Unlock BFSI 2.0: Covid-19 a bigger boost for fintech than demonetisation

While demonetisation was a trigger for the adoption of digitisation in India, the Covid-19 pandemic had made the sector achieve in 5 months what it would have otherwise taken 5 years to achieve, said top financial technology (fintech) and technology-finance (techfin) experts at the Business Standard Unlock BFSI 2.0 webinar on Friday. While they all agreed that there were more opportunities than challenges for the sector going ahead, they underlined the importance of digital literacy and customer awareness to enable rural India to become part of the fintech revolution.


They were speaking at the second session of Business Standard’s six-part Unlock BFSI 2.0 webinar series. The discussion was moderated by Tamal Bandopadhyay, consulting editor, Business Standard.


The panelists in today’s session, titled ‘All roads lead to the digital world’, were Google Pay Managing Director and business head Sajith Sivanandan, PhonePe Chief Executive Sameer Nigam; Mswipe founder & CEO Manish Patel, Zerodha Chief Investment Officer Nikhil Kamath, VISA group country manager (India & South Asia) T R Ramachandran, and Infrasoft Technologies MD & CEO Rajesh Mirjankar.


Ramachandran observed that several interesting trends had emerged for the fintech sector from the Covid-19 pandemic. Micro, Small and Medium Enterprises (MSME) digitisation had gone up, along with the number of innovative payment solutions, there was a heterogenity of payments and the government had decided to play an active role in the space. "Any sector in which the government is interested is always an interesting sector."


Mswipe's Patel said while he saw more opportunities than challenges in the future, the challenges were real and needed to be addressed. He further said that in contrast with offline payments earlier, more and more SMEs were shifting to online. "Largely, payments for SMEs meant offline. For the first time these SMEs are thinking of going online," he said.


Zerodha's Kamath said: "More and more people are now moving to web platforms for stock trading."


Crises tend to be a fertile breeding ground for innovation and an acceleration of a lot of trends in the fintech space has happened due to the Covid-19 pandemic, Google Pay’s Sivanandan said. "In 5 months, we have seen 5-10 years of progress."


On his part, PhonePe's Nigam said Covid-19 had been very helpful in customer acquisition, with customers themselves turning into spokespersons for digital payment.


Speaking on “sachetisation” of products like insurance and mutual funds, Nigam said: "The moment you talk about ‘Bharat’ consumers, you really need a 'sachet' for everything. Commenting on WhatsApp’s possible entry into the space, Nigam said: "I would like them to enter sooner than later. In payments, the first-mover advantage is really not that important."


Zerodha's Kamath spoke about under-penetration of the broking market in the country and said that in the US equity markets there were a lot more participants. "It is not one broker cannibalising the other; we have to grow as a market as it is still underpenetrated in India," he said. He also said that more capital needed to come into the financial ecosystem.

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