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Fintech Fest 2020: Risk management will help bankers differentiate and create an edge

Indian banks have to rapidly adapt to disruptive changes fetched by the pandemic through data and digitisation

End of July the largest two-day, virtual fintech meet-up, the Global Fintech Fest 2020, took place in India. The second day of virtual fintech meet-up yet again saw head honchos and industry chiefs across the Fintech & BFSI ecosystems across the globe share persuasive ideas and thoughts. The two-day fest is organised by Fintech Convergence Council (FCC), Payments Council of India (PCI) and National Payments Corporation of India (NPCI).

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Speaking at the virtual fintech meet-up, Uday Kotak, Managing Director & CEO, Kotak Mahindra Bank betting big on the ‘risk management’ function across banking, said, Risk and risk management will play the big differentiator for banks and is what will help bankers create an edge for themselves in the industry.” “Risk management will continue to remain with banks” he stressed, in a discussion with G Padmanabhan, Non-Executive Chairman, Bank of India.

Talking about a more inclusive eco-system, Mr. Kotak said, “This is an era of cooperation. Banks and fintech will continue to co-operate in some areas while competing in the others, however, digital players will emerge ahead. He also stressed that policy supervision, regulation and governance have to be ownership neutral and have to be the same for both the public sector and private banks. Meanwhile, talking about fintech players, he also said he will look at investment opportunities in the sector.

A very different future

Reiterating on a more data-driven and digital model, Arundhati said, “Banks will have to be ready for the future. The future is going to be different from anything that we have seen in the past. Banks will, therefore, have to look at how they approach the entire customer journey—whether they want to be distribution-heavy and branch-light or asset-light, liability-heavy and transaction- heavy, however being digital and data-driven will be imperative for banking.”

Rajan Anandan mentioned that while India has over 40000 startups with only 10% having raised venture capital. However, he said that in the last 4 months, every Indian startup has improved its profitability. He observed that products are getting better and distribution is getting smarter, and as a result, the ecosystem is going to improve. He was hopeful that by the end of 2021, the health of the Indian startup ecosystem will be better placed.

India FinTech Report (2nd edition) – a comprehensive study on the fintech eco-system for the period 2019-H12020.

The report finds that India has 2174 fintech startups, wherein Bengaluru, Mumbai and Delhi comprising of 447, 437 and 208 start-ups respectively, led the fintech momentum in the country. They were followed by Hyderabad and Gurugram comprising of 133 and 128 start-ups respectively. Apart from the aforesaid top five FinTech destinations, the rest of India accounted for 738 start-ups.

According to the report, India fintech raised $5.4 BN in equity funding during the period. In terms of India’s fintech investment trends, the report showcased a stage-wise break-up of the total fintech funding stating – ‘Series G’ led the stage-wise funding at 1818 mn followed by Series B at 868.8 mn.

In a segment-wise overview, the report highlighted that the first wave of disruption in financial services was led by digital payment startups, followed by digital lending, wealth management, and InsurTech startups. However, the second wave, or ‘FinTech 2.0’ will be led by Neobanks that aim to redefine customer-centric consumer and business banking experiences. The total funding raised by Indian Neo banks so far aggregated at $139.8 Mn. This does not include $93 million raised by Razorpay since 2019. In their efforts to become a part of the next wave of FinTech innovation, venture capital & private equity investors have started investing heavily in Neo banking startups.

About the Fintech Fest 2020

The Global Fintech Fest has witnessed a participation from 50+ countries, 100+ speakers and 10000+ registered delegates in attendance. Significantly, 45% are international speakers and 30% women speaker participation. Of the total delegate participation, around 30% are from the international community. In addition, there are 75 Indian and international 75 exhibitors showcasing their products and services in the two-day fest. Global Fintech Festival has brought together representatives of banking, financial technology and investment industries from across the globe to host impactful dialogues, public discussions and a curated exhibition of the latest disruptive technologies.

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