 Okay, I think we're live. Yeah, and I have shared my screen. So you should be seeing the browser Okay, yeah, hi, so the agenda for today's meeting is based on seeking inputs for the stakeholder consultation related to FinTech issue, so that's the consumer. What is being invited to provide inputs to this working group of a steering committee. So to give some context, the Ministry of Finance and Corporate Affairs. So our finance minister Arun Jaitley constituted a steering committee for all FinTech related issues. So this committee has all the secretaries of various departments including like IT, finance and services, MSME and Customs and UIDI, CO, RBI's Deputy Governor and the terms of reference of this committee is they have broadly mentioned five points. So of which one is to see where we are on the FinTech sector globally and how India is progressing when compared to the rest of the world and how do we better understand the current state of the industry and to also analyze critically the regulatory regimes spread over different entities that has impacted growth of FinTech in India. So a quick note here, so we are cashless consumers and at 50p we've been covering a lot of payments related topics but FinTech slightly covers the entire spread of the technology that is powering all layers of the finance. So that includes banking and that would include MSME lending, banking, lending payments, investments and be it like the capital markets or the mutual funds or insurance. So in all these sectors there has like so it's so when we say like FinTech it's not just payments so it will be payments plus the new credit, digital lending plus say insure tech. So that's the overall terms of reference of this committee so we will not just be looking at payments but broadly all of FinTech but I think the payments being the busiest kid in the entire space so payments would attract significant attention. The third point is of course how do we leverage FinTech on to say MSME financing or affordable housing other it even like goes on to say like how do we do land record management which is directly not essentially a place where traditional FinTech has been there but because FinTech is encompassing technologies which could be potentially used in solving these problems so these are also added along and one of the key focus for us is essentially around increasing access and adoption of digital payments and to study developments in all these areas. So this will be like this is around like how do we study how do we know better about the entire range of FinTech that is that can be possibly deployed which will trigger growth on all these sectors and the next point is about like how do we develop regulatory interventions so how do regulators better equip themselves so what can be a business friendly light ditch regulation model which also takes care of regulatory concerns as well as is friendly to business so one such model that's been talked around is the regulatory sandbox model and how that will impact like the innovation innovative ability so that like the innovators can focus more on their innovations rather than on regulations and so the last point encompassing all these is like how to promote like ease of doing in business so these are like some of the points and then the next two points is around like how do we use data for digital lending so it talks about data with GSTN and data with credit information companies it actually mentions in open domain but I'm not really sure what portion of that is in open domain and how that impacts so from a consumer standpoint this also means that what are the data rights so some of that conversation is also part of this steering committee's terms of reference they are particularly inclined to look at these particularly with the view of developing applications for financing MSMEs and they are also interested in working out unique enterprise ID numbers similar to the UIDIs for the enterprises and how do we go about international cooperation opportunities in context so recently may have heard that UPI did a cross border remittance UPI was added as a payment option for cross border remittances so some of these opportunities like how FinTech can be used to collaborate on cross border opportunities so these are the terms of reference of the steering committee that is being formed by Ministry of Finance now that steering committee has decided to call upon for a stakeholder consultation and we were invited to that along with a set of representatives from the industry so the questions that were posed to us were listed here so NIPFP is organizing this stakeholder consultation for Ministry of Finance Department of Economic Affairs this steering committee so the questions posed by them include the eight questions that are in the document so we will go through one of these and we will see I have made some notes hoping we can expand on them and discuss on them during this hangout through the week until when the window is open we could feel free to reach out and we can add your views as well so Abhishek you have any comments we will go to the questions I think we can start going for the questions let me just introduce the questions so according to the list of questions there are about eight questions which NIPFP has put out asking for responses the first one I think is on what are the current roadblocks to provide lending and other financial services through a fintech solution to the people who don't have access to formalized bank lending so this question I am assuming is talking about all those companies which are doing alternative lending like if they are using any alternative data sources for lending then the companies would fall under this so lending is one part it also talks about other financial services so that would even include payment payments say in the case of other enabled payments because it particularly talks about bank lending or even the other financial services could potentially include other financial services like not just lending but say insurance and investments as well but particularly it talks about what are the roadblocks for a fintech solution to deliver to that category of market which currently is not served by the formal banking sector I just came about one response thinking consumer in mind that is like some of the technologies that are available and some of the regulations need for use of such technology such as the other AKYC while it reduces the costs for the providers providing these lending and financial services it adds certain risks as well that would include new methods of fraud or the data risks privacy and cybersecurity risks and these are actually vastly unknown for that consumer especially the one which is not in the urban India and which is not being served by the government but it is also about potentially a rural person with a lower literacy understanding these and then having access to these so what actually happens is because of this information arbitrage we have also seen some frauds happen in the delivery of the cash in the last mile through APS the banking correspondence there are issues on their sustainability and some of them do indulge into fraudulent practices so what essentially this means to the consumer is the consumer is not having access to the formal lending solutions and they go back to say the informal lending or informal modes of payment so that includes cash so in order to kind of break this one thing that is needed is beyond the awareness on existence and use of certain products which has been happening let's say which is also needed is a broader digital literacy so there is something called as national digital literacy mission so they do undertake some of these digital literacy programs but more trust is needed specifically on initiatives such as the RBI which tries to caution users against some of these frauds so what this basically means is then we weigh them off and probably have better confidence in using these products and services so there is a need for an increased messaging both say by the government and the industry and the regulator on the risks and safety measures which will improve the general awareness and confidence will also come when firm action is taken against fraudulent practices so this is a much higher corporate level so this is one thing that I could think of so you mentioned something about use of informal use of new data sources for informal lending so are there roadblocks in that because one potential roadblock is essentially we don't have data protection regulation yet so there is that's like a gray area for anyone who is operating right now because right now it's not regulated but the future course of regulation is unknown so it's like a potential unknown for businesses to enter the business with so is there anything you want to add on that I think I've heard a couple of things in the past where I think especially among the promises like one which lent to students where students are not being properly informed about the terms and services of these services so they just end up signing up for them and the whole structure itself is like upon the scheme so the point about the data protection is a good one because that is something that we need before we need some sort of solid work on the data protection thing before we start regulating using alternatives to data and so one other thing that can serve as roadblock that I see is around the other regulations and the use of and the distinction on the use of other by the new of index so some of them so the banks do have higher level of access and some of these fintechs just got their access revoked off the EKYC system so what this does is essentially it provides an unlevel playing field and it also relying on the other EKYC infrastructure to find a significant risk for them because suddenly they were cut off and they are unable to carry on their business so there has to be a structured regulation which either allows or does not allow access to certain systems be it other tomorrow it could be say public credit registry so there has to be a clear policy on who gets access and what level of access and so that will determine the ability of a fintech firm to kind of gauge their costs and better invest on their solutions and product design so the second question talks about have you considered launching fintech products or services but not done so due to compliance issues in what sectors backing investments insurance do you face significant compliance issues so one thing I was just mentioning was the EKYC access is a compliance issue and the other set of regulations and compliance keep changing rapidly so that adds a cost and brings along with an uncertainty found was like all the NISM certifications that are required to kind of enter the investment advisory services to operate into the investments so one needs to have an NISM certification and all the NISM certification exams require other so I don't know why that has been force fitted there but that I knew at least one founder who had to go and enroll for Radha before writing the certifications which is a precursor to starting up so like on a scale of ease of doing business this is like a deterrent so you have any thoughts on the subject hello so the next question is on what steps have been taken by regulators to ensure a fintech company is not currently regulated by a particular regulator and is able to seek clarifications on its services what is the nature of responsiveness and engagement offered by regulators you have interacted with and how this can be improved so firstly from a payments consumers perspective we are yet to have the payments regulators so there isn't a regulatory body that is available yet but in terms of maybe we are not a fintech company so we don't have the experience of reaching out to regulator for clarifications and the responsiveness but in general this is a cause for concern where we don't know who is the regulator and the regulator is also not mandated to be responsive so and especially to the consumer so why this question asks about regulatory responsiveness towards a fintech company so we need a clear set of guidelines on regulatory responsiveness particularly on payment space where there is no regulator today and one thing I felt that this question was posed more towards the cryptocurrency payment systems cryptocurrency startups which are the fintechs which are operating and there is no clear regulator on these cryptocurrencies so the sad part is we have had the cryptocurrency band and any interactions with the banking system has been cut off I don't know what kind of responsiveness they are receiving from the regulators I wish maybe we should be reaching out to some of these crypto startups and see if they have any comments on this okay sorry there is an organization like they assert in for fintech I think it was discussed a while back because right now there is no way to report a breach of fintech so I don't think the fintech certain has actually started functioning yet because there has been the announcement of fint certain but there has not been any functioning of it but essentially the regulators that are mentioned here are regulators of each of these divisions of finance so you will have the banking regulator that is the RBI itself and the investments regulator would be the SEBI and the insurance regulator would be IRDA and so mutual funds again fall under SEBI so are these regulators responsive enough to fintech companies operating in this space this is largely the question I am not sure like fintech certain would also technically somebody become cybersecurity regulator sort of thing cutting across all these domains but in a sense like the question is around like are these existing regulators responding to the fintech companies clarifications or in case if a particular sector let's say payments is not covered by any regulators specifically so RBI still has is the de facto regulator of such such products and systems same as the case of crypto and until crypto was banned so RBI was the crypto regulator even though RBI did not have a view on it till some time back so the question is more on how does RBI itself respond to such companies where there is no clear regulator so back to the terms of reference say for example it actually says it actually includes land records management under fintech for whatever reason that is so so for example and we don't have a regulator for land record management fintech company which is on to say developing technology for land records management so so I don't know like what we can comment on regulator is not seen as so one thing there is a there is a paper which I read which talks about like what are the useful metrics for a regulator to respond like how often they should be conducting consultations and what should be the duration of these processes followed in these consultations however comments stakeholder comments getting incorporated and in case where like the regulator regulator has to kind of make some decisions based on views collected how does a regulator kind of justify why it has taken a particular stand on a on a recent approach than like based on say based on what the regulator wishes so this is essentially to kind of improve the regulatory strengthen the regulatory governance so that like the industry has a strong regulator which is like accountable so part of that is essentially the regulator should also be responsive enough to these stakeholders particularly in case of clarifications and things like that which which affect kind of a business's ability to kind of launch new products or into new markets so moving on the next question is about do laws and regulations related to consumer protection and enhancement of safety and soundness of financial system need to be reviewed in the light of changing relationship between traditional players and its consumers so I had like two comments here one is we need like more tighter reporting norms because we do see regulators themselves not having much data on on what the service providers operate and increasingly more transparency of those reporting requirements so which will essentially make the regulator kind of not just the regulator see that data but a broader audience seeing that data which which kind of puts in like more rise to the data so that is one so that this will help both say improving detection of any compliance with the guarantees because right now we are not really sure what kind of reactions regulator does upon these mandatory compliance reports are they just sleeping in some storage space so we need the better access to we need more tighter reporting norms and more transparency of such data so that people can look through it one the other point that I had to make was essentially on the changing relationship not just traditional players and traditional players including state as well so one of the big friction that is there through the entire ecosystem both say for the businesses and for the consumers around the compliance requirements and cutting across all all of finance we have the PMLA money-launting act so one thing that has been argued for is we need to have proportional proportional requirement for KYC compliance not everybody needs to be at the same level of KYC compliance and KYC there has been even arguments around when can we not have KYC and still be not causing any risk to the financial system soundless and safety this basically will also reduce friction both in terms of delivering services as well as reduce cost for the businesses and for the citizen as well in increasing the data tight world so this would mean that citizens get to have not lose all of the data or have some right to privacy as well so given that the right to privacy judgment has come up there is also a structured need to kind of revisit the PMLA reporting requirements what kind of data gets captured and is that really useful in detecting and if it's not can we get away with some of those so this will actually help both businesses and consumers as well next is what is what infrastructural constraints are there that inhibit the growth of FinTech in India particularly with a view towards financial inclusion and access example, better broadband service penetration so while some of these infrastructure issues are to be fixed like better broadband service penetration is being looked at through say the public Wi-Fi initiative of TRI and we are getting better in say the mobile data penetration with 4G but some of the other infrastructure that really needs to improve is one is a scalable consumer grievance literacy infrastructure so now when we see across all these industries while the cost of doing the business and say cost of transaction for the consumer has come down largely to like reaping the benefits of the technology that's been deployed one thing that has not happened is the cost of solving grievance literacy is going significantly high and so this is the cost that business incurs in resolving grievance and the cost of cost to the consumer in following through the grievance process or in some terms following up the regulator is also pretty high that it kind of provides no incentive for the consumer to report and follow up, no incentive for the business to kind of fix the problem because there is no regulatory such not handling grievances in a proper way and so the way, one way to solve this is like how do we scale this up for like across the board how do we have a better, cheaper consumer grievance literacy infrastructure because what this essentially does to the consumers is they lose trust in these formal systems and they fall back to their traditional modes of say be it lending or payment so one way to kind of solve this this will certainly inhibit the growth of FinTech in one sense and the other thing is the regulatory infrastructure and the regulatory capacity needs to improve and it needs to have more a transparent responsive regulator so and the capacity of the people participating in the regulatory consultations should also be in line with the understanding of say the industry there is a greater need to have a better understanding of these issues among a broader set of people so that these could the regulatory process can deliver better results and the other thing is scaling up the competition commission and antitrust policies that we have today in an increasingly networked and where we see like players cutting across various domains and various platforms merging into converging into one using technology there is a need to look at competition and antitrust issues in in newer ways so this could also if not taken care could lead to kind of stagnation you have any points to add on this on the infrastructure no, I don't think so at this point okay so the next question is what data needs to be collected made digital accessible and more for more and better provision of intake in India so the context of this is there is a public credit registry that is being set up and a high level task force just submitted in support so this looks at creating a central repository of all credit data and I need to go through that to see like what the RBI is planning to do on the public credit registry and what kind of data will be shared will be collected will be made accessible using that because that would largely change the kind of data that the digital vendors especially have access to and what that means to everyone in the ecosystem including the consumer and how does that impact so that is one I have added one point specific to consumers which is around there needs to be more regulatory open data so while the regulator is collecting some data more of that data should be opened up and we should also have ways to kind of measure and rate the fintech service providers some various quality parameters and probably come up with some kind of grading system because we currently have say a very large market with many, many number of players like made in payments where like you'll have some 100 payment apps literally let's say a mutual fund we probably have something like 40 or 15 mutual fund houses so how does a consumer kind of see see through this competition and kind of get through something like what's the best service provider for him or her so while say the established industries let's say the mutual funds and all those have some amount of data on functioning of all these providers and there are there are places where you can get comparison on them but there is still a need for like a lot of data on say the other providers and including payments insurance too has we've seen the insured tech providers like insurance comparison sites that's also there for lending but one thing that all these comparison sites focus on is only on the the marketing of these companies so essentially it's a it's a pitch of best court by all these companies as against say looking holistically at comparing service providers on various quality parameters that could say include not just the cost but let's say also the service levels measured across various levels right so that could kind of give the benefits of competition to the consumer now some of these data is already existing with the regulator it's just that it's not available in a nice fancy dashboard so that has to be made either the raw data has to be made available made digital and made available or like be made available more friendly formats that people can build services on top of that like what has been done say now with the insured tech or the loan comparison sites which does only other but what if you could also do that on various other quality of service parameters so something similar to what try has done with the network coverage between the telcos that kind of gives consumer more information on what is best for him or her it's it will propagate like further growth and the next question is game for business it's around like are you operating on multiple jurisdictions and what are the implications of differing data protection standards data storage and sharing requirements on your business how should Indian regulation be designed to ensure India's competitive over driven Fintech Fintech sector so one thing that we commonly see across at least in payments is a very high level of centralization of data and some of these platforms that Fintech currently operate let's say UPI or the BVPS they are like highly centralized data platforms is not just with the Fintech service provider but is also with a network operator this leads to kind of no competitive advantage for the Fintech provider to kind of have access to data or insights because that data is shared with the payment system operator as well so that in some sense put together with the PMLA regulations can be treated as what I call as a data taxation and if we compare we are probably the highest we'll be probably having the highest data taxation levels and data taxation levels would prohibit for both the industry and from an industry standpoint for businesses to offer differentiated products based on the consumers they have acquired and their data as well as for consumers in protecting their privacy and hence moving away from these products which collect data which is highly centralized so this is one comment that I had so this obviously also needs to look through GDPR LACFAS style regulation that's there in the US which is so how do we compare with them and what kind of impact that has on us for the growth of Fintech sector so and the last question is on the skills that are needed for Fintech demand and is there a trend for particular skill sets do you face the source constraints what's the role of government so again from a consumer standpoint I did write on we need to have as increasingly even to participate say in the regulatory process or a government representation in the Fintech sector you need to have a broad based understanding of finance technology economics public policy because it's a cross functional skill set that is needed to look through these problems these industries what their problems are and what their solutions could be so one thing that needs to be done is provide like more support for academic programs on cross functional studies research and what will also help is government putting up detailed vision documents and review the progress of that with the regulator industry and all the stakeholders so something an example of this could be like the vatal committee report which kind of provided the context or a medium term long term vision of the committee but what's also needed is what's the view of government and what's the view of stakeholders so not publishing that document is the first step and then having a holistic discussion around that topic and then subsequently say following that up with what's happening on that say on a yearly or two yearly basis which would kind of help have everyone along the same level of knowledge which is required to kind of engage in these conversations so that is what I have been I I wish if you want to add something so I think we are a comprehensive set of questions but they all seem very targeted towards the larger company so is there anything that you think of a smaller company or making that mark good question so but I'm not really seeing the distinction say on larger versus smaller companies in the questions that have been asked or like do you see any specific example but I mean I get the larger point of say the the steering committee itself was kind of looking at ease of doing business and I'm not sure how well does this go along with say some of the startup incubators and their problems and their policies but is there anything like you want to add on that no I think no not really because on the the questions themselves are like seeking responses from companies which they are already operating in multiple jurisdictions or they have a hiring problem right so I think some companies maybe the smaller 8 to 10 members in tech companies who are trying to do something they either have to partner with an existing firm or existing financial institution to provide services so do you see that partnership are becoming a problem because the smaller companies will be using or building their tech based on the platform of another bigger company which is always yes but I don't think that is kind of covered explicitly here I think one area that I could see that be put put together is on the around the competition and antitrust and like how can we encourage more smaller players as well because the larger players they do have inherent advantages but so how do we kind of formulate policies specifically on fintech sector to encourage the smaller players to be more more friendlier towards the smaller players as well but I think we need to kind of put something around material on say whether it's friendlier to smaller companies or larger companies first have some reference to that and then kind of put that point across and say like that's potentially an infrastructure constrained in some sense because smaller companies need that extra which a infrastructural support that could be in the form of I think the one area where the steering committee itself talks about is that regulatory sandbox approach so potentially a smaller company will not have the wherewithal to kind of stand through the regulatory compliance requirements on the day one so you kind of have a sandbox and on the regulatory sandbox you do get some kind of regulatory lineances for the trade off of say performing a small pilot or something like that so those kind of things or it could be a real infrastructure issues like it could be around setting up of more incubators things like that so those probably could be probably add something like on incubators how do we make it start up really in the context of fintech because again the context matters because fintech is a networked world so by default you will have to network with the other entities which would be large or you will be part of a network where players of all sizes coexist at the same level but how do you ensure that say a network does provide a level playing field to all players of all sizes so this could be seen in the context of how payment system operator treats its own payment system players of varying sizes even if all of them are on the same network so things like that needs to be like because these problems are something that is specific to fintech sector maybe we need to phrase that we will then put it here start up really in a network in the wrong so I just added that we will see how we can put that across that and any other comments no I think so what we will do is either we will update the same blog post with these comments or we should put out a new blog post yeah I think we kind of update that with the link to the video will already be available but I will try and reach out to people who commented through some kind of alternate channel and see what they want to have and then ask them to leave a comment on this talk so that could continue so maybe it's not unfortunately we couldn't have them here but we will see how to get their comments as well on this okay great do you have anything else to add anything else this this submission has to be made on Friday to the committee so I will be phrasing this on Thursday afternoon so if you want to send in comments please send by Wednesday night and then I could come up with a consolidated comments by Wednesday and I will probably be writing a follow up blog post on the actual consultation process along with the written response that we submit and the deliberations that happened during the meeting so that's probably sometime next week we will have the update on that so we can publish written responses on Friday and we could publish a subsequent blog post on the deliberations that happened during the meeting sure okay thank you so much for joining Sheikant and sharing your comments I think this is really useful just to get a good overview of what the questions are for us and how do we approach this so I think this is one of the first times they are doing such a consultation like probably a physical meeting yes we did have the VATAL committee publishing its report and they did see comments even the PPI regulations did see comments but it was not like a formal meeting and to a interaction it was like the ministry or the regulator publishing a report and asking feedback which some of us did send but we didn't kind of have a back and forth conversation or say a physical conversation but I think this is one of the first times they are having actually a physical meeting as well because they are part of a steering committee so the steering committee would probably have to give its report sometime so they are collecting inputs for the steering committee's work and the steering committee would probably putting up a report which could be made as a some kind of a policy framework for the sectors and the scope of these issues that I mentioned the steering committee is actually quite large so we need to see and this will not be the only consultation so there may be different consultations with different stakeholders or like say banks or the other stakeholders as well so we are not aware of that I did read that one meeting of the steering committee already happened in the month of March and coincidentally it was the time when the PMB fraud had happened and there were deliberations around the swift messaging system and the CBS linking and discussions surrounding that because essentially that was the PMB fraud was just about active then and the steering committee did meet and discuss on this there was a brief report on that but aside from that there has been no references to this committee's work publicly yet so what I am also thinking is we kind of maintain a page where we track the steering committee's work through news reports and kind of see through what essentially happens with the steering committee and we will go to track the developments of this as well sure that sounds good okay thank you so much for joining us and sharing your comments I think we will close the livestream now yeah thanks Abhishek thank you folks for watching and this is really useful so lets just take it forward with the updated