Fintech in India has grown leaps and bounds thanks to the advent of technology making India one of the top fintech hubs.
Thanks to the government’s push toward the digital economy and emerging technologies and innovations, India is experiencing the fintech boom.
The pandemic, though has caused massive health and economic consequences globally, it has also opened the door to new opportunities.
The global crisis accelerated digital payment development and offered an opportunity to build a better system to support and provide access to safe, affordable, and seamless digital financial services.
For a sustainable fintech ecosystem, a uniform regulatory regime is a must. Fintech relies heavily on technology and with increasing digitalization on the internet.
As online transactions are prone to security threats the need for regulation becomes more eminent. Now, every fintech has its own unique business model.
Constant changes and developments in technology make these models dynamic and hence difficult to govern.
So, it is a challenging task to keep all fintech under the same rules and regulations. It is clear that the regulations need to keep pace with the fintech evolution and a more holistic approach concentrating on creating an unambiguous environment is required.
While facing new technologies and innovations, organizations should evaluate and assess their existing infrastructure and its ability to withstand the changes.
For this reason, a successful strategy is needed that spans infrastructure, regulation, and the wider ecosystem, to create a digital financial service without compromising their security and inclusive development.
A strategy framework for the infrastructure needs to be developed considering the key elements like digital identity system, interoperable payment system, etc.
Fintech has tremendous potential to reshape the financial sector completely and to support financial inclusion, but there are still risks and challenges.
An enabling fintech ecosystem needs to promote financial stability, integrity, and customer protection. Designing appropriate regulatory frameworks can help create pathways for the growth of fintech.
Though infrastructure and regulation are vital points, to maximize inclusion and achieve sustainable development, fintech has to focus on the wider ecosystem.
A focus on a wider ecosystem includes education, funding, better policies, regulatory facilitation arrangements, regulatory sandbox, etc.
An explicit focus on these points can lead to sustainable development and a positive effect on the growth trajectory.
Along with these points, cross-border accordance, wider market access, and implementation of sequenced reforms can serve the industry well and build scalable fintech that supports innovation, financial inclusion, and development.