Bangalore and Mumbai have both been one of the first cities who took an initiative towards developing the FinTech ecosystem in the country. Both the cities are looking at providing the best opportunities for start-ups to scale their business and operations in the country.
However, with the emergence of new opportunities and think tanks coming up, Mumbai is most probably the new hub for Fintech in India. Being the financial capital, Mumbai has an edge when it comes to FinTech. It is one city that has an advantage in terms of skills, technology expertise, infrastructure. And the plan is to set it up as a city that is the one-stop hub for all FinTech innovations and solutions for India.
In order to have a clear picture of the financial industry in India and how technology is playing a vital role in the sector, Analytics India Magazine spoke to Suniti Nanda, Fintech Officer, Government of Maharashtra, who is also leading the Mumbai FinTech Hub, that uplifts start-ups that are genuinely delivering unique solutions to problems and enhancing the entire ecosystem.
Filling The Void In The FinTech Sector
The government of Maharashtra was investing in conducting research and expanding their horizons before coming up with the FinTech policy, which was implemented in February 2018. The establishment of the Mumbai FinTech Hub last years is a direct by-product of the policy that was brought in by the government to strengthen the FinTech ecosystem in the country.
The FinTech hub and the Maharashtra Govt. is hoping to bring in easier access to funding, as one aspect. And the other aspect to it is the grants and the reimbursements. Depending on the nature of the start-up, the hub has a policy that allows disbursing grants/reimbursement up to a certain amount.
“We are hoping to help start-ups who have the potential but have not been able to scale their business and look at continuously supporting them with the necessary things until they get the desired funding,” said Suniti.
The hub is also hoping to set up an investor platform in the next few months that will be akin to a capital-raising platform. A FinTech start-up with a turnover of at least INR 25 crore will be entitled to annual assistance of INR 10 lakh for three years as reimbursement of internet and electricity expenses, goods and services tax, and expenses for participating in global exhibitions or similar events.
“To help develop the global FinTech hub in Mumbai, the policy enables the government to create an industrial sandbox,” added Suniti.
A lot of companies are introducing their own independent accelerator programs that are rapidly changing the dynamics of the financial services in the country. Mumbai Fintech Hub recently had its first leg of the accelerator programme that was supported by multiple industry partners such as NPCI, PayU, FinoPayments Bank, IndusInd Bank etc.
“The programme has been designed as such that start-ups derive that maximum benefits on this through funding to help them move on to the next stage.,” said Suniti. “As a government, we are directing our efforts towards increasing opportunities to help start-ups optimize themselves and reduce their mortality rate (where the multiple partners come into play).”
From the first leg of the program, 12 startups are selected. And having FinTech Yatra as the execution partner responsible for co-working and facility management for the programme, the selected start-ups of the first cohort have been working on solutions across financial services such as insurance, payment getaways, real-time data analysis, InvestTech, lending etc.
“Mumbai FinTech Hub has not only granted these start-ups direct access to multiple industry partners but has also presented with the opportunity to collaborate with Govt. of Maharashtra and other regulators,” said Suniti. “The provision of a regulatory sand-box, government use cases and a monthly stipend to each start-up along with customised mentor connect has propelled their growth narrative in the right direction.”
Talking about the technology side, the FinTech sector itself is a combination of technology and the financial services sector. Most start-ups and established companies, alike, are looking at incorporating some element of artificial intelligence, machine learning in all their services.
“If you were to compare us with our global counterparts, we are not far behind in the adoption of technology but the purpose that it serves is different. We are leaning more towards financial inclusion,” said Suniti. “We are making concentrated efforts towards uplifting the start-up ecosystem to make India recognizable as a global hub for innovation.”
Today, the importance of technology cannot be under assumed and the hub is looking forward to leveraging it optimally to provide better services, build newer experiences etc. Parallelly, it is also working on creating the right kind of journey and using the right technology to scale businesses.
That is it not all, the hub is constantly adding in newer initiatives by understanding the demand or need gap — pilots are encouraged across FinTech to Agri-Tech to everything involved. The department of IT has developed the entire programme and as a part of the FinTech that falls under it, the hub encompasses innovations/solutions that pan across Insure-Tech, consumer journeys, use of technology to determine stocks, Agri-FinTech etc.
The Roadmap Ahead
Looking into the future, Suniti believes that the first and foremost thing is to concentrate efforts towards making Mumbai a global FinTech hub. Currently, Mumbai and even Bangalore, does not feature on the world map for global FinTech hubs.
“The idea is to understand what are the key hindrances that prevent us from being on the map and what are the future steps that must be undertaken to realize our true potential,” Suniti concluded. “We need to focus on a few key elements such as access to capital, infrastructure and ecosystem, global market access, API sandbox etc. to make our mark felt.”
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