The Global Fintech Festival 2023 – Key Takeaways

The Global Fintech Festival 2023 has come and gone, leaving a lasting impression on me. Firstly, the festival's scale, energy, and success blew me away. It was one of the best conferences I have attended in my decade-old career as an investment manager. The energy was palpable, and the mood was positive across all the speaker sessions, delegates, founders, and visitors attending this session. Every attendee could inhale the sweet smell of the success of the UPI and payments industry in India. It was truly global in nature to see Government delegates and speakers worldwide sharing the stage in India.

Here are some of my takeaways on the GFF from the eyes of an investor and a consumer of the fintech products.

Payments

One of the key takeaways from the opening session for me was the scope of growth in payments in India and globally. The NPCI chief mentioned in his remarks that he sees payments crossing 100 bn transactions a month, a growth of 10x from Aug 2023 in the near to medium term. When this happens, we will see a positive circle of motion underlying this kind of velocity of payments. Payments are the first step in bringing cash into formal chains of financing. As more money in circulation is fed into formal financing chains, we are setting the wheels of lending, wealth tech, insurance tech, and commerce in motion to achieve higher growth scales.

Frictionless Lending Platform

One?area to look forward to will be the success of RBI's pilot using the frictionless lending platform in the dairy sector. The platform aims to integrate data sources across the spectrum, which can provide a holistic view on the profile of the borrower in just a few minutes. If the borrower profile is within the underwriting criteria set by the lender, the loan is disbursed in a couple of minutes. The pilot in the dairy sector has data from 22 different sources coming together on one platform. This would otherwise require spending time and effort to collect data from other banks, milk co-operative boards, tax reports, if any etc., sequentially or haphazardly. This can be a harrowing process for both the lender as well as the borrower, and loan disbursements are ineffective and inefficient. The outer limit of TAT for lending using the Frictionless platform is 10mins. If the quality and execution of lending using the public platform of frictionless credit is successful, it will be a game changer for the lending economy in the country. We will truly democratize the availability of credit and reduce the ill effects of informal lending practices which are still prevalent for many sections of society.?

NPCI and RBI Innovation Hub

The quality and kind of exhibits and stalls, especially from NPCI and RBI Innovation Hub, were par excellence. The content of kiosks, screen displays, and initiatives taken by them is proof of the progress made in the fintech space in India. Experiencing the product launches of NPCI at the various NPCI kiosks delighted the customer in me. Hope the UPI Lite X using the NFC technology (near field communication) becomes mainstream for expanding the payments ecosystem in remote areas of the country. It was heartening to see the quantum and variety of startups in the field of payments, lending, security, and fintech infra.

Nascent, yet growing market

I met several public market investors in GFF who had come to check out the innovations happening in the fintech industry. The awareness level could be higher beyond the founders and investors in the fintech space. It also reflects the nascency of the investment stage in the private markets in our country. Financial Services contribute to 37% of the Nifty 50 Index in India. It is the largest sector in the Nifty Index by a mile and has been so for a decade or more. However, it is still constituted by traditional lenders. Even as our country crossed 10 bn UPI transactions in August 2023, we are yet to have a well-established listed fintech in India apart from Paytm.

Profitability of Fintech

As an investor, I came out disappointed to not get a clear picture on the monetization strategy and road to profitability for the companies in this space.?

Use of AI in fintech

Honestly, I came out unimpressed on the potential of AI in fintech from the GFF 2023. As an investor, I was looking to get some insights into the potential use of AI, which can have a game-changing impact for the ecosystem. What I could gather from various sessions was the use of AI for incremental features or value additions. I believe the ecosystem needs more time and thought to leverage AI in fintech. Or the companies for competitive reasons are not sharing their gameplan in a public forum.

Cross Border payments

This is the next level to be unlocked for NPCI and UPI. There was lot of focus on this area during the GFF 2023. Rightfully so, because once this level is achieved, Indian businesses can leverage the China+1 strategy seamlessly without any leakages and compliance-related delays due to cross-border restrictions. However, over here also, I believe NPCI is doing some great work. The goal of NPCI is to have payment pipes for cross border payments with more than a dozen major countries by 2030.

One gripe on the GFF was that a lot of it was concentrated on payments and lending. I hope future editions of GFF will see much more participation from the areas of insurance tech, wealth Tech, and invest-tech and give a holistic flavor on the fintech landscape of India.

It was one of the most well-organized corporate festivals I have attended. The GFF saw footfalls of 40,000- 50,000 on 2 of the 3 days. For an event of this scale and schedule, the events were almost on time, barring 5-10 mins. This is incredible considering the tightly packed schedule of the sessions spread across three floors of the magnificent Jio Convention Centre. I am incredibly thankful to GFF for organizing this successful conference and look forward to attending it next year.