Digital India and its

role in promoting
Fintech
What is Digital India?
• Digital India is a Programme to prepare India for a knowledge
future.

• The focus is on being transformative.

• The focus is on making technology central to enabling change.

• It is an Umbrella Programme - covering many departments.

• It weaves together a large number of ideas and thoughts into a single,
comprehensive vision so that each of them is seen as part of a larger goal.
• Each individual element stands on its own. But is also part of the larger
picture.
• It is coordinated by DEITY, implemented by the entire government.
• The weaving together makes the Mission transformative in totality
• The Programme:
• Pulls together many existing schemes.

• These schemes will be restructured and re-focused.

• They will be implemented in a synchronized manner.

• The common branding of programmes as Digital India

highlights their transformative impact.
Vision of Digital India
Centered on 3 Key Areas

• Digital Infrastructure as a Utility to Every Citizen

• Governance & Services on Demand

• Digital Empowerment of Citizens

Vision Area 1: Infrastructure
as a Utility to Every Citizen
• High speed internet as a core utility

• Cradle to grave digital identity -unique, lifelong, online,

authenticable

• Mobile phone & Bank account enabling participation in digital

& financial space

• Easy access to a Common Service Centre

• Safe and secure Cyber-space

Vision Area 2: Governance
& Services On Demand
• Seamlessly integrated across departments or jurisdiction

• Services available in real time from online &mobile platform

• All citizen entitlements to be available on the cloud

• Services digitally transformed for improving Ease of Doing

Business

• Making financial transactions electronic & cashless

Vision Area 3: Digital
Empowerment of Citizens
• Universal Digital Literacy

• Universally accessible digital resources

• All documents/ certificates to be available on cloud

• Availability of digital resources / services in Indian languages

• Collaborative digital platforms for participative governance

Composition of Monitoring
Committee on Digital India
• Prime Minister – Chairman
• Finance Minister
• Minister of Communications & IT
• Minister of RD
• Minister of HRD
• Minister of Health
• Special Invitees:
• Principal Secretary to PM
• Cabinet Secretary
• Secretaries of Expenditure, Planning, DoT and Posts
• Secretary, DeitY – Convener
Role of Digital India
• The Indian government has also played a crucial role in
promoting the growth of fintech in the country.

• Policies such as Digital India and fintech-friendly regulations

have created an enabling environment for such companies
to thrive.

• The government has also launched initiatives such as the

Pradhan Mantri Jan Dhan Yojana (PMJDY) to promote
financial inclusion and transform India into a digitally
empowered society and knowledge economy.
• These policies and initiatives have helped improve online
infrastructure, increase internet connectivity, and promote
digital literacy, all of which continue to contribute to the
growth of the fintech sector.

• The rise in digital adoption during the pandemic has made

India a trailblazer of the fintech revolution for developing as
well as developed nations.

• The government's biggest and most successful initiative

thus far has been the launch of the National Payments
Council of India to promote digital payments and financial
• With the introduction of tax benefits for businesses and
consumers on e-payments, surcharges on electronic transactions
are being relaxed.

• The government's efforts towards strengthening the fintech space

in India are also evident in its authentication requirements for
electronic transactions.
• This move has brought transparency, integrity, and timely delivery
of financial benefits and services to the public.
• Broadly, the fintech sector is regulated under five
regulations:

(i) the Payments and Settlement Systems Act of 2007;

(ii) Peer-to-peer lending guidelines of 2017;

(iii) National Payments Corporation of India regulations for

payments via the Unified Payments Interface (UPI);

(iv) Regulations governing NBFCs under the RBI Act of

1934; and

(v) Regulations governing payment banks under the

Banking Regulations Act of 1949.
Introduction of the Digital
India Act 2023
• Earlier this year, the Ministry of Electronics and Information
Technology (MeitY) proposed revising the IT Act 2000, a 22-
year-old act drawn during the early days of the internet.

• A much needed and welcome proposal, the Digital India Act

2023 (DIA), is a proposed legislation that aims to act as a
catalyst for the Indian economy by enabling more innovation
and more startups and, at the same time, protecting the
citizens of India in terms of safety, trust, and accountability.
key components of the proposed
DIA
• Enabling an open internet to promote choice, competition,
online diversity, ease of doing business and fair access to
digital markets.

• Provisions around mandating interoperability of digital

services and non-discriminatory access to digital services are
expected.

• Ensuring online safety and trust with robust provisions for

protecting users against harmful content and cyber-attacks.

• Curbing false information and fake news with specific

compliance on information moderation by intermediaries.
• Enabling an open internet to promote choice, competition,
online diversity, ease of doing business and fair access to digital
markets. Provisions around mandating interoperability of digital
services and non-discriminatory access to digital services are
expected.

• Ensuring online safety and trust with robust provisions for

protecting users against harmful content and cyber-attacks.

• Curbing false information and fake news with specific

compliance on information moderation by intermediaries.

• Securing clear pathways for data sourcing and cloud adoption.

Role Of Fintech
In Financial
Inclusion
What Is Fintech?
• Fintech, a
combination of the
terms “financial”
and “technology,”
refers to businesses
that use technology
to enhance or
automate financial
services and
processes.
• The term encompasses a rapidly growing industry that
serves the interests of both consumers and businesses in
multiple ways. From mobile banking and insurance to
cryptocurrency and investment apps, fintech has a
seemingly endless array of applications.

• Fintech refers to the application of software and hardware

to financial services and processes, making them faster,
easier to use and more secure.

• The fintech industry includes everything from payment

processing solutions to mobile banking apps.
FINTECH Universe
How Does Fintech Work?
• The inner workings of financial technology products and
services vary.

• Some of the newest advancements utilize machine learning

algorithms, blockchain and data science to do everything from
process credit risks to run hedge funds.

• There’s even an entire subset of regulatory technology

dubbed regtech, designed to navigate the complex world of
compliance and regulatory issues of industries like fintech.

• As fintech has grown, so have concerns

regarding cybersecurity in the fintech industry.
• The massive growth of fintech companies and marketplaces
on a global scale has led to increased exposure of
vulnerabilities in fintech infrastructure while making it a
target for cybercriminal attacks.

• Luckily, technology continues to evolve to minimize

existing fraud risks and mitigate threats that continue to
emerge.
Technologies
• Fintech companies use a variety of technologies, including artificial
intelligence (AI), big data, robotic process automation (RPA),
and blockchain.
• AI algorithms can provide insight into customer spending habits,
allowing financial institutions to better understand their clients.
• Chatbots are another AI-driven tool that banks are starting to use to
help with customer service.
• Big data can predict client investments and market changes in order
to create new strategies and portfolios, analyze customer spending
habits, improve fraud detection, and create marketing strategies .
• Robotic Process Automation is an artificial intelligence
technology that focuses on automating specific repetitive
tasks.

• RPA helps to process financial information such as accounts

payable and receivable more efficiently than the manual
process and often more accurately.

• Blockchain is an emerging technology in finance which has

driven significant investment from many companies.

• The decentralized nature of blockchain can eliminate the

need for a third party to execute transactions
TYPES OF FINTECH STARTUPS AND COMPANIES

• Consumer banking and investing

• Mobile payments

• Insurance tech

• Digital lending and leasing

• Budgeting apps
Cryptocurrency Fintech
• Cryptocurrency and blockchain intersect with fintech in a
number of ways.

• For starters, several crypto trading platforms have emerged in

recent years that allow users to trade different kinds of
cryptocurrencies and take advantage of decentralized
exchanges.

• And to keep people’s digital currency safe, a number of crypto

wallets have sprung up as well.

• Some examples of cryptocurrency fintech companies

include Coinbase, Blockfi and SALT.
Payment Fintech

• Moving money around is something fintech is very good at.

• The phrase “I’ll Venmo you” or “I’ll CashApp you” is now a

replacement for “I’ll pay you later.” These are, of course, go-
to mobile payment platforms.

• It’s easier than ever to send money digitally anywhere in the

world.

• In addition to Venmo and Cash App, popular payment

companies include Zelle, Paypal, Stripe and Square.
ROLE OF FINTECH
• the global pandemic has spurred governments to embrace
digital delivery methods, facilitating secure and rapid cash
transfers to support vulnerable consumers.

• this shift not only ensures minimal physical interaction but also
paves the way for revolutionary advancements in international
remittances.

• as businesses adapt to the new normal, fintech trends play a

pivotal role in processing payments, enabling e-commerce,
streamlining accounting procedures, and even assisting in
government aid programs like the payroll protection program
(PPP).
Role Of Fintech in Financial Inclusion
• Financial inclusion means facilitating access to financial products
and services to the entire population irrespective of economic and
geographic conditions.

• Accessibility has been an issue in the formal financial system since

its inception.

• However, recent advancements in technology have allowed fintech

companies to positively impact the financial service through
inclusion.

• While 20% of the Indian population is still unbanked, fintech

companies are working hard to bank the unbanked and increase the
financial inclusion possibilities.
• It also opens up upskilling channels for financial institutions
as well. Within the Indian financial system, there are large
banks, mid-sized banks that include niche banks, small
finance banks, regional rural banks and co-operative banks.

• Here’s how fintech can lead the way for financial inclusion:

• Innovation and use of technology

• Easy access to credit

• Innovation and compliance

• Reaching far and wide

• Trustworthiness
Innovation and use of technology
• Fintech companies innovate to enable secure digital
payments.

• With AI, they have been successful in creating instant digital

payments that allow transfers, verification, cashless buying
and selling, and more.

• They are all about convenience and flexibility.

• They are also easy to use.

• From booking LPG cylinders online to paying utility bills has

all become clicks.
Easy access to credit
• Traditional banks typically require a lot of paperwork. Fintech
companies, on the other hand, require minimal paperwork.

• They also use AI for risk assessment on indicators such as income and
spending patterns.

• This is greatly useful for local businesses for micro-financing services

and capital investment.

• Fintech companies also use various tools to educate their audiences.

• Financial literacy is the way to go forward. Awareness about

qualifying for loans and fulfilling credit requirements helps users as
well as fintech.
Innovation and compliance
• Compliances such as identity verification are fewer for
fintech companies.

• Moreover, the RBI has allowed eAadhaar verification and

video KYC to promote digitisation and reduce customer
acquisition costs.

• All this works in favour of fintech companies and they can

innovate and roll out new features and products faster;
while also adhering to government regulations.
Reaching far and wide
• Internet usage has drastically increased in the country. In
areas where physical banks cannot be set up, fintech
companies have a massive advantage.

• They can provide access to basic products and services and

help unbanked users save and grow their money.

• Fintech companies can help uneducated and semi-educated

users with easy onboarding.

• They can also provide customer-friendly services with the

integration of AI and ML with Big data.
Extending Financial Services to the Most Remote
Areas of the Nation

• Fintech companies can reach out to remote locations where

physical bank branches cannot be established because of
increasing internet usage and advancements in online
banking.

• Fintech companies enable people in rural places or low-

income, unbanked persons to save and develop their money.

• This also helps take advantage of government programmes

and assistance by giving access to simple products or
services, including financing or savings instruments.
Disruptive Potential in the Traditional Finance
and Banking Sector
• Fintech companies are pioneering new territory in the formal
finance sector through the creative and inventive use of
technology in the loan process.

• Fintech businesses boost efficiency and expand loan

availability using machine learning algorithms and other data
sources like social media footprints, call logs, purchase
history, and utility service provider payments.

• Additionally, Fintech companies' approval and disbursement

of loans happen considerably more quickly.
Trustworthiness

• Most people are skeptical of online payments due to a lack

of trust.

• Biometric technology plays a major role here.

• It makes banking faster, more reliable and more efficient.

• It can ensure the highest level of authenticity and prevents

data from getting compromised.
Future Fintech Prospects For Financial
Inclusion

• the significance of micro, small, and medium enterprises

(MSMEs) as a vital economic force and a key job provider
cannot be overstated. fintech, in turn, has the potential to
tap into a vast market of underserved populations,
unlocking new opportunities for financial inclusion.

• to address the challenges faced by the mass market, there is

an urgent need for innovative solutions that navigate
restricted regulatory policies and bridge the gap in financial
and digital literacy.
• this fusion of technology and financial services has given
rise to various platforms and applications, simplifying access
to financial services, such as online personal loans, business
loans, and much more. additionally, fintech startups are
emerging as future-oriented service providers for banks,
revolutionizing web banking and presenting a boon for the
industry.

• In conclusion, the rise of fintech has brought about a

transformative shift in the financial industry.
• By leveraging technology, fintech has opened up
opportunities for individuals to save, invest, and participate
in government programs and assistance, thereby fostering
economic growth and empowerment.

• as we look ahead, fintech holds immense potential for

further innovation, collaboration, and expansion. with its
ability to adapt to changing market needs and improve
financial experiences, fintech is poised to shape the future
of finance, offering unprecedented convenience, efficiency,
and inclusivity for individuals and businesses alike.