Adoption of financial technology will ride the growth tide for financial services in India, according to panellists at the opening session of VCCircle Financial Services Investment Summit 2015 held on August 26.
More than 200 financial services entrepreneurs and investors attended six sessions led by 40 panellists at the summit.
The opening panel moderated by Tamal Bandyopadhyay, Advisor, Bandhan Bank, and Consulting Editor, Mint, started off with a discussion on technology being a growth driver to the success of the country’s financial services sector and how it can be used to accelerate the pace. The panel witnessed active participation from Ashish Chauhan, CEO and MD, BSE; Prashant Purker, executive director, ICICI Venture Funds; GS Sundararajan, whole time director, Shriram Capital Ltd; Bala Deshpande, senior managing director at NEA; and Sanjay Kukreja, managing director at Chrys Capital Advisors.
“Technology is an opportunity to transforming the whole sector,” Sundararajan at Shriram Capital said. “We are largest technology investors today,” Deshpande of NEA said. “And we know how these startups are working towards realising the dream of financial inclusion.”
The panellists were also quick to applaud the government’s initiatives to boost financial inclusion to every Indian including the underprivileged. “I am happy to see initiatives by the government like the PMJD (Pradhan Mantri Jan Dhan Yojana) Scheme. Things like opening of bank account are necessary but not a sufficient condition; the question is how to follow these up,” Purker of ICICI Venture Funds said.
The panel noted the role of private equity/venture capital in funding the corporate and startup ecosystem in the country. Kukreja of Chrys Capital was quick to draw a comparison between China and India with the latter still having a long way to go for PE investments. The panel stressed on the need for banks to be a big booster for the corporate sector as currently they are unwilling to lend money to the sector given the fact that many firms are suffering from low profitability and earnings. “I don't see banks playing a big role in funding startups and I have my doubts that capitalising banks will fuel startup funding,” Chauhan of BSE said.
Financial services experts emphased the importance of startups in digital lending space using technology to disrupt the current systems of lending and borrowing. “With the help of technology developed by young companies, small firm lending will reach $100 billion in terms of spends in a few years,” Piyush Khaitan, co-founder and MD at NeoGrowth Credit, said.
“Automating efficiency in the lending process is the key,” Gaurav Hinduja, co-founder at Capital Float, said. “One structural difference between India and the UK, the US is lending rates,” Gaurav Chopra, co-founder at Indialends.com, said. “Fintech will be one of the most disruptive ideas in times to come,” Sachin Tagra, head financial services at Brand Capital, said.
PE fund managers are also very optimistic about technology as a game changer in financial services sector. “As far as disruption is concerned, we have learnt that market place is changing faster,” Promeet Ghosh, managing director at Temasek Holdings Advisors, said. “Biggest disruption through technology is going to come in consumer lending and it will play big,” said Sunish Sharma, managing partner at Kedaara Capital.
“Cheaper smartphones and data availability are positives for fintech,” Rajiv Sabharwal, executive director at ICICI Bank, said in his keynote address. According to him, digitisation is happening internally and externally in the banks. “The low costs of smartphones and availability of fast data have led to lot of excitement in fintech,” he said.