Aadhaar has achieved “an awful lot” to become among the largest identity schemes of the world, but it may have been introduced 10 years too early, says a renowned fintech commentator. "As I see it, Aadhaar started off as a visionary programme in 2007," says Chris Skinner. With the benefit of hindsight, one would say one would do it differently in 2017, he told BusinessLine here.
CENTRAL REGISTRY
This is because one has the advantage of the distributed ledger technology (blockchain), which decentralises the massive database and renders it more secure. The very fact that Aadhaar resides on a central registry poses a challenge, since it lends itself to hacking, as has been reported in recent times.
In fact, even distributed ledger technology is at an experimental stage now. So it might just be that Aadhaar's time has not come yet, Skinner reasoned. A leading author and speaker, chair of the European Networking Forum, the Financial Services Club and Nordic Finance Innovation, Skinner was hosted by SunTec Business Solutions here.
CHALLENGE IN WEST
Known worldwide as a strategist on financial markets, he said the wave of digitalisation has thrown up associated challenges and opportunities across the globe. For instance, Europe and America have to contend with technology infrastructure of the seventies and eighties. "So they're in a legacy economy syndrome where things are soo complicated that if you try to tinker with it, you potentially bring down the whole system."
But India and China are doing some amazingly interesting things, in different ways, in what are essentially growth economies, as recently articulated by the IMF. "In India, this growth has been driven to some extent by demonetisation. What I have been able to learn is that it has been received well by politicians, except the Opposition," Skinner said.
DEMONETISATION BOOST
Of course, it returned as much as 99 per cent of the large denomination notes within a year. So its objective of exposing the dirty money trail may not have been achieved. What demonetisation did do was drive the move towards mobile wallets and mobile payments and push those concepts through.
Skinner was effusive about the success of Paytm founder Vijay Shekhar Sharma, whose aim is to make it India's largest bank with 500 million accounts by the end of the decade. "This would be driven and supported by Chinese players Alipay and Ant Financial. These is a lot of Ant Financial capabilities sitting behind Paytm." This is made possible by the plug-and-play software and open source structure. The figures speak for themselves for their combined success, Skinner said.
FINTECH INNOVATION
Paytm's user base of 130 million in October 2016, had grown to 250 million by October 2017 post-demonestisation. It is not as if it was the only innovation here that has interested Skinner, but the one he was closest to. The Aadhaar story is equally compelling.
On innovations in the fintech space, he said when we have banks doing things already, a lot of what comes out in terms of innovations are banking-like. "But when you have no banks doing anything to people, then what you have is completely new thinking. This is what is so exciting about Africa, Indonesia or the Philippines." Visits to countries such as Rwanda, Ethiopia or South Africa, the Philippines or Indonesia have been revealing in this context, Skinner said.