‘India will be data rich before getting financially rich’

Empowerment of the next billion through digital platforms and financial services will bring about a major transformation in the electronic commerce and delivery of services, inspiring a generation of entrepreneurs.

With over 200 million people in India set to get hooked to smart phones, in addition to 300 million now, and millions of people in rural parts India taking to financial services, India is expected to see transformational changes, according to experts at the recently concluded Global Entrepreneurs Summit here.

They believe India is at the cusp of a revolution of access to financial services through different modes and this in turn will accelerate electronic commerce.

Speaking on ‘Byte into a Better Future: Fintech Disrupters,’ Diana Louise Patricia Layfield, Vice-President, Google, said, “With a population of 1.2 billion people, India will become a data rich nation before it transforms itself into financially rich. It is interesting that 10 per cent of the population has access to more funds because they can share their data.”

“With digital empowerment, the rest of the population will be able to access funds. Significantly, this will bring down the cost of delivery of services and financial transactions,” she added.

Rajiv Behari Lall, Founder and CEO, Infrastructure Development Finance Group, said, “Understanding the challenges of Indian rural households, IDFC has developed Micro ATMs, a hand held device taken to the doorstep of the rural households. People get to access this ‘Bank in a Box’ device, which is made through Aadhaar interface. Most of the banking services such as deposit of funds and withdrawals can be made.”

“Like IDFC, a number of banks and financial services companies are innovating to reach out to people with new models. This will only get bigger,” Lall said.

Speaking on ‘Payment Platforms: What's the Next Game Changer,’ Sachin Bansal, Executive Chairman and co-founder, Flipkart, said, “Digital payment transactions will get bigger and everybody and anybody can become an entrepreneur even from a remote location and sell his goods and services. While consumers will find this easy, those offering services will seek to pursue stickiness of consumers.”

“The monopoly situation in a number of sectors will pave way for oligopoly where small players compete with established ones. It is already being experienced. And digital consumers will embrace this change and gear for new opportunities,” he said.

Referring to Aadhaar, Bansal said, “It will open opportunities for financial technology companies to play a role in the country's financial inclusion drive.”

Ruth Patricia Goodwin-Groen, Managing Director at United Nations Capital Development Fund, said, “With more than 200 million people (this is equivalent to the population of Brazil) set to be added into smartphone platforms in India alone over the next 12-18 months, the scope to offer services will get that much bigger.”

The cost of transactions will also come down as volumes go up. Digital empowerment will pave way for momentum in electronic commerce and this revolution will encourage new players with their innovative approaches, the experts said.

Lisa Mather, Vice-President, Paypal, said, “Financial inclusion will be disruptive. In some of the innovations, India will lead the world with new approaches. Around the year 2000, there was a boom and burst of micro-finance institutions. Now we are witness to a wave of disruptive fintech models.”