Introduction to Fintech

What is Fintech
Fintech is new financial industry that applies
technology to improve financial actions.

-from research paper based on 200 other

papers

Describe a business that aims at providing

financial services by making use of software and
moder technology

-Fintech weekly
What is Fintech Continue…
Not a new phenomenon !
Finance has always been a pioneer is using technology!
Revenue (₹ Net Profit (₹ IT Spend (%
Bank
crore) crore) of Revenue)
State Bank of 70,000
125,728.68 Up to 5%
India (approx)
65,800
HDFC Bank 87,371.87 6-7%
(approx)
45,800
ICICI Bank 49,079.96 9.5%
(approx)
Kotak
17,248.31 7,399.4 7-8%
Mahindra Bank
Axis Bank 32,348.31 7,613.5 9.3%
ATMs, CBS, Signature Recognition, MICR, Fraud Detection, Mobile Banking, Net
Banking, Program Trading, Online Trading etc.
So how is Fintech different?

Fintech, the abbreviation for financial technology, is a broad category

that refers to the innovative use of technology in the design and delivery
of financial services and product

• Delivery of products and services by Technology

• No Clear distinction between product, service and Technology
• Technology itself may be the product
Technologies involves in Fintech
• Payment system
• Cryptography
• Block Chain + Smart Contract
• Artificial Intelligence and Machine Learning
• Big Data and Analytics
• Cloud technologies
• Process Automation
• Image and voice Processing – including NLP
• VR and AVR
WEF Fintech Framework World Economic Forum:
Functions of financial
services
1. Payments
2. Market provisioning
3. Investment
management
4. Insurance
5. Deposits and Lending
6. Capital raising
Some numbers for importance of FinTech

• The global fintech industry is expected to be worth $917.17

billion by 2032. Currently, it is around $226.71 billion.
• There were nearly 13,100 fintech in the United States of America
in January 2024, which is almost 1,500 more than in 2023.
• The fintech revenues are expected to grow globally to
$197.8 billion in 2024 with America - $66.3 billion, EMEA - $30.5
billion, and Asia Pacific - $101 billion.
• Revenues in the fintech industry are expected to grow almost 3x
faster than those in the traditional banking sector – says
McKinsey.
Fintech Disruptor
Traditional finance vs. FinTech

Characteristic
Traditional Banks Fintech
s
Banks are the institutes that are
Fintech firms improve and automate
licensed to carry out financial
Function the delivery of financial services by
services and focus on client
focusing on customer requirements.
security.
They are regulated by the
There is no particular regulation for
Regulation national or central banks of the
fintech companies.
country.
Fintech companies have larger
Banks have limited market
Growth market distribution because of the
distribution.
new trends and technologies.
Strict regulations lower the risk Flexible nature makes it riskier than
Risk
factor. banks.
Evolution of Fintech
Major benefits
• Customer services and revenue
• Reduce costs
• Greater convenience
• Speed
• Faster rate of approval
• Automate manual processes
• AT & AW
• Advance security
There are few Cons
• Security Risk
• Lack of Hyman interaction
• Complex Network
• System Reliability
• Risk and Fraud
Question and Answers (Q & A)
 Where we are?
• India on fastest growth in world
• India faced with unique situations and diversity, culture,
disparities in income, education, living standards, employment
• One of concern to reach every citizen, make processes, smooth
and corruption free
• Policies to empower and develop citizens
• Digital growth beyond expectations..internet, mobile
• India is continuously facing cyber threats like cyber warfare,
cyber terrorism and cyber espionage.
• Lack of requisite skills, trainings and expertise
 What is Digital India?
• A Programme to transform India into a digitally empower society & knowledge
economy.
• Digital empowerment of citizens:
Universal digital literacy; All digital resources universally accessible; All
Government documents/certificates to be available on the Cloud; Availability
of digital resources/services in Indian languages; Collaborative digital
platforms for participative governance; Portability of all entitlements for
individuals through the cloud.

• To ensure that Government services are made available to citizens

electronically by improving online infrastructure and by increasing Internet
connectivity or by making the country digitally empowered in the field of
technology.
What is Digital India…..contd.

 It is an Umbrella Program – 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.
 Many elements are only process improvements with minimal
cost.
 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
• Shareable private space on a public cloud
• Safe and secure Cyber-space
Vision Area 2: Governance & Services On Demand

• Seamlessly integrated across departments or

jurisdictions
• 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
• Leveraging GIS for decision support systems &
development
 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
• Portability of all entitlements through cloud
Nine Pillars of Digital India
Area 1 Area 2 Electronics Manufacturing

4. E-Governance
– Reforming 7. Electronics
1. Broadband government Manufacturing –
Highways through Target NET ZERO
Imports
Technology
5. eKranti –
2. Universal Electronic
Access to delivery of 8. IT for Jobs
Phones services

3. Public 6. Information 9. Early Harvest

Internet Access for All Programmes
Programme
 Pillar 1. Broadband Highways
1yr: 50,000
GP
• Coverage: 250,000 GP
Broadband for • Timeline: December 2yr: 100,000
all 2026
GP
Rural • CAPEX: Rs 32,000 Cr 3yr: 100,000
• Nodal Dept: DoT GP

• Virtual Network Operators for

Broadband for service delivery. Changes in
• Mandate communication Rules to
all infrastructure in new urban facilitate.
development and buildings.
Urban

• Coverage: Nationwide Integration of

National • Timeline: March 2027 SWAN, NKN,
Information • Cost: Rs 15,686 Cr
NOFN. To be
Infrastructure • Nodal Dept: DeitY
implemented
in 2 years
 Pillar 2. Universal Access to Mobile
connectivity

• Coverage:
Remaining Ongoing
Universal uncovered Programme
Access to villages (~ Increased
mobile 42,300 villages) network
• Timeline: FY penetration &
connectivity
2014-18 coverage of
• Cost: Rs 16,000 gaps
Cr
• Nodal Dept:
DoT
 Pillar 3. Public Internet Access
Programme – National Rural Internet Mission

Ongoing
Programme
• Coverage: 2,50,000 villages (now 130,000) Reach of
CSCs – • Timeline: 3 Years - March 2017
Govt.
made viable, • Cost: Rs 4750 Cr
multi-functional • Nodal Agency: DeitY services to
end-points for all GPs
service delivery

This should
• Coverage: 1,50,000 Post Offices be long term
Post Offices • Timeline: 2 Years vision for
• Nodal Agency: D/o Posts POs
to become
Multi-Service
Centres
 Pillar 4. e-Governance:
Reforming Government through
Technology
 Government Business Process Re-engineering using IT to
improve transactions
• Form Simplification, reduction
• Online applications and tracking, Interface between departments
• Use of online repositories e.g. school certificates, voter ID cards, etc.
• Integration of services and platforms – UIDAI, Payment Gateway,
Mobile Platform, EDI
 Electronic Databases – all databases and information to be
electronic, not manual
 Workflow automation inside government
 Public Grievance Redressal - using IT to automate, respond,
analyse data to identify and resolve persistent problems – largely process
improvements
 To be implemented across government - critical for
transformation.
 Pillar 5. eKranti - Electronic Delivery of
Services
 Technology for Farmers
 Technology for Education – e- • Real time price information
Education • Online ordering of inputs
• Online cash, loan, relief payment with
• All Schools connected with broadband mobile banking
• Free wifi in all schools (250,000)
• Digital Literacy program  Technology for Security
• Mobile Emergency Services
• MOOCs – develop pilot Massive Online
Open Courses  Technology for Financial Inclusion
 Technology for Health – e- • Mobile Banking
Healthcare • Micro-ATM program
• CSCs/ Post Offices
• Online medical consultation
• Online medical records  Technology for Justice
• Online medicine supply • e-Courts, e-Police, e-Jails, e-
• Pan-India exchange for patient Prosecution

information  Technology for Security

• Pilots – 2015; Full coverage in 3 years  National Cyber Security Co-ordination
Center
 Technology for Planning
• GIS based decision making
• National GIS Mission Mode Project
 Pillar 6. Information for All

 Online Hosting of Information & documents

 Citizens have open, easy access to information
 Open data platform

 Government pro-actively engages through social

media and web based platforms to inform citizens
 MyGov.in
 2-way communication between citizens and government

 Online messaging to citizens on special

occasions/programs

 Largely utilise existing infrastructure – limited additional

resources needed
 Pillar 7. Electronics Manufacturing
Target NET ZERO IMPORTS by 2020

 Target NET ZERO Imports is a striking demonstration of intent

 Ambitious goal which requires coordinated action on many fronts
 Taxation, Incentives
 Economies of Scale, Eliminate cost disadvantages
 Focused areas – Big Ticket Items
 FABS, Fab-less design, Set top boxes, VSATs, Mobiles, Consumer &
Medical Electronics, Smart Energy meters, Smart cards, micro-ATMs
 Incubators, clusters
 Skill development
 Government procurement

 There are many ongoing programs which will be fine-tuned.

 Existing Structures inadequate to handle this goal. Need

strengthening.
 Pillar 8. IT for Jobs New
Scheme
Train people in
• Coverage: 1 Crore students IT ready
• Timeline: 5 years workforce
smaller towns & • Cost: Rs 200 Cr for weaker sections
villages for IT • Nodal Agency: DeitY
sector jobs ICT
enabled
• Scope: Setting up of BPO per NE State growth in
IT/ITES in NE • Coverage: NE States NE
• Nodal Agency: DeitY
Ongoing
Skilled
Train Service Delivery • Coverage: 3,00,000 VLEs and
Agents to run viable • Timeline: 2 Years Viable
businesses delivering • Nodal Agency: DeitY CSCs
IT services

Telecom service
• Coverage: 5,00,000
Telecom
providers to train ready
rural workforce to • Timeline: 5 Years
cater to their own • Nodal Agency: DoT workforce
needs
 Pillar 9. Early Harvest
Programmes
Targeted
• Coverage: Elected representatives, All Govt
Mass
employees
IT platform for • 1.36 Cr mobiles and 22 Lakh emails messaging
messages • Mass Messaging Application developed since July
14

• Basket of e-Greetings templates available 1st e-

Government • Crowd sourcing of e-Greetings thru MyGov
Greeting
Greetings to be • e-Greetings Portal ready by 14 August
2014 from PM
e-Greetings on 15th
Aug 2014

• Coverage: All Central Govt. Offices

in Delhi To be
Biometric • Operational in DeitY & Initiated in completed
attendance Urban Development by Oct
• On-boarding started in other 2014
depts
• Procurement of devices – tender
 Pillar 9. Early Harvest
Programmes Approval -
• Scope: All universities on NKN Oct 2014
Wi-fi in All • 400 additional Universities
• Cost: Rs 790 Cr Implementa
Universities
tion done
by Dec 2015

Email to be
• Phase I upgradation for 10 Lakh employees
done primary mode
Secure email within • Ph II for 50 Lakh employees by March 2015 of
government
• Cost: Rs 98 Cr communicatio
n

Standardize • Standardised templates under To be ready

government email preparation by October
design
2014
 Estimated Costs and Impacts

 Overall Costs of Digital India

~ Rs 100,000 Cr in ongoing schemes (only DeitY, DOT & not incl. those in other
line Ministries)
~ Rs 13,000 Cr for new schemes & activities
 Impact of Digital India by 2019
• Broadband in 2.5 lakh villages, universal phone connectivity
• Net Zero Imports by 2020
• 400,000 Public Internet Access Points
• Wi-fi in 2.5 lakh schools, all universities; Public wi-fi hotspots for
citizens
• Digital Inclusion: 1.7 Cr trained for IT, Telecom and Electronics Jobs
• Job creation: Direct 1.7 Cr. and Indirect at least 8.5 Cr.
• e-Governance & eServices: Across government
• India to be leader in IT use in services – health, education, banking
• Digitally empowered citizens – public cloud, internet access
 Challenges & Changes Needed

 Program on this scale never conceived

 Each Pillar/program has own challenges
 Human Resource Issues
 NIC - not equipped for a fraction of this task (obsolesce) - needs revamping &
restructuring
 DeitY – needs program managers – at least 4 more officers at senior levels
 Ministries – Need a Chief Information Officer / Chief Technology Officer
(CIO/CTO)
 Could begin with CIOs 10 major Ministries
 Can be anyone – from within or outside government
 To be patterned as AS & FAs – dual reporting
 Financial Resource Issues
 Mostly structured around ongoing programs : Better focus, need some restructuring
 Some others are process improvements or better utilisation of resources
 A few new programs may be needed – particularly in Electronics manufacturing and
Skill Development

 Coordination Issues
 Program covers many other departments
 Need commitment and effort
Question and Answers (Q & A)
What is Fintech Business Model?
A business model is the fundamental framework that
defines how your business functions. It outlines how you
deliver value to customers or other businesses and, in
turn, how you generate revenue.
How to choose right Business Model
• Define your goal
• Understand your target audience
• Asses core offerings
• Consult strategic Partners
• Evaluate scalability
Disrupting Traditional Banking