Back to Growth: Interview with Naveen Surya, So Hum Bharat Digital
1. How do the digital payments trend that India observed during COVID-19 appear to continue, sustain or grow in 2021?
It is expected to sustain the growth considering long period on new use cases and new user base added for recurring small retail transactions.
2. What are some of the imminent innovations for further financial inclusion and literacy to onboard the next billion users, that are surfacing in the industry? And how are digital payments being promoted in semi-urban & rural areas?
Offline payments, domestic remittance, migrant workers’ cashless payroll etc. are areas that still need to be worked on. For literacy and on-boarding, friction of onboarding in form of KYC needs to be exempt or access of eKYC to licensed payments players need to be restored urgently currently amongst RBI licensed and regulated entities only Banks have access to use eKYC as AUA and KUA. Zero-MDR is retrograde and must be reversed, a reasonable market driven commercial is critical for growth of innovation in digital payments. In absence of Incentive there can be pressure on capital infusion and value creation opportunity in the payment domain. Accelerated roll out of at least 4-5 new NUE on merit may also help expand the market to underbanked and unbanked consumers as well as business users from self-employed, MSME, SME segments. Promotion of digital payments across geography is usually use case driven for specific segments and usually needs to closer to customers as well as on premise of merchants or on digital medium of the merchants. That needs to be accelerated and continued.
3. Fintech has been one of the most attractive and evolving sectors in the Startup space in India and globally. How do you see the Startup activity evolving in this space in 2021?
Start up activities across the fintech continues to be on high growth model, excepts some specific areas of credit products, all other segments e.g., payments, insurance, wealth management is growing rapidly and expected to continue the same in coming year as well. Availability of credit for NBFCs and FinTech’s and expansion of digital lending models to newer segments in businesses like P2P is critical for the growth. On ground demand is still high for credit but the supply has some challenges, hopefully the same would improve in coming year, with collections for all NBFCs and other players improving QoQ. Biggest beneficiaries have been tech solution providers helping financial services segment to automate and digitize most of the processes. High focus on Digital Customer on-boarding with solutions like Video KYC etc. have seen high demand, similarly digital reporting and compliance solutions, better customer grievances management digitally etc. are the areas which may expand and grow in 2021.
4. How have the sector specific reforms (Video KYC, liberalized FDI in Insurance Intermediaries, Innovation Sandboxes, Digital Payments, PSL status for Startups, etc.) helped the BFSI sector thrive and be resilient during COVID-19 period? And what are some of the areas for further improvement?
Video KYC, FDI relaxation for Insurance Intermediaries, Sandboxes etc. has been life saver and major reasons for growth even during COVID time. With these initiative, next stage of improvements can be planned in 2021, for example: removing duplication of Video-KYC, Facilitating and promoting multi-bio-metric authentication for customers, Sandboxes need to be integrated across the financial sector regulators, can be planned to run multiple cohorts at the same time, Digital payment pricing should be market driven, though supervised for being reasonable but not free. Cross sell should be allowed across insurance sector by all insurance players like it is allowed in banking. Some of these are critical to take Financial services expansion to next billion consumers.
5. Going ahead, what are the 3 most important outcomes that you would look forward to from the Budget 2021-2022 for the financial services industry?
Reversal of Zero MDR in digital payments. Simplified norms for KYC and removal of KYC duplication across financial sector and access of KYC as AUA to all PMLA governed financial services companies. GST exemption for financial services being delivered to underbanked and unbanked consumers like domestic remittance, AEPS, low value credit, micro insurance, low value saving plans, products and pensions (below 1 lakh annually).
* The views and opinions expressed above are solely of the interviewee. The content does not reflect Invest India's position or opinion and Invest India bears no responsibility for the same.