GS-3:Indian Economy and issues relating to growth, development and employment; Effects of liberalization on the economy; Inclusive Growth
Keywords: Fintech, Infinity Forum, financial empowerment, digital banks, fintech security, IFSC, GIFT City.
Why in News?
Prime Minister while virtually inaugurating the InFinity Forum, urged the fintech industry in India to convert their Fintech initiatives into a Fintech revolution.
Keypoints:
As per PM, the revolution will help to achieve financial empowerment of every single citizen of the country, highlighting that the Fintech industry in India is already innovating to enhance access to finance and the formal credit system to every person in the country.
As per him, the rise of Fintech is resting on four pillars - income, investments, insurance and institutional credit.
- When income grows, investment becomes possible;
- Insurance covers enable greater risk-taking ability and investments; and
- Institutional credit brings means for advancement
He also noted that technology is making a big shift in finance, and mobile payments last year exceeded ATM cash withdrawals for the first time. Without any physical branch offices, fully digital banks are already a reality, and may become commonplace in less than a decade.
InFinity Forum
- It is a leadership forum on Financial Technology, jointly hosted by the Gift City regulator IFSCA and Bloomberg.
- It aims to unite the world’s leading minds in policy, business, and technology to explore and advance the biggest ideas in FinTech, and to develop those ideas into global solutions and opportunities.
- The two-day summit will see participation from more than 70 nations, while Indonesia, South Africa and the United Kingdom are partner countries.
IFSC at Gift City was born out of the vision that finance combined with technology would be an important part of India’s future development. GIFT City is an emerging global financial and IT services hub, a first of its kind in India, designed to be at or above par with globally benchmarked business districts.
Fintech sector in India:
- As per KPMG, India's fintech sector attracted over $2 Billion in investments in the first half of 2021.
- The report cited that Fintech's business model, with its inherent benefit of leveraging data besides providing great customer experience, are the biggest attraction for investors.
- Moreover segments such as e-commerce and digital financial services have got a significant boost due to the social distancing limitations during the Covid-19 pandemic.
Financial technology (Fintech) is used to describe new tech that seeks to improve and automate the delivery and use of financial services.
- At its core, fintech is utilized to help companies, business owners and consumers better manage their financial operations, processes, and lives by utilizing specialized software and algorithms that are used on computers and, increasingly, smartphones.
- Fintech also includes the development and use of crypto-currencies such as bitcoin.
However, It needs to be underlined that fintech innovation will be incomplete without fintech security innovation.
Conclusion:
Finance is the lifeblood of an economy, and technology is its carrier. Both are equally important for achieving “Antyodaya and Sarvodaya”.
Source: The Hindu BL
Prelims:
Q. Consider the following statements with respect to GIFT City:
- It is located at Kandla in Gujarat.
- It is an emerging global manufacturing hub especially petrochemicals.
Which of the statement/s given above is/are correct?
a. 1 only
b. 2 only
c. Both 1 and 2
d. Neither 1 or 2
Ans: d
Mains:
Q. 'Fintech innovation will be incomplete without fintech security innovation’. Comment.
