New Delhi [India], March 25 (ANI): India is on way to becoming Asia's top financial technology (fintech) hub with 87 per cent adoption rate as against the global average of 64 per cent, RBI Governor Shaktikanta Das said on Thursday.
The fintech market in India valued at Rs 1.9 lakh crore in 2019 is expected to reach Rs 6.2 lakh crore by 2025 across diversified fields like digital payments, digital lending, peer to peer (P2P) lending, crowd funding, block chain technology, distributed ledgers technology, big data, RegTech and SupTech, he said while addressing the Times Network India Economic Conclave.
"In a world where fintech companies are leading in terms of the volume of digital transactions and playing a more active role in the banking and finance industry, it is important that the commercial banks adapt to the technological changes and work in tandem with these entities so that in future they are part of the ecosystem rather than competing with fintech companies for business," said Das.
"A meaningful collaboration and co-existence in providing affordable and efficient value-added services will help both the worlds."
In the dynamic world of financial services, and more so after the pandemic, fintech is expected to challenge the financial sector with innovations and its exponential growth, said Das. Harnessing fintech for customer services will effectively control costs and expand the banking and non-banking businesses.
Das said the increased use of digital payments brought about by Covid-19 can fuel a rise in digital lending in the current decade as companies accumulate consumer data and enhance credit analytics.
This in turn presents new and complex trade-offs between financial stability, competition and data protection, thereby warranting new regulatory frameworks and novel ways of monitoring.
"It is imperative for the financial sector regulators to monitor global developments and formulate policy responses to the risks and the opportunities," said Das.
The RBI Governor said he foresees four distinct sets of banking landscapes emerging in the current decade. The first set will be dominated by a few large Indian banks with a domestic and international presence.
Second, there will be several mid-sized banks with an economy-wide presence. The third set will encompass smaller private sector banks, small finance banks, regional rural banks and cooperative banks, which may specifically cater to the credit requirements of small borrowers.
The fourth segment will consist of digital players who may act as service providers directly to customers or through banks as their agents or associates. "In fact, digital players will increasingly emerge as critical pieces across all segments." (ANI)