians in science & technology; indigenization of technology and developing new technology.
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Fintech Open Summit: Context
- Recently, NITI Aayog has organized a three-week-long ‘Fintech Open Summit’ to showcase the importance of the fintech industry in India.
Fintech Open Summit: Key points
- The Fintech Open Summit has been conducted in collaboration with PhonePe, AWS and EY.
- Fintech Open is a first of its kind initiative, which will bring together regulators, fintech professionals and enthusiasts, industry leaders, the start-up community, and developers to collaborate, exchange ideas and innovate.
Objective of Fintech Open Summit
- Encourage an open ecosystem across the fintech industry
- Foster innovation and growth
- Ensure financial inclusion and leverage new models like Account Aggregator to unleash the next wave of fintech innovation.
About Open platform
- An open platform is created using public investment, wherein numerous private entrepreneurs, start-ups, and developers can join to create new solutions. Example: Cowin, UPI etc.
- 270 banks are connected with the UPI and many entrepreneurs and start-ups have provided solutions that have helped increase the country’s fintech adoption rate—which is the highest globally at 87%.
What is fintech?
- FinTech is generally described as an industry that uses technology to make financial systems and the delivery of financial services more efficient.
- FinTech is broadly used to describe emerging technological innovations in the financial services sector, with ever increasing reliance on information technology.
Fintech services importance
- Increasing digitalisation: India is witnessing increasing digitization with people getting greater and easier access to financial services.
- Provide better security: The shift in consumers’ financial behaviour—from cash to e-wallets and UPI has done away the issues associated with cash transactions.
- More equitable: The expansion of digital payments is an important pivot for creating a more equitable, prosperous, and financially inclusive India.
- Accelerated financial inclusion: The fintech industry is playing a critical role in facilitating financial inclusion across the country.
Fintech industry in India
- In India, FinTechs and digital players could function as the fourth segment of the Indian financial system, alongside large banks, mid-sized banks including niche banks, small finance banks, regional rural banks and cooperative banks.
- It has the potential to fundamentally transform the financial landscape where consumers will be able to choose from broader set of alternatives at competitive prices, and financial institutions could improve efficiency through lower costs.
- India has emerged as the fastest growing FinTech market and the third largest FinTech ecosystem in the world.
- The rapid and transformational changes in financial services brought on by FinTechs need to be continuously monitored and evaluated.
- Regulators need to be creative, nimble and tech savvy with their approach.
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