A man know for not mincing his words, Niti Aayog CEO Amitabh Kant believes that physical banks will perish in the next 5-6 years. Asserting that India is progressing fast to become a digital payments economy, Kant said: “You will see the death of physical banks in the next 5-6 years, because the cost (to operate them) will be so enormous.”
He was speaking at the second IAMAI FintechX conference held in Delhi where industry leaders deliberated on making sense of data, solving issues such as financial inclusion and creating a product to serve millennial customers.
“India will become data rich before it becomes rich,” Kant said.
He also added that data costs in the country have reduced by 50 percent in the past year, paving way for digital transactions. Monthly digital payments have increased from USD 15 million in November 2016 to USD 359 million in March 2017.
The consensus among fintech leaders was that digital is the way to go to make financial inclusion a reality in India. “Fintech as a tool for financial inclusion is the goal. The vision is that each individual, irrespective of the type of phone they use – smartphone or a feature phone – should be able to make digital payments,” Dr Saurabh Garg, Joint Secretary, Department of Economic Affairs, Ministry of Finance said.
Lenders are using data through mobile phones to identify customers and their spending habits.
“The Aadhaar design principle is based on micro-services and in this case we have a first mover advantage over other countries. There are hardly any countries in the world which have a stack like the ‘IndiaStack’. If we can develop an ecosystem around APIs of identification, it will be of great potential,” said Mrityunjay Mohapatra, Deputy MD and CIO at State Bank of India and Chairman of FinTech committee of IAMAI.
“All eKYC will be made Aadhaar-based soon and the spread of physical infrastructure in the next two years will be a game changer for the industry,” Kant remarked.
With more than 50 percent of India’s population below the age of 25 and a growing number of individuals preferring experiences rather than ownership, panelists agreed that FinTech should be used to create products for such a market.
This was one of the hotly debated topics during a discussion on “Emerging models based on digital data” at the conference.
“The individual who is a millennial is thinking differently. This individual today is an individual who is impatient,” said Navin Chandani, Chief Business Development Officer, BankBazaar.
(Moneycontrol was an Online Media Supporter for the IAMAI FintechX conference.)