A high-level delegation of financial technology (fintech) companies from the UK recently headed out to Mumbai to explore tie-ups in a market with an expanding digital consumer base.
India is acknowledged as the fastest emerging fintech ecosystem globally. As many as 420 fintech start-ups came up in India over 2016-17, leaving behind the US at 305 new start-ups within that period.
The UK is at the forefront of tapping into this ecosystem, with a recent flurry of activities linked with the sector. The Indian High Commission in London hosted a special roundtable with 15 fintech companies from Britain keen to explore opportunities of expanding into the Indian market. The initiative was part of the Access India Programme, a flagship scheme of the diplomatic mission to support UK businesses access the Make in India initiative of the Indian government.
Y.K. Sinha, Indian high commissioner to the UK, said: “As per a report by the National Association of Software and Services Companies (NASSCOM), the Indian fintech software market is forecast to touch $2.4 billion by 2020 from the current $1.2 billion. This provides a great opportunity to UK fintech firms to collaborate in India's quest to transform the lives of 1.2 billion people.”
The Indian government has identified fintech as a major priority for the development of the financial and digital infrastructure in India. It is hoped that fintech companies in India will benefit hugely from the “India Stack” that the government has established through financial inclusion and the Aadhar system.
UK-based companies like Digital Shadows, Onfido, Global Processing Services (GPS) and PESB joined representatives from the UK's Department for International Trade (DIT), the UK India Business Council (UKIBC) and Innovate Finance to deliberate on the barriers and challenges UK firms face when entering the Indian market and the ways to resolve these.
Joanne Dewar, Deputy CEO of GPS, said the “great initiative” would lead to stronger innovative collaborations between India and the UK.
“India offers access to a pool of highly skilled individuals that can make a real positive impact on any business' operations,” she said.
The worry about a tech skills gap has been flagged by UK industry body Tech London Advocates, which revealed that more than a third of tech companies surveyed earlier this year had failed to complete prospective hires because of worries about immigration. In a Brexit-hit scenario, with growing uncertainty around the movement of professionals, collaborations with the wider world are seen as key for British companies.
Against this backdrop, India hosted Fintegrate Zone 2018 in Mumbai at the Bombay Stock Exchange with the DIT sending a significant delegation to the event.
Baroness Fairhead, Minister of State for Trade and Export Promotion at the DIT, said: “The UK is a world leader in the technology industry, and it was inspiring to see the connections between UK and Indian companies on my visit to Mumbai.
“The opportunities for growth are plenty, and as an international economic department we will continue to use trade missions not only to boost UK exports, but also to help businesses of all sizes forge ties and build cultivate relationships with potential buyers and investors.”
Dan McLaughlin, Head of International at Smart Pension, was part of the delegation of British firms and used the visit to demonstrate his company's “world-leading pension technology”
Nations are looking for solutions as they face the demographic challenges of an ageing population. By 2050, India will have over 200 million people aged over 65 and we firmly believe that efficient, user-centric technology - supported by pension auto enrolment - is a key way to ensure citizens have access to high quality retirement provision,” he said.
The company has long-term plans to export its technology to India, where it hopes to make a connect with like-minded people within the fintech sector.
Technology leaders from both countries believe synergies exist in the way people transact within the B2B and B2C space.
According to the British High Commission, the future of Indian FinTech is bright and the UK is a natural partner.
A City of London Corporation report titled ′
′ notes that India is a dominant force in the financial technology sector globally, with 29 per cent annual returns on investments.
"Annual returns on fintech investment in India are highest worldwide at 29 per cent, compared to Asia′s average of 25 per cent and the global 20 per cent standard... In 2017, a demonetisation wave in India led to a 1,000 per cent increase in demand for digital transaction technologies," the report found.
The Indian fintech sector growth so far has largely been as a result of digital payments, with much of the action confined to the B2B space. There continues to be vast scope among those with little or no access to financial services in the country.
The need for incubation facilities for early-stage fintech ideas looking to serve poorer markets may be one area where the UK's strengths within the fintech sector could prove useful.