India To See Regulations In The FinTech Space: KPMG
The Indian government could soon introduce regulations for the burgeoning FinTech industry with investors betting big on payments and blockchain technology. According to an industry report [PDF] by tax and advisory firm KPMG, fintech interest grew in India during January-March quarter of 2017. Armed with digital technology, expert analytics, and the promise of superior customer experience, the fintech sector seems to be ready to take the industry giants head on and lead exponential market growth.
As Manavjeet Singh, CEO & Founder, Rubique noted in his blog on CXOToday, “In India, the growing relevance and demand for fintech services is the result of major socio-economic and demographic changes. As the current generation of millennials’ dependence on the internet increases, the demand for faster, tech-enabled and mobile solutions has also increased proportionately.”
The fintech sector, through constant analysis of trends in the market has created various propositions that are disrupting the banking services sector globally. The Indian market is catching up rapidly with these trends and is building a robust fintech sector in the country. A good example of this is the rising adoption of blockchain, an innovative technology which is an amalgamation of mathematics, cryptography and economics that creates and maintains a database of transactions involving multiple participants that does not require any third-party validation or reconciliation. In simple terms, blockchain is a ledger of transactions that builds a single, indisputable record of financial activities between two or more participants.
“Though at a relatively nascent stage in India, the blockchain technology has generated great interest among the major market players in the fintech sector and many of them are looking to invest in the technology on a domestic as well as global level,” he said. [Read the full article here]
The KPMG report showed that interest in artificial intelligence (AI) also increased. Over the next quarter, insurtech may come into its own in India, according to the report. In such a scenario, the Indian government is expected to release regulations for fintech, particularly related to peer-to-peer lending, which could lead to additional activity, the report said, citing Paytm’s example, Asias largest funding round of USD 200 million in March quarter, it said AI and blockchain may be big bets for investors apart from payments, open data and data analytics.
Over the quarter, investment into Asia’s fintech space hit USD 492 million across 33 deals, as per the report. “Interest in regtech (regulatory technology) and insurtech (insurance technology) is also projected to increase over the remainder of 2017,” it said. KPMG India Fintech Head Neha Punater said, “While payments and lending continue to drive most fintech investment in India, other areas are quickly gaining momentum.”
At the same time, Companies like MoneyTap is changing India’s FinTech landscape that is poised for the long haul journey, and there are big changes on the cards. According to a report by the ACCA (Association of Chartered Certified Accountants, a burgeoning ‘RegTech’ (Regulation Technology) sector which can use automation and data-analysis to provide intelligent, low-cost solutions to streamline this process. Understanding the intricacies of global best practices and adapting them for varying national contexts can set aspiring FinTech hubs on a course for success.
ACCA Head of Development Mohammed Sajid Khan noted that accountants with a more global skill set, will make a stronger mark in the world of FinTech and RegTech, which are the future avenues of the industry. The global competition in these areas have greater potential than just for Silicon Plateau’s technology centre in Bangalore. Whether it is reducing the costs of international trade for Indian businesses or making it easier for global companies to use India as a geographical hub, technology adoption will also necessitate transformations in tax compliance, audit and reporting processes.
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